<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):
April 23, 1998
MAC-GRAY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 011-13495 04-3361982
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
22 Water Street, Cambridge, MA 02141
(Address of principal executive offices and zip code)
(617) 492-4040
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
- ------- ------------------------------------
(a) On April 23, 1998, Mac-Gray Corporation, a Delaware corporation (the
"Registrant"), acquired Copico, Inc., a Massachusetts corporation ("Copico"),
through the purchase by Mac-Gray Services, Inc., a Delaware corporation and
wholly-owned subsidiary of the Registrant ("Mac-Gray Services"), of one hundred
percent of the outstanding capital stock of Copico. The acquisition was
completed pursuant to a Stock Purchase Agreement, dated as of March 31, 1998
(the "Copico Agreement"), by and among Mac-Gray Services, Copico and certain
stockholders.
In consideration and pursuant to the Copico Agreement, the Registrant
issued 250,000 shares of its common stock, par value $.01 per share (the
"Registrant's Common Stock"), valued at approximately $4.2 million based upon
the closing price of the Registrant's Common Stock (NYSE: TUC) on April 23,
1998. The cash portion of the purchase price was approximately $11.1 million,
including the payment of approximately $6.1 million of debt.
The funds used to pay the cash portion of the consideration were comprised
primarily of borrowings under the Registrant's $90 million senior secured
revolving and term loan credit facility with State Street Bank and Trust
Company, CoreStates Bank and BankBoston, N.A. (the "Credit Facility").
Copico is a major provider of card and coin-operated reprographics
equipment and services to the academic and public library markets in New
England, New York and Florida. Copico provides and services copiers, laser
printers and microform reader-printers for libraries of colleges, universities
and graduate schools. Copico also is the sole provider of reprographics
services to the New York public library system, as well as other public
libraries.
(b) On April 24, 1998, the Registrant acquired through Mac-Gray Services, one
hundred percent of the outstanding capital stock of Amerivend Corporation, a
Florida corporation, and the assets of Amerivend Southeast Corporation, a
Georgia corporation (together with Amerivend Corporation, "Amerivend"). The
acquisition was completed pursuant to a Stock and Asset Purchase Agreement,
dated as of March 4, 1998 (the "Amerivend Agreement"), by and among Mac-Gray
Services, Amerivend, Gerald E. Pulver and the Gerald E. Pulver Grantor Retained
Annuity Trust.
Pursuant to the Amerivend Agreement, the purchase price was approximately
$33.3 million in cash, including the payment of approximately $6.8 million of
debt. A portion of the purchase price, $1.5 million, is being held in escrow to
satisfy any potential claims in accordance with the Amerivend Agreement. The
funds used to pay the purchase price were comprised primarily of borrowings
under the Credit Facility.
Amerivend is a provider of card and coin-operated laundry equipment in
Florida and Georgia. Amerivend also is the principal distributor of Maytag
Corporation's commercial laundry products in Alabama, Florida and Georgia.
2
<PAGE>
Item 5. Other Events
- ------- ------------
On April 24 and 27, 1998, the Registrant issued the press releases attached
as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ------- ------------------------------------------------------------------
(a) Financial Statements of Businesses Acquired
To the extent required by this Item, financial statements of the businesses
acquired will be filed by the Registrant by amendment of this Current Report on
Form 8-K no later than July 7, 1998.
(b) Pro Forma Financial Information
To the extent required by this Item, pro forma financial information will
be filed by the Registrant by amendment of this Current Report on Form 8-K no
later than July 7, 1998.
(c) Exhibits
Exhibit No. Description
- ----------- -----------
2.1 Stock Purchase Agreement, dated as of March 31, 1998, by and
among Mac-Gray Services, Inc., Copico, Inc. and certain
stockholders, is incorporated by reference herein to the
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on April 9, 1998 (Reg. No. 333-49795).
2.2 Stock and Asset Purchase Agreement, dated as of March 4, 1998, by
and among Mac-Gray Services, Inc., Amerivend Corporation,
Amerivend Southeast Corporation, Gerald E. Pulver and the Gerald
E. Pulver Grantor Retained Annuity Trust. Pursuant to Item
601(b)(2) of Regulation S-K, the Schedules referred to in the
Stock and Asset Purchase Agreement are omitted. The Registrant
hereby undertakes to furnish supplementally a copy of any omitted
Schedule to the Commission upon request.
99.1 Press release announcing the completion of the acquisition by
Mac-Gray Services, Inc. of the outstanding capital stock of
Copico, Inc., dated April 24, 1998.
99.2 Press release announcing the completion of the acquisition by
Mac-Gray Services, Inc. of the outstanding capital stock of
Amerivend Corporation and the assets of Amerivend Southeast
Corporation, dated April 27, 1998.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 8, 1998 MAC-GRAY CORPORATION
By: /s/ Patrick A. Flanagan
--------------------------------------
Patrick A. Flanagan
Executive Vice President and Secretary
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2.1 Stock Purchase Agreement, dated as of March 31, 1998, by and
among Mac-Gray Services, Inc., Copico, Inc. and certain
stockholders, is incorporated by reference herein to the
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on April 9, 1998 (Reg. No. 333-49795).
2.2 Stock and Asset Purchase Agreement, dated as of March 4, 1998, by
and among Mac-Gray Services, Inc., Amerivend Corporation,
Amerivend Southeast Corporation, Gerald E. Pulver and the Gerald
E. Pulver Grantor Retained Annuity Trust. Pursuant to Item
601(b)(2) of Regulation S-K, the Schedules referred to in the
Stock and Asset Purchase Agreement are omitted. The Registrant
hereby undertakes to furnish supplementally a copy of any omitted
Schedule to the Commission upon request.
99.1 Press release announcing the completion of the acquisition by
Mac-Gray Services, Inc. of the outstanding capital stock of
Copico, Inc., dated April 24, 1998.
99.2 Press release announcing the completion of the acquisition by
Mac-Gray Services, Inc. of the outstanding capital stock of
Amerivend Corporation and the assets of Amerivend Southeast
Corporation, dated April 27, 1998.
5
<PAGE>
EXHIBIT 2.2
================================================================================
STOCK AND ASSET PURCHASE AGREEMENT
By and Among
Mac-Gray Services, Inc.,
("Buyer")
Amerivend Corporation,
("Amerivend")
Amerivend Southeast Corporation,
("Amerivend Southeast")
and
Gerald E. Pulver
and
Gerald E. Pulver Grantor Retained Annuity Trust
("Stockholders")
March 4, 1998
================================================================================
<PAGE>
STOCK AND ASSET PURCHASE AGREEMENT
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. SALE OF SHARES AND ASSETS; PURCHASE PRICE 1
1.01 Transfer of Amerivend Shares................................ 1
1.02 Sale of Southeast Assets.................................... 2
1.03 Purchase Price.............................................. 2
1.04 Closing..................................................... 3
1.05 Amerivend Purchase Price Adjustment......................... 3
1.06 Further Assurances.......................................... 5
1.07 Transfer Taxes.............................................. 5
1.08 No Assumption; Allocation of Southeast Purchase Price....... 5
1.09 Proration................................................... 6
1.10 Transfer of Southeast Assets................................ 6
1.11 Employees................................................... 6
1.12 Stockholders' Representative................................ 7
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND
MR. PULVER........................................................ 8
2.01 Making of Representations and Warranties.................... 8
2.02 Organization and Qualifications of the Companies............ 8
2.03 Capital Stock of the Companies; Beneficial Ownership........ 9
2.04 Subsidiaries; Investments................................... 9
2.05 Authority................................................... 10
2.06 Real and Personal Property.................................. 11
2.07 Laundry Leases.............................................. 13
2.08 Equipment................................................... 13
2.09 Title....................................................... 13
2.10 Financial Statements........................................ 14
2.11 Taxes....................................................... 15
2.12 Collectibility of Accounts Receivable....................... 17
2.13 Inventories................................................. 17
2.14 Absence of Certain Changes.................................. 18
2.15 Ordinary Course............................................. 20
2.16 Banking Relations........................................... 20
2.17 Intellectual Property....................................... 20
2.18 Contracts................................................... 22
2.19 Litigation.................................................. 23
2.20 Compliance with Laws........................................ 23
2.21 Insurance................................................... 24
2.22 Warranty or Other Claims.................................... 24
2.23 Powers of Attorney.......................................... 24
</TABLE>
i
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<TABLE>
<S> <C>
2.24 Finder's Fee................................................ 24
2.25 Permits; Burdensome Agreements.............................. 24
2.26 Corporate Records; Copies of Documents...................... 25
2.27 Transactions with Interested Persons........................ 25
2.28 Employee Benefit Programs................................... 25
2.29 Environmental Matters....................................... 27
2.30 List of Directors and Officers.............................. 29
2.31 Employees; Labor Matters.................................... 29
2.32 Non-Foreign Status.......................................... 30
2.33 Backlog..................................................... 30
2.34 Customers, Distributors and Suppliers....................... 30
2.35 Transfer of Shares.......................................... 30
2.36 Stock Repurchase............................................ 30
2.37 Disclosure.................................................. 30
2.38 Commission Payments......................................... 31
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS..... 31
3.01 Amerivend Shares............................................ 31
3.02 Authority................................................... 31
3.03 Finder's Fee................................................ 32
3.04 Agreements.................................................. 32
SECTION 4. COVENANTS OF THE COMPANIES AND THE STOCKHOLDERS........ 32
4.01 Making of Covenants and Agreements.......................... 32
4.02 Conduct of Business......................................... 32
4.03 Consents.................................................... 34
4.04 Notice of Default........................................... 35
4.05 Consummation of Agreement................................... 35
4.06 Cooperation of the Companies and the Stockholders........... 35
4.07 No Solicitation of Other Offers............................. 35
4.08 Confidentiality............................................. 36
4.09 Tax Returns................................................. 36
4.10 Filing Cooperation.......................................... 36
4.11 No Transfer of Securities................................... 36
4.12 Use of Trade Name........................................... 37
4.13 Updating of Information..................................... 37
4.14 2451 Brickell Avenue........................................ 37
SECTION 4A. CERTAIN TAX MATTERS................................... 37
4A.01 Section 338(h)(10) Election................................. 37
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER................ 38
5.01 Making of Representations and Warranties.................... 38
5.02 Organization of Buyer....................................... 38
5.03 Authority of Buyer.......................................... 38
5.04 Litigation.................................................. 39
5.05 Finder's Fee................................................ 39
SECTION 6. COVENANTS OF BUYER..................................... 39
6.01 Making of Covenants and Agreements.......................... 39
6.02 Confidentiality............................................. 39
6.03 Consents.................................................... 40
6.04 Consummation of Agreement................................... 40
SECTION 7. CONDITIONS............................................. 40
7.01 Conditions to the Obligations of Buyer...................... 40
7.02 Conditions to Obligations of the Companies and the
Stockholders................................................ 44
SECTION 8. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED............ 45
8.01 Termination................................................. 45
8.02 Effect of Termination....................................... 46
8.03 Right to Proceed............................................ 46
SECTION 9. SURVIVAL............................................... 46
9.01 Survival of Warranties...................................... 46
SECTION 10. INDEMNIFICATION....................................... 47
10.01 Indemnification by Southeast and the Stockholders........... 47
10.02 Limitations on Indemnification by Southeast and the
Stockholders................................................ 47
10.03 Indemnification by Buyer.................................... 48
10.04 Limitation on Indemnification by Buyer...................... 48
10.05 Notice; Defense of Claims................................... 49
10.06 Claims Against Indemnification Escrow....................... 50
SECTION 11. MISCELLANEOUS......................................... 50
11.01 Fees and Expenses........................................... 50
11.02 Governing Law............................................... 50
11.03 Notices..................................................... 50
11.04 Entire Agreement............................................ 51
11.05 Assignability; Binding Effect............................... 51
11.06 Captions and Gender......................................... 52
11.07 Execution in Counterparts................................... 52
11.08 Amendments.................................................. 52
11.09 Publicity and Disclosures................................... 52
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
11.10 Consent to Jurisdiction..................................... 52
11.11 Specific Performance........................................ 52
11.12 Bulk Sales Law.............................................. 53
</TABLE>
iv
<PAGE>
STOCK AND ASSET PURCHASE AGREEMENT
----------------------------------
AGREEMENT entered into as of March 4, 1998 by and among Mac-Gray Services,
Inc., a Delaware corporation ("Buyer"), Amerivend Corporation, a Florida
corporation ("Amerivend"), Amerivend Southeast Corporation, a Georgia
corporation ("Southeast"), Gerald E. Pulver ("Mr. Pulver") and the Gerald E.
Pulver Grantor Retained Annuity Trust (the "Pulver Trust"). Amerivend and
Amerivend Southeast are sometimes referred to herein individually as a "Company"
and together as the "Companies" and Mr. Pulver and the Pulver Trust are
sometimes referred to herein individually as a "Stockholder" and together as the
"Stockholders."
W I T N E S S E T H
-------------------
WHEREAS, the Stockholders are the record and beneficial owners of all of
the issued and outstanding capital stock of Amerivend which consists entirely of
an aggregate of Five Hundred (500) shares of common stock, $.10 par value per
share (the "Amerivend Shares");
WHEREAS, subject to the terms and conditions set forth herein, the
Stockholders desire to sell all of the Amerivend Shares to Buyer, and Buyer
desires to acquire all of the Amerivend Shares; and
WHEREAS, subject to the terms and conditions hereof, Southeast desires to
sell, transfer and assign to Buyer and Buyer desires to purchase from Southeast,
all of the properties and assets comprising the laundry distribution and coin
route management business of Southeast (the "Southeast Laundry Business").
NOW, THEREFORE, in order to consummate said purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:
SECTION 1. SALE OF SHARES AND ASSETS; PURCHASE PRICE.
------------------------------------------------------
1.01 Transfer of Amerivend Shares. At the Closing (as hereinafter
----------------------------
defined), each Stockholder shall deliver or cause to be delivered to Buyer
certificates representing all of the Amerivend Shares owned by such Stockholder
as set forth on Exhibit A, which collectively shall represent all of the issued
---------
and outstanding capital stock of Amerivend. Such stock certificates shall be
duly endorsed in blank for transfer or shall be presented with stock powers duly
executed in blank, with such signature guarantees and such other documents as
may be reasonably required by Buyer to effect a valid transfer of such Amerivend
Shares by such Stockholder, free and clear of any and all liens, encumbrances,
charges or claims. Each Stockholder by execution of this Agreement hereby
appoints Buyer as his attorney-in-fact to effectuate transfer of the Amerivend
Shares at the Closing.
<PAGE>
1.02 Sale of Southeast Assets. Upon the terms and subject to the
------------------------
conditions set forth in this Agreement, Southeast agrees to sell, assign,
transfer and deliver to Buyer, and Buyer agrees to purchase from Southeast, all
right, title and interest in and to the following assets of Southeast which
comprise the Southeast Laundry Business, other than the Southeast Receivable (as
defined below) (the "Southeast Assets"):
(a) Laundry Machines and other Tangible Assets. All of Southeast's
------------------------------------------
(i) new and used inventory of washers and dryers, soap, bleach and softener
dispensers and change machines, parts and accessories, a true, correct and
complete list of which is attached hereto as Schedule 1.02(a)(i) and (ii)
-------------------
furniture and office equipment, a true, correct and complete list of which is
attached hereto as Schedule 1.02(a)(ii), in each case together with any
--------------------
additions thereto prior to the Closing Date;
(b) Vehicles. All of the vehicles listed on Schedule 1.02(b) attached
-------- ----------------
hereto;
(c) Receivables. All notes and accounts receivable of Southeast
-----------
outstanding on the Closing Date (other than the receivable due from Amerivend to
Southeast in the amount of $408,299, plus any interest through the Closing Date
(the "Southeast Receivable"));
(d) Name. The name "Amerivend Southeast" and all related and
----
associated logos and trademarks, and all licenses to or from third parties with
respect to the foregoing and rights related thereto;
(e) Distributorship; Contracts. All of the rights of Southeast under
--------------------------
and interest of Southeast in (i) all distributorship agreements with Maytag
Corporation, including all Parts Distributor Agreements and Commercial
Distributor Sales Agreements (collectively, the "Maytag Distributorship") and
(ii) all customer purchase orders;
(f) Goodwill. All of the goodwill of Southeast in, and the going
--------
concern value of the Southeast Laundry Business, and all of the intellectual
property and intangible assets of Southeast used or held for use in the
Southeast Laundry Business, including without limitation all business and
customer lists, proprietary information, and trade secrets; and
(g) Records. All of Southeast's customer logs and records and other
-------
business records relating to the Southeast Laundry Business.
1.03 Purchase Price. In reliance upon the representations and warranties
--------------
of the Companies and the Stockholders contained herein and made at the Closing
and subject to satisfaction of all of the conditions contained herein:
2
<PAGE>
(a) Amerivend Shares. In consideration of the sale by the
----------------
Stockholders to Buyer of the Amerivend Shares, Buyer agrees that at the Closing
it will deliver to the Stockholders an aggregate purchase price (the "Amerivend
Purchase Price") equal to (i) $33,140,000, less (ii) the aggregate amount of
principal of and accrued and unpaid interest, premiums and penalties (if any)
and other amounts on all indebtedness of Amerivend for borrowed funds
outstanding as of the Closing Date (as hereinafter defined) (assuming payment in
full by Buyer of all such indebtedness on the Closing Date), including without
limitation the indebtedness listed on Schedule 1.03 attached hereto (but
-------------
excluding the Southeast Receivable), less (iii) the amount of the Southeast
Receivable, and as adjusted pursuant to Section 1.05 hereof. The Amerivend
Purchase Price shall be paid by Buyer at the Closing by delivery to the Escrow
Agent (as defined in Section 1.03(c) below) of $1,500,000 with the balance paid
to the Stockholders, as allocated between the Stockholders as specified on
Exhibit A hereto, by wire transfer to an account specified by each Stockholder.
- ---------
(b) Southeast Assets. In consideration of the sale by Southeast to
----------------
Buyer of the Southeast Assets, Buyer agrees that at the Closing it will deliver
to Southeast an aggregate purchase price (the "Southeast Purchase Price") equal
to $360,000, which shall be paid at the Closing by wire transfer to an account
specified by Southeast.
(c) Escrow Amount. On the Closing Date, Buyer shall deliver to State
-------------
Street Bank and Trust Company (the "Escrow Agent") cash in an amount equal to
$1,500,000 (the "Escrow Amount") to be held by the Escrow Agent pursuant to and
in accordance with the terms and provisions of the Indemnification Escrow
Agreement in the form attached hereto as Exhibit B (the "Escrow Agreement").
---------
1.04 Closing. Unless this Agreement shall have been terminated in
-------
accordance with Section 8 hereof, the closing of the purchase and sale of the
Amerivend Shares and the Southeast Assets provided for in this Agreement (the
"Closing") shall take place at the offices of Goodwin, Procter & Hoar LLP at
Exchange Place, 53 State Street, Boston, Massachusetts 02109 commencing at 10:00
A.M. Eastern Standard Time on March 31, 1998 or, if the conditions contained in
Sections 7.01(i) and 7.02(d) have not been satisfied by such date, on the date
that is three (3) business days after such conditions are satisfied, in either
case provided that the conditions to closing set forth in Section 7 hereof are
satisfied or, if applicable, waived, or at such other time and date as may be
otherwise mutually agreed upon by the parties (the "Closing Date"). Except as
otherwise expressly provided in this Agreement or in any document contemplated
by this Agreement, all matters at the Closing shall be considered to take place
simultaneously and no delivery of any documents shall be deemed complete until
all transactions and deliveries of documents are completed.
3
<PAGE>
1.05 Amerivend Purchase Price Adjustment.
-----------------------------------
(a) Closing Adjustment. The Amerivend Purchase Price shall be
------------------
adjusted as of the Closing Date to the extent that Estimated Net Working Capital
(as defined below) of Amerivend differs from ($1,331,929), the Net Working
Capital of Amerivend at December 31, 1997 (the "1997FYE Net Working Capital"),
as follows:
(i) The Amerivend Purchase Price shall be increased by the
amount (if any) by which Estimated Net Working Capital exceeds the 1997FYE Net
Working Capital; and
(ii) The Amerivend Purchase Price shall be decreased by the
amount (if any) by which the 1997FYE Net Working Capital exceeds Estimated Net
Working Capital.
For purposes of this Section 1.05, "Net Working Capital" (which may be a
negative) means the aggregate value of Amerivend's current assets minus the
aggregate value of Amerivend's current liabilities, all as determined in
accordance with generally accepted accounting principles ("GAAP") and consistent
with the practices and policies used in preparing Amerivend's December 31, 1997
balance sheet. For purposes of this Agreement, "Estimated Net Working Capital"
(which may be a negative) means the estimated Net Working Capital of Amerivend
at the Closing Date based on a statement jointly prepared by and agreed to by
Buyer and Amerivend at least two business days prior to the Closing Date.
(b) Post-Closing Adjustment. The Amerivend Purchase Price will be
-----------------------
adjusted dollar for dollar following the Closing Date as provided in this
Section 1.05(b). Buyer shall pay the Stockholders (in proportion to their
respective allocations on Exhibit A hereto) the amount (if any) by which the
---------
Closing Net Working Capital (as defined in Section 1.05(c) below) exceeds the
Estimated Net Working Capital and the Stockholders shall pay Buyer the amount
(if any) by which the Estimated Net Working Capital exceeds the Closing Net
Working Capital. Payment shall be made in immediately available funds by the
party obligated to make such payment not more than five business days following
the determination of the Closing Net Working Capital pursuant to Section 1.05(c)
hereof.
(c) Closing Net Working Capital Statement. Buyer will furnish to the
-------------------------------------
Stockholders' Representative (as defined in Section 1.12 hereof) not later than
45 days after the Closing Date a statement (the "Closing Net Working Capital
Statement") showing the Net Working Capital of Amerivend at the Closing Date,
which amount may be a negative (the "Closing Net Working Capital"). Buyer will
give Stockholders' Representative and his accountants reasonable access to
books, records and work papers of Amerivend for purposes of confirming the
Closing Net Working Capital Statement. Unless Stockholders' Representative
notifies Buyer in writing that it disagrees with the Closing Net Working Capital
Statement within 30 days after Stockholders' Representative's receipt thereof,
the Closing Net Working
4
<PAGE>
Capital Statement shall be conclusive and binding on all parties hereto and not
subject to dispute or review. If Stockholders' Representative notifies Buyer in
writing of its disagreement with the Closing Net Working Capital Statement
within such 30-day period, then Stockholders' Representative and Buyer shall
attempt to resolve their differences with respect thereto within 30 days after
Buyer's receipt of Stockholders' Representative's written notice of
disagreement. Any dispute regarding the Closing Net Working Capital Statement
not resolved by Stockholders' Representative and Buyer within such 30-day period
will be resolved by an accounting firm mutually acceptable to both parties or,
in the absence of agreement, by an accounting firm of national reputation
selected by lot after eliminating Buyer's principal outside accountants and
Stockholders' Representative' principal outside accountants and one additional
firm designated as objectionable by each of Buyer and Stockholders'
Representative. The parties will engage the accounting firm within seven days
after such 30-day period. The determination by the accounting firm so selected
of the Closing Net Working Capital Statement and the Closing Net Working Capital
(with such modifications therein, if any, as reflect such determination) shall
be conclusive and binding upon all parties hereto and not subject to dispute or
review. The fees and expenses of such accounting firm in acting (in the event of
a dispute) under this Section 1.05(c) shall be shared equally by Stockholders'
Representative and Buyer.
1.06 Further Assurances. The Stockholders and Southeast from time to time
------------------
after the Closing at the request of Buyer and without further consideration
shall execute and deliver further instruments of transfer and assignment and
take such other action as Buyer may reasonably require to more effectively
transfer and assign to, and vest in, Buyer the Amerivend Shares, the Southeast
Assets and all rights thereto, and to fully implement the provisions of this
Agreement.
1.07 Transfer Taxes. All sales and transfer taxes, fees and duties, if
--------------
any, under applicable law incurred in connection with the sale and transfer of
the Amerivend Shares and Southeast Assets pursuant to this Agreement will be
borne and paid by the Stockholders and Southeast, respectively, and the
Stockholders and Southeast shall promptly reimburse Amerivend and Buyer for any
such tax, fee or duty which any of them is required to pay under applicable law.
1.08 No Assumption; Allocation of Southeast Purchase Price. Buyer is not
-----------------------------------------------------
assuming and shall not pay or be liable for any liability or obligation of
Southeast of any kind or nature, known, unknown, contingent or otherwise. At or
prior to the Closing, Buyer and Southeast shall agree on the allocation of the
Southeast Purchase Price, which allocation shall be set forth on Schedule 1.08
-------------
attached hereto. Such allocation shall be made in accordance with (i) the
respective fair market values of the Southeast Assets being purchased and sold
and (ii) the provisions of Section 1060 of the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder, and shall be binding upon
Buyer and Southeast for all purposes (including financial accounting purposes,
financial and regulatory reporting purposes
5
<PAGE>
and tax purposes). Buyer and Southeast each further agrees to file its Federal
income tax returns and its other tax returns reflecting such allocation, Form
8594 and any other reports required by Section 1060 of the Code, in accordance
with said allocation.
1.09 Proration. Buyer and Southeast shall prorate personal property taxes
---------
and any other items as agreed by Buyer and Southeast in connection with the sale
of the Southeast Assets. Such proration shall be made as of 12:00 a.m. on the
Closing Date and the Southeast Purchase Price shall be adjusted as necessary to
reflect such proration.
1.10 Transfer of Southeast Assets. At the Closing, Southeast shall deliver
----------------------------
or cause to be delivered to Buyer good and sufficient instruments of transfer
transferring to Buyer title to all of the Southeast Assets including without
limitation, a Bill of Sale and assignments of the Maytag Distributorship,
together with any required consents to assignment. Such instruments of transfer
(a) shall be in the form which is usual and customary for transferring the type
of property involved under the laws of the jurisdictions applicable to such
transfers, (b) shall be in form and substance reasonably satisfactory to Buyer
and its counsel, (c) shall effectively vest in Buyer good and marketable title
to all of the Southeast Assets free and clear of all Encumbrances (as defined in
Section 2.06 hereof), and (d) where applicable, shall be accompanied by evidence
of the discharge of all Encumbrances against the Southeast Assets.
1.11 Employees.
---------
(a) Southeast shall terminate all of its employees effective as of
the Closing and Buyer shall not assume or have any obligations or liabilities
with respect to such terminations.
(b) Buyer shall offer employment to each of Southeast's employees as
of the Closing Date. Southeast acknowledges and agrees that Buyer may interview
and discuss employment terms and issues with its employees. Nothing in this
Agreement shall be construed as a commitment or obligation of Buyer to continue
the employment of, any of Southeast's employees.
(c) Southeast shall pay all wages, salaries, commissions, and the
cost of all fringe benefits provided to all of its employees which shall have
become due for work performed as of and through the day preceding the Closing
Date, and Southeast shall collect and pay all taxes in respect of such wages,
salaries, commissions and benefits.
(d) Southeast acknowledges and agrees that Buyer shall not acquire
any rights or interests of Southeast in, or assume or have any obligations or
liabilities of Southeast under, any benefit plans maintained by, or for the
benefit of employees of Southeast prior to the Closing Date including without
limitation obligations for severance or vacation accrued but not taken as of the
Closing Date.
6
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1.12 Stockholders' Representative.
----------------------------
(a) By executing and delivering this Agreement, each Stockholder
hereby irrevocably constitutes and appoints Gerald E. Pulver as his true and
lawful agent and attorney-in-fact (the "Stockholders' Representative") with full
power of substitution to act in his name, place and stead with respect to all
transactions contemplated by, and all terms and provisions of, this Agreement,
and to act on his behalf in any dispute or arbitration involving this Agreement,
and to do or refrain from doing all such further acts and things, and execute
all such documents as the Stockholders' Representative shall deem necessary or
appropriate in connection with the transactions contemplated by this Agreement,
in all events in the Stockholders' Representative's sole and absolute
discretion, including, without limitation, the power:
(i) to waive any condition to the obligations of the Company and the
Stockholders to consummate the transactions contemplated by this Agreement;
(ii) to act for each Stockholder with regard to matters pertaining to
indemnification referred to in this Agreement, including the power to compromise
any claim on behalf of any Stockholder and to transact matters of litigation;
(iii) to execute and deliver all ancillary agreements, certificates
and documents, and to make representations and warranties therein, on behalf of
each Stockholder in connection with the consummation of the transactions
contemplated by this Agreement;
(iv) to do or refrain from doing any further act or deed on
behalf of each Stockholder relating to the subject matter of this Agreement, as
fully and completely as each such Stockholder could do if personally present;
and
(v) to receive all notices on behalf of each Stockholder in
connection with any claims or matters under this Agreement.
(b) The appointment of the Stockholders' Representative in this
Section 1.04 shall be deemed coupled with an interest and shall be irrevocable,
and Buyer and any other person may conclusively and absolutely rely, without
inquiry, upon any action of the Stockholders' Representative on behalf of the
Stockholders in all matters referred to herein. All notices delivered by Buyer
to the Stockholders' Representative (whether pursuant hereto or otherwise) for
the benefit of the Stockholders shall constitute notice to the Stockholders.
(c) All actions, decisions and instructions of the Stockholders'
Representative taken, made or given pursuant to the authority granted to the
Stockholders' Representative pursuant to paragraph (a) above shall be conclusive
and binding upon the
7
<PAGE>
Stockholders, and the Stockholders shall not have the right to object, dissent,
protest or otherwise contest the same.
(d) The provisions of this Section 1.12 are independent and severable,
shall constitute an irrevocable power of attorney, coupled with an interest
surviving death or disability of any Stockholder, granted by each of the
Stockholders to the Stockholders' Representative and shall be binding upon the
executors, heirs, legal representatives, successors and assigns of each of the
Stockholders.
(e) Buyer shall be entitled to rely conclusively on the instructions and
decisions of the Stockholders' Representative as to any actions required or
permitted to be taken by the Stockholders or the Stockholders' Representative
hereunder, and no party hereunder shall have any cause of action against Buyer
for any action taken in good faith by Buyer in reliance upon the instructions or
decisions of the Stockholders' Representative.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND
---------------------------------------------------------------
MR. PULVER.
-----------
2.01 Making of Representations and Warranties. As a material inducement to
----------------------------------------
Buyer to enter into this Agreement and consummate the transactions contemplated
hereby, each Company and Mr. Pulver jointly and severally hereby make to Buyer
the representations and warranties contained in this Section 2. No Stockholder
shall have any right of indemnity or contribution from Amerivend or any
Subsidiary with respect to the breach of any representation or warranty
hereunder.
2.02 Organization and Qualifications of the Companies. Each Company is a
------------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of Florida (in the case of Amerivend) or Georgia (in the case of Southeast),
with full corporate power and authority to own or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is currently conducted or proposed to be
conducted. The copies of each Company's Articles of Incorporation, as amended
to date, and of each Company's by-laws, as amended to date, and heretofore
delivered to Buyer's counsel, are complete and correct, and no amendments
thereto are pending. Each Company is duly qualified to do business as a foreign
corporation in each jurisdiction where the nature of its properties or the
conduct of its business makes its qualification so necessary, except where the
failure to be so qualified would not have a material adverse effect on the
business, assets, properties, results of operations, condition (financial or
otherwise) or prospects (a "Material Adverse Effect") of the Companies and their
Subsidiaries (as hereinafter defined) taken as a whole.
8
<PAGE>
2.03 Capital Stock of the Companies; Beneficial Ownership.
----------------------------------------------------
(a) The authorized capital stock of Amerivend consists of 3,000,000
shares of common stock, $.10 par value per share, of which 500 shares are duly
and validly issued, outstanding, fully paid and nonassessable and of which
2,999,500 shares are authorized but unissued. There are no outstanding options,
warrants, rights, commitments, preemptive rights or agreements of any kind for
the issuance or sale of, or outstanding securities convertible into, any
additional shares of capital stock of any class of Amerivend. No capital stock
of either Company has been issued in violation of any federal or state law.
Except as set forth in Schedule 2.03 attached hereto, there are no voting
-------------
trusts, voting agreements, proxies or other agreements, instruments or
undertakings with respect to the voting of the Amerivend Shares to which either
Amerivend or any of the Stockholders is a party.
(b) Each of the Stockholders owns beneficially and of record that
number of Amerivend Shares set forth opposite such Stockholder's name in
Exhibit A attached hereto free and clear of any and all Encumbrances.
- ---------
2.04 Subsidiaries; Investments. Each Company's subsidiaries and
-------------------------
investments in any other corporation or business entity are listed in Schedule
--------
2.04 attached hereto (collectively, the "Subsidiaries" and, individually, each a
- ----
"Subsidiary"). Except as set forth in Schedule 2.04 attached hereto, each
-------------
Subsidiary is a duly organized, validly existing corporation or other business
entity in good standing under the laws of the jurisdiction of its incorporation
or formation with full power and authority to own or lease its properties and to
conduct its business in the manner and in the places where such properties are
owned or leased or such business is currently conducted or proposed to be
conducted. Except as disclosed in Schedule 2.04 attached hereto, all of the
-------------
outstanding shares of capital stock of each Subsidiary are owned beneficially
and of record by the relevant Company, free of any lien, restriction or
encumbrance and said shares have been duly and validly issued and are
outstanding, fully paid and nonassessable. The copies of each of the
Subsidiaries' Articles of Incorporation and by-laws, or other organizational
documents, each as amended to date, and heretofore delivered to Buyer's counsel,
are complete and correct, and no amendments thereto are pending. None of the
Subsidiaries is in violation of any term of its Articles of Incorporation or by-
laws (or comparable organizational documents). Each Subsidiary is duly
qualified to do business as a foreign corporation in each jurisdiction where (i)
such Subsidiary conducts business and (ii) the laws of such jurisdiction require
such qualification, and it is not required to be licensed or qualified to
conduct its business or own its property in any other jurisdiction. Except as
disclosed in Schedule 2.04 attached hereto, (A) there are no outstanding
-------------
warrants, options or other rights to purchase or acquire any of the shares of
capital stock or other ownership interests of any Subsidiary, or any outstanding
securities convertible into such shares or outstanding warrants, options or
other rights to acquire any such convertible securities, (B) there are no
restrictions on the transfer of any Subsidiaries' capital stock or other
ownership
9
<PAGE>
interests, and (C) no capital stock or other ownership interest of any
Subsidiary has been issued in violation of any foreign, federal, state or local
law.
2.05 Authority. Each Company has full right, authority and power to enter
---------
into this Agreement and each agreement, document and instrument to be executed
and delivered by such Company pursuant to this Agreement and to carry out the
transactions contemplated hereby and thereby. The execution, delivery and
performance by each Company of this Agreement and each such other agreement,
document and instrument have been duly authorized by all necessary action of
such Company and no other action on the part of such Company is required in
connection therewith.
This Agreement and each agreement, document and instrument contemplated
hereby to which either Company is a party constitute, or when executed and
delivered by such Company will constitute, valid and binding obligations of such
Company enforceable against such Company in accordance with their terms, except
as limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights
and (ii) general principles of equity that restrict the availability of
equitable remedies. The execution, delivery and performance by each Company of
this Agreement and each such agreement, document and instrument:
(A) does not and will not violate any provision of the Articles of
Incorporation or by-laws or any similar organizational documents of either
Company;
(B) does not and will not violate any federal, state or local laws
applicable to either Company or require either Company to obtain any approval,
consent or waiver of, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; and
(C) does not and will not result in a breach of, constitute a default
under, accelerate any obligation under, or give rise to a right of termination
of any indenture or loan or credit agreement or any other agreement, contract,
instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to which either Company
(or any of its Subsidiaries) is a party or by which the property of either
Company (or any of its Subsidiaries) is bound or affected, except as set forth
on Schedule 2.05, or result in the creation or imposition of any mortgage,
-------------
Pledge, lien, security interest or other charge or encumbrance on either
Company's (or any of its Subsidiary's) assets or on the capital stock of either
Company, except as specifically identified in Schedule 2.05 attached hereto.
-------------
10
<PAGE>
2.06 Real and Personal Property.
--------------------------
(a) Real Property. All of the real property owned or leased by
-------------
either Company or any of its Subsidiaries is identified in Schedule 2.06(a)
----------------
attached hereto (herein referred to as the "Owned Real Property" or the "Leased
Real Property," as the case may be, or collectively as the "Real Property.")
(i) Title. Except as set forth in Schedule 2.06(a) attached
----- ----------------
hereto, each Company and each Subsidiary (as the case may be) has good, clear,
record and marketable title to (A) all Owned Real Property of such Company and
(B) enforceable leasehold interests in the Leased Real Property of such Company,
in each case free and clear of all easements, covenants, restrictions, leases,
mortgages, liens, assessments, claims, rights, judgments, encroachments,
pledges, conditional sale agreements, security interests, encumbrances, or other
matters affecting title (collectively, "Encumbrances"), other than:
(x) easements, covenants, restrictions and similar
encumbrances that do not and could not materially interfere with the use of the
Owned Real Property as currently used and improved; and
(y) minor encroachments that do not and could not
materially adversely affect the value or use of the Owned Real Property as
currently used and improved and that could be removed without material cost.
((x) and (y) are collectively referred to as "Permitted Encumbrances"), except
as set forth in Schedule 2.06(a) attached hereto. To the knowledge of the
----------------
Companies and the Stockholders, the lessors of the Leased Real Property have
good, clear, record and marketable title to the Leased Real Property, and the
Companies and their Subsidiaries have good, clear, record and marketable title
to enforceable leasehold interests in the Leased Real Property, in each case
free and clear of all Encumbrances other than Permitted Encumbrances, subject
only to the right of reversion of the lessor, except as set forth in Schedule
--------
2.06(a).
- -------
(ii) Status of Leases. All leases of Leased Real Owned Real
----------------
Property are identified in Schedule 2.06(a) attached hereto, and true and
----------------
complete copies thereof have been delivered to Buyer. Each of said leases has
been duly authorized and executed by the parties thereto and is in full force
and effect. Neither Company nor any of their Subsidiaries is in default under
any of said leases or has received any notice thereof, nor has any event
occurred which, with notice or the passage of time, or both, would give rise to
such a default. To the knowledge of the Companies and the Stockholders, none of
the other parties to said leases is in default thereunder and there is no event
which, with notice or the passage of time, or both, would give rise to such a
default. After giving effect to the transactions contemplated by this Agreement,
each of said leases will be fully enforceable by the Company or Subsidiary which
is a party thereto against the other party thereto.
11
<PAGE>
(iii) Consents. Except as set forth in Schedule 2.06(a)
-------- ----------------
attached hereto, no approval is required with respect to the transactions
contemplated by this Agreement from the other parties to any lease of the Leased
Real Property, from the holder of any Encumbrance on any Owned Real Property, or
from any regulatory authority, no filing with any regulatory authority is
required in connection therewith, and to the extent that any such consents,
approvals or filings are required, the Companies or the Stockholders will obtain
or complete them before the Closing.
(iv) Condition of Real Property. There are no material
--------------------------
defects in the physical condition of any land, buildings or improvements
constituting part of the Real Property, including, without limitation,
structural elements, mechanical systems, parking and loading areas, and all such
buildings and improvements are in good operating condition and repair and have
been well maintained.
(v) Compliance with the Law. Neither Company nor any
-----------------------
Subsidiary has received any notice from any governmental authority of any
violation of any law, ordinance, regulation, license, permit or authorization
issued with respect to any Real Property that has not been heretofore corrected,
and no such violation exists which should have a material adverse effect on the
operation or value of any Real Property. All improvements located on or
constituting part of the Real Property and their use and operation by the
Companies and their Subsidiaries were and are now in compliance in all material
respects with all applicable laws, ordinances, regulations, licenses, permits
and authorizations, except as set forth in Schedule 2.06(a) attached hereto. No
----------------
approval or consent to the transactions contemplated by this Agreement is
required of any governmental authority with jurisdiction over any aspect of the
Real Property or its use or operations, except where the failure to obtain such
approval or consent would not have a material adverse effect on the operation or
value of the Real Property. Neither Company nor any Subsidiary has received any
notice of any real estate tax deficiency or assessment which has not been
satisfied or is aware of any proposed material deficiency, claim or assessment
with respect to any of the Real Property, or any pending or threatened
condemnation thereof.
(b) Personal Property. A complete description of the machinery and
-----------------
equipment of each Company and each of its Subsidiaries is contained in Schedule
--------
2.06(b) attached hereto. Except as specifically disclosed in said Schedule or
- -------
the Base Balance Sheet (as hereinafter defined), each Company and each of its
Subsidiaries has good and marketable title to all of its personal property.
None of such personal property or assets is subject to any Encumbrance except as
specifically disclosed in said Schedule or in the Base Balance Sheet. The Base
Balance Sheet reflects all personal property of Amerivend and each of its
Subsidiaries. Except as otherwise specified in Schedule 2.06(b) attached
----------------
hereto, all leasehold improvements, furnishings, machinery and equipment of each
Company and each of its Subsidiaries are in good repair, have been well
maintained and substantially comply with all applicable laws, ordinances and
regulations, and such machinery and equipment is in good
12
<PAGE>
working order; and neither Company nor any of the Stockholders knows of any
pending or threatened change of any such law, ordinance or regulation which
could adversely affect either Company, any of its Subsidiaries or any of their
businesses.
2.07 Laundry Leases. Schedule 2.07 attached hereto lists all of the
-------------- -------------
contracts, understandings and arrangements, whether written or oral, including
any tenancy at will, under which either Company or any of their Subsidiaries are
bound, or to which either Company or any of their Subsidiaries is a party, which
relate to the placement of laundry machines (the "Laundry Leases"). Schedule
--------
2.07 attached hereto contains a true, correct and complete list of all Laundry
- ----
Lease locations, Laundry Lease expirations, the number of laundry machines at
each Laundry Lease location, vend prices, net revenues after commission for each
Laundry Lease location and whether the terms of such Laundry Lease require the
consent or approval of or prior notice to any third party as a result of the
consummation of the transactions contemplated by this Agreement. True and
correct copies of all the Laundry Leases have been delivered or made available
to Buyer prior to the date hereof. Each of the Laundry Leases is valid, in full
force and effect and binding upon the relevant Company or its Subsidiaries, as
the case may be, and the other parties thereto in accordance with its respective
terms. Neither Company, its Subsidiaries nor, to the knowledge of the Companies
and the Stockholders, any other party is in default under or in arrears in the
performance, payment or satisfaction of any agreement or condition on its part
to be performed or satisfied under any Laundry Lease, nor, to the knowledge of
the Companies and the Stockholders, does any condition exist that with notice or
lapse of time or both would constitute such a default, and no waiver or
indulgence has been granted by any lessee under any Laundry Lease. Neither
Company nor any of its Subsidiaries has received notice or has knowledge of any
fact which would result in the termination, repudiation or breach of any Laundry
Lease. After giving effect to the transactions contemplated by this Agreement,
each of the Laundry Leases will be valid and effective in accordance with its
terms, and fully enforceable by the relevant Company or a Subsidiary against the
other party thereto.
2.08 Equipment. The laundry machines that are the subject of the Laundry
---------
Leases listed in Schedule 2.07 constitute all of the laundry machines which are
-------------
owned and/or operated by the Companies and their Subsidiaries, except for
laundry machines held in inventory as set forth in Schedule 2.08 attached
-------------
hereto. Schedule 2.08 attached hereto includes a true, correct and complete
-------------
list of: (i) all of the laundry machines and change machines installed at the
Laundry Lease locations listed in Schedule 2.07 and (ii) all of the inventory of
-------------
new laundry machines of the Companies and their Subsidiaries (collectively, the
"Equipment"). All of the Equipment is in good operating condition, ordinary
wear and tear excepted.
2.09 Title. Except as set forth in Schedule 2.09 attached hereto, each
----- -------------
Company and its Subsidiaries have good and valid title to, or a valid leasehold
interest in, all of their Equipment, Laundry Leases and the other properties and
assets which are used in their business or otherwise material to their financial
condition, free and clear of any Encumbrance.
13
<PAGE>
The Southeast Assets being purchased by Buyer hereunder constitute all of the
assets necessary for Buyer to operate the Southeast Laundry Business as
currently conducted.
2.10 Financial Statements.
--------------------
(a) The Companies have delivered to Buyer the following financial
statements, copies of which are attached hereto as Schedule 2.10:
-------------
(b) Consolidated balance sheets of Amerivend and its Subsidiaries as
of December 31, 1995, 1996 and 1997 and statements of income and retained
earnings and statements of cash flows for the three (3) years then ended, which
statements are audited by Amerivend's independent public accountants (KPMG Peat
Marwick in the case of the 1995 and 1996 statements and Morrison, Brown, Argiz &
Company in the case of the 1997 statements). The balance sheet of Amerivend as
of December 31, 1997 is referred to herein as the "Amerivend Base Balance
Sheet."
(c) Consolidated balance sheets of Southeast and its Subsidiaries as
of March 31, 1995, 1996 and 1997 and statements of income and retained earnings
and statements of cash flows for the three (3) years then ended, which
statements are audited by Conn & Company, P.C., independent public accountants.
The audited balance sheet of Southeast as of March 31, 1997 is referred to
herein as the "Amerivend Southeast Base Balance Sheet" and, together with the
Amerivend Base Balance Sheet, the "Base Balance Sheet."
(d) A consolidated balance sheet of Amerivend and its Subsidiaries
as of January 31, 1998 and statements of income and retained earnings and
statements of cash flows for the one-month period then ended, certified by
Amerivend's Treasurer or Chief Financial Officer.
(e) Consolidated balance sheets of Southeast and its Subsidiaries as
of December 31, 1997 and January 31, 1998 and statements of income and retained
earnings and statements of cash flows for the nine-month and one-month periods
then ended, respectively, certified by Southeast's Treasurer or Chief Financial
Officer.
The financial statements described in (b), (c), (d) and (e) above have been
prepared in accordance with GAAP applied consistently during the periods covered
thereby, are complete and correct in all material respects and present fairly in
all material respects the financial condition of each Company and its
Subsidiaries, as the case may be, at the dates of said statements and the
results of operations for the periods covered thereby.
(f) As of the date of the Base Balance Sheet, neither Company nor
any of its Subsidiaries has or will have any liabilities of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including, without
14
<PAGE>
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, liabilities for taxes due or then accrued or to become due, or
contingent or potential liabilities relating to activities of either Company or
any of its Subsidiaries or the conduct of their business prior to the date of
the Base Balance Sheet, regardless of whether claims in respect thereof had been
asserted as of such date), except (i) liabilities stated or adequately reserved
against on the Base Balance Sheet or the notes thereto, (ii) liabilities
reflected in Schedules furnished to Buyer hereunder as of the date hereof, or
(iii) immaterial liabilities incurred in the ordinary course of business of the
Companies and their Subsidiaries, as applicable, in existence as of the date of
the Base Balance Sheet which are not required to be reflected in the Base
Balance Sheet or the notes thereto under GAAP.
(g) As of the date hereof and as of the Closing, neither Company nor
any of its Subsidiaries has had or will have any liabilities of any nature,
whether accrued, absolute, contingent or otherwise, asserted or unasserted,
known or unknown (including, without limitation, liabilities as guarantor or
otherwise with respect to obligations of others, liabilities for taxes due or
then accrued or to become due, or contingent or potential liabilities relating
to activities of either Company or any of its Subsidiaries or the conduct of
their business prior to the date hereof or the Closing, as the case may be,
regardless of whether claims in respect thereof had been asserted as of such
date), except liabilities (i) stated or adequately reserved against on the Base
Balance Sheet or the notes thereto, (ii) reflected in Schedules furnished to
Buyer hereunder on the date hereof, or (iii) incurred after the date of the Base
Balance Sheet in the ordinary course of business of the Companies or any
Subsidiary consistent with the terms of this Agreement.
2.11 Taxes.
-----
(a) Each Company and each of its Subsidiaries has paid or caused to
be paid all federal, state, local, foreign and other taxes, including, without
limitation, income taxes, estimated taxes, capital gains taxes, alternative
minimum taxes, excise taxes, sales taxes, goods and services taxes, use taxes,
value-added taxes, gross receipts taxes, franchise taxes, capital stock taxes,
employment and payroll-related taxes, withholding taxes, stamp taxes, transfer
taxes, windfall profit taxes, environmental taxes and property taxes, whether or
not measured in whole or in part by net income, and all deficiencies, or other
additions to tax, interest, fines and penalties owed by it (collectively,
"Taxes"), required to be paid by it through the date hereof whether disputed or
not. All Taxes and other assessments and levies which either Company or any of
their Subsidiaries is required to withhold or collect have been withheld and
collected and have been paid over to the proper governmental authorities within
the time required by applicable law.
(b) Each Company and each of its Subsidiaries has in accordance with
applicable law filed all federal, state, local and foreign tax returns and all
other materials required to be filed by it through the date hereof and will
continue to do so in respect of any
15
<PAGE>
fiscal period ending on or prior to the Closing Date, and all such returns
correctly and accurately set forth the amount of any Taxes relating to the
applicable period. A list of federal, state, local and foreign income tax
returns filed with respect to each Company and its Subsidiaries for taxable
periods ending on or after March 9, 1989 is set forth in Schedule 2.11 attached
-------------
hereto, and said Schedule indicates those returns that have been audited or
currently are subject of an audit. For each taxable period of each Company and
its Subsidiaries ended on or after March 9, 1989, such Company has delivered to
Buyer correct and complete copies of all federal, state, local and foreign tax
returns, examination reports and statements of deficiencies assessed against or
agreed to by such Company or any of its Subsidiaries.
(c) Except as set forth in Schedule 2.11 attached hereto, neither
-------------
the Internal Revenue Service ("IRS") nor any other governmental authority is now
asserting or, to the knowledge of the Companies and the Stockholders,
threatening to assert against either Company or any of its Subsidiaries, any
deficiency or claim for additional Taxes. No claim has ever been made by an
authority in a jurisdiction where a Company or any Subsidiary does not file
reports and returns that such Company or such Subsidiary is or may be subject to
taxation by that jurisdiction. There are no Encumbrances on any of the assets
of the Companies or any of their Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Taxes. Neither Company nor any
Subsidiary has ever entered into a closing agreement pursuant to Section 7121 of
the Internal Revenue Code of 1986, as amended (the "Code").
(d) Except as set forth in Schedule 2.11 attached hereto, there has
-------------
not been any audit of any tax return filed by either Company or any Subsidiary,
no such audit is in progress, and neither Company nor any Subsidiary has been
notified by any tax authority that any such audit is contemplated or pending.
Except as set forth in Schedule 2.11, no extension of time with respect to any
-------------
date on which a tax return was or is to be filed by either Company or any
Subsidiary is in force, and no waiver or agreement by either Company or any
Subsidiary is in force for the extension of time for the assessment or payment
of any Taxes.
(e) Neither Company nor any Subsidiary has ever been (or has ever
had any liability for unpaid Taxes because it once was) a member of an
"affiliated group" (as defined in Section 1504(a) of the Code). Except as set
forth in Schedule 2.11 attached hereto, neither Company nor any Subsidiary has
-------------
ever filed, and has ever been required to file, a consolidated, combined or
unitary tax return with any other entity. Except as set forth in Schedule 2.11,
-------------
neither Company nor any Subsidiary owns or has ever owned a direct or indirect
interest in any trust, partnership, corporation or other entity. Except as set
forth in Schedule 2.11 attached hereto, neither Company nor any Subsidiary is
-------------
a party to any tax sharing agreement. Neither Company nor any Subsidiary is or
could be liable for any Taxes of any other person or entity.
16
<PAGE>
(f) For purposes of this Agreement, all references to sections of
the Code shall include any predecessor provisions to such Sections and any
similar provisions of federal, state, local or foreign law.
(g) For federal income tax purposes, Amerivend elected to be an S
corporation under (S)1362 of the Code effective as of March 9, 1989 and has been
an S corporation at all times since March 9, 1989. For state income tax
purposes, including but not limited to the States of Florida and Georgia,
Amerivend elected to be an S corporation effective as of March 9, 1989 and has
been an S corporation at all times since March 9,
1989. Amerivend is an entity described in Section 280(G)(b)(5)(A)(i) of the
Code.
(h) Amerivend filed with each of its Georgia S corporation corporate
tax returns filed since March 9, 1989 a consent agreement signed by all of its
nonresident stockholders, in which all of such stockholders agreed to pay
Georgia income tax on their portion of Amerivend's corporate income.
2.12 Collectibility of Accounts Receivable. All of the accounts and notes
-------------------------------------
receivable of the Companies or any Subsidiary shown or reflected on the Base
Balance Sheet or existing at the date hereof (less the reserve for bad debts set
forth on the Base Balance Sheet) are or will be at the Closing valid and
enforceable claims, fully collectible and subject to no setoff or counterclaim.
Neither Company nor any Subsidiary has any accounts or loans receivable from any
person, firm or corporation which is affiliated with either Company or any
Subsidiary or from any director, officer or employee of either Company or any
Subsidiary, except as disclosed in Schedule 2.12 attached hereto, and all
-------------
accounts and loans receivable of Amerivend from any such person, firm or
corporation shall be paid in cash prior to the Closing, or shall be included in
indebtedness of Amerivend in accordance with Section 1.03 hereof.
2.13 Inventories. Except as disclosed in Schedule 2.13, all items in the
----------- -------------
inventories of the Companies or any Subsidiary shown on the Base Balance Sheet
or existing at the date hereof are of a quality and quantity saleable or
leasable in the ordinary course of business of the Companies and their
Subsidiaries at profit margins consistent with their experience during the year
ended December 31, 1997. Except as disclosed in Schedule 2.13, said inventories
-------------
reflect write-downs to realizable values in the case of items which are below
standard quality or have become obsolete or unsaleable or unleasable (except at
prices less than cost) in the ordinary course of the business of the Companies
and their Subsidiaries. No such write-downs since January 1, 1997 have had a
Material Adverse Effect on the Companies and their Subsidiaries taken as a
whole. The values of the inventories stated in the Base Balance Sheet and any
subsequent financial statements of either Company or any Subsidiary reflect the
normal inventory valuation policies of the Companies and their Subsidiaries and
were determined at the lower of cost or market in accordance with generally
accepted accounting principles, practices and methods consistently applied.
Purchase commitments for parts are not in excess of normal requirements and none
are at prices materially in excess of current
17
<PAGE>
market prices. Except as disclosed in Schedule 2.13, all inventory items are
--------------
located on the Owned Real Property or the Leased Real Property. Since the date
of the Base Balance Sheet, no inventory items have been sold, leased or disposed
of except through sales and leases in the ordinary course of business at profit
margins consistent with the experience of the Companies and their Subsidiaries
during the year ended December 31, 1997.
2.14 Absence of Certain Changes. Except as disclosed in Schedule 2.14
-------------------------- -------------
attached hereto, since the date of the Amerivend Base Balance Sheet (in the case
of Amerivend) and since the date of the Southeast Base Balance Sheet (in the
case of Southeast) there has not been:
(a) Any change in the financial condition, properties, assets,
liabilities, business or operations of either Company or any of its
Subsidiaries, which change by itself or in conjunction with all other such
changes, whether or not arising in the ordinary course of business, has had a
Material Adverse Effect on the Companies and their Subsidiaries taken as a
whole;
(b) Any contingent liability incurred by either Company or any of
its Subsidiaries as guarantor or otherwise with respect to the obligations of
others or any cancellation of any material debt or claim owing to, or waiver of
any material right of, the Company or any of its Subsidiaries;
(c) Any Encumbrance placed on any of the properties of either
Company or any of its Subsidiaries which remains in existence on the date hereof
or will remain on the Closing Date;
(d) Any obligation or liability of any nature, whether accrued,
absolute, contingent or otherwise, asserted or unasserted, known or unknown
(including, without limitation, liabilities for Taxes due or to become due or
contingent or potential liabilities relating to products or services provided by
the Companies or any of their Subsidiaries or the conduct of the business of the
Companies or any of their Subsidiaries since the date of the Base Balance Sheet
regardless of whether claims in respect thereof have been asserted), incurred by
either Company or any of its Subsidiaries other than obligations and liabilities
incurred in the ordinary course of business consistent with the terms of this
Agreement (it being understood that product or service liability claims shall
not be deemed to be incurred in the ordinary course of business);
(e) Any purchase, sale or other disposition, or any agreement or
other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of either Company or any of its Subsidiaries other than in
the ordinary course of business;
18
<PAGE>
(f) Any damage, destruction or loss, whether or not covered by
insurance, which has had a Material Adverse Effect on the Companies and their
Subsidiaries taken as a whole;
(g) Any declaration, setting aside or payment of any dividend by
either Company or any of its Subsidiaries, or the making of any other
distribution in respect of the capital stock, or other ownership interests, of
either Company or any of its Subsidiaries, or any direct or indirect redemption,
purchase or other acquisition by either Company or any of its Subsidiaries of
its own capital stock, or other ownership interests;
(h) Any labor trouble or claim of unfair labor practices involving
either Company or any of its Subsidiaries, any change in the compensation
payable or to become payable by either Company or any of its Subsidiaries to any
of its officers, employees, agents or independent contractors other than normal
merit increases in accordance with its usual practices, or any bonus payment or
arrangement made to or with any of such officers, employees, agents or
independent contractors;
(i) Any change with respect to the officers or management of either
Company or any of its Subsidiaries;
(j) Any payment or discharge of a material lien or liability of
either Company or any of its Subsidiaries which was not shown on the Base
Balance Sheet or incurred in the ordinary course of business thereafter;
(k) Any obligation or liability incurred by either Company or any of
its Subsidiaries to any of its officers, directors, stockholders or employees,
or any loans or advances made by either Company or any of its Subsidiaries to
any of its officers, directors, stockholders or employees, except normal
compensation and expense allowances payable to officers or employees;
(l) Any change in accounting methods or practices, credit practices
or collection policies used by either Company or any of its Subsidiaries;
(m) Any other transaction entered into by either Company or any of
its Subsidiaries other than transactions in the ordinary course of business;
(n) Any change in the financial condition of any Subsidiary of
either Company that would make it more likely than not that any guarantee made
by such Company with respect to such Subsidiary's obligations will be triggered
within six (6) months after the date of this Agreement, or any change in the
financial condition of any such Subsidiary that has triggered a guarantee of
either Company with respect to the obligations of such Subsidiary;
19
<PAGE>
(o) Any waiver of any valuable right of, or cancellation of any debt
or claim held by, either Company or any of its Subsidiaries; or
(p) Any agreement or understanding whether in writing or otherwise,
for either Company or any its Subsidiaries to take any of the actions specified
in paragraphs (a) through (o) above.
2.15 Ordinary Course. Since the dates of their respective Base Balance
---------------
Sheets, each Company and each of its Subsidiaries has conducted its business
only in the ordinary course and consistently with its prior practices.
2.16 Banking Relations. All of the arrangements which either Company or
-----------------
any of its Subsidiaries has with any banking institution are completely and
accurately described in Schedule 2.16 attached hereto, indicating with respect
-------------
to each of such arrangements the type of arrangements maintained (such as
checking account, borrowing arrangements, safe deposit box, etc.) and the person
or persons authorized in respect thereof.
2.17 Intellectual Property.
---------------------
(a) Except as described in Schedule 2.17 attached hereto, each
Company and each of its Subsidiaries has exclusive ownership of, or exclusive
license to use, all patent, copyright, trade secret, trademark, or other
proprietary rights (collectively, "Intellectual Property") used or to be used in
the business of such Company or such Subsidiary as presently conducted or
contemplated. All of the rights of each Company and each of its Subsidiaries in
such Intellectual Property are freely transferable. There are no claims or
demands of any other person pertaining to any of such Intellectual Property and
no proceedings have been instituted, or are pending or threatened, which
challenge the rights of either Company or any of its Subsidiaries in respect
thereof. Except as described in Schedule 2.17, each Company and each of its
-------------
Subsidiaries has the right to use, free and clear of claims or rights of other
persons, all customer lists, designs, manufacturing or other processes, computer
software, systems, data compilations, research results and other information
required for or incident to its products or its business as presently conducted
or contemplated.
(b) All patents, patent applications, trademarks, trademark
applications and registrations and registered copyrights which are owned by or
licensed to either Company or any of its Subsidiaries are listed in Schedule
--------
2.17 attached hereto. All of such patents, patent applications, trademark
- ----
registrations, trademark applications and registered copyrights have been duly
registered in, filed in or issued by the United States Patent and Trademark
Office or such other applicable governmental office or authority under the
jurisdiction of which the relevant Company and its Subsidiaries conduct
business, as the case may be, and have been properly maintained and renewed in
accordance with all applicable provisions of applicable law and administrative
regulations.
20
<PAGE>
(c) All licenses or other agreements under which either Company or
any of its Subsidiaries is granted rights in Intellectual Property are listed in
Schedule 2.17 attached hereto. All said licenses or other agreements are in
- -------------
full force and effect, there is no material default by any party thereto, and,
except as set forth in Schedule 2.17 attached hereto, all of the rights of each
-------------
Company or any Subsidiary thereunder will continue in full force and effect upon
consummation of the transactions contemplated hereby. To the knowledge of the
Companies and the Stockholders, the licensors under said licenses and other
agreements have and had all requisite power and authority to grant the rights
purported to be conferred thereby. True and complete copies of all such licenses
or other agreements, and any amendments thereto, have been provided to Buyer.
(d) All licenses or other agreements under which either Company or
any of its Subsidiaries has granted rights to others in Intellectual Property
owned or licensed by either Company or such Subsidiary are listed in
Schedule 2.17 attached hereto. All of said licenses or other agreements are
- -------------
in full force and effect and, to the knowledge of the Companies and the
Stockholders, there is no material default by any party thereto, and, except as
set forth in Schedule 2.17 attached hereto, all of the rights of each Company
-------------
or any Subsidiary thereunder will continue in full force and effect
upon consummation of the transactions contemplated hereby. True and complete
copies of all such licenses or other agreements, and any amendments thereto,
have been provided to Buyer.
(e) Each Company and each of its Subsidiaries has taken all steps
required in accordance with sound business practice to establish and preserve
its ownership of all material Intellectual Property rights with respect to its
products, services and technology. Except as set forth on Schedule 2.17,
-------------
neither Company nor any of its Subsidiaries has made any valuable non-public
information of either Company available to any person other than employees of
the Companies and their Subsidiaries, except pursuant to written agreements
requiring the recipients to maintain the confidentiality of such information and
appropriately restricting the use thereof. Neither Company nor any Stockholder
has any knowledge of any infringement by others of any material Intellectual
Property rights of either Company or any Subsidiary.
(f) The present and contemplated business, activities, products and
services of the Companies and their Subsidiaries do not infringe any
Intellectual Property of any other person. No proceeding charging either
Company or any of its Subsidiaries with infringement of any adversely held
Intellectual Property has been filed or is threatened to be filed. To the
knowledge of the Companies and the Stockholders, there exists no unexpired
patent or patent application which includes claims that would be infringed by or
otherwise adversely affect the products, activities or business of either
Company or any Subsidiary. Neither Company nor any of its Subsidiaries is
making unauthorized use of any confidential information or trade secrets of any
person, including, without limitation, to the knowledge of the Companies, any
former employer of any past or present employee of either Company or any of its
Subsidiaries. Except as set forth in Schedule 2.17, neither Company or any
-------------
Subsidiary nor, to the
21
<PAGE>
knowledge of the Companies and the Stockholders, any of their employees have any
agreements or arrangements with any persons other than a Company or its
Subsidiaries related to confidential information or trade secrets of such
persons or restricting any such employee's ability to engage in business
activities of any nature. The activities of their employees on behalf of the
Companies or any Subsidiary do not violate any such agreements or arrangements
known to the Companies.
2.18 Contracts. Except for contracts, commitments, plans, agreements and
---------
licenses described in Schedule 2.18 attached hereto (true and complete copies of
-------------
which have been delivered to Buyer) and excluding Laundry Leases, neither
Company nor any of its Subsidiaries is a party to or subject to:
(a) Any plan or contract providing for bonuses, pensions, options,
stock purchases, deferred compensation, retirement payments, profit sharing,
collective bargaining or the like, or any contract or agreement with any labor
union;
(b) Any employment contract, consulting contract or contract for
services which is not terminable within thirty (30) days by the relevant Company
or a Subsidiary without liability for any penalty or severance payment;
(c) Any contract or agreement for the purchase of any commodity,
material or equipment except purchase orders in the ordinary course for less
than $10,000 each, such orders not exceeding $50,000 in the aggregate;
(d) Any other contracts or agreements creating any obligations of
either Company or any of its Subsidiaries of $10,000 or more with respect to any
such contract or agreement not specifically disclosed elsewhere under this
Agreement;
(e) Any contract or agreement providing for the purchase of all or
substantially all of its requirements of a particular product from a supplier;
(f) Any contract or agreement which by its terms does not terminate
or is not terminable without penalty by the relevant Company or a Subsidiary or
their successors within one (1) year after the date hereof;
(g) Any contract or agreement for the sale or lease of its products
not made in the ordinary course of business;
(h) Any contract with any sales agent or distributor of products of
either Company or any of its Subsidiaries;
22
<PAGE>
(i) Any contract containing covenants limiting the freedom of either
Company or any of its Subsidiaries to compete in any line of business or with
any person or entity;
(j) Any contract or agreement for the purchase of any fixed asset
for a price in excess of $10,000, whether or not such purchase is in the
ordinary course of business;
(k) Any license agreement (as licensor or licensee);
(l) Any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money;
(m) Any contract or agreement with any officer, employee, director
or stockholder of either Company or any of its Subsidiaries or with any persons
or organizations controlled by or affiliated with any of them; or
(n) Any contract, agreement or understanding whether in writing or
otherwise for either Company or any of its Subsidiaries to take any of the
actions specified in paragraphs (a) through (m) above.
Neither Company nor any of its Subsidiaries individually or in the
aggregate is in default under any such contracts, commitments, plans, agreements
or licenses described in said Schedule or has any knowledge of conditions or
facts which, with notice or the passage of time, or both, would constitute a
default.
2.19 Litigation. Schedule 2.19 attached hereto lists all currently pending
---------- -------------
litigation and governmental or administrative proceedings or investigations to
which either Company or any of its Subsidiaries is a party. Except for matters
described in Schedule 2.19 attached hereto, there is no litigation or
-------------
governmental or administrative proceeding or investigation pending or, to the
knowledge of the Companies and the Stockholders, threatened against either
Company or any of its Subsidiaries or their affiliates (including, without
limitation, directors and officers) which may have, either individually or in
the aggregate, a Material Adverse Effect on the Companies and their Subsidiaries
taken as a whole, or which would prevent or hinder the consummation of the
transactions contemplated by this Agreement. With respect to each matter set
forth therein, Schedule 2.19 attached hereto sets forth a description of the
-------------
matter, the forum (if any) in which it is being conducted, the parties thereto
and the type and amount of relief sought.
2.20 Compliance with Laws. Except as set forth in Schedule 2.20 attached
-------------------- -------------
hereto, each Company and each of its Subsidiaries is in compliance in all
material respects with all applicable statutes, ordinances, orders, judgments,
decrees, rules and regulations promulgated by any federal, state, municipal or
foreign entity, agency, court or other governmental
23
<PAGE>
authority applicable to it or to the conduct of its business, and neither
Company nor any of its Subsidiaries has received notice of a violation or
alleged violation of any such statute, ordinance, order, rule or regulation,
except where the failure to be in such compliance would not have, either
individually or in the aggregate, a Material Adverse Effect on the Companies and
their Subsidiaries taken as a whole, and neither Company nor any of its
Subsidiaries has received notice of a material violation or alleged material
violation of any such statute, ordinance, order, rule or regulation.
2.21 Insurance. The physical properties, assets, business, operations,
---------
employees, officers and directors of each Company and each of its Subsidiaries
are insured to the extent disclosed in Schedule 2.21 attached hereto, and all
-------------
such insurance policies and arrangements are disclosed in said Schedule. There
is no claim by either Company or any of its Subsidiaries pending under any such
policies as to which coverage has been questioned, denied or disputed by the
insurer. Said insurance policies and arrangements are in full force and effect,
all premiums due with respect thereto are currently paid, and each Company and
each of its Subsidiaries is in compliance in all material respects with the
terms thereof. Said insurance is adequate and customary for the business
engaged in by the Companies and their Subsidiaries and is sufficient for
compliance by each Company and each of its Subsidiaries with all requirements of
law and all agreements and leases to which such Company or any of its
Subsidiaries is a party.
2.22 Warranty or Other Claims. There are no existing or threatened product
------------------------
liability, warranty or other similar claims, or any facts upon which a material
claim of such nature could be based, against either Company or any of its
Subsidiaries for products or services which are defective or fail to meet any
product or service warranties except as disclosed in Schedule 2.22 hereto. No
-------------
claim has been asserted against either Company or any of its Subsidiaries for
renegotiation or price redetermination of any business transaction, and there
are no facts upon which any such claim could be based.
2.23 Powers of Attorney. Neither Company, any Subsidiary nor any
------------------
Stockholder has any outstanding power of attorney.
2.24 Finder's Fee. Neither Company nor any of its Subsidiaries has
------------
incurred or become liable for any broker's commission or finder's fee relating
to or in connection with the transactions contemplated by this Agreement.
2.25 Permits; Burdensome Agreements. Schedule 2.25 lists all material
------------------------------ -------------
permits, registrations, licenses, franchises, certifications and other approvals
(collectively, the "Approvals") required from federal, state or local
authorities in order for each Company and each of its Subsidiaries to conduct
its business. Each Company and each of its Subsidiaries has obtained all such
Approvals, which are valid and in full force and effect, and is operating in
material compliance therewith. Except as disclosed in Schedule 2.25 or in any
-------------
other Schedule
24
<PAGE>
hereto, neither Company nor any of its Subsidiaries is subject to or bound by
any agreement, judgment, decree or order which may have, either
individually or in the aggregate, a Material Adverse Effect on the Companies
and their Subsidiaries taken as a whole. Schedule 2.25 lists all registrations,
-------------
certifications and similar approvals necessary or customary in the Companies'
business for use in the manufacture, marketing, maintenance, leasing, sales and
distribution of the Companies' and their Subsidiaries' products and services.
2.26 Corporate Records; Copies of Documents. The corporate record and
--------------------------------------
minute books of each Company and each of its Subsidiaries accurately record all
corporate action taken by their respective stockholders and board of directors
and committees. The copies of the corporate records of each Company and each of
its Subsidiaries, as made available to Buyer for review, are true and complete
copies of the originals of such documents. Each Company has made available for
inspection and copying by Buyer and its counsel true and correct copies of all
documents referred to in this Section or in the Schedules delivered to Buyer
pursuant to this Agreement.
2.27 Transactions with Interested Persons. Except as set forth in Schedule
------------------------------------ --------
2.27 attached hereto, neither Company, any of its Subsidiaries, any Stockholder,
- ----
officer, supervisory employee or director of either Company or Subsidiary nor,
to the knowledge of the Companies and the Stockholders, any of their respective
spouses or family members, owns directly or indirectly on an individual or joint
basis any material interest in, or serves as an officer or director or in
another similar capacity of, any competitor or supplier of either Company or any
Subsidiary, or any organization which has a material contract or arrangement
with either Company or any of its Subsidiaries. Except as set forth in Schedule
--------
2.27 attached hereto, there are no loans, leases or other continuing
- ----
transactions between either Company or any Subsidiary and any present, or
former, stockholder, director, officer or employee or, to the knowledge of the
Companies and the Stockholders, any member of such stockholder's, director's,
officer's or employee's immediate family, or any business organization
controlled by any such stockholder, director, officer, employee or his or her
immediate family.
2.28 Employee Benefit Programs. Schedule 2.28 lists every Employee Program
------------------------- -------------
(as defined below) that has been maintained (as defined below) by either Company
or any of their Subsidiaries at any time during the three-year period ending on
the Closing Date.
(a) Each Employee Program which has ever been maintained by either
Company or any of its Subsidiaries and which has at any time been intended to
qualify under Section 401(a) or 501(c)(9) of the Code has received a favorable
determination or approval letter from the IRS regarding its qualification under
such Section and has, in fact, been qualified under the applicable section of
the Code from the effective date of such Employee Program through and including
the Closing (or, if earlier, the date that all of such Employee Program's assets
were distributed). No event or omission has occurred which would cause any such
Employee Program to lose its qualification under the applicable Code section.
25
<PAGE>
(b) Neither Company nor any Stockholder knows or has reason to know,
of any failure of any party to comply with any laws applicable to the Employee
Programs that have been maintained by either Company or any of its Subsidiaries.
With respect to any Employee Program ever maintained by either Company or any of
its Subsidiaries, there has occurred no "prohibited transaction," as defined in
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code, or breach of any duty under ERISA or
other applicable law (including, without limitation, any health care
continuation requirements or any other tax law requirements, or conditions to
favorable tax treatment, applicable to such plan), which could result, directly
or indirectly, in any taxes, penalties or other liability to either Company, any
Subsidiary or Buyer. No litigation, arbitration, governmental administrative
proceeding (or investigation) or other proceeding (other than those relating to
routine claims for benefits) is pending or threatened with respect to any such
Employee Program. No Employee Program has any material unfunded or underfunded
obligation to provide benefits to any past, current or future participant
therein.
(c) Neither Company, any Subsidiary nor any Affiliate (as defined
below) (i) has ever maintained any Employee Program which has been subject to
Title IV of ERISA (including, but not limited to, any Multiemployer Plan (as
defined below)) or (ii) has ever provided health care or any other non-pension
benefits to any employees after their employment is terminated (other than as
required by Part 6 of Subtitle B of Title I of ERISA) or has ever promised to
provide such post-termination benefits.
(d) With respect to each Employee Program maintained by either
Company or any Subsidiary within the three (3) years preceding the Closing,
complete and correct copies of the following documents (if applicable to such
Employee Program) have previously been delivered to Buyer: (i) all documents
embodying or governing such Employee Program, and any funding medium for the
Employee Program (including, without limitation, trust agreements), as they may
have been amended; (ii) the most recent IRS determination or approval letter
with respect to such Employee Program under Code Section 401 or 501(c)(9), and
any applications for determination or approval subsequently filed with the IRS;
(iii) the three (3) most recently filed IRS Forms 5500, with all applicable
schedules and accountants' opinions attached thereto; (iv) the summary plan
description for such Employee Program (or other descriptions of such Employee
Program provided to employees) and all modifications thereto; (v) any insurance
policy (including any fiduciary liability insurance policy) related to such
Employee Program; (vi) any documents evidencing any loan to an Employee Program
that is a leveraged employee stock ownership plan; and (vii) all other materials
reasonably necessary for Buyer to perform any of its responsibilities with
respect to any Employee Program subsequent to the Closing (including, without
limitation, health care continuation requirements).
26
<PAGE>
(e) For purposes of this Section:
(i) "Employee Program" means (A) all employee benefit plans
within the meaning of ERISA Section 3(3), including, but not limited to,
multiple employer welfare arrangements (within the meaning of ERISA Section
3(4)), plans to which more than one unaffiliated employer contributes and
employee benefit plans (such as foreign or excess benefit plans) which are not
subject to ERISA; and (B) all stock option plans, bonus or incentive award
plans, severance pay policies or agreements, deferred compensation agreements,
supplemental income arrangements, vacation plans, and all other employee benefit
plans, agreements and arrangements not described in (A) above. In the case of an
Employee Program funded through an organization described in Code Section
501(c)(9), each reference to such Employee Program shall include a reference to
such organization.
(ii) An entity "maintains" an Employee Program if such entity
sponsors, contributes to, or provides (or has promised to provide) benefits
under such Employee Program, or has any obligation (by agreement or under
applicable law) to contribute to or provide benefits under such Employee
Program, or if such Employee Program provides benefits to or otherwise covers
employees of such entity, or their spouses, dependents or beneficiaries.
(iii) An entity is an "Affiliate" of a Company or a Subsidiary if
it would have ever been considered a single employer with such Company or any of
its Subsidiaries under ERISA Section 4001(b) or part of the same "controlled
group" as such Company or any of its Subsidiaries for purposes of ERISA Section
302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and which is
maintained pursuant to one or more collective bargaining agreements.
2.29 Environmental Matters.
---------------------
(a) Except as set forth in Schedule 2.29 attached hereto, (i)
-------------
neither Company nor any of its Subsidiaries has ever generated, transported,
used, stored, treated, disposed of or managed any Hazardous Waste (as defined
below); (ii) no Hazardous Material (as defined below) has ever been or is
threatened to be spilled, released or disposed of at any site presently or
formerly owned, operated, leased or used by either Company or any of its
Subsidiaries, or has ever been located in the soil or groundwater at any such
site; (iii) no Hazardous Material has ever been transported from any site
presently or formerly owned, operated, leased or used by either Company or any
of its Subsidiaries for treatment, storage or disposal at any other place; (iv)
neither Company nor any of its Subsidiaries presently owns, operates, leases or
uses, nor has it previously owned, operated, leased or used any site on which
underground storage tanks are or were located; and (v) no lien has ever been
imposed by any governmental
27
<PAGE>
agency on any property, facility, machinery or equipment owned, operated, leased
or used by either Company or any of its Subsidiaries in connection with the
presence of any Hazardous Material.
(b) Except as set forth in Schedule 2.29 attached hereto, (i)
-------------
neither Company nor any of its Subsidiaries has any material liability under,
nor has it ever violated, any Environmental Law (as defined below); (ii) each
Company and each of its Subsidiaries, any property owned, operated, leased or
used by any of them, and any facilities and operations thereon, are presently in
compliance with all applicable Environmental Laws; (iii) neither Company nor any
of its Subsidiaries has ever entered into or been subject to any judgment,
consent decree, compliance order or administrative order with respect to any
environmental or health and safety matter or received any request for
information, notice, demand letter, administrative inquiry or formal or informal
complaint or claim with respect to any environmental or health and safety matter
or the enforcement of any Environmental Law; and (iv) neither Company nor any of
its Subsidiaries has any reason to believe that any of the items enumerated in
clause (iii) of this Subsection will be forthcoming.
(c) Except as set forth in Schedule 2.29 attached hereto, no site
-------------
owned, operated, leased or used by either Company or any of its Subsidiaries
contains any asbestos or asbestos-containing material, any polychlorinated
biphenyls (PCBs) or equipment containing PCBs, or any urea formaldehyde foam
insulation.
(d) The Companies have provided to Buyer copies of all documents,
records, and information available to the Companies or any of their Subsidiaries
concerning any environmental or health and safety matter relevant to either
Company or any of its Subsidiaries, whether generated by either Company, its
Subsidiaries or others, including, without limitation, environmental audits,
environmental risk assessments, site assessments, documentation regarding off-
site disposal of Hazardous Materials, spill control plans and reports,
correspondence, permits, licenses, approvals, consents and other authorizations
related to environmental or health and safety matters issued by any governmental
agency.
(e) For purposes of this Section 2.29, (i) "Hazardous Material"
shall mean and include any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant, contaminant or
other substance which may pose a threat to the environment or to human health or
safety, as defined or regulated under any Environmental Law; (ii) "Hazardous
Waste" shall mean and include any hazardous waste as defined or regulated under
any Environmental Law; (iii) "Environmental Law" shall mean any environmental or
health and safety-related law, regulation, rule, ordinance or by-law at the
foreign, federal, state or local level, whether existing as of the date hereof,
previously enforced or subsequently enacted; and (iv) "Company" shall mean and
include both Companies, each of their respective Subsidiaries and all other
entities for whose conduct either Company or any of its Subsidiaries is or may
be held responsible under any Environmental Law.
28
<PAGE>
2.30 List of Directors and Officers. Schedule 2.30 attached hereto
------------------------------ -------------
contains a true and complete list of all current directors and officers of each
Company and each of its Subsidiaries. In addition, Schedule 2.30 attached
-------------
hereto contains a list of all managers, employees and consultants of each
Company and any Subsidiary who, individually, have received or are scheduled to
receive compensation from either Company or any of its Subsidiaries for the year
ending December 31, 1997, in excess of $50,000. In each case, such Schedule
includes the current job title and aggregate annual compensation of each such
individual.
2.31 Employees; Labor Matters. The Companies and their Subsidiaries employ
------------------------
a total of approximately 96 full-time employees and 2 part-time employees and
generally enjoy good employer-employee relationships. The Companies and their
Subsidiaries do not employ a total of 100 or more employees (excluding employees
who work less than 20 hours per week or who have worked for a Company or any of
its Subsidiaries less than six (6) of the last twelve (12) months) and will not
have employed 100 or more employees at any point during the 90 days prior to and
including the Closing Date. Neither Company nor any of its Subsidiaries is
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it to the date hereof or amounts required to be reimbursed to such employees.
Upon termination of the employment of any of said employees, neither Company,
any Subsidiary nor Buyer will by reason of the transactions contemplated under
this Agreement or anything done prior to the Closing be liable to any of said
employees for so-called "severance pay" or any other payments, except as set
forth in Schedule 2.31. Neither Company nor any Subsidiary has any policy,
-------------
practice, plan or program of paying severance pay or any form of severance
compensation in connection with the termination of employment, except as set
forth in said Schedule. Each Company and each of its Subsidiaries is in
compliance with all applicable laws and regulations respecting labor,
employment, fair employment practices, work place safety and health, terms and
conditions of employment and wages and hours. There are no charges of
employment discrimination or unfair labor practices, nor are there any strikes,
slowdowns, stoppages of work or any other concerted interference with normal
operations which are existing, pending or threatened against or involving either
Company or any of its Subsidiaries. No question concerning representation exists
respecting any employees of either Company or any of its Subsidiaries. There
are no grievances, complaints or charges that have been filed against either
Company or any of its Subsidiaries under any dispute resolution procedure
(including, but not limited to, any proceedings under any dispute resolution
procedure under any collective bargaining agreement) that might have a Material
Adverse Effect on the Companies and their Subsidiaries taken as a whole, and
there is no arbitration or similar proceeding pending and no claim therefor has
been asserted. No collective bargaining agreement is in effect or is currently
being or is about to be negotiated by either Company or any of its Subsidiaries.
Neither Company nor any of its Subsidiaries has received any information
indicating that any of its employment policies or practices is currently being
audited or investigated by any federal, state or local government agency. Each
Company and
29
<PAGE>
each of its Subsidiaries is, and at all times since its organization has been,
in compliance with the requirements of the Immigration Reform Control Act of
1986.
2.32 Non-Foreign Status. Neither Company nor any of its Subsidiaries is a
------------------
"foreign person" within the meaning of Section 1445 of the Code and Treasury
Regulations Section 1.1445-2.
2.33 Backlog. As of the date hereof, each Company and each of its
-------
Subsidiaries has a backlog of firm orders for the sale or lease of products or
services, for which revenues have not been recognized by such Company or any
Subsidiary, as set forth in Schedule 2.33.
-------------
2.34 Customers, Distributors and Suppliers. Schedule 2.34 sets forth any
------------------------------------- -------------
customer, sales representative or distributor (whether pursuant to a commission,
royalty or other arrangement) which accounts for more than 1% of the sales of
the Companies and their Subsidiaries on a consolidated basis for the twelve (12)
months ended December 31, 1997 (collectively, the "Customers and Distributors").
Schedule 2.34 lists all of the suppliers of each Company and each of its
- -------------
Subsidiaries to whom during the year ended December 31, 1997, the Companies or
any of their Subsidiaries made payments aggregating $50,000 or more, showing,
with respect to each, the name, address and dollar volume involved (the
"Suppliers"). The relationships of each Company and each of its Subsidiaries
with its Customers, Distributors and Suppliers are good commercial working
relationships. No Customer, Distributor or Supplier has canceled, materially
modified, or otherwise terminated its relationship with either Company or any
Subsidiary, or has during the last twelve (12) months decreased materially its
services, supplies or materials to either Company or any such Subsidiary or its
usage or purchase of the services or products of either Company or any
Subsidiary, nor to the knowledge of the Companies, does any Customer,
Distributor or Supplier have any plan or intention to do any of the foregoing.
2.35 Transfer of Shares. No holder of stock of either Company or any
------------------
Subsidiary has at any time transferred any of such stock to any employee of
either Company or any Subsidiary, which transfer constituted or could be viewed
as compensation for services rendered to either Company or any Subsidiary by
said employee.
2.36 Stock Repurchase. Except as set forth in Schedule 2.36, neither
---------------- -------------
Company nor any Subsidiary has redeemed or repurchased any of its capital stock.
2.37 Disclosure. The representations, warranties and statements contained
----------
in this Agreement and in the Certificates, Exhibits and Schedules delivered by
the Companies and its Subsidiaries pursuant to this Agreement to Buyer do not
contain any untrue statement of a material fact, and, when taken together, do
not omit to state a material fact required to be stated therein or necessary in
order to make such representations, warranties or statements not misleading in
light of the circumstances under which they were made. There are no facts
30
<PAGE>
which presently or may in the future have a Material Adverse Effect on the
Companies and their Subsidiaries taken as a whole which have not been
specifically disclosed herein or in a Schedule furnished herewith, other than
general economic conditions affecting the industries in which the Companies and
their Subsidiaries operate.
2.38 Commission Payments. Schedule 2.38 attached hereto lists each
------------------- -------------
obligation or commitment, whether current or future, of Amerivend to make
guaranteed commission, prepaid rent, laundry room renovations or similar
payments under any Laundry Lease or other contract, including the Laundry Lease
or contract which requires each such payment, the due date of each such payment
and the amount of each such payment. The aggregate amount of revenues which
Amerivend would otherwise be entitled to receive but that they are obligated to
pay over to the landlords prior to the revenue sharing arrangements set forth in
the applicable Laundry Lease becoming available to Amerivend is less than
$90,000.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
--------------------------------------------------------------
As a material inducement to Buyer to enter into this Agreement and
consummate the transactions contemplated hereby, each Stockholder hereby
severally makes to Buyer each of the representations and warranties set forth in
this Section 3 with respect to such Stockholder. No Stockholder shall have any
right of indemnity or contribution from Amerivend or any Subsidiary with respect
to the breach of any representation or warranty hereunder.
3.01 Amerivend Shares. Such Stockholder owns of record and beneficially
----------------
the number of Amerivend Shares set forth opposite such Stockholder's name in
Exhibit A attached hereto. Such Amerivend Shares are, and when delivered by
- ---------
such Stockholder to Buyer pursuant to this Agreement will be, duly authorized,
validly issued, fully paid, nonassessable and free and clear of any and
Encumbrances and restrictions on transfer, under Article 8 of any applicable
state version of the Uniform Commercial Code, including but not limited to
Massachusetts, Florida and Georgia, or otherwise, except restrictions on
transferability under applicable securities laws.
3.02 Authority. Such Stockholder has full right, authority, power and
---------
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Stockholder
pursuant to this Agreement and to carry out the transactions contemplated hereby
and thereby. This Agreement and each agreement, document and instrument
constitute, or when executed and delivered will constitute, a valid and binding
obligation of such Stockholder, enforceable in accordance with their respective
terms, and such Stockholder has full power and authority to transfer, sell and
deliver the Amerivend Shares to Buyer pursuant to this Agreement. The
execution, delivery and performance of this Agreement and each such agreement,
document and instrument:
31
<PAGE>
(i) does not and will not violate any federal, state or local
laws applicable to such Stockholder or require such Stockholder to obtain any
approval, consent or waiver from, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; and
(ii) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of, any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or arbitration award to
which such Stockholder is a party or by which the property of such Stockholder
is bound or affected, or result in the creation or imposition of any Encumbrance
on any assets of either Company or any Subsidiary or on the Amerivend Shares
owned by such Stockholder.
3.03 Finder's Fee. Such Stockholder has not incurred or become liable for
------------
any broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
3.04 Agreements. Each such Stockholder who is employed by either Company
----------
or any Subsidiary is not a party to any non-competition, trade secret or
confidentiality agreement with any party other than a Company or a Subsidiary.
There are no agreements or arrangements not contained herein or disclosed in a
Schedule hereto, to which such Stockholder is a party relating to the business
of either Company or any Subsidiary or to such Stockholder's rights and
obligations as a stockholder, director or officer of either Company or any
Subsidiary. Such Stockholder does not own, directly or indirectly, on an
individual or joint basis, any material interest in, or serve as an officer or
director of, any customer, competitor or supplier of either Company or any
Subsidiary, or any organization which has a contract or arrangement with either
Company or any Subsidiary. Such Stockholder has not at any time transferred any
of the stock of either Company or any Subsidiary held by or for such holder to
any employee of either Company or any Subsidiary, which transfer constituted or
could be viewed as compensation for services rendered to either Company or any
Subsidiary by said employee. The execution, delivery and performance of this
Agreement will not violate or result in a default or acceleration of any
obligation under any contract, agreement, indenture or other instrument
involving either Company or any Subsidiary to which such Stockholder is a party.
SECTION 4. COVENANTS OF THE COMPANIES AND THE STOCKHOLDERS.
------------------------------------------------------------
4.01 Making of Covenants and Agreements. Each Company and the Stockholders
----------------------------------
jointly and severally hereby make the covenants and agreements set forth in this
Section 4 and
32
<PAGE>
the Stockholders agree to cause each Company and its Subsidiaries to comply with
such agreements and covenants.
4.02 Conduct of Business. Between the date of this Agreement and the
-------------------
Closing Date, each Company and each of its Subsidiaries will:
(a) Conduct its business only in the ordinary course and refrain
from changing or introducing any method of management or operations except in
the ordinary course of business and consistent with prior practices;
(b) Refrain from making any purchase, sale or disposition of any
asset or property other than in the ordinary course of business, from purchasing
any capital asset costing more than $50,000 and from mortgaging, pledging,
subjecting to a lien or otherwise encumbering any of its properties or assets
other than in the ordinary course of business, except that Amerivend may
distribute to its stockholders its interest in the partnership which owns
property in Crested Butte, Colorado (the "Partnership Distribution");
(c) Refrain from incurring any contingent liability as a guarantor
or otherwise with respect to the obligations of others, and from incurring any
other contingent or fixed obligations or liabilities except in the ordinary
course of business;
(d) Refrain from making any change or incurring any obligation to
make a change in its Articles of Incorporation, by-laws or similar
organizational documents or authorized or issued capital stock or ownership
interests;
(e) Except for the Partnership Distribution, refrain from (i)
declaring, setting aside or paying any dividend, making any other distribution
in respect of its capital stock or ownership interests, (ii) making any direct
or indirect redemption, purchase or other acquisition of its stock or ownership
interests or (iii) issuing, granting, awarding, selling, pledging, disposing of
or encumbering or authorizing the issuance, grant, award, sale, pledge,
disposition or encumbrance of any shares of, or securities convertible or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of its capital stock of any class thereof;
(f) Refrain from making any change in the compensation payable or to
become payable to any of its officers, employees, agents or independent
contractors, or granting any severance or termination pay to, or entering into
or amending any employment, severance or other agreement or arrangement with,
any of its directors, officers or other employees, or establishing, adopting or
entering into or amending any collective bargaining, bonus, incentive, deferred
compensation, profit sharing, stock option or purchase, insurance, pension,
retirement or other employee benefit plan;
33
<PAGE>
(g) Refrain from (i) prepaying any loans (if any) from its
stockholders, officers or directors or any company affiliated with any of the
foregoing, including each of Southeast and Amerivend, (ii) making any change in
its borrowing arrangements, (iii) modifying, amending or terminating any of its
contracts except in as specifically provided in this Agreement and except with
respect to Laundry Leases in the ordinary course of business or (iv) waiving,
releasing or assigning any material rights or claims, except that Amerivend may
pay the Southeast Receivable;
(h) Refrain from changing accounting policies or procedures
(including, without limitation, procedures with respect to the payment of
accounts payable and collection of accounts receivable);
(i) Pay all accounts payable in the ordinary course of business and in
a manner consistent with past practice and in any event within 60 days unless
they are being disputed in good faith;
(j) Use its best efforts to prevent any change with respect to its
management and supervisory personnel and banking arrangements;
(k) Use its best efforts to keep intact its business organization,
to keep available its present officers and employees and to preserve the
goodwill of all suppliers, customers, independent contractors and others having
business relations with it;
(l) Have in effect and maintain at all times all insurance of the
kind, in the amount and with the insurers set forth in Schedule 2.21 attached
-------------
hereto or equivalent insurance with any substitute insurers approved in writing
by Buyer;
(m) Permit Buyer and its authorized representatives to have full
access to all its properties, assets, contracts, books, tax returns, records,
accounting, financial and other business files and information and furnish to
Buyer or its authorized representatives such financial and other information
with respect to its business or properties as Buyer may from time to time
reasonably request;
(n) refrain from entering into any executory agreement, commitment
or undertaking to do any of the activities prohibited by the foregoing
provisions; and
(o) provide monthly aging reports of accounts receivables and
monthly financial statements, including a balance sheet as of month-end and a
monthly income statement, as soon as practicable but not later than 21 days
after the last day of each month.
4.03 Consents. Prior to the Closing Date, each Company, each of its
--------
Subsidiaries and the Stockholders shall make all filings with and notifications
of governmental authorities,
34
<PAGE>
regulatory agencies and other entities required to be made by such parties in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby; and each Company and the
Stockholders shall obtain all authorizations, waivers, consents and permits, in
form and substance reasonably satisfactory to Buyer, from all third parties,
including, without limitation, applicable governmental authorities, regulatory
agencies, lessors, lenders and contract parties, required to permit the
continuation of the business of each Company and each Subsidiary and the
consummation of the transactions contemplated by this Agreement, and to avoid
any breach, default, termination, acceleration or modification of any material
agreement, contract, lease or permit as a result of, or in connection with, the
execution and performance of this Agreement.
4.04 Notice of Default. Promptly upon the occurrence of, or promptly upon
-----------------
either Company or any Stockholder becoming aware of the impending or threatened
occurrence of, any event which would cause or constitute a breach or default, or
would have caused or constituted a breach or default had such event occurred or
been known to such Company or such Stockholder prior to the date hereof, of any
of the representations, warranties or covenants of the Companies or the
Stockholders contained in or referred to in this Agreement or in any Schedule or
Exhibit referred to in this Agreement, the Companies or the Stockholders shall
give detailed written notice thereof to Buyer and the Companies and the
Stockholders shall use their best efforts to prevent or promptly remedy the
same.
4.05 Consummation of Agreement. Each Company and each Stockholder shall
-------------------------
use its or his best efforts to perform and fulfill all conditions and
obligations on their parts to be performed and fulfilled under this Agreement,
to the end that the transactions contemplated by this Agreement shall be fully
carried out. To this end, each Company will obtain prior to the Closing all
necessary authorizations or approvals of its stockholders and board of
directors.
4.06 Cooperation of the Companies and the Stockholders. Each Company and
-------------------------------------------------
each of the Stockholders shall cooperate with all reasonable requests of Buyer
and Buyer's counsel in connection with the consummation of the transactions
contemplated hereby.
4.07 No Solicitation of Other Offers. Unless and until this Agreement
-------------------------------
shall have been terminated, neither either Company nor any of the Stockholders
shall, nor shall the Company permit any of its directors, officers, employees or
agents to, directly or indirectly, (i) take any action to solicit, initiate
submission of or encourage, proposals or offers from any person relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) a portion of the assets of, or any equity interest in, either Company,
any merger or business combination with either Company or any public or private
offering of interests in the Company (an "Acquisition Proposal"), (ii)
participate in any discussions or negotiations regarding an Acquisition Proposal
with any person or entity other than Buyer and its representatives, (iii)
furnish any information or afford access to the properties, books or records of
either Company to any person or entity that may consider making or has made an
35
<PAGE>
offer with respect to an Acquisition Proposal other than Buyer and its
representatives, or (iv) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person to do any of the foregoing. The Companies will promptly notify Buyer upon
receipt of any offer or indication that any person is considering making an
offer with respect to an Acquisition Proposal or any request for information
relative to either Company or for access to the properties, books and records of
either Company, and will promptly reject any such offer or request.
4.08 Confidentiality. The Companies and the Stockholders agree that,
---------------
unless and until the Closing has been consummated, each Company, its
Subsidiaries, its officers, directors, agents and representatives and the
Stockholders will hold in strict confidence, and will not use, any confidential
or proprietary data or information obtained from Buyer with respect to its
business or financial condition except for the purpose of evaluating,
negotiating and completing the transactions contemplated hereby. Information
generally known in Buyer's industry or which has been disclosed to the
Companies, any Subsidiary or the Stockholders by third parties which have a
right to do so shall not be deemed confidential or proprietary information for
purposes of this Agreement. If the transactions contemplated by this Agreement
are not consummated, each Company, its Subsidiaries and the Stockholders will
return to Buyer (or certify that they have destroyed) all copies of such data
and information, including, but not limited to, financial information, customer
lists, business and corporate records, worksheets, test reports, tax returns,
lists, memoranda and other documents prepared by or made available to the
Companies, its Subsidiaries or the Stockholders in connection with the
transactions.
4.09 Tax Returns. The Stockholders shall cooperate with Buyer to permit
-----------
Amerivend in accordance with applicable law to promptly prepare and file on or
before the due date or any extension thereof all federal, state and local tax
returns required to be filed by Amerivend with respect to taxable periods ending
on or before the Closing.
4.10 Filing Cooperation. Each Company and the Stockholders shall cooperate
------------------
with Buyer and it agents in connection with any filings to be made by Buyer,
including, without limitation, filings under (i) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "Hart-Scott-Rodino Act"), (ii) the
Securities Act or (iii) the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and shall furnish all information required in connection
therewith. Such cooperation shall include, but not be limited to, obtaining any
consent to inclusion of each Company's financial statements and the audit
reports with respect thereto in any filing made pursuant to any federal or state
securities laws (and any public disclosure related thereto), whether before or
after the Closing. The Stockholders acknowledge and agree that they have
provided this Section of this Agreement to the Companies' outside accountants
and have obtained assurances that such accountants will provide such consent.
36
<PAGE>
4.11 No Transfer of Securities. Unless and until this Agreement shall have
-------------------------
been terminated in accordance with its terms, no Stockholder shall directly or
indirectly exchange, deliver, assign, pledge, encumber or otherwise transfer or
dispose of any of the capital stock of either Company (including any options in
respect thereof), nor shall any Stockholder directly or indirectly grant any
right of any kind to acquire, dispose of, vote or otherwise control in any
manner any such securities.
4.12 Use of Trade Name. After the Closing Date, neither Southeast nor any
-----------------
Stockholder, nor any person controlling, controlled by or under common control
with Southeast or any Stockholder will for any reason, directly or indirectly,
for itself or any other person, (a) use the name "Amerivend" or (b) use or
disclose any trade secrets, confidential information, know-how, proprietary
information or other intellectual property of Southeast transferred pursuant to
this Agreement. On the Closing Date, Southeast will file with the Georgia
Secretary of State a charter amendment changing its name such that it does not
include the word "Amerivend."
4.13 Updating of Information. Not later than the Closing Date, the
-----------------------
Companies and the Stockholders will deliver to Buyer information necessary to
update the Schedules hereto and the lists, documents and other information
furnished to Buyer as contemplated by this Agreement, in all cases consistent
with the terms of this Agreement.
4.14 2451 Brickell Avenue. To the extent that Amerivend does not have
--------------------
good and valid title to the laundry room located at 2451 Brickell Avenue, Miami,
Florida, free and clear of any and all Encumbrances, Amerivend and the
Stockholders shall take such actions as are necessary to cause Amerivend to
obtain such title prior to the Closing.
SECTION 4A. CERTAIN TAX MATTERS.
---------------------------------
4A.01 Section 338(h)(10) Election.
---------------------------
(a) The Stockholders and Buyer shall jointly make, and the
Stockholders shall cause the beneficiaries of the Pulver Trust and any other
person required for a valid election to make, (i) the joint election provided
for in Section 338(h)(10) of the Code and Treasury Regulation (S) 1.338(h)(10)-
1(d) (the "Section 338 Regulations") with respect to Amerivend and (ii) such
other similar elections, if any, under the laws of any state or local
jurisdiction analogous to the election provided for in Section 338(h)(10) of the
Code (the elections described in (i) and (ii) collectively, the "Section 338
Elections"). The Stockholders and Buyer shall comply fully with all filing and
other requirements necessary to effectuate the Section 338 Elections on a timely
basis and agree to cooperate in good faith with each other in the preparation
and timely filing of any tax returns required to be filed in connection with the
making of the Section 338 Elections, including the exchange of information and
the joint
37
<PAGE>
preparation and filing of IRS Form 8023-A and related schedules. Except for the
tax imposed by Section 1374 of the Code, the Stockholders will pay any Taxes
attributable to the Section 338 Elections and will indemnify Buyer in accordance
with Section 10.01 against any adverse consequences arising out of any failure
to pay such Taxes.
(b) At or prior to the Closing, Buyer and the Stockholders shall
jointly allocate the deemed sale price for the assets of Amerivend as determined
under Section 338 among the assets of Amerivend, which allocation shall be set
forth in Schedule 4A attached hereto, provided that Buyer and the Stockholders
-----------
agree that between $6,700,000 and $7,000,000 of such deemed sale price shall be
allocated to assets of Amerivend which are depreciable for federal income tax
purposes. Such allocation shall be binding upon Buyer and the Stockholders for
all purposes (including financial accounting purposes, financial and regulatory
reporting purposes and tax purposes). Buyer and each Stockholder further agrees
to file their Federal income tax returns, any other tax returns, and any other
reports required by the Code, in accordance with said Schedule 4A and the
-----------
foregoing.
(c) Mr. Pulver, directly or through his designated representatives
and at his expense, shall have the right to, and Buyer agrees to take such
reasonable measures as may be necessary to permit Mr. Pulver or his designated
representatives to, actively participate in the currently pending audit of
Amerivend's and Mr. Pulver's 1993 and 1994 federal income tax returns (the
"Audit"). Mr. Pulver further agrees not to concede, compromise or settle any
issue which may arise in connection with the Audit which could, directly or
indirectly, give rise to a tax deficiency against which (i) Buyer has agreed to
indemnify Mr. Pulver, without the prior consent of Buyer or (ii) could adversely
affect Buyer in any way. Buyer agrees to permit Mr. Pulver, directly or through
his designated representatives and at his expense, to exclusively control all
stages of all administrative or judicial proceedings relating to the Audit
provided that such actions do not have any adverse impact on Buyer; provided,
however, that Buyer shall have the right to participate in such administrative
or judicial proceedings, and Mr. Pulver agrees at all times to notify Buyer of
any significant developments with respect thereto.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER.
- ----------------------------------------------------
5.01 Making of Representations and Warranties. As a material inducement to
----------------------------------------
the Companies and the Stockholders to enter into this Agreement and consummate
the transactions contemplated hereby, Buyer hereby makes the representations and
warranties to the Companies and the Stockholders contained in this Section 5.
5.02 Organization of Buyer. Buyer is a corporation duly organized, validly
---------------------
existing and in good standing under the laws of the State of Delaware with full
corporate power to own or lease its properties and to conduct its business in
the manner and in the places where such properties are owned or leased or such
business is conducted by it.
38
<PAGE>
5.03 Authority of Buyer. Buyer has full right, authority and power to
------------------
enter into this Agreement and each agreement, document and instrument to be
executed and delivered by the Buyer pursuant to this Agreement and to carry out
the transactions contemplated hereby and thereby. The execution, delivery and
performance by Buyer of this Agreement and each such other agreement, document
and instrument have been duly authorized by all necessary corporate action of
Buyer and no other action on the part of Buyer is required in connection
therewith. This Agreement and each other agreement, document and instrument
constitute, or when executed and delivered will constitute, valid and binding
obligations of Buyer enforceable in accordance with their terms, except as
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights and
(ii) general principles of equity that restrict the availability of equitable
remedies. The execution, delivery and performance by Buyer of this Agreement
and each such agreement, document and instrument:
(A) does not and will not violate any provision of the Certificate of
Incorporation or by-laws of Buyer; and
(B) does not and will not violate any federal, state or local laws
applicable to Buyer or require Buyer to obtain any approval, consent or waiver
of, or make any filing with, any person or entity (governmental or otherwise)
which has not been obtained or made.
5.04 Litigation. There is no litigation pending or, to Buyer's knowledge,
----------
threatened against Buyer which would prevent or hinder the consummation of the
transactions contemplated by this Agreement.
5.05 Finder's Fee. Buyer has not incurred or become liable for any
------------
broker's commission or finder's fee which would be payable by any Stockholder or
either Company relating to or in connection with the transactions contemplated
by this Agreement.
SECTION 6. COVENANTS OF BUYER.
- -------------------------------
6.01 Making of Covenants and Agreements. Buyer hereby makes the covenants
----------------------------------
and agreements set forth in this Section 6.
6.02 Confidentiality. Buyer agrees that, unless and until the Closing has
---------------
been consummated, Buyer and its officers, directors, agents and representatives
will hold in strict confidence, and will not use, any confidential or
proprietary data or information obtained from the Companies or the Stockholders
with respect to the business or financial condition of the Companies and its
Subsidiaries except for the purpose of evaluating, negotiating and completing
the transactions contemplated hereby. Information generally known in the
industries of the Companies and its Subsidiaries or which has been disclosed to
Buyer by third
39
<PAGE>
parties which have a right to do so shall not be deemed confidential or
proprietary information for purposes of this Agreement. If the transactions
contemplated by this Agreement are not consummated, Buyer will return to the
Companies (or certify that it has destroyed) all copies of such data and
information, including, but not limited to, financial information, customer
lists, business and corporate records, worksheets, test reports, tax returns,
lists, memoranda and other documents prepared by or made available to Buyer in
connection with the transactions. Notwithstanding the foregoing, Buyer shall be
permitted to disclose such information about the Companies, their Subsidiaries,
the Stockholders and the transactions contemplated hereby as may be legally
required, and otherwise reasonably necessary, in the preparation, completion,
filing and distribution of such reports, filings and other documents required by
the Securities Act, the Exchange Act or New York Stock Exchange rules.
6.03 Consents. Buyer shall make all filings with and notifications of
--------
governmental authorities, regulatory agencies and other entities required to be
made by Buyer in connection with the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby; and Buyer shall
obtain all authorizations, waivers, consents and permits, from all third
parties, including, without limitation, applicable governmental authorities,
regulatory agencies, lessors, lenders and contract parties, required to permit
the consummation of the transactions contemplated by this Agreement, and to
avoid any breach, default, termination, acceleration or modification of any
material agreement, contract, lease or permit as a result of, or in connection
with, the execution and performance of this Agreement.
6.04 Consummation of Agreement. Buyer shall use its best efforts to
-------------------------
perform and fulfill all conditions and obligations on its part to be performed
and fulfilled under this Agreement, to the end that the transactions
contemplated by this Agreement shall be fully carried out.
SECTION 7. CONDITIONS.
-----------------------
7.01 Conditions to the Obligations of Buyer. The obligation of Buyer to
--------------------------------------
consummate this Agreement and the transactions contemplated hereby are subject
to the fulfillment, prior to or at the Closing, of the following conditions
precedent:
(a) Representations; Warranties; Covenants. Each of the
--------------------------------------
representations and warranties of the Companies and the Stockholders contained
in this Agreement shall be true and correct in all material respects (except for
such representations and warranties that are qualified by their terms as to
materiality, which representations and warranties as so qualified shall be true
in all respects) as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing; and each Company and each of the
Stockholders shall, on or before the Closing, have performed all of their
obligations hereunder which by the terms hereof are to be performed on or before
the Closing.
40
<PAGE>
(b) No Material Change. There shall have been no change in the
------------------
financial condition, prospects, properties, assets, liabilities, business or
operations of either Company or any Subsidiary since the date hereof which has
resulted in or is reasonably likely to result in a Material Adverse Effect on
the Companies and theirs Subsidiaries taken as a whole, whether or not in the
ordinary course of business.
(c) Net Worth. Immediately prior to giving effect to the
---------
transactions contemplated by this Agreement, the consolidated net worth of
Amerivend (total assets minus total liabilities determined in accordance with
GAAP) at the Closing Date shall not be less than $4,691,503, which the parties
hereto agree was the consolidated net worth of Amerivend at December 31, 1996.
(d) Certificate from Officers. The Stockholders shall have
-------------------------
delivered to Buyer a certificate signed by each Stockholder and by each
Company's President and Chief Financial Officer or Treasurer dated as of the
Closing Date to the effect that the statements set forth in paragraphs (a), (b)
and (c) above are true and correct.
(e) Approval of Buyer's Counsel. All actions, proceedings,
---------------------------
instruments and documents required to carry out this Agreement and the
transactions contemplated hereby and all related legal matters contemplated by
this Agreement shall have been approved by Goodwin, Procter & Hoar LLP, as
counsel for Buyer, and such counsel shall have received on behalf of Buyer such
other certificates, opinions and documents in form satisfactory to such counsel,
as Buyer may reasonably require from the Companies and the Stockholders to
evidence compliance with the terms and conditions hereof as of the Closing and
the correctness as of the Closing of the representations and warranties of the
Companies and the Stockholders and the fulfillment of their respective
covenants.
(f) Opinion of Counsel. On the Closing Date, Buyer shall have
------------------
received from the Law Offices of Stephen L. Vinson, Jr., P.A., counsel for the
Companies and the Stockholders, an opinion as of said date, in the form attached
hereto as Exhibit C.
---------
(g) No Litigation. There shall have been no determination by Buyer,
-------------
acting in good faith, that the consummation of the transactions contemplated by
this Agreement has become inadvisable or impracticable by reason of the
institution or threat by any person or any federal, state, foreign or other
governmental authority of litigation, proceedings or other action against Buyer,
either Company, any Subsidiary or any Stockholder.
(h) Consents. Each Company and the Stockholders shall have made all
--------
filings with and notifications of governmental authorities, regulatory agencies
and other entities required to be made by the Companies, their Subsidiaries or
the Stockholders in connection with the execution and delivery of this
Agreement, the performance of the transactions contemplated hereby and the
continued operation of the business of the Companies and their
41
<PAGE>
Subsidiaries by Buyer subsequent to the Closing. The Companies, the Stockholders
and Buyer shall have received all authorizations, waivers, consents and permits,
in form and substance reasonably satisfactory to Buyer, from all third parties,
including, without limitation, the landlord of Amerivend's office space in
Orlando, Florida, applicable governmental authorities, regulatory agencies,
lessors, lenders and contract parties, required to permit the continuation of
the business of the Companies and each Subsidiary and the consummation of the
transactions contemplated by this Agreement, and to avoid a breach, default,
termination, acceleration or modification of any indenture, loan or credit
agreement or any other material agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction, decree,
determination or arbitration award as a result of, or in connection with, the
execution and performance of this Agreement.
(i) Hart-Scott-Rodino. All required filings under the Hart-Scott-
-----------------
Rodino Act shall have been completed and all applicable time limitations under
such Act shall have expired without a request for further information by the
relevant federal authorities under such Act, or in the event of such a request
for further information, the expiration of all applicable time limitations under
the Act shall have occurred without the objection of such federal authorities.
(j) Non-Competition Agreement. Mr. Pulver shall have executed and
-------------------------
delivered to Buyer a Non-Competition Agreement in substantially the form of
Exhibit D attached hereto.
- ---------
(k) FIRPTA Withholding. At or prior to the Closing, Buyer shall
------------------
have received from each Stockholder a "transferor's certificate of non-foreign
status" as provided in the Treasury Regulations under Section 1445 of the Code
in the form attached hereto as Exhibit E.
---------
(l) Employee Programs. Amerivend shall have taken all steps
-----------------
under the relevant documents and applicable law to maintain the qualification of
each Employee Program of Amerivend identified in Schedule 2.28 notwithstanding
-------------
the purchase of the Amerivend Shares by Buyer.
(m) Resignations. Amerivend shall have delivered to Buyer
------------
resignations (in their respective capacities as directors and officers, but not
as employees) of all of the directors of Amerivend and of such officers of
Amerivend as may be requested by Buyer at least five (5) days prior to the
Closing, such resignations to be effective at the Closing.
(n) Releases. Amerivend shall have delivered to Buyer general
--------
releases signed by each Stockholder and by each officer and director of
Amerivend and each of its Subsidiaries of all claims which any of them have
against Amerivend, any Subsidiary and Buyer in the form attached hereto as
Exhibit F.
- ---------
42
<PAGE>
(o) Real Estate. Buyer and Mr. Pulver shall have entered into, and
-----------
Mr. Pulver shall cause any co-owners of any of the Pulver Real Estate to enter
into, mutually satisfactory documentation providing for the purchase by Buyer
from Mr. Pulver (and any co-owners) of the real property, together with
buildings and improvements thereon, owned by Mr, Pulver at 4101 SW 73rd Avenue,
Miami, Florida 33155 (the "Miami Property"), 5411 Boran Place, Tampa, Florida
33610 (the "Tampa Property" and 7105 Oakridge Parkway, Ausell, Georgia 30168-
5832 (the "Ausell Property") and, together with the Miami Property and the Tampa
Property, the "Pulver Real Estate") for cash purchase prices equal to either, in
Buyer's sole discretion, (A) $900,000 for the Miami Property, $385,000 for the
Tampa Property and the appraised value for the Ausell Property determined by
reference to the appraisal report currently being prepared by NationsBank of
Florida, N.A. (each, a "NationsBank Appraised Value") or (B) the average of the
NationsBank Appraised Value for a property and the appraised value of such
property determined by reference to an appraisal by a second qualified real
estate appraiser engaged by Buyer (each, an "Average Appraised Value"). If the
purchase of one or more of the properties comprising the Pulver Real Estate
cannot be consummated by the Closing Date, then, until the closing of such
purchase can occur, Amerivend (or Buyer, as its successor) and Mr. Pulver will
continue to operate under the terms of the existing lease(s) to which they are
parties with respect to such property or properties (the "Existing Leases"). In
addition, in the event that Buyer cannot obtain a written commitment to issue a
title insurance policy and survey with respect to any property comprising the
Pulver Real Estate, which title commitment and survey shows (i) the state of
title to such property to be as represented in this Agreement, (ii) no
exceptions for gaps in the chain of title, (iii) no Encumbrances, encroachments
or title defects, and (iv) no violations of any applicable zoning or other
ordinance, statute, rule or regulation, which violation could materially impair
the use of such property by Buyer, then Buyer shall not be obligated to purchase
such property and Amerivend (or Buyer, as its successor) and Mr. Pulver will
continue to operate under the terms of the Existing Lease with respect to such
property.
(p) Clearwater Lease. Amerivend and Mr. Pulver shall have
----------------
terminated the lease by Amerivend of Mr. Pulver's condominium in Clearwater,
Florida, and Amerivend and Buyer shall have been released from all obligations
thereunder, all pursuant to documentation in form and substance satisfactory to
Buyer.
(q) Release of Liens. All Encumbrances on the assets of Amerivend
----------------
and the Southeast Assets shall have been terminated and released (other than the
non-monetary judgments described under Item 5 on Schedule 2.05 attached hereto)
-------------
and Buyer shall have received UCC-3 termination statements and such other
documents evidencing such terminations.
(r) Parachute Payments. Amerivend shall have paid $1,000,000 to
------------------
each of the individuals set forth on Schedule 7.01 pursuant to Section 3.C of
their respective employment agreements with Amerivend, such individuals shall
have
43
<PAGE>
released Amerivend and Buyer from all obligations under such Section and each
such employment agreement shall be amended as of the Closing to delete such
Section, all pursuant to documentation in form and substance satisfactory to
Buyer.
(s) Payoff Letters. Amerivend shall have delivered to Buyer payoff
--------------
letters with respect to the indebtedness described on Schedule 1.03 attached
-------------
hereto.
(t) Asset Transfer. Southeast shall have delivered to Buyer the
--------------
bills of sale, assignments, and other instruments of transfer and assignment in
accordance with the provisions hereof, transferring to Buyer all of Southeast's
right, title and interest in and to the Southeast Assets, free and clear of all
Encumbrances.
(u) Retainer Agreement. Amerivend and Stephen L. Vinson, Jr., P.A.
------------------
shall have terminated the Professional Services Agreement to which they are
parties and entered into a new agreement, in form and substance reasonably
satisfactory to Buyer, which may be terminated by Amerivend on and after
December 31, 1998 without any payment or penalty.
(v) Escrow Agreement. The Escrow Agreement shall have been executed
----------------
and delivered by the parties thereto.
7.02 Conditions to Obligations of the Companies and the Stockholders. The
---------------------------------------------------------------
obligations of the Companies and the Stockholders to consummate this Agreement
and the transactions contemplated hereby is subject to the fulfillment, prior to
or at the Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
--------------------------------------
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects as though made on and as of the
Closing Date. Buyer shall, on or before the Closing, have performed all of its
obligations hereunder which by the terms hereof are to be performed on or before
the Closing. Buyer shall have delivered to the Companies and the Stockholders a
certificate of the President or any Vice President of Buyer dated the Closing
Date to such effect.
(b) Approval of the Companies' Counsel. All actions, proceedings,
----------------------------------
instruments and documents required to carry out this Agreement and the
transactions contemplated hereby and all related legal matters contemplated by
this Agreement shall have been approved by the Law Offices of Stephen L. Vinson,
Jr., P.A., as counsel for the Companies and the Stockholders, and such counsel
shall have received on behalf of the Companies and the Stockholders such other
certificates, opinions and documents in form satisfactory to such counsel, as
the Companies may reasonably require from Buyer to evidence compliance with the
terms and conditions hereof as of the Closing and the correctness as of the
Closing of the representations and warranties of Buyer and the fulfillment of
its covenants.
44
<PAGE>
(c) No Litigation. There shall have been no determination by the
-------------
Companies, acting in good faith, that the consummation of the transactions
contemplated by this Agreement has become inadvisable or impracticable by reason
of the institution or threat by any person or any federal, state, foreign or
other governmental authority of litigation, proceedings or other action against
Buyer, either Company, any Subsidiary or any Stockholder.
(d) Hart-Scott-Rodino. All required filings under the Hart-Scott-
-----------------
Rodino Act shall have been completed and all applicable time limitations under
such Act shall have expired without a request for further information by the
relevant federal authorities under such Act, or in the event of such a request
for further information, the expiration of all applicable time limitations under
the Act shall have occurred without the objection of such federal authorities.
(e) Non-Competition Agreement. Buyer shall have executed and
-------------------------
delivered to Mr. Pulver a Non-Competition Agreement in substantially the form of
Exhibit D attached hereto.
- ---------
(f) Real Estate. Buyer and Mr. Pulver shall have entered into
-----------
mutually satisfactory documentation providing for the purchase by Buyer from Mr.
Pulver of the Pulver Real Estate for cash purchase prices equal to either, in
Buyer's sole discretion, (A) the NationsBank Appraised Values or (B) the Average
Appraised Values. If the purchase of one or more of the properties comprising
the Pulver Real Estate cannot be consummated by the Closing Date, then, until
the closing of such purchase can occur, Amerivend (or Buyer, as its successor)
and Mr. Pulver will continue to operate under the terms of the Existing Lease(s)
with respect to such property or properties.
(g) The Escrow Agreement shall have been executed and delivered by the
parties thereto.
SECTION 8. TERMINATION OF AGREEMENT; RIGHTS TO PROCEED.
- --------------------------------------------------------
8.01 Termination. At any time prior to the Closing, this Agreement may be
-----------
terminated as follows:
(i) by mutual written consent of all of the parties to this
Agreement;
(ii) by Buyer, provided that Buyer is not in material breach of
this Agreement, (A) if either Company or any Stockholder is in material breach
of this Agreement and such breach shall remain uncured for a period of five (5)
business days after Buyer shall have given written notice of such breach to
Amerivend and, if applicable, such Stockholder, (B) if either Company or any
Stockholder shall have explicitly or by conduct repudiated this
45
<PAGE>
Agreement and such repudiation shall have remained uncured for a period of five
(5) business days after Buyer shall have given written notice thereof to
Amerivend and, if applicable, such Stockholder, or (C) if at or prior to
Closing, any of the conditions in Section 7.01 shall not have been satisfied,
complied with or performed in all material respects (unless such failure of
satisfaction, noncompliance or nonperformance is the result directly or
indirectly of any action or failure to act on the part of Buyer) and Buyer shall
not have waived such failure of satisfaction, noncompliance or nonperformance;
(iii) by Amerivend, provided that neither Company nor any of the
Stockholders is in material breach of this Agreement, (A) if Buyer is in
material breach of this Agreement and such breach shall remain uncured for a
period of five (5) business days after Amerivend shall have given written notice
of such breach to Buyer, (B) if Buyer shall have explicitly or by conduct
repudiated this Agreement and such repudiation shall have remained uncured for a
period of five (5) business days after Amerivend shall have given written notice
thereof to Buyer, or (C) if at or prior to Closing, any of the conditions in
Section 7.02 shall not have been satisfied, complied with or performed in all
material respects (unless such failure of satisfaction, noncompliance or
nonperformance is the result directly or indirectly of any action or failure to
act on the part of either Company or any Stockholder) and Amerivend shall not
have waived such failure of satisfaction, noncompliance or nonperformance; or
(iv) by Buyer or Amerivend, if the Closing has not occurred on
or before April 30, 1998.
8.02 Effect of Termination. All obligations of the parties hereunder shall
---------------------
cease upon any termination pursuant to Section 8.01; provided, however, that (i)
-------- -------
the provisions of this Section 8, Section 4.08, Section 6.02 and Section 11
hereof shall survive any termination of this Agreement, (ii) nothing herein
shall relieve any party from any liability for a material error or omission in
any of its representations or warranties contained herein or a material failure
to comply with any of its covenants, conditions or agreements contained herein,
and (iii) any party may proceed as further set forth in Section 8.03 below.
8.03 Right to Proceed. Anything in this Agreement to the contrary
----------------
notwithstanding, if any of the conditions specified in Section 7.01 hereof have
not been satisfied, Buyer shall have the right to proceed with the transactions
contemplated hereby without waiving any of its rights hereunder, and if any of
the conditions specified in Section 7.02 hereof have not been satisfied, the
Stockholders shall have the right to proceed with the transactions contemplated
hereby without waiving any of their rights hereunder.
46
<PAGE>
SECTION 9. SURVIVAL
- ---------------------
9.01 Survival of Warranties. Each of the representations, warranties,
----------------------
agreements, covenants and obligations herein or in any Schedule, Exhibit,
Certificate or financial statement delivered by any party to the other party
incident to the transactions contemplated hereby are material, shall be deemed
to have been relied upon by the other party and shall survive the Closing
regardless of any investigation and shall not merge in the performance of any
obligation by either party hereto.
SECTION 10. INDEMNIFICATION
- ----------------------------
10.01 Indemnification by Southeast and the Stockholders. Southeast and the
-------------------------------------------------
Stockholders jointly and severally agree subsequent to the Closing to indemnify
and hold Amerivend, each Subsidiary, Buyer and their respective subsidiaries and
affiliates and persons serving as officers, directors, partners or employees
thereof (individually, a "Buyer Indemnified Party" and, collectively, the "Buyer
Indemnified Parties") harmless from and against any damages, liabilities,
losses, taxes, fines, penalties, costs and expenses (including, without
limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon any of the following
matters:
(a) Fraud, intentional misrepresentation or a deliberate or willful
breach by either Company or any Stockholder of any of their representations,
warranties or covenants under this Agreement or in any Certificate, Schedule or
Exhibit delivered pursuant hereto;
(b) Any other breach of any representation, warranty or covenant of
either Company or any Stockholder under this Agreement or in any Certificate,
Schedule or Exhibit delivered pursuant hereto, or by reason of any claim, action
or proceeding asserted or instituted arising out of any matter or thing
constituting a breach of such representations, warranties or covenants;
(c) Any liability of Amerivend or any Subsidiary for Taxes arising
from an event or transaction prior to the Closing or as a result of the Closing
which have not been paid or provided for or reserved against by Amerivend in the
Base Balance Sheet, including, without limitation, any increase in Taxes due to
the unavailability of any loss or deduction claimed by Amerivend or a
Subsidiary; provided, however, that neither Southeast nor the Stockholders shall
have any obligation under this Section 10.01(c) for any Taxes imposed by Section
1374 of the Code which arise by virtue of any election under Section 338(h)(10)
of the Code; and
47
<PAGE>
(d) Any liability of Southeast.
10.02 Limitations on Indemnification by Southeast and the Stockholders.
----------------------------------------------------------------
Notwithstanding the foregoing, the right of Buyer Indemnified Parties to
indemnification under Section 10.01 shall be subject to the following
provisions:
(a) No indemnification shall be payable pursuant to Subsection
10.01(b) above to any Buyer Indemnified Party, unless the total of all claims
for indemnification pursuant to Section 10.01 shall exceed $25,000 in the
aggregate, whereupon the full amount of such claims shall be recoverable in
accordance with the terms hereof; and
(b) No indemnification shall be payable to a Buyer Indemnified Party
with respect to claims under Subsection 10.01(b) which are asserted after the
date which is eighteen (18) months after the Closing Date (the "Expiration
Date"); provided that (i) if on or prior to the Expiration Date a specific state
of facts shall have become known which may give rise to a claim for
indemnification under Subsection 10.01(b) and a Buyer Indemnified Party shall
have given written notice to the Stockholders of such facts known by such Buyer
Indemnified Party at such time, then the right to indemnification with respect
to such claim shall remain in effect without regard to when such matter shall be
finally determined and disposed of and (ii) claims under Subsection 10.01(b) for
indemnification for Taxes or environmental matters or based upon or related to a
breach of any representation, warranty or covenant with respect to Taxes or tax
related matters or environmental matters may be asserted until the 60th day
following expiration of the statute of limitations (if any) applicable to such
claim.
The limitations contained in this Subsection 10.02 shall not apply to the
indemnification obligations of Southeast and the Stockholders arising under
Subsections 10.01(a) and 10.01(c).
10.03 Indemnification by Buyer. Buyer agrees to indemnify and hold
------------------------
Southeast and the Stockholders (individually, each a "Stockholder Indemnified
Party" and, collectively, the "Stockholder Indemnified Parties") harmless from
and against any damages, liabilities, losses and expenses (including, without
limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon (a) any breach of any
representation, warranty or covenant made by Buyer in this Agreement or in any
Certificate delivered by Buyer hereunder, or by reason of any claim, action or
proceeding asserted or instituted arising out of any matter or thing
constituting such a breach and (b) any Taxes imposed by Section 1374 of the Code
which arise by virtue of any election under Section 338(h)(10) of the Code.
10. Limitation on Indemnification by Buyer. Notwithstanding the
--------------------------------------
foregoing, the right of Stockholder Indemnified Parties to indemnification under
Section 10.03 shall be subject to the following provisions:
48
<PAGE>
(a) No indemnification pursuant to Section 10.03(a) shall be payable
to any Stockholder Indemnified Party, unless the total of all claims for
indemnification pursuant to Section 10.03 shall exceed $25,000 in the aggregate,
whereupon the full amount of such claims shall be recoverable in accordance with
the terms hereof; and
(b) No indemnification shall be payable to any Stockholder
Indemnified Party with respect to claims under Section 10.03(a) above which are
asserted after the Expiration Date; provided that if on or prior to the
Expiration Date a specific state of facts shall have become known which may give
rise to a claim for indemnification under Subsection 10.03(a) and a Stockholder
Indemnified Party shall have given written notice to Buyer of such facts known
by such Stockholder Indemnified Party at such time, then the right to
indemnification with respect to such claim shall remain in effect without regard
to when such matter shall be finally determined and disposed of.
The limitations contained in this Section 10.04 shall not apply to the
indemnification obligations of Buyer arising under Section 10.03(b).
10.05 Notice; Defense of Claims. An indemnified party may make claims for
-------------------------
indemnification hereunder by giving written notice thereof to the indemnifying
party within the period in which indemnification claims can be made hereunder.
If indemnification is sought for a claim or liability asserted by a third party,
the indemnified party shall also give written notice thereof to the indemnifying
party promptly after it receives notice of the claim or liability being
asserted, but the failure to do so shall not relieve the indemnifying party from
any liability except to the extent that it is prejudiced by the failure or delay
in giving such notice. Such notice shall summarize the bases for the claim for
indemnification and any claim or liability being asserted by a third party.
Within 20 days after receiving such notice the indemnifying party shall give
written notice to the indemnified party stating whether it disputes the claim
for indemnification and whether it will defend against any third-party claim or
liability at its own cost and expense. If the indemnifying party fails to give
notice that it disputes an indemnification claim within 20 days after receipt of
notice thereof, it shall be deemed to have accepted and agreed to the claim,
which shall become immediately due and payable. The indemnifying party shall be
entitled to direct the defense against a third-party claim or liability with
counsel selected by it (subject to the consent of the indemnified party, which
consent shall not be unreasonably withheld) as long as the indemnifying party is
conducting a good faith and diligent defense. The indemnified party shall at
all times have the right to fully participate in the defense of a third-party
claim or liability at its own expense directly or through counsel; provided,
--------
however, that if the named parties to the action or proceeding include both the
- -------
indemnifying party and the indemnified party and the indemnified party is
advised that representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the
indemnified party may engage separate counsel at the expense of the indemnifying
party. If no such notice of intent to dispute and defend a third-party claim or
liability is given by the indemnifying party, or if such good faith
49
<PAGE>
and diligent defense is not being or ceases to be conducted by the indemnifying
party, the indemnified party shall have the right, at the expense of the
indemnifying party, to undertake the defense of such claim or liability (with
counsel selected by the indemnified party), and to compromise or settle it,
exercising reasonable business judgment. If the third-party claim or liability
is one that by its nature cannot be defended solely by the indemnifying party,
then the indemnified party shall make available such information and assistance
as the indemnifying party may reasonably request and shall cooperate with the
indemnifying party in such defense, at the expense of the indemnifying party.
10.06 Claims Against Indemnification Escrow. In the event that a Buyer
-------------------------------------
Indemnified Party sustains or incurs losses (including, without limitation,
attorneys fees) for which it is entitled to indemnification from Southeast or
the Stockholders under this Agreement, in addition to all other rights or
remedies that such Buyer Indemnified Party may have (including the right to
collect directly from Southeast or the Stockholders), such Buyer Indemnified
Party shall be entitled to receive in cash from the Escrow Agent an amount equal
to the losses (including, without limitation, attorneys fees), sustained or
incurred by such Buyer Indemnified Party, in accordance with the Escrow
Agreement.
SECTION 11. MISCELLANEOUS.
---------------------------
11.01 Fees and Expenses. Buyer shall pay its own expenses and costs
-----------------
associated with the preparation of this Agreement and the consummation of the
transactions contemplated hereby. Each of Southeast and the Stockholders shall
pay all of their fees and expenses and all fees and expenses of Amerivend in
connection with the preparation of this Agreement and the consummation of the
transactions contemplated hereby, and no expenses of either Company or the
Stockholders relating in any way to the transactions contemplated hereby,
including, without limitation, legal, accounting or other professional expenses
and any broker's commission or finder's fee, shall be charged to, paid by or
reflected in any account of Amerivend, any Subsidiary or Buyer.
11.02 Governing Law. This Agreement shall be construed under and governed
-------------
by the internal laws of The Commonwealth of Massachusetts without regard to its
conflict of laws provisions.
11.03 Notices. Any notice, request, demand or other communication required
-------
or permitted hereunder shall be in writing and shall be deemed to have been
given if delivered or sent by facsimile transmission, upon receipt, or if sent
by registered or certified mail, upon the sooner of the date on which receipt is
acknowledged or the expiration of three (3) days after deposit in United States
post office facilities properly addressed with postage prepaid. All notices to
a party will be sent to the addresses set forth below or to such other address
or person as such party may designate by notice to each other party hereunder:
50
<PAGE>
TO BUYER: Mac-Gray Corporation
- -------- 22 Water Street
Cambridge, MA 02141
Fax: (617) 492-5386
Attn: Chief Executive Officer
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
53 State Street
Boston, MA 02109
Fax: (617) 523-1231
Attn: Stuart M. Cable, Esq.
TO EITHER COMPANY Gerald E. Pulver
- --------------------- 1865 Brickell Avenue
OR ANY STOCKHOLDER: Apt. PH-5
- --------------------- Miami, FL 33129
Fax: (305) 858-6116
With a copy to: Law Offices of Stephen L. Vinson, Jr., P.A.
1200 Brickell Avenue
Suite 1680
Miami, FL 33131
Fax: (305) 375-9511
Attn: Stephen L. Vinson, Jr., Esq.
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
11.04 Entire Agreement. This Agreement, including the Schedules and
----------------
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings, including the letter of intent
among Amerivend, Mac-Gray Corporation and Mr. Pulver dated February 18, 1998.
11.05 Assignability; Binding Effect. This Agreement shall only be
-----------------------------
assignable by Buyer, whether in whole or in part, to an entity controlling,
controlled by or under common control with Buyer upon written notice to the
Companies and the Stockholders, and such assignment shall not relieve Buyer of
any liability hereunder. This Agreement may not be assigned by either Company
or the Stockholders without the prior written consent of Buyer.
51
<PAGE>
This Agreement shall be binding upon and enforceable by, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted
assigns.
11.06 Captions and Gender. The captions in this Agreement are for
-------------------
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
11.07 Execution in Counterparts. For the convenience of the parties and to
-------------------------
facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
11.08 Amendments. This Agreement may not be amended or modified, nor may
----------
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by Buyer, each Company and the Stockholders'
Representative, or in the case of a waiver, the party waiving compliance.
11.09 Publicity and Disclosures. No press releases or public disclosure,
-------------------------
either written or oral, of the transactions contemplated by this Agreement,
shall be made by a party to this Agreement without the prior knowledge and
written consent of Buyer, the Companies and the Stockholders' Representative;
provided, however, that Buyer shall be permitted to disclose such information
- -------- -------
about the Companies, their Subsidiaries, the Stockholders and the transactions
contemplated hereby as may be legally required, and otherwise reasonably
necessary, in the preparation, completion, filing and distribution of such
reports, filings and other documents required by the Securities Act, the
Exchange Act or New York Stock Exchange rules; provided, further, that Buyer
-------- -------
shall be permitted to make such press releases related to the execution of this
Agreement as may be reasonably approved by the Stockholders' Representative.
11.10 Consent to Jurisdiction. Each of the parties hereby consents to
-----------------------
personal jurisdiction, service of process and venue in the federal or state
courts of The Commonwealth of Massachusetts for any claim, suit or proceeding
arising under this Agreement, or in the case of a third-party claim subject to
indemnification hereunder, in the court where such claim is brought.
11.11 Specific Performance. The parties agree that it would be difficult to
--------------------
measure damages which might result from a breach of this Agreement by either
Company or the Stockholders and that money damages would be an inadequate remedy
for such a breach. Accordingly, if there is a breach or proposed breach of any
provision of this Agreement by either Company or the Stockholders, and Buyer
does not elect to terminate under Section 8, Buyer shall be entitled, in
addition to any other remedies which it may have, to an injunction
52
<PAGE>
or other appropriate equitable relief to restrain such breach without having to
show or prove actual damage to Buyer.
11.12 Bulk Sales Law. Buyer hereby waives compliance by Southeast of any
--------------
applicable bulk sales law and Southeast agrees to make full and prompt payment
of all amounts owed by Southeast to its creditors. Southeast and Mr. Pulver,
jointly and severally, agree (in addition to and independent of the
indemnification obligations contained in Section 10) to indemnify and hold Buyer
harmless from, and reimburse Buyer for, any loss, cost, expense, liability or
damage (including reasonable counsel fees and disbursements and expenses) which
Buyer may suffer or incur by virtue of the non-compliance by Southeast with such
laws.
[End of Text]
53
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
MAC-GRAY SERVICES, INC.
By: /s/ Stewart G. MacDonald, Jr.
-------------------------------
Name: Stewart G. MacDonald, Jr.
Title: Chief Executive Officer
AMERIVEND CORPORATION
By: /s/ Gerald E. Pulver
----------------------
Name: Gerald E. Pulver
Title: President
AMERIVEND SOUTHEAST
CORPORATION
By: /s/ Gerald E. Pulver
----------------------
Name: Gerald E. Pulver
Title: President
/s/ Gerald E. Pulver
----------------------
Gerald E. Pulver
GERALD E. PULVER GRANTOR
RETAINED ANNUITY TRUST
By: NationsBank, N.A., as Trustee
By: /s/ Barry A. Givner
----------------------
Name: Barry A. Givner
Title: Senior Vice President - Trust
54
<PAGE>
List of Exhibits and Schedules
------------------------------
Exhibit A List of Stockholders, Stockholdings and Consideration to be Paid
B Form of Indemnification Escrow Agreement
C Form of Opinion of Counsel for the Companies and the Stockholders
D Form of Non-Competition Agreement
E FIRPTA Representation
F Form of General Release
Schedule 1.02(a)(i) Southeast Inventory
1.02(a)(ii) Southeast Equipment
1.02(b) Southeast Vehicles
1.03 Indebtedness
1.08 Southeast Allocation
2.03 Voting Agreements, etc.
2.04 Subsidiaries
2.05 Liens, etc.
2.06(a) Real Property
2.06(b) Personal Property
2.07 Laundry Leases
2.08 Equipment
2.09 Title
2.10 Financial Statements
2.11 Tax Disclosures
2.12 Affiliated Accounts Receivable
2.13 Inventories
2.14 Absence of Changes
2.16 Banking Arrangements
2.17 Intellectual Property
2.18 Contracts, etc.
2.19 Litigation
2.20 Compliance with Laws
2.21 Insurance
2.22 Warranty Claims
2.25 Permit; Burdensome Agreements
2.27 Transactions with Interested Persons
2.28 Employee Benefit Programs
2.29 Environmental Matters
2.30 Officers and Directors
2.31 Labor Matters
2.33 Backlog
2.34 Customers, Distributors and Suppliers
2.36 Stock Repurchases
4A Amerivend Allocation
55
<PAGE>
EXHIBIT A
---------
List of Stockholders, Stockholdings and Consideration to be Paid
----------------------------------------------------------------
<TABLE>
<CAPTION>
============================================================
Consideration
Name of Ownership of Payable
Stockholder Company Shares by Buyer
- ------------------------------------------------------------
<S> <C> <C>
Gerald E. Pulver 382 Amerivend Shares 76.4% of
Amerivend
Purchase Price
- ------------------------------------------------------------
Gerald E. Pulver
Grantor Retained 118 Amerivend Shares 23.6% of
Annuity Trust Amerivend
Purchase Price
============================================================
</TABLE>
<PAGE>
EXHIBIT B
---------
FORM OF
-------
INDEMNIFICATION ESCROW AGREEMENT
--------------------------------
AGREEMENT made as of ____________, 1998 by and among Mac-Gray Services,
Inc., a Delaware corporation ("Buyer"), Gerald E. Pulver and Gerald E. Pulver
Grantor Retained Annuity Trust (together, the "Stockholders"), Gerald E. Pulver,
as representative of the Stockholders, and not in his personal capacity (the
"Stockholders' Representative"), and State Street Bank and Trust Company, as
escrow agent (the "Escrow Agent").
WHEREAS, Buyer, Amerivend Corporation, Amerivend Southeast Corporation and
the Stockholders are parties to a Stock and Asset Purchase Agreement dated as of
____________, 1998 (the "Purchase Agreement");
WHEREAS, Section 10 of the Purchase Agreement provides for the
indemnification of Buyer in respect of the matters set forth in such section,
subject to certain limitations;
WHEREAS, pursuant to Section 1.03 of the Purchase Agreement, Buyer has
agreed to deposit the sum of One Million Five Hundred Thousand Dollars
($1,500,000) with the Escrow Agent to hold, invest and deliver pursuant to this
Agreement; and
WHEREAS, the Escrow Agent is willing to enter into this Agreement and
perform as required herein in consideration of the premises and the mutual
obligations and promises contained in this Agreement on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of these premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows.
1. Appointment of the Escrow Agent; Stockholders' Representative.
-------------------------------------------------------------
(a) Buyer and the Stockholders' Representative hereby appoint and
designate State Street Bank and Trust Company as Escrow Agent for the property
described herein. The Stockholders' Representative shall serve as exclusive
representative of the Stockholders with respect to the Escrow Fund and this
Agreement.
(b) By the execution and delivery of this Agreement, Seller and each
of the Stockholders hereby irrevocably constitutes and appoints Gerald E. Pulver
as his or its true and lawful agent and attorney-in-fact (the "Stockholders'
Representative"), with full power of substitution to act in his or its name,
place and stead with respect to all transactions contemplated by and all terms
and provisions of this Agreement, and to act on his or its behalf in any
dispute, litigation or arbitration involving this Agreement, do or refrain from
doing all such further acts and things, and execute all such documents as the
Stockholders' Representative shall deem necessary or appropriate in connection
with the transactions contemplated by this Agreement, including, without
limitation, the power to do or refrain from
<PAGE>
doing any further act or deed on behalf of the Stockholders which he deems
necessary or appropriate in his sole discretion relating to the subject matter
of this Agreement, as fully and completely as each Stockholder could do if
personally present. The Stockholders' Representative hereby accepts such
appointment.
The appointment of the Stockholders' Representative shall be deemed coupled
with an interest and shall be irrevocable, and Buyer and the Escrow Agent may
conclusively and absolutely rely, without inquiry, upon any action of the
Stockholders' Representative on behalf of the Stockholders in all matters
referred to herein. All actions, decisions and instructions of the
Stockholders' Representative taken, made or given pursuant to the authority
granted to the Stockholders' Representative pursuant to this paragraph shall be
conclusive and binding upon all of the Stockholders.
The provisions of this paragraph are independent and severable, shall
constitute an irrevocable power of attorney, coupled with an interest and
surviving death or dissolutions, granted by the Stockholders to the
Stockholders' Representative and shall be binding upon the executors, heirs,
legal representatives, successors and assigns of each of the Stockholders.
2. Escrow Fund; Amounts Earned on Escrow Fund.
------------------------------------------
(a) Buyer has herewith deposited with the Escrow Agent and the Escrow
Agent acknowledges receipt of One Million Five Hundred Thousand Dollars
($1,500,000) (the "Escrow Fund") to be held in a designated separate account of
the Escrow Agent (the "Escrow Account"). The consideration deposited hereunder,
inclusive of any earnings on the same, shall be referred to as the "Escrow
Fund." The Escrow Fund shall be invested from time to time in Eligible
Investments (as defined in Section 22) pursuant to (and as specified in) the
written direction of the Stockholders' Representative received by the Escrow
Agent (which direction shall include maturity terms selected by Buyer and the
Stockholders' Representative, if applicable). In no instance shall the Escrow
Agent have any liability for any loss on any such investment.
3. Amounts Earned on Escrow Fund; Tax Matters. All amounts earned, paid
------------------------------------------
or distributed with respect to the Escrow Fund (whether interest, dividends or
otherwise) shall become a part of the Escrow Fund and shall be held hereunder
upon the same terms as the original Escrow Fund. The parties agree that to the
extent permitted by applicable law, including Section 468B(g) of the Internal
Revenue Code of 1986, as amended, the Stockholders will include all amounts
earned on the Escrow Fund in their gross income for federal, state and local
income tax (collectively, "income tax") purposes and pay any income tax
resulting therefrom. The parties also agree for income tax purposes to treat
all amounts deposited by Buyer in the Escrow Fund as payments of purchase price
received by the Stockholders on the date of this Escrow Agreement. The parties
hereto agree to provide the Escrow Agent with a certified tax identification
number by signing and returning a Form W-9 to the Escrow Agent prior to the date
on which interest or other income is first earned by the Escrow Fund. The
parties hereto understand that, in the event their tax identification numbers
are not certified to
2
<PAGE>
the Escrow Agent prior to any income earned on the Escrow Fund, the Internal
Revenue Code, as amended from time to time, may require withholding of a portion
of any interest or other income earned on the investment of the Escrow Fund.
4. Claims Against Escrow Fund. At any time or times prior to the
--------------------------
expiration of this Agreement, Buyer may make claims against the Escrow Fund
pursuant to Section 10.6 of the Purchase Agreement. Buyer shall notify the
Stockholders' Representative and the Escrow Agent in writing prior to the
expiration of this Agreement of each such claim, including a summary of the
amount of and bases for such claim. If the Stockholders' Representative shall
dispute such claim, the Stockholders' Representative shall give written notice
thereof to Buyer and to the Escrow Agent within twenty (20) days after receipt
of notice of Buyer's claim, in which case the Escrow Agent shall continue to
hold the Escrow Fund in accordance with the terms of this Agreement; otherwise,
such claim shall be deemed to have been acknowledged to be payable out of the
Escrow Fund in the full amount thereof and the Escrow Agent shall use its best
efforts to pay such claim in immediately available funds to Buyer within three
(3) business days after expiration of said twenty day period or as soon as
possible thereafter. If the amount of the claim exceeds the value of the Escrow
Fund, the Escrow Agent shall have no liability or responsibility for any
deficiency.
5. Disputed Claims. If a controversy arises between one or more of the
---------------
parties hereto, or between any of the parties hereto and any person not a party
hereto, as to whether or not or to whom the Escrow Agent shall deliver the
Escrow Fund or as to any other matter arising out of or relating to the Escrow
Fund or this Agreement, the Escrow Agent shall not be required to determine the
same and shall not make any delivery of the Escrow Fund but shall retain it
until the Escrow Agent shall have either (i) received written instructions
signed by both Buyer and the Stockholders' Representative or (ii) been directed
by an order of a court of competent jurisdiction as to the respective rights of
Buyer and the Stockholders' Representative with respect to the Escrow Fund, in
which case the Escrow Agent shall disburse the Escrow Fund in accordance with
such instructions or order within three (3) business days after the receipt
thereof, unless such instructions or order otherwise provide.
The Escrow Agent shall be entitled to assume that no such controversy has
arisen unless it has received a written notice that such a controversy has
arisen which refers specifically to this Agreement; provided, however, that the
-------- -------
Escrow Agent shall not be bound by any such notice unless it is received within
the twenty (20) business day time period as set forth above in Section 4.
If a controversy of the type referred to in this paragraph arises, the
Escrow Agent may, in its sole discretion (but shall not be obligated to),
commence interpleader or similar actions or proceedings for determination of the
controversy pursuant to Section 9.
6. Termination. This Agreement shall terminate on ___________ [INSERT
-----------
DATE WHICH IS EIGHTEEN MONTHS AFTER THE DATE HEREOF] (the "Termination Date") if
there are no outstanding indemnification claims on the Termination Date;
otherwise this Agreement shall
3
<PAGE>
continue in effect until all claims Buyer has made pursuant to Section 4 hereof
on or prior to the Termination Date shall have been disposed of. As of the
Termination Date, an amount of the Escrow Fund adequate to cover all disputed
and undisputed claims made by Buyer pursuant to Section 4 hereof will be held by
the Escrow Agent, and the Escrow Agent shall distribute on the Termination Date
the balance, if any, of the Escrow Fund to the Stockholders as directed by the
Stockholders' Representative. At such time as all remaining claims hereunder
have been resolved and the Escrow Agent has received a written notice executed
by Buyer and the Stockholders' Representative to that effect that any amounts to
be distributed to Buyer in connection therewith have been so distributed, the
Escrow Agent shall distribute the remaining Escrow Fund, if any, to the
Stockholders as directed by the Stockholders' Representative.
Anything contained herein to the contrary notwithstanding, the provisions
of Section 9 and Section 11 shall remain in full force and effect for so long as
the Escrow Agent may have any liability.
7. Scope of Undertaking. The Escrow Agent shall have no responsibility
--------------------
or obligation of any kind in connection with this Agreement and the Escrow Fund,
and shall not be required to deliver the same or any part thereof or take any
action with respect to any matters that might arise in connection therewith,
other than to receive, hold, and make delivery of the Escrow Fund as herein
expressly provided or by reason of a judgment or order of a court of competent
jurisdiction.
8. Knowledge and Sufficiency of Documents. The Escrow Agent shall not be
--------------------------------------
bound by or have any responsibility with respect to compliance with any
agreement between any of the other parties hereto, irrespective of whether the
Escrow Agent has knowledge of the existence of any such agreement or terms and
provisions thereof, the Escrow Agent's only duty, liability, and responsibility
being to receive, hold and deliver the Escrow Fund as herein provided. The
Escrow Agent shall not be required in any way to determine the validity or
sufficiency, whether in form or in substance, of the Escrow Fund or the
validity, sufficiency, genuineness or accuracy of any instrument, document,
certificate, statement or notice referred to in this Agreement or contemplated
hereby; or the identity or authority of the persons executing the same, and it
shall be sufficient if any writing purporting to be such instrument, document,
certificate statement or notice is delivered to the Escrow Agent and purports on
its face to be correct in form and signed or otherwise executed by the party or
parties required to sign or execute the same under this Agreement.
9. Right of Interpleader. Should any controversy arise between Buyer, on
---------------------
one hand, and the Stockholders' Representative, on the other, or any other
person, firm or entity, with respect to this Agreement, the Escrow Fund, or any
part thereof, or the right of any party or other person to receive the Escrow
Fund, or should such parties fail to designate another Escrow Agent as provided
in Section 17 hereof, or if the Escrow Agent should be in doubt as to what
action to take, the Escrow Agent shall have the right (but not the obligation)
to (i) withhold delivery of the Escrow Fund until the controversy is resolved as
provided in Section 5 hereof, the conflicting demands are withdrawn or its doubt
is resolved as provided in Section
4
<PAGE>
5 hereof, or (ii) institute a bill of interpleader in any court of competent
jurisdiction to determine the rights of the parties hereto (the right of the
Escrow Agent to institute such bill of interpleader, however, shall not be
deemed to modify the manner in which the Escrow Agent is entitled to make
disbursements of the Escrow Fund as hereinabove set forth, other than to tender
the Escrow Fund into the registry of such court). Should a bill of interpleader
be instituted, or should the Escrow Agent be threatened with litigation or
become involved in litigation in any manner whatsoever on account of this
Agreement or the Escrow Fund, then as between themselves and the Escrow Agent,
Buyer and the Stockholders, jointly and severally, hereby bind and obligate
themselves, their successors, heirs, executors and assigns to pay the Escrow
Agent its reasonable attorneys' fees and any and all other disbursements,
expenses, losses, costs and damages of the Escrow Agent in connection with or
resulting from such threatened or actual litigation. Notwithstanding the
foregoing, as between themselves, Buyer and the Stockholders shall each pay one-
half of all amounts payable to the Escrow Agent pursuant to this paragraph.
10. Scope of Duties and Errors in Judgment. It is expressly understood
--------------------------------------
and agreed that the Escrow Agent shall be under no duty or obligation to give
any notice, or to do or to omit the doing of any action or anything with respect
to the Escrow Fund, except to hold the same (and any earnings thereon, pursuant
to the terms hereof) in the Escrow Account and to make disbursements in
accordance with the terms of this Agreement. Without limiting the generality of
the foregoing, it is acknowledged and agreed that (i) no implied duties shall be
read into this Agreement on the part of the Escrow Agent, and (ii) the Escrow
Agent shall not be obligated to take any legal or remedial action which might in
its judgment involve it in any expense or liability for which it has not been
furnished acceptable indemnification. The Escrow Agent, its directors, officers
and employees shall not be liable for any error in judgment or any act or steps
taken or permitted to be taken in good faith, or for any mistake of law or fact,
or for anything it may do or refrain from doing in connection herewith, except
for its own willful misconduct or gross negligence.
11. Indemnity. As between themselves and the Escrow Agent, Buyer and the
---------
Stockholders, jointly and severally, agree to indemnify the Escrow Agent against
and hold the Escrow Agent harmless from any and all losses, costs, damages,
expenses, claims, and attorney's fees and expenses suffered or incurred by the
Escrow Agent as a result of, in connection with or arising from or out of the
acts or omissions of the Escrow Agent in performance of or pursuant to this
Agreement, except such acts or omissions as may result from the Escrow Agent's
willful misconduct or gross negligence. In no event shall the Escrow Agent be
liable for indirect, punitive, special or consequential damages.
Buyer and the Stockholders, jointly and severally, agree to assume any and
all obligations imposed now or hereafter by any applicable tax law with respect
to the payment of Escrow Funds under this Agreement, and to indemnify and hold
the Escrow Agent harmless from and against any taxes, additions for late
payment, interest, penalties and other expenses, that may be assessed against
the Escrow Agent in any such payment or other activities under this Agreement.
Buyer and Stockholders' Representative undertake to instruct the Escrow
5
<PAGE>
Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments, or other governmental charges,
certifications and governmental reporting in connection with its acting as
Escrow Agent under this Agreement. Buyer and the Stockholders, jointly and
severally, agree to indemnify and hold the Escrow Agent harmless from any
liability on account of taxes, assessments or other governmental charges,
including without limitation the withholding or deduction or the failure to
withhold or deduct the same, and any liability for failure to obtain proper
certifications or to properly report to governmental authorities, to which the
Escrow Agent may be or become subject in connection with or which arises out of
this Agreement, including costs and expenses (including reasonable legal fees
and expenses), interest and penalties.
Notwithstanding the foregoing, as between themselves, Buyer and the
Stockholders shall each pay one-half of all amounts payable to the Escrow Agent
pursuant to this paragraph.
12. Notices. Any notice or other communication required or permitted
-------
hereunder shall be in writing and shall be deemed to have been given when
received three (3) days after deposited in the U.S. mails for delivery by
registered or certified mail, return receipt requested, postage prepaid and
received by the party to whom is was sent, addressed as follows:
TO BUYER: Mac-Gray Corporation
- --------
22 Water Street
Cambridge, MA 02141
Attn: Chief Executive Officer
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
53 State Street
Boston, MA 02109
Attn: Stuart M. Cable, Esq.
TO STOCKHOLDERS: Gerald E. Pulver
- ---------------
1865 Brickell Avenue
Apt. PH-5
Miami, FL 33129
6
<PAGE>
With a copy to: Law Offices of Stephen L. Vinson, Jr., P.A.
1200 Brickell Avenue
Suite 1680
Miami, FL 33131
Attn: Stephen L. Vinson, Jr., Esq.
TO ESCROW AGENT: State Street Bank and Trust Company
- ---------------
Two International Place
Boston, MA 02211
Attn: ___________
With a copy to: ______________, Esq.
Peabody & Arnold
50 Rowes Wharf
Boston, MA 02110
13. Consultation with Legal Counsel. The Escrow Agent may consult with
-------------------------------
its in-house counsel or other counsel satisfactory to it in respect to question
relating to its duties or responsibilities hereunder or otherwise in connection
herewith and shall not be liable for any action taken, suffered, or omitted by
the Escrow Agent in good faith upon the advice of such counsel. The Escrow
Agent may act through its officers, employees, agents and attorneys.
14. Choice of Laws; Cumulative Rights. This Agreement and the disposition
---------------------------------
hereunder shall be construed and regulated under and their validity and effect
shall be determined by the Commonwealth of Massachusetts. All of the Escrow
Agent's rights hereunder are cumulative of any other rights it may have by law
or otherwise.
15. Reimbursement of Expenses. The Escrow Agent shall be entitled to
-------------------------
reimbursement from Buyer and the Stockholders of all its reasonable costs and
expenses, including reasonable fees and expenses of legal counsel incurred by it
in connection with the preparation, operating, administration and enforcement of
this Agreement. The Escrow Agent shall be entitled to reimbursement on demand
for all expenses incurred in connection with the administration of this
Agreement or the escrow created hereby which are in excess of its compensation
for normal services hereunder, including without limitation, payment of any
legal fees and expenses incurred by the Escrow Agent in connection with
resolution of any claim by any party hereunder. Notwithstanding the foregoing,
as between themselves, Buyer and the Stockholders shall each pay one-half of all
amounts payable to the Escrow Agent pursuant to this paragraph.
16. Entire Agreement. This Agreement evidences the entire agreement among
----------------
Buyer, the Stockholders, the Stockholders' Representative and the Escrow Agent
in connection with the Escrow Fund and no other agreement entered into between
the parties or any of them shall be considered or adopted or binding, in whole
or in part, by or upon the Escrow Agent,
7
<PAGE>
notwithstanding that any other such agreement may be deposited herewith or the
Escrow Agent may have knowledge thereof. This Agreement may be amended only in
writing signed by all of the parties hereto.
17. Resignation. The Escrow Agent may resign upon 10 days' prior written
-----------
notice to Buyer and the Stockholders' Representative, and upon the written
instruction of Buyer and the Stockholders' Representative, the Escrow Agent
shall deliver the Escrow Fund to any designated substitute Escrow Agent mutually
agreeable to such parties. If Buyer and the Stockholders' Representative fail
to designate a substitute Escrow Agent within 10 days, the Escrow Agent, in its
sole discretion and its sole option, either may (i) continue to hold the Escrow
Fund, or (ii) institute a bill of interpleader as contemplated by Section 9
hereof.
18. Captions. Section heading and captions have been inserted for
--------
convenience only and do not in anyway limit the provisions set out in the
various sections hereof.
19. Severability. If one or more of the provisions contained herein for
------------
any reason shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
20. Compensation. Buyer and Stockholders shall each pay to the Escrow
------------
Agent one-half the fee determined by the Escrow Agent, from time to time, to be
applicable to this escrow and bear all costs and expenses incurred by the Escrow
Agent in connection therewith. The Escrow Agent's fees, as in effect on the date
hereof, are attached hereto as Schedule A.
----------
21. Collected Funds; Collection of Items. No monies shall be required to
------------------------------------
be disbursed by the Escrow Agent until and unless it has collected funds. The
Escrow Agent may pay out monies held in escrow due to the Company by its check.
The Escrow Agent shall not be obligated to take any legal action to enforce
payment of any item deposited with it in escrow.
22. Investment. Subject to Section 2(a) of this Agreement, available
----------
uninvested portion of the Escrow Fund shall be invested (and reinvested, as the
case may be) from time to time by the Escrow Agent in any of the following
investments (collectively, "Eligible Investments"):
(i) short term obligations issued or guaranteed by The United
States of America or any agency or instrumentality thereof; or
(ii) Certificates of deposit of or interest bearing accounts with
national banks or corporations endowed with trust powers, including the Escrow
Agent, having capital and surplus in excess of $100,000,000; or
8
<PAGE>
(iii) IMMA, Insured Money Market Account short term investment of
the Escrow Agent.
Investments pursuant to such investment instructions described above shall
in all instances be subject to availability (including any time-of-day
requirements). In no instance shall Escrow Agent have any obligation to provide
investment advice of any kind. The Escrow Agent shall not be required to invest
any funds held hereunder except as expressly provided in written instructions
received from Stockholders' Representative pursuant to Section 2 hereof, and
shall not be obligated to pay interest on uninvested funds. All amounts
received by the Escrow Agent (and any credits to the Escrow Account) shall be
conditional upon collection (and actual receipt by the Escrow Agent of final
payment). In no event shall the Escrow Agent have any obligation to advance
funds.
The Escrow Agent may be authorized at all times and from time to time to
liquidate any investment of the Escrow Fund as may be necessary to provide
available cash to make any release, disbursement or payment called for under the
terms of this Agreement. The Escrow Agent shall have no responsibility or
liability for any losses resulting from liquidation of the Escrow Fund (such as
liquidation prior to maturity).
23. Security Interest. The parties grant to the Escrow Agent a lien upon
-----------------
and security interest in the Escrow Fund, to secure payment of the parties'
obligations and liabilities, both joint and several hereunder.
24. Execution in Counterparts. For the convenience of the parties and to
-------------------------
facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document and such counterparts may be delivered by
facsimile.
25. Consent to Jurisdiction and Service. Buyer, each Stockholder and the
-----------------------------------
Stockholders' Representative hereby absolutely and irrevocably consents and
submits to the jurisdiction of the courts in the Commonwealth of Massachusetts
and of any Federal court located in said Commonwealth in connection with any
actions or proceedings brought against Buyer, the Stockholders and/or the
Stockholders' Representative arising out of or relating to this Escrow
Agreement. In any such action or process Buyer, each Stockholder and the
Stockholders' Representative hereby absolutely and irrevocably waive personal
service of any summons, complaint, declaration or other process and hereby
absolutely and irrevocably agree that the service thereof may be made by
certified or registered first-class mail directed to Buyer and the Stockholders'
Representative, as the case may be, at their respective addresses in accordance
with Section 12 hereof.
26. Force Majeure. Neither Buyer, any Stockholder, nor the Stockholders'
-------------
Representative nor the Escrow Agent shall be responsible for delays or failures
in performance resulting from acts beyond control. Such acts shall include but
not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics,
governmental regulations superimposed after
9
<PAGE>
the fact, fire, communication line failures, computer viruses, power failures,
earthquakes or other disasters.
27. Binding Effect. This Agreement shall be binding upon the respective
--------------
parties hereto and their heirs, executors, successors and assigns.
28. Modifications. This Agreement may not be altered or modified without
-------------
the express written consent of the parties hereto. No course of conduct shall
constitute a waiver of any of the terms and conditions of this Escrow Agreement,
unless such waiver is specified in writing, and then only to the extent so
specified. A waiver of any of the terms and conditions of this Escrow Agreement
on one occasion shall not constitute a waiver of the other terms of this Escrow
Agreement, or of such terms and conditions on any other occasion.
29. Reproduction of Documents. This Agreement and all documents relating
-------------------------
thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, and (b) certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, optical disk, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
[End of Text]
10
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement in multiple
counterparts, each of which is and shall be considered an original for all
intents and purposes effective as of the date first written above.
MAC-GRAY SERVICES, INC.
By:_________________________________
Name:
Title:
____________________________________
Gerald E. Pulver
GERALD E. PULVER GRANTOR
RETAINED ANNUITY TRUST
By: NationsBank, N.A., as Trustee
By:_________________________________
Name:
Title:
____________________________________
Gerald E. Pulver, as Stockholders'
Representative
STATE STREET BANK AND TRUST
COMPANY, as Escrow Agent
By:_________________________________
Name:
Title:
DOCSC\605710.1
11
<PAGE>
EXHIBIT C
---------
FORM OF
-------
OPINION OF
----------
LAW OFFICES OF STEPHEN L. VINSON, JR., P.A.
-------------------------------------------
[CUSTOMARY INTRODUCTION AND QUALIFICATIONS]
1. Each Company is a corporation duly organized, validly existing and in
good standing under the laws of Florida (in the case of Amerivend) or Georgia
(in the case of Amerivend Southeast), with full corporate power and authority to
own or lease its properties and to conduct its business in the manner and in the
places where such properties are owned or leased or such business is currently
conducted or proposed to be conducted. The copies of each Company's Articles of
Incorporation, as amended to date, and of each Company's by-laws, as amended to
date, and heretofore delivered to Buyer's counsel, are complete and correct, and
no amendments thereto are pending. Each Company is duly qualified to do
business as a foreign corporation in each jurisdiction where the nature of its
properties or the conduct of its business makes its qualification so necessary.
2. The authorized capital stock of Amerivend consists of 3,000,000 shares
of common stock, $.10 par value per share, of which 500 shares are duly and
validly issued, outstanding, fully paid and nonassessable and of which 2,999,500
shares are authorized but unissued. There are no outstanding options, warrants,
rights, commitments, preemptive rights or agreements of any kind for the
issuance or sale of, or outstanding securities convertible into, any additional
shares of capital stock of any class of Amerivend. No capital stock of either
Company has been issued in violation of any federal or state law. Except as set
forth in Schedule 2.03 to the Stock and Asset Purchase Agreement (the "Purchase
-------------
Agreement"), there are no voting trusts, voting agreements, proxies or other
agreements, instruments or undertakings with respect to the voting of the
Amerivend Shares to which Amerivend or any of the Stockholders is a party.
Exhibit A to the Purchase Agreement sets forth a true and correct list of all of
- ---------
the holders of record of all of the issued and outstanding shares of Amerivend's
capital stock. Each of the Stockholders owns beneficially and of record that
number of Amerivend Shares set forth opposite such Stockholder's name in Exhibit
-------
A to the Purchase Agreement free and clear of any and all pledges, liens,
- -
encumbrances or other claims or charges.
3. Each Company has full right, authority and power to enter into the
Purchase Agreement and each agreement, document and instrument to be executed
and delivered by such Company pursuant to the Purchase Agreement (the "Related
Agreements") and to carry out the transactions contemplated hereby and thereby.
The execution, delivery and performance by each Company of the Purchase
Agreement and each Related Agreement to which it is a party have been duly
authorized by all necessary action of such Company and no other action on the
part of such Company is required in connection therewith.
<PAGE>
4. Each Company and each Stockholder has duly executed and delivered the
Purchase Agreement and each Related Agreement to which it is a party, and each
such agreement constitutes the valid and binding obligation of such Company
and/or such Stockholder, as the case may be, enforceable against such Company
and/or such Stockholder, as the case may be, in accordance with its terms,
except as limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights and (ii) general principles of equity that restrict the
availability of equitable remedies.
5. The execution, delivery and performance by each Company of the
Purchase Agreement and the Related Agreements to which it is a party: (i) do
not and will not violate any provision of the Articles of Incorporation or by-
laws of such Company; (ii) do not and will not violate any law, statute, rule or
regulation applicable to such Company or its properties or require such Company
to obtain any approval, consent or waiver of, or to make any filing with, any
governmental or regulatory agency or administrative body or to obtain any other
approval, consent or waiver of, or to make any other filing with, any other
person or entity, in each case that has not been obtained or made; and (iii)
except as set forth in Schedule 2.05 to the Purchase Agreement, do not and will
-------------
not result in a breach of, constitute a default under, accelerate any obligation
under, or give rise to a right of termination of any indenture or loan or credit
agreement or any other agreement, contract, instrument, mortgage, lien, lease,
permit, authorization, order, writ, judgment, injunction, decree, determination
or arbitration award to which such Company is a party or by which the property
of such Company is bound or affected, or result in the creation or imposition of
any mortgage, pledge, lien, security interest or other charge or encumbrance on
any property or asset owned by, or on the capital stock of, such Company.
6. The execution, delivery and performance by each Stockholder of the
Purchase Agreement and the Related Agreements to which it is a party: (i) do
not and will not violate any law, statute, rule or regulation applicable to such
Stockholder or require such Stockholder to obtain any approval, consent or
waiver of, or to make any filing with, any governmental or regulatory agency or
administrative body or to obtain any other approval, consent or waiver of, or to
make any other filing with, any other person or entity, in each case that has
not been obtained or made; and (ii) do not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give rise to a
right of termination of any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization,
order, writ, judgment, injunction, decree, determination or arbitration award to
which such Stockholder is a party or by which the property of such Stockholder
is bound or affected, or result in the creation or imposition of any mortgage,
pledge, lien, security interest or other charge or encumbrance on any property
or asset owned by either Company or on the Amerivend Shares owned by such
Stockholder.
2
<PAGE>
7. Except as described in the Purchase Agreement and the Schedules
thereto, there are no (i) actions, suits, claims or proceedings pending or
threatened against either Company, whether at law or in equity, or before or by
any federal, state, municipal or other governmental body or (ii) judgments,
decrees, injunctions or orders of any court, governmental body or arbitrator
against either Company.
3
<PAGE>
EXHIBIT D
---------
FORM OF
-------
NON-COMPETITION AGREEMENT
-------------------------
This NON-COMPETITION AGREEMENT is made as of ________, 1998 by and between
Mac-Gray Corporation, a Delaware corporation (together with its subsidiaries,
the "Company"), and Gerald E. Pulver ("Mr. Pulver"). Reference is made to that
certain Stock and Asset Purchase Agreement, dated as of _________, 1998 (the
"Purchase Agreement"), by and among Mac-Gray Services, Inc., a Delaware
corporation and wholly-owned subsidiary of Mac-Gray Corporation ("Mac-Gray
Services"), Amerivend Corporation, a Florida corporation ("Amerivend"),
Amerivend Southeast Corporation, a Georgia corporation ("Amerivend Southeast"),
Mr. Pulver and Gerald E. Pulver Grantor Retained Annuity Trust (together with
Mr. Pulver, the "Stockholders").
WHEREAS, concurrently with the execution and delivery of this Agreement,
the parties thereto are consummating the transactions contemplated by the
Purchase Agreement, pursuant to which (i) the Stockholders will sell, and Mac-
Gray Services will purchase, all of the issued and outstanding capital stock of
Amerivend (the "Stock Purchase") and (ii) Amerivend Southeast will sell, and
Mac-Gray Services will purchase, all of the properties and assets comprising the
laundry distribution and coin route management business of Amerivend Southeast
(together with the Stock Purchase, the "Purchase");
WHEREAS, prior to the Purchase, Mr. Pulver was a principal stockholder of,
and was principally involved in the management of the businesses of, Amerivend
and Amerivend Southeast;
WHEREAS, Mr. Pulver will receive substantial economic benefits under the
Purchase Agreement; and
WHEREAS, as a material inducement to Mac-Gray Services and Mr. Pulver to
consummate the transactions contemplated by the Purchase Agreement, the Company
and Mr. Pulver are executing and delivering this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Non-competition.
---------------
(a) In consideration of the consummation of the transactions
contemplated by the Purchase Agreement, including the payments to be made by the
Company to Mr. Pulver thereunder, Mr. Pulver covenants and agrees that, for a
period beginning on the date of this Agreement and expiring on the fifth
anniversary of such date (the "Termination Date"), he shall not, without the
express prior written consent of the Company, directly or indirectly,
<PAGE>
anywhere in the Restricted Area (as defined below) (A) engage in any activity in
the Designated Industry (as defined below) or (B) engage, participate or invest
in or assist (whether as owner, part-owner, shareholder, partner, member,
director, officer, trustee, employee, agent or consultant, or in any other
capacity) any business organization whose activities, products or services are
in the Designated Industry; provided, however, that Mr. Pulver may make passive
-------- -------
investments in a competitive enterprise, the shares of which are publicly
traded, if Mr. Pulver's aggregate investment in such enterprise constitutes less
than one percent (1%) of the equity ownership of such enterprise. Without
implied limitation, the foregoing non-competition covenant shall prohibit Mr.
Pulver from (i) hiring, attempting to hire or otherwise soliciting, for or on
behalf of any entity or person, any officer or other employee of the Company or
any of its Affiliates (as defined below), or authorizing or approving any such
action by any other person, (ii) encouraging for or on behalf of any entity or
person any officer or other employee to terminate his or her relationship or
employment with the Company or any of its Affiliates, (iii) soliciting for or on
behalf of any entity or person any customer of the Company or any of its
Affiliates and (iv) diverting to any entity or person any customer of the
Company or any of its Affiliates.
(b) For purposes of this Agreement, the following terms shall have
the following meanings:
(i) "Restricted Area" means each state of the United States
---------------
(A) in which Amerivend or Amerivend Southeast is, as of the date of this
Agreement, conducting any business activities and (B) in which the Company or
any of its Affiliates are, as of the date of this Agreement or at any time prior
to the Termination Date, conducting any business activities.
(ii) "Designated Industry" means the businesses of Amerivend,
-------------------
Amerivend Southeast and the Company as of the date of this Agreement, including
the business of owning, selling, leasing, operating or servicing card or coin-
operated laundry machines.
(iii) "Affiliate" shall mean, with respect to any person or
---------
entity (herein the "first party"), any other person or entity that directly or
indirectly controls, or is controlled by, or is under common control with, such
first party (the term "control" as used herein (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly, of the power to (A) vote twenty-five percent (25%) or more of the
outstanding voting securities of such person or entity, or (B) otherwise direct
the management or policies of such person or entity by contract or otherwise).
2. Confidentiality.
---------------
(a) It is specifically agreed between the parties hereto that: (i)
the trade secrets of Amerivend and, to the extent transferred to Mac-Gray
Services pursuant to the Purchase Agreement, Amerivend Southeast (the "Trade
Secrets") shall include (A) the names and locations of the customers of
Amerivend and Amerivend Southeast and the services
2
<PAGE>
provided to each customer or supplier and (B) the terms and conditions of the
contracts Amerivend and Amerivend Southeast have or had with each such customer
or supplier; and (ii) the confidential information of Amerivend and, to the
extent transferred to Mac-Gray Services pursuant to the Purchase Agreement,
Amerivend Southeast (the "Confidential Information") shall include (A) any other
confidential or proprietary information or data relating to the business of
Amerivend, Amerivend Southeast or any of their Affiliates, which is not
generally known to the public and which provides or provided Amerivend,
Amerivend Southeast and their Affiliates some competitive advantage, or the
opportunity to obtain such advantage, or the disclosure of which could be or
would have been detrimental to the interests of Amerivend, Amerivend Southeast
and their Affiliates, including, without limitation, all notes, memoranda,
inventions, drawings, file data, documentation, diagrams, specifications, know
how, processes, formulas, models, customer lists, sales representative lists,
sales plans, proprietary information, research and development procedures,
research or development and test results, marketing techniques and materials,
marketing and development plans, price lists, pricing policies, business plans,
reports, information relating to customers' and/or suppliers' identities,
characteristics and agreements, financial information and projections, and
employee files, and (B) any information described above which Amerivend,
Amerivend Southeast or any of their Affiliates obtained from another party and
which Amerivend, Amerivend Southeast or such Affiliate treats or treated as
proprietary or designates or designated as Confidential Information, whether or
not owned or developed by Amerivend, Amerivend Southeast or such Affiliate.
(b) At all times, Mr. Pulver shall keep secret and shall not ever
publish, divulge, furnish, impart or disclose any of the Trade Secrets or
Confidential Information to any person, firm or corporation other than the
Company or any of its Affiliates, or use any of the Trade Secrets or
Confidential Information, directly or indirectly, for his own benefit or for the
benefit of any person, firm or corporation other than the Company and its
Affiliates. The parties hereto acknowledge that all Trade Secrets and
Confidential Information shall be the property of the Company and its Affiliates
and shall be delivered by Mr. Pulver to the Company upon the execution of this
Agreement.
3. Scope of Agreement. The parties acknowledge that the time, scope,
------------------
geographic area and other provisions of this Agreement have been specifically
negotiated by sophisticated commercial parties and agree that (a) all such
provisions are reasonable under the circumstances of the transactions
contemplated by the Purchase Agreement, (b) are given as an integral and
essential part of the transactions contemplated by the Purchase Agreement and
(c) but for the covenants of Mr. Pulver contained in this Agreement, Mac-Gray
Services would not enter into the Purchase Agreement or consummate the
transactions contemplated thereby. Mr. Pulver has independently consulted with
his counsel and has been advised in all respects concerning the reasonableness
and propriety of the covenants contained herein, with specific regard to the
businesses conducted by the Company and its Affiliates.
4. Specific Performance; Severability. It is specifically understood and
----------------------------------
agreed by the parties hereto that the breach by Mr. Pulver of any provision of
this Agreement will result
3
<PAGE>
in irreparable injury to the Company and its Affiliates, that the remedy at law
alone will be an inadequate remedy for such breach and that, in addition to any
other remedy they may have, the Company and each of its Affiliates shall be
entitled to enforce the specific performance of this Agreement by Mr. Pulver
through both temporary and permanent injunctive relief without the necessity of
proving actual damages. If the Company is required to post a bond in connection
with obtaining any temporary or permanent injunctive relief, the parties hereto
agree that such bond shall be limited in amount to $10,000 and that such amount
is reasonable and adequate for such bond. In the event that any covenant or
provision contained in this Agreement shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its extending for too
long a period of time or over too large a geographical area or by reason of its
being too extensive in any other respect, such covenant or provision shall not
be construed to be null, void and of no effect, but rather shall be interpreted
to extend only over the maximum period of time for which it may be enforceable,
and/or over the maximum geographical area as to which it may be enforceable,
and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action. The existence of
any claim or cause of action which Mr. Pulver may have against the Company or
any of its Affiliates shall not constitute a defense or bar to the enforcement
of any of the provisions of this Agreement and shall be pursued through separate
court action by Mr. Pulver.
5. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of The Commonwealth of Massachusetts, without regard to
the conflicts or choice of law provisions thereof.
6. Dispute Resolution. Except as provided below, any dispute arising out
------------------
of or relating to this Agreement or the breach, termination or validity hereof
shall be finally settled by binding arbitration conducted expeditiously in
accordance with the J.A.M.S./Endispute Comprehensive Arbitration Rules and
Procedures (the "J.A.M.S. Rules"). The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. (S)(S)1-16, and judgment upon the award
rendered by the arbitrators may be entered by any court having jurisdiction
thereof. The place of arbitration shall be Boston, Massachusetts.
Such proceedings shall be administered by the neutral arbitrator in
accordance with the J.A.M.S. Rules as he/she deems appropriate, however, such
proceedings shall be guided by the following agreed upon procedures:
(a) mandatory exchange of all relevant documents, to be accomplished
within forty-five (45) days of the initiation of the procedure;
(b) no other discovery;
(c) hearings before the neutral arbitrator which shall consist of a
summary presentation by each side of not more than three (3) hours; such
hearings to take place on one or two days at a maximum; and
4
<PAGE>
(d) decision to be rendered not more than ten (10) days following
such hearings.
Notwithstanding anything to the contrary contained herein, the provisions
of this Section 6 shall not apply with regard to any equitable remedies to which
any party may be entitled hereunder.
7. Consent to Jurisdiction. Each of the parties hereto (a) hereby
-----------------------
irrevocably submits to the jurisdiction of any United States District Court of
competent jurisdiction for the purpose of enforcing the award or decision in any
proceeding, (b) hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution (except as
protected by applicable law), that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or the subject matter hereof may not be enforced
in or by such court, and (c) hereby waives and agrees not to seek any review by
any court of any other jurisdiction which may be called upon to grant an
enforcement of the judgment of any such court. Each of the parties hereto
hereby consents to service of process by registered mail at the address to which
notices are to be given. Each of the parties hereto agrees that its or his
submission to jurisdiction and its or his consent to service of process by mail
is made for the express benefit of the other parties hereto. Final judgment
against any party hereto in any such action, suit or proceeding may be enforced
in other jurisdictions by suit, action or proceeding on the judgment, or in any
other manner provided by or pursuant to the laws of such other jurisdiction.
8. Successors and Assigns. This Agreement shall inure to the benefit of,
----------------------
and be binding upon, the successors of the Company and its Affiliates by way of
merger, consolidation or transfer of all or substantially all of the assets of
the Company, and may not be assigned by Mr. Pulver.
9. No Conflicting Obligations. Mr. Pulver hereby represents and warrants
--------------------------
to the Company that he is not now under, or bound to be under in the future, any
obligation to any person, firm or corporation which is or would be inconsistent
or in conflict with this Agreement or would prevent, limit or impair in any way
the full and absolute performance by Mr. Pulver of his obligations hereunder.
In addition, Mr. Pulver covenants that he will not enter into or discuss
entering into any such agreement.
10. Entire Agreement; Modifications. This Agreement and the Purchase
-------------------------------
Agreement constitute the entire agreement between the parties pertaining to
their subject matter and supersede all prior and contemporaneous agreements,
representations, negotiations and understandings of the parties, whether oral or
written. No supplement, modification or amendment to this Agreement shall be
binding unless executed in writing by all the parties hereto.
5
<PAGE>
11. Waivers. The failure of any party to require the performance or
-------
satisfaction of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent subsequent enforcement
of such term or obligation or be deemed a waiver of any subsequent failure or
breach.
12. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
13. Notices. All notices and other communications under this Agreement
-------
shall be in writing and shall be delivered in accordance with the provisions of
the Purchase Agreement.
[End of Text]
6
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Non-Competition
Agreement as of the date and year first written above.
MAC-GRAY CORPORATION
By: ________________________________
Name:
Title:
____________________________________
Gerald E. Pulver
7
<PAGE>
EXHIBIT E
---------
FIRPTA NON-FOREIGN TRANSFEROR CERTIFICATE
__________________
Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that a transferee of a U.S. real property interest must withhold tax if
the transferor is a foreign person. To inform Mac-Gray Services, Inc., a
Delaware corporation ("Buyer"), that withholding of tax is not required upon the
disposition of a U.S. real property interest by ________________ (the
"Stockholder"), the undersigned hereby certifies as follows:
1. The Stockholder is not a foreign person, foreign corporation, foreign
partnership, foreign trust or foreign estate (as those terms are defined in the
Code and Income Tax Regulations);
2. The Stockholder's social security number or employer identification
number is ____________________; and
3. The Stockholder's address is:
________________________________
________________________________
The Stockholder understands that this certification may be disclosed to the
Internal Revenue Service by Buyer and that any false statement contained herein
could be punished by fine, imprisonment or both.
Under penalties of perjury, the undersigned declares that he has examined
this certification and to the best of his knowledge and belief it is true,
correct and complete, and he further declares that he has authority to sign this
document on behalf of the Stockholder.
Date: ___________________ __________________________
[NAME/TITLE]
<PAGE>
ACKNOWLEDGMENT
--------------
STATE OF ____________________
COUNTY OF ___________________
BEFORE ME, a Notary Public authorized to take acknowledgments in the State
and County set forth above, personally appeared ___________________, on behalf
of the Stockholder, known to me and known by me to be the person who executed
the foregoing and he acknowledged before me that he executed said instrument and
that the facts stated therein are true.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the State and County aforesaid, this the _____ day of ______, 1998.
----------------------------
Notary Public
My Commission Expires:
<PAGE>
EXHIBIT F
---------
FORM OF
-------
GENERAL RELEASE
---------------
[TO BE EXECUTED BY THE STOCKHOLDERS]
This Release is delivered by __________ (the "Releasing Party") pursuant to
Section 7.01(n) of the Stock and Asset Purchase Agreement dated as of ________,
1998 by and among Mac-Gray Services, Inc., a Delaware corporation ("Mac-Gray"),
Amerivend Corporation, a Florida corporation (the "Company"), Amerivend
Southeast Corporation, a Georgia corporation, and the stockholders named therein
(the "Purchase Agreement"). Capitalized terms used herein and not otherwise
defined shall have the meanings provided in the Purchase Agreement.
1. Release. In consideration of the substantial economic benefit
-------
received by the Releasing Party pursuant to the Purchase Agreement, including,
but not limited to, the Amerivend Purchase Price paid to the Releasing Party,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby irrevocably acknowledged by the Releasing Party, the Releasing
Party hereby releases and forever discharges (i) Mac-Gray and the Company, (ii)
each present and former stockholder, director, officer, employee and agent of
Mac-Gray and the Company and (iii) each subsidiary, affiliate, successor and
assign of the persons named in clauses (i) and (ii) above (each a "Released
Party" and collectively, the "Released Parties") of and from any and all
commitments, indebtedness, suits, demands, obligations and liabilities, whether
asserted, unasserted, absolute, contingent, known or unknown, or otherwise, of
every kind and nature, including claims and causes of action both in law and in
equity, which such Releasing Party and/or such Releasing Party's heirs,
executors, administrators, beneficiaries, affiliates, successors or assigns ever
had, now has or, to the extent arising from or in connection with any act,
omission or state of facts taken or existing on or prior to the Closing Date,
may have after the Closing Date, against any Released Party, other than claims
or causes of action, if any, arising under or pursuant to the Purchase Agreement
or any non-competition agreement to which the Releasing Party and any Released
Party are parties. The provisions of this Release shall inure to the benefit of
the Released Parties.
The Releasing Party hereby represents to the Released Parties that (a) the
Releasing Party has not assigned any claim or possible claim against any
Released Party, (b) the Releasing Party fully intends to release, and by
executing this Release, the Releasing Party is releasing, all claims against the
Released Parties, including without limitation unknown and contingent claims
(other than those specifically reserved above), and (c) the Releasing Party has
had the opportunity to consult with counsel with respect to the execution and
delivery of this Release and the consequences hereof.
2. Governing Law. This Release shall be construed in accordance with and
-------------
governed by the laws of The Commonwealth of Massachusetts applicable to
agreements made and to be performed wholly within such jurisdiction.
<PAGE>
3. Severability. If any portion of this Release is declared by a court
------------
of competent jurisdiction to be invalid or unenforceable after all appeals have
either been exhausted or the time for any appeals to be taken has expired, the
remainder of the terms, provisions, covenants and restrictions of this Release
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
EXECUTED as of the ____ day of ________, 1998.
______________________________
[NAME OF THE RELEASING PARTY]
2
<PAGE>
EXHIBIT F
---------
FORM OF
-------
GENERAL RELEASE
---------------
[TO BE EXECUTED BY THE OFFICERS AND DIRECTORS OF AMERIVEND]
This Release is delivered by __________ (the "Releasing Party") pursuant to
Section 7.01(n) of the Stock and Asset Purchase Agreement dated as of ________,
1998 by and among Mac-Gray Services, Inc., a Delaware corporation ("Mac-Gray"),
Amerivend Corporation, a Florida corporation (the "Company"), Amerivend
Southeast Corporation, a Georgia corporation, and the stockholders named therein
(the "Purchase Agreement"). Capitalized terms used herein and not otherwise
defined shall have the meanings provided in the Purchase Agreement.
1. Release. For good and valuable consideration, the receipt and
-------
sufficiency of which are hereby irrevocably acknowledged by the Releasing Party,
the Releasing Party hereby releases and forever discharges (i) Mac-Gray and the
Company, (ii) each present and former stockholder, director, officer, employee
and agent of Mac-Gray and the Company and (iii) each subsidiary, affiliate,
successor and assign of the persons named in clauses (i) and (ii) above (each a
"Released Party" and collectively, the "Released Parties") of and from any and
all commitments, indebtedness, suits, demands, obligations and liabilities,
whether asserted, unasserted, absolute, contingent, known or unknown, or
otherwise, of every kind and nature, including claims and causes of action both
in law and in equity, which such Releasing Party and/or such Releasing Party's
heirs, executors, administrators, beneficiaries, affiliates, successors or
assigns ever had, now has or, to the extent arising from or in connection with
any act, omission or state of facts taken or existing on or prior to the Closing
Date, may have after the Closing Date, against any Released Party[, INCLUDING,
WITHOUT LIMITATION, ALL CLAIMS RELATED TO YOUR EMPLOYMENT WITH THE COMPANY, THE
COMPENSATION PROVIDED TO YOU BY THE COMPANY, THE COMPANY'S DECISION TO TERMINATE
YOUR EMPLOYMENT, OR YOUR ACTIVITIES ON BEHALF OF THE COMPANY (INCLUDING, WITHOUT
LIMITATION, ANY CLAIMS OF UNLAWFUL DISCRIMINATION UNDER THE COMMON LAW OR ANY
STATUTE), OTHER THAN CLAIMS OR CAUSES OF ACTION, IF ANY, ARISING UNDER OR
PURSUANT TO ANY EMPLOYMENT AGREEMENT TO WHICH THE RELEASING PARTY AND ANY
RELEASED PARTY ARE PARTIES]. The provisions of this Release shall inure to the
benefit of the Released Parties.
The Releasing Party hereby represents to the Released Parties that (a) the
Releasing Party has not assigned any claim or possible claim against any
Released Party, (b) the Releasing Party fully intends to release, and by
executing this Release, the Releasing Party is releasing, all claims against the
Released Parties including without limitation unknown and contingent claims
(other than those specifically reserved above), and (c) the Releasing Party has
had the opportunity to consult with counsel with respect to the execution and
delivery of this Release and the consequences hereof.
3
<PAGE>
[IN SIGNING THIS RELEASE, THE RELEASING PARTY HEREBY ACKNOWLEDGES THAT SUCH
RELEASING PARTY HAS BEEN GIVEN THE OPPORTUNITY, IF SO DESIRED, TO CONSIDER THIS
RELEASE FOR TWENTY-ONE (21) DAYS BEFORE EXECUTING IT. IF THIS RELEASE IS NOT
SIGNED BY THE RELEASING PARTY AND RETURNED TO MAC-GRAY SO THAT IT IS RECEIVED
WITHIN TWENTY-ONE (21) DAYS OF THE RELEASING PARTY'S RECEIPT OF THE RELEASE, THE
RELEASE WILL NOT BE VALID. IN THE EVENT THAT THE RELEASING PARTY EXECUTES AND
RETURNS THIS RELEASE WITHIN TWENTY-ONE (21) DAYS OF THE DATE OF ITS DELIVERY TO
THE RELEASING PARTY, THE RELEASING PARTY WILL THEREBY ACKNOWLEDGE THAT SUCH
DECISION WAS ENTIRELY VOLUNTARY AND THAT THE RELEASING PARTY HAD THE OPPORTUNITY
TO CONSIDER THIS RELEASE FOR THE ENTIRE TWENTY-ONE (21) DAY PERIOD. MAC-GRAY
ACKNOWLEDGES THAT FOR A PERIOD OF SEVEN (7) DAYS FROM THE DATE OF THE EXECUTION
OF THIS RELEASE, THE RELEASING PARTY SHALL RETAIN THE RIGHT TO REVOKE THE
RELEASE BY WRITTEN NOTICE THAT MAC-GRAY RECEIVES BEFORE THE END OF SUCH PERIOD,
AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
EXPIRATION OF SUCH REVOCATION PERIOD.]
2. Governing Law. This Release shall be construed in accordance with and
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governed by the laws of The Commonwealth of Massachusetts applicable to
agreements made and to be performed wholly within such jurisdiction.
3. Severability. If any portion of this Release is declared by a court
------------
of competent jurisdiction to be invalid or unenforceable after all appeals have
either been exhausted or the time for any appeals to be taken has expired, the
remainder of the terms, provisions, covenants and restrictions of this Release
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
EXECUTED as of the ____ day of ________, 1998.
______________________________
[NAME OF THE RELEASING PARTY]
4
<PAGE>
Exhibit 99.1
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MAC-GRAY CORPORATION COMPLETES ACQUISITION OF COPICO
CAMBRIDGE, Mass., April 24 -- Mac-Gray Corporation (NYSE: TUC), a leading
provider of card- and coin-operated laundry equipment service to the multi-
housing industry, today announced that it has completed the acquisition of
Copico, Inc. for approximately $10.95 million in cash, less the assumption of
certain debt, and 250,000 shares of Mac-Gray common stock.
Copico is the major provider of card- and coin-operated reprographics equipment
and services to the academic and public library markets in New England, New
York, and Florida. It had revenues of $7.1 million in the fiscal year ended
January 31, 1998, its second consecutive year of revenue growth exceeding twenty
percent.
Copico is the sole provider of reprographics services to the New York public
library system as well as other public libraries. Most of the company's
equipment is operated by debit cards. The company currently serves more than 250
institutions in New England, New York and Florida, and has operations facilities
in New York City, Canton, MA and Miramar, FL.
The acquisition completes another step in Mac-Gray's growth plan. The ability
to provide more products and services to its existing customers is a core
component of Mac-Gray's long-term strategy.
Mac-Gray, in addition to being one of North America's leading providers of
laundry services and related amenities to the multi-housing industry, is the
largest provider of such services to the college and university market. Through
its MicroFridge(R) division, the company is also the sole provider of
MicroFridge products combining refrigerators and microwave ovens for the
academic and government housing markets. Mac-Gray is the industry leader in
smart-card operated laundry equipment, which enhances customer convenience by
eliminating the need for coins.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995. The statements contained in this release which are not historical facts,
such as those containing future financial performance and growth, are forward
looking statements that are subject to change based on various factors which may
be beyond the company's control. Accordingly the future performance and
financial results of the company may differ materially from those expressed or
implied in any such forward looking statements.
<PAGE>
Exhibit 99.2
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MAC-GRAY CORPORATION COMPLETES ACQUISITION OF AMERIVEND CORPORATION
CAMBRIDGE, Mass., and MIAMI, April 27 -- Mac-Gray Corporation (NYSE: TUC), a
leading provider of card- and coin-operated laundry equipment service to the
multi-housing industry, today announced that it has completed the acquisition of
one hundred percent of the outstanding capital stock of Amerivend Corporation
and the assets of Amerivend Southeast Corporation (together "Amerivend") for
approximately $33 million in cash, less the assumption of certain debt.
Amerivend is the largest provider of card- and coin-operated laundry equipment
in Florida and will add laundry route business in the Atlanta market for Mac-
Gray, as well. It is also the principal distributor of Maytag commercial
laundry products in Alabama, Georgia and Florida.
Amerivend had 1997 revenues of $18.6 million. Mac-Gray's 1997 revenues totaled
$81.4 million.
Mac-Gray, in addition to being one of North America's leading providers of
laundry services and related amenities to the multi-housing industry, is the
largest provider of such services to the college and university market. Through
its Micro-Fridge(R) division, the company is also the sole provider of
MicroFridge products combining refrigerators and microwave ovens for the
academic and government housing markets. Mac-Gray is the industry leader in
smart-card operated laundry equipment, which enhances customer convenience by
eliminating the need for coins.
Safe Harbor Statement under the Private Litigation Reform Act of 1995. The
statements contained in this press release which are not historical facts, such
as those containing future financial performance and growth, are forward looking
statements that are subject to change based on various factors which may be
beyond the company's control. Accordingly the future performance and financial
results of the company may differ materially from those expressed or implied in
any such forward looking statements.
