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Executive Unit Repurchase Agreement

This is an actual contract by Alliance Laundry Systems.

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Sectors: Manufacturing
Governing Law: New York, View New York State Laws
Effective Date: February 24, 2004
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ALLIANCE LAUNDRY HOLDINGS LLC


EXECUTIVE UNIT REPURCHASE AGREEMENT


THIS EXECUTIVE UNIT REPURCHASE AGREEMENT (this "Agreement") is made as of February 24, 2004, by and between Alliance Laundry Holdings LLC, a Delaware limited liability company (the "Company") and Robert Wallace ("Executive"). Any capitalized terms used but not defined herein shall have the meanings assigned to them in Section 4 hereof.


WHEREAS, Executive has, pursuant to a Purchase and Sale Agreement, dated as of the date hereof, by among Executive, certain affiliates of Trust Company of the West ("TCW"), certain affiliates of Sankaty Advisors, Inc. ("Sankaty"), and certain other Persons, agreed to acquire from TCW and Sankaty a total of (i) 5.200 of the Company's Class L Units (the "Class L Units") at a price of $4,112.65 per Unit and (ii) 46.796 of the Company's Class A Units (the "Class A Units" and together with the Class L Units, the "Executive Units") at a price of $50.78 per Unit; and


WHEREAS, in consideration for Executive's continued employment by Company and/or one of its subsidiaries, Executive has agreed that the Executive Units are subject to repurchase by the Company on the terms and subject to the conditions set forth herein.


NOW, THEREFORE, in consideration for the premises contained herein and the mutual obligations of the parties hereto, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive hereby agree as follows:


1. Representations and Warranties; Acknowledgments.


(a) In connection with the execution of this Agreement by Executive, Executive represents and warrants to the Company that:


(i) The execution, delivery and performance of this Agreement by Executive does not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he or she is bound and upon the execution and delivery of this Agreement by the Company, this Agreement shall be the legal, valid and binding obligation of Executive, enforceable in accordance with its terms.


(ii) Executive is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any Person or entity other than the Company.


(iii) Executive has consulted with independent legal counsel regarding his or her rights and obligations under this Agreement and he or she fully understands the terms and conditions contained herein.


(b) Acknowledgements.


(i) Executive acknowledges and agrees that:


(A) no provision contained herein shall entitle Executive to remain in the employment of the Company or any of its subsidiaries or affect the right of the Company or any of its subsidiaries to terminate Executive's employment at any time; and


(B) the Company shall not have any duty or obligation to disclose to Executive, and Executive shall not have the right to be advised of, any material information regarding the Company or its subsidiaries at any time prior to, upon or in connection with the repurchase of Executive Units upon the termination of Executive's employment with the Company or any of its subsidiaries or as otherwise provided hereunder.


2. Right to Purchase Executive Units Upon Termination of Employment.


(a) Repurchase Option. In the event that Executive is no longer employed by the Company or any of its subsidiaries for any reason (the date of such termination being referred to herein as the "Termination Date"), the Executive Units, whether held by Executive or one or more Permitted Transferees, will be subject to repurchase by the Company and the Investors pursuant to the terms and conditions set forth in this Section 2 (the "Repurchase Option").


(b) Termination Other than for Cause or Voluntary Termination. If Executive is no longer employed by the Company or any of its subsidiaries as a result of Executive's death or permanent disability (as determined by the Board in its good faith judgment) or Executive's termination by the Company or any of its subsidiaries without Cause, then on or after the Termination Date, the Company may elect to purchase all or any portion of the Executive Units at a price per Unit equal to the Fair Market Value thereof (x) as determined on the Termination Date, if the Repurchase Notice (as defined in paragraph (d) below) has been delivered within three months after the Termination Date, or (y) as determined as of a date determined by the Board within thirty (30) days prior to the delivery of the Repurchase Notice, if the Repurchase Notice is delivered after the third month following the Termination Date.


(c) Voluntary Termination or Termination for Cause. If Executive is no longer employed by the Company or any of its subsidiaries as a result of Executive's termination for Cause or resignation, then on or after the Termination Date, the Company may elect to purchase all or any portion of the Executive Units at a price per Unit equal to the lower of the Original Value thereof or the Fair Market Value thereof determined as described in clause 2(b) above; provided, however, that if Executive resigns on or after the fifth anniversary of the date hereof, then on or after such Termination Date, the Company may elect to purchase all or any portion of the Executive Units at a price per unit equal to the Fair Market Value thereof determined as described in clause 2(b) above.


(d) Repurchase Procedures. The Company may elect to exercise the right to purchase all or any portion of the Executive Units pursuant to the Repurchase Option by delivering written notice (the "Repurchase Notice") to the holder or holders of Executive Units within 180 days after Executive's Termination Date. The Repurchase Notice will set forth the number of Executive Units to be acquired from such holder(s), the aggregate consideration to be paid for


2


such Units and the time and place for the closing of the transaction. If any of the Executive Units are held by Permitted Transferees of Executive, the Company shall purchase the Units elected to be purchased from such holder(s) of Executive Units pro rata according to the number of Executive Units held by such holder(s) at the time of delivery of such Repurchase Notice (determined as nearly as practicable to the nearest unit).


(e) Investor's Rights.


(i) If for any reason the Company does not elect to purchase all of the Executive Units pursuant to the Repurchase Option prior to the 180th day following the Termination Date, the Investors will be entitled to exercise the Repurchase Option, in the manner set forth in this Section 2, for the Executive Units the Company has not elected to purchase (the "Available Units"). As soon as practicable, but in any event within thirty (30) days after the Company determines that there will be any Available Units, the Company will deliver written notice (the "Option Notice") to the Investors setting forth the number of Available Units and the price for each Available Unit.


(ii) Each of the Investors will initially be permitted to purchase up to its pro rata share (based upon the number of Class L Units and Class A Units then held by such Investors) of any class of the Available Units by delivering written notice to the Company within twenty (20) days after receipt of the Option Notice from the Company (such 20-day period being referred to herein as the "Investor Election Period").


(iii) As soon as practicable, but in any event within five (5) days after the expiration of the Investor Election Period, the Company will, if necessary, notify the Investors electing to purchase Available Units of any Available Units which Investors have not elected to purchase and each of the electing Investors will be entitled to purchase any number of the remaining Available Units (the "Second Option Notice"); provided, that if in the aggregate such Investors elect to purchase more than the remaining Available Units, such remaining Available Units of a particular class purchased by each such Investor will be reduced on a pro rata basis based upon the numb
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