**EXHIBIT 10.6**
**INDEMNITY AGREEMENT**
     This Indemnity Agreement, dated as of November 24, 2004 (the “Agreement”) is made byand between Coinmach Service Corp., a Delaware corporation (the “Company”) and James N.Chapman, (the “Indemnitee”).
**RECITALS**
     A. The Company is aware that competent and experienced persons are increasingly reluctant toserve as directors or officers of corporations unless they are protected by adequateindemnification, due to increased exposure to litigation costs and risk resulting from theirservice to such corporations, and due to the fact that the exposure may bear no reasonablerelationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors and officers areoften difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directorsand officers with adequate, reliable knowledge of legal risks to which they are exposed orinformation regarding the proper course of action to take;
     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be sogreat (whether or not the case is meritorious), that the defense and/or settlement of suchlitigation may be beyond the personal resources of directors and officers;
     D. The Board of Directors of the Company (the “Board”) has concluded that, to retainand attract talented and experienced individuals to serve as officers and directors of the Companyand to encourage such individuals to make the business decisions necessary or appropriate for thesuccess of the Company and its Subsidiaries (as defined in Section 1 below), it isnecessary for the Company to contractually indemnify its directors and certain of its officers, andcertain of the directors and officers of its Subsidiaries, and to assume for itself maximumpermissible liability for Expenses, losses, liabilities and damages in connection with claimsagainst such officers and directors relating to their service in such capacities, and has furtherconcluded that the failure to provide such contractual indemnification could result in significantharm to the Company and its Subsidiaries and the Company’s stockholders;
     E. The provisions of the Amended and Restated Certificate of Incorporation of the Company (the“Certificate of Incorporation”) specifically state that the rights to indemnification andpayment of expenses described therein are not exclusive, and thereby contemplate that contractswith respect to indemnification and payment of Expenses by the Company and similar obligations ofthe Company may be entered into by and between the Company and persons entitled to such rightsdescribed in the Certificate of Incorporation; and
     F. The Company desires the Indemnitee to serve or continue to serve as a director or officerof the Company and/or one or more of its Subsidiaries without undue concern for claims for damagesarising out of or related to such services to the Company and/or one or more of its Subsidiaries.
 

 

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
     1. Definitions. For the purposes of this Agreement, the following terms shall havethe meanings set forth below:
     (a) Agent. “Agent” means any person who (i) is or was a director, officer,employee, or other agent of the Company or a Subsidiary of the Company, (ii) is or wasserving at the request of, for the convenience of, or to represent the “interest of theCompany” or a Subsidiary of the Company as a director, officer, trustee, partner, employee,fiduciary or agent of another foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, foundation, association, organization or otherlegal entity or enterprise or (iii) is or was serving in any capacity with respect to anyemployee, fiduciary benefits plans of the Company or any Subsidiary. For purposes ofsubsection (ii) of this Section 1(a), if Indemnitee is serving or has served as adirector, officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,Indemnitee shall be deemed to be serving at the request of the Company.
     (b) Controlled. “Controlled” means subject to the power to exercise acontrolling influence over the management or policies of a corporation, partnership, jointventure, trust or other entity.
     (c) Expenses. “Expenses” includes all direct and indirect costs, fees andexpenses of any type or nature whatsoever (including, without limitation, attorneys’ feesand related disbursements and retainers, other out-of-pocket costs such as fees anddisbursements of expert witnesses, private investigators and professional advisors, courtcosts, transcript costs, fees of experts, duplicating, printing and binding costs, telephoneand fax transmission charges, postage, delivery services, secretarial services and otherdisbursements and Expenses and reasonable compensation for time spent by the Indemnitee forwhich he is not otherwise compensated by the Company or any third party) actually andreasonably incurred by the Indemnitee in connection with either the investigation, defense,settlement or appeal of, or otherwise related to a Proceeding or establishing or enforcing aright to indemnification under this Agreement or otherwise.
     (d) Proceeding. “Proceeding” means any threatened, pending, or completedclaim, action, suit, arbitration, alternate dispute resolution process, investigation,administrative hearing, appeal or any other proceeding, whether civil, criminal,administrative, investigative or any other type whatsoever, whether formal or informal,including a proceeding initiated by Indemnitee pursuant to Section 6 of thisAgreement to enforce Indemnitee’s rights hereunder.
     (e) Subsidiary. “Subsidiary” means (i) any corporation of which 50% or more ofthe outstanding voting securities are owned directly or indirectly by the Company, or whichis otherwise controlled by the Company, (ii) any partnership, joint venture, limitedliability company, trust or other entity of which 50% or more of the equity interest isowned directly or indirectly by the Company, or which is otherwise controlled by the
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Company or (iii) the Company owns a general partner or managing member or similarinterest.
     2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to serve as anAgent of the Company, at its will (or under separate agreement, if such agreement exists), in thecapacity Indemnitee currently serves as an Agent of the Company; provided, however,that nothing contained in this Agreement is intended to or shall (i) restrict the ability of theIndemnitee to resign at any time and for any reason from any current or future position orpositions, (ii) create any right to continued employment of the Indemnitee in any current or futureposition or positions, or (iii) restrict the ability of the Company to terminate the employment oragency of Indemnitee at any time and for any reason (subject to compliance with the terms of anyemployment or other applicable agreement to which the Company (or any of its Subsidiaries) and theIndemnitee are parties).
     3. Indemnification as Agent.
     (a) Third Party Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding (other than an action by or in the right of the Company) by reasonof the fact that he is or was an Agent of the Company, or by reason of anything done or not done byhim in any such capacity or otherwise at the request of the Company or any of its officers,directors, or stockholders, the Company shall indemnify and hold harmless the Indemnitee againstany and all Expenses, losses and liabilities of any type whatsoever (including, but not limited to,judgments, damages, liabilities, losses, fines, excise taxes, penalties and amounts paid insettlement) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal of, or otherwise related to such Proceeding, if he acted in good faith and ina manner he reasonably believed to be in, or not opposed to, the best interests of the Company,and, with respect to any criminal action or Proceeding, if he had no reasonable cause to believehis conduct was unlawful. The termination of any Proceeding, or any claim, issue or matter in sucha Proceeding by reason of settlement, judgment, order or otherwise, shall be deemed to be asuccessful result as to such Proceeding, claim, issue or matter, so long as there has been nofinding (either adjudicated or pursuant to Section 6(c) below) that Indemnitee (i) did notact in good faith, or (ii) did not act in a manner reasonably believed to be in, or not opposed to,the best interests of the Company, or (iii) with respect to any criminal Proceeding, had reasonablecause to believe his conduct was unlawful.
     (b) Derivative Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding by or in the right of the Company to procure a judgment in its favorby reason of the fact that he is or was an Agent of the Company, or by reason of anything done ornot done by him in any such capacity, the Company shall indemnify and hold harmless the Indemniteeagainst any amounts paid in settlement of any such Proceeding and any and all Expenses, losses andliabilities of any type whatsoever (including, but not limited to, judgments, damages, liabilities,losses, fines, excise taxes, penalties and amounts paid in settlement) actually and reasonablyincurred by him in connection with the investigation, defense, settlement, or appeal of, orotherwise related to such Proceeding, if he acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company; except that noindemnification under this subsection shall be made with respect to any claim, issue or matter asto which such person has been finally adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the court in whichsuch Proceeding was brought shall determine upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, such person is fairly and reasonablyentitled to indemnity for such Expenses as the court shall deem proper.
     (c) Scope of Indemnification. If the General Corporation Law of the State of Delaware(the “Delaware Law”) or any other applicable law is amended after the date hereof to permitthe Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee withrespect to any action or Proceeding, not contemplated by this Agreement, then this Agreement(without any further action be either party hereto) shall automatically be deemed to be amended torequire that the Company indemnify Indemnitee to the fullest extent permitted by the Delaware Law.
     4. Advancement of Expenses. Subject to Sections 7(a) and (b) below,the Company shall advance all Expenses actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense, settlement or appeal of, or otherwise related to anyProceeding to which the Indemnitee is a party or is threatened to be made a party by reason of thefact that the Indemnitee is or was an Agent of the Company. Indemnitee hereby agrees to repay suchamounts advanced if it shall ultimately be determined pursuant to Section 6 below that theIndemnitee is not entitled to be indemnified by the Company.
     5. Indemnification Procedures.
     (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of thecommencement of or the threat of commencement of any Proceeding, the Indemnitee shall, if theIndemnitee believes that indemnification with respect thereto may be sought from the Company underthis Agreement, provide written notice to the Company of the commencement or threat of commencementthereof; provided that the failure to give such notice shall not impair Indemnitee’s rightsunder this Agreement.
     (b) Notice to Insurer. If, at the time of the receipt of a notice of the commencementof a Proceeding pursuant to Section 5(a) above, the Company has in effect an insurancepolicy or policies providing directors’ and officers’ liability insurance, the Company shall giveprompt notice of the commencement of such Proceeding to the insurers in accordance with theprocedures set forth in the respective policies. The Company shall thereafter take all necessaryor desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payableas a result of such Proceeding in accordance with the terms of such policies.
     (c) Assumption of Defense. In the event the Company shall be obligated to pay theExpenses of the Indemnitee with respect to any Proceeding, the Company shall be entitled to assumethe defense of such Proceeding, with counsel of its choosing, upon the delivery to the Indemniteeof written notice of its election to do so, which written notice shall be delivered within ten (10)calendar days after receipt of written notice of the Proceeding pursuant to Section 5(a)above. After delivery of such notice, the Company will not be liable to the Indemnitee under thisAgreement for any fees and Expenses of counsel which are subsequently incurred by the Indemniteewith respect to the same Proceeding; provided, however, that the Indemnitee shallhave the right to employ his counsel in any such Proceeding at the Indemnitee’s
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expense; and providedfurther, that if (i) the employment of counsel by theIndemnitee has been previously authorized by the Company, or (ii) the Indemnitee shall havereasonably concluded that there may be a conflict of interest between the Company and theIndemnitee in the conduct of any such defense or that Indemnitee may have separate defenses orcounterclaims to assert with respect to any issue which may not be consistent with the position ofother defendants in such Proceeding, or (iii) the Company shall not, in fact, have employed counselto assume the defense of such Proceeding in a timely manner, then, in any such case, the fees andExpenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if theCompany fails to comply with any of its obligations under this Agreement or in the event that theCompany or any other person takes any action to declare this Agreement void or unenforceable, orinstitutes any action, suit or Proceeding to deny or to recover from Indemnitee the benefitsintended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counselof Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection withany such matter. The Company shall not, without the prior written consent of Indemnitee, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional termthereof, the full release of Indemnitee from all liability in respect of such Proceeding, whichrelease shall be in form and substance reasonably satisfactory to Indemnitee. This Section5(c) shall not apply to a Proceeding brought by Indemnitee under Section 6 below orpursuant to Section 7(a) or (b) below.
     (d) Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee.Indemnitee shall execute all documents required and shall do everything that may be necessary tosecure such rights, including the execution of such documents necessary to enable the Company toeffectively bring suit to enforce such rights.
     (e) Cooperation by Indemnitee. Indemnitee shall give the Company such information andcooperation as it may reasonably require and as shall be within Indemnitee’s power.
     6. Determination of Right to Indemnification.
     (a) Successful Proceeding. To the extent the Indemnitee has been successful, on themerits or otherwise, in the defense of any Proceeding referred to in Section 3 above, theCompany shall indemnify the Indemnitee against any and all Expenses actually and reasonablyincurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee against any and all Expensesactually and reasonably incurred by or for him in connection with each successfully resolved claim,issue or matter.
     (b) Other Proceeding. In the event that Section 6(a) above is inapplicable,or applicable only in part, the Company shall nevertheless indemnify the Indemnitee unless it isdetermined in a form described below that the Indemnitee has not met the applicable standard ofconduct set forth in Section 3 above, if any, which entitles Indemnitee to suchindemnification.
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     (c) Forum in Event of Dispute. The Indemnitee shall be entitled to select the forumin which the validity of the Company’s claim under Section 6(b) hereof that the Indemniteeis not entitled to indemnification will be heard, from among the following (subject to provisionsof applicable law):
     (i) by a majority vote of the directors of the Board who are not parties to suchProceeding, even though less than a quorum; or
     (ii) by a committee of such directors designated by majority vote of such directors,even though less than a quorum; or
     (iii) if there are no such directors, or if such directors so direct, by independentlegal counsel in a written opinion; or
     (iv) by the stockholders.
     (d) Submission of Company’s Claim. As soon as practicable, and in no event later thanthirty (30) days after written notice of the Indemnitee’s choice of forum pursuant to Section6(c) above, the Company shall, at its own expense, submit to the selected forum in such manneras the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemniteeis not entitled to indemnification. The Company shall act in the utmost good faith to assure theIndemnitee a complete opportunity to defend against such claim.
     (e) Appeal to Court. Notwithstanding a determination by any forum listed inSection 6(c) above that Indemnitee is not entitled to indemnification with respect to aspecific Proceeding, the Indemnitee shall have the right to apply to the court in which thatProceeding is or was pending or any other court of competent jurisdiction, for the purpose ofenforcing the Indemnitee’s right to indemnification pursuant to this Agreement.
     (f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding any otherprovision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against allExpenses incurred by the Indemnitee in connection with any hearing or Proceeding under thisSection 6 involving the Indemnitee and against all Expenses incurred by the Indemnitee inconnection with any other Proceeding between the Company and the Indemnitee involving theinterpretation or enforcement of the rights of the Indemnitee under this Agreement unless a courtof competent jurisdiction finds that the claims and/or defenses of the Indemnitee in any suchProceeding was frivolous or made in bad faith.
     (g) Effect of Certain Resolutions. Neither the settlement or termination of anyProceeding nor the failure of the Company to award indemnification or to determine thatindemnification is payable shall create a presumption that Indemnitee is not entitled toindemnification hereunder. In addition, the termination of any Proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent shallnot create a presumption that Indemnitee did not act in good faith and in a manner which Indemniteereasonably believed to be in or not opposed to the best interests of the Company or, with respectto any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.
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     (h) Failure To Act Not a Defense. The failure of the Company (including its Board ofDirectors or any committee thereof, independent legal counsel, or stockholders) to make adetermination concerning the permissibility of indemnification hereunder or the advancement ofExpenses under this Agreement shall not be a defense in any action brought under Section 6above, and shall not create a presumption that such indemnification or advancement is notpermissible.
     7. Exceptions.
     (a) Excluded Action or Omissions. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated to indemnify or advance Expenses to Indemniteewith respect to Proceedings or claims arising out of acts, omissions or transactions for whichIndemnitee is prohibited from receiving indemnification under applicable law.
     (b) Claims Initiated by Indemnitee. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify or advance Expenses to the Indemnitee with respect to Proceedings or claims initiated orbrought voluntarily by the Indemnitee and not by way of defense or counterclaims asserted byIndemnitee in any Proceeding brought against Indemnitee, except with respect to Proceedings broughtto establish or enforce a right to indemnification under this Agreement or any other statute or lawor otherwise as required under the General Corporation Law of the State of Delaware, but suchindemnification or advancement of Expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate.
     (c) Lack of Good Faith. Any other provision herein to the contrary notwithstanding,the Company shall not be obligated pursuant to the terms of this Agreement to indemnify theIndemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted bythe Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdictiondetermines that each of the material assertions made by the Indemnitee in such Proceeding wasfrivolous or made in bad faith.
     (d) Unauthorized Settlements. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify the Indemnitee for any amount paid in settlement of a Proceeding effected without theprior written consent of the Company. The Company agrees not to unreasonably withhold its consentto any settlement.
     (e) No Duplicative Payment. The Company shall not be liable under this Agreement tomake any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemniteehas otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.
     8. Non-exclusivity. **The provisions for indemnification and advancement of Expensesset forth in this Agreement shall not be deemed exclusive of any other rights which the Indemniteemay have under any provision of law, the Certificate of Incorporation or Amended and RestatedBylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, orotherwise, both as to action in his official**
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**capacity and as to action in another capacity while occupying a position as an Agent of theCompany.**
     9. Interpretation of Agreement; Scope. It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnification to theIndemnitee to the fullest extent now or hereafter permitted by applicable law. The benefits ofthis Agreement shall inure to the Indemnitee both with respect to acts done or not done by him bothbefore and after this date.
     10. Burden of Proof. In making a determination with respect to entitlement toindemnification hereunder, the person or persons or entity making such determination shall presumethat Indemnitee is entitled to indemnification under this Agreement, and the Company shall have theburden of proof to overcome that presumption in connection with the making by any person, personsor entity of any determination contrary to that presumption.
     11. Severability. If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision held to be invalid,illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not inany way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions ofthis Agreement (including, without limitation, all portions of any paragraph of this Agreementcontaining any such provision held to be invalid, illegal or unenforceable, that are not themselvesinvalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable and to give effect to Section 9hereof.
     12. Modification and Waiver. Except as contemplated by Section 3(c), nosupplement, modification or amendment of this Agreement shall be binding unless executed in writingby all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.
     13. Survival, Successors and Assigns. The Indemnitee’s rights under this Agreementshall continue after the Indemnitee has ceased acting as an Agent of the Company. The terms ofthis Agreement shall be binding on and inure to the benefit of the Company and its successors andassigns and shall be binding on and inure to the benefit of Indemnitee and Indemnitee’s heirs,executors and administrators.
     14. Gender. The masculine, feminine or neuter pronouns used herein shall beinterpreted without regard to gender, and the use of the singular or plural shall be deemed toinclude the other whenever the context so requires.
     15. Notice. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receivedby the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date. All notice to either party will be sent to theapplicable address below, or as subsequently modified by written notice.
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     If to the Company:    Coinmach Service Corp. 303 Sunnyside Blvd., Suite 70 Plainview, NY 11803 Attention: Robert M. Doyle
     If to Indemnitee, at such Indemnitee’s primary address listed in the records of the Company.
     16. Governing Law. This Agreement, and all rights, remedies, liabilities, powers andduties of the parties to this Agreement, shall be governed exclusively by and construed accordingto the laws of the State of Delaware without regard to principles of conflicts of laws.
     17. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or Proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.
     18. Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all such counterparts shall together constitute one andthe same instrument.
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     The parties hereto have entered into this Indemnity Agreement effective as of the date firstabove written.       COINMACH SERVICE CORP.      By: /s/ Stephen R. Kerrigan          Title: Chief Executive Officer      INDEMNITEE: /s/ James N. Chapman    
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**INDEMNITY AGREEMENT**
     This Indemnity Agreement, dated as of November 24, 2004 (the “Agreement”) is made byand between Coinmach Service Corp., a Delaware corporation (the “Company”) and David A.Donnini, (the “Indemnitee”).
**RECITALS**
     A. The Company is aware that competent and experienced persons are increasingly reluctant toserve as directors or officers of corporations unless they are protected by adequateindemnification, due to increased exposure to litigation costs and risk resulting from theirservice to such corporations, and due to the fact that the exposure may bear no reasonablerelationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors and officers areoften difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directorsand officers with adequate, reliable knowledge of legal risks to which they are exposed orinformation regarding the proper course of action to take;
     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be sogreat (whether or not the case is meritorious), that the defense and/or settlement of suchlitigation may be beyond the personal resources of directors and officers;
     D. The Board of Directors of the Company (the “Board”) has concluded that, to retainand attract talented and experienced individuals to serve as officers and directors of the Companyand to encourage such individuals to make the business decisions necessary or appropriate for thesuccess of the Company and its Subsidiaries (as defined in Section 1 below), it isnecessary for the Company to contractually indemnify its directors and certain of its officers, andcertain of the directors and officers of its Subsidiaries, and to assume for itself maximumpermissible liability for Expenses, losses, liabilities and damages in connection with claimsagainst such officers and directors relating to their service in such capacities, and has furtherconcluded that the failure to provide such contractual indemnification could result in significantharm to the Company and its Subsidiaries and the Company’s stockholders;
     E. The provisions of the Amended and Restated Certificate of Incorporation of the Company (the“Certificate of Incorporation”) specifically state that the rights to indemnification andpayment of expenses described therein are not exclusive, and thereby contemplate that contractswith respect to indemnification and payment of Expenses by the Company and similar obligations ofthe Company may be entered into by and between the Company and persons entitled to such rightsdescribed in the Certificate of Incorporation; and
     F. The Company desires the Indemnitee to serve or continue to serve as a director or officerof the Company and/or one or more of its Subsidiaries without undue concern for claims for damagesarising out of or related to such services to the Company and/or one or more of its Subsidiaries.
 

 

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
     1. Definitions. For the purposes of this Agreement, the following terms shall havethe meanings set forth below:
     (a) Agent. “Agent” means any person who (i) is or was a director, officer,employee, or other agent of the Company or a Subsidiary of the Company, (ii) is or wasserving at the request of, for the convenience of, or to represent the “interest of theCompany” or a Subsidiary of the Company as a director, officer, trustee, partner, employee,fiduciary or agent of another foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, foundation, association, organization or otherlegal entity or enterprise or (iii) is or was serving in any capacity with respect to anyemployee, fiduciary benefits plans of the Company or any Subsidiary. For purposes ofsubsection (ii) of this Section 1(a), if Indemnitee is serving or has served as adirector, officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,Indemnitee shall be deemed to be serving at the request of the Company.
     (b) Controlled. “Controlled” means subject to the power to exercise acontrolling influence over the management or policies of a corporation, partnership, jointventure, trust or other entity.
     (c) Expenses. “Expenses” includes all direct and indirect costs, fees andexpenses of any type or nature whatsoever (including, without limitation, attorneys’ feesand related disbursements and retainers, other out-of-pocket costs such as fees anddisbursements of expert witnesses, private investigators and professional advisors, courtcosts, transcript costs, fees of experts, duplicating, printing and binding costs, telephoneand fax transmission charges, postage, delivery services, secretarial services and otherdisbursements and Expenses and reasonable compensation for time spent by the Indemnitee forwhich he is not otherwise compensated by the Company or any third party) actually andreasonably incurred by the Indemnitee in connection with either the investigation, defense,settlement or appeal of, or otherwise related to a Proceeding or establishing or enforcing aright to indemnification under this Agreement or otherwise.
     (d) Proceeding. “Proceeding” means any threatened, pending, or completedclaim, action, suit, arbitration, alternate dispute resolution process, investigation,administrative hearing, appeal or any other proceeding, whether civil, criminal,administrative, investigative or any other type whatsoever, whether formal or informal,including a proceeding initiated by Indemnitee pursuant to Section 6 of thisAgreement to enforce Indemnitee’s rights hereunder.
     (e) Subsidiary. “Subsidiary” means (i) any corporation of which 50% or more ofthe outstanding voting securities are owned directly or indirectly by the Company, or whichis otherwise controlled by the Company, (ii) any partnership, joint venture, limitedliability company, trust or other entity of which 50% or more of the equity interest isowned directly or indirectly by the Company, or which is otherwise controlled by the
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Company or (iii) the Company owns a general partner or managing member or similarinterest.
     2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to serve as anAgent of the Company, at its will (or under separate agreement, if such agreement exists), in thecapacity Indemnitee currently serves as an Agent of the Company; provided, however,that nothing contained in this Agreement is intended to or shall (i) restrict the ability of theIndemnitee to resign at any time and for any reason from any current or future position orpositions, (ii) create any right to continued employment of the Indemnitee in any current or futureposition or positions, or (iii) restrict the ability of the Company to terminate the employment oragency of Indemnitee at any time and for any reason (subject to compliance with the terms of anyemployment or other applicable agreement to which the Company (or any of its Subsidiaries) and theIndemnitee are parties).
     3. Indemnification as Agent.
     (a) Third Party Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding (other than an action by or in the right of the Company) by reasonof the fact that he is or was an Agent of the Company, or by reason of anything done or not done byhim in any such capacity or otherwise at the request of the Company or any of its officers,directors, or stockholders, the Company shall indemnify and hold harmless the Indemnitee againstany and all Expenses, losses and liabilities of any type whatsoever (including, but not limited to,judgments, damages, liabilities, losses, fines, excise taxes, penalties and amounts paid insettlement) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal of, or otherwise related to such Proceeding, if he acted in good faith and ina manner he reasonably believed to be in, or not opposed to, the best interests of the Company,and, with respect to any criminal action or Proceeding, if he had no reasonable cause to believehis conduct was unlawful. The termination of any Proceeding, or any claim, issue or matter in sucha Proceeding by reason of settlement, judgment, order or otherwise, shall be deemed to be asuccessful result as to such Proceeding, claim, issue or matter, so long as there has been nofinding (either adjudicated or pursuant to Section 6(c) below) that Indemnitee (i) did notact in good faith, or (ii) did not act in a manner reasonably believed to be in, or not opposed to,the best interests of the Company, or (iii) with respect to any criminal Proceeding, had reasonablecause to believe his conduct was unlawful.
     (b) Derivative Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding by or in the right of the Company to procure a judgment in its favorby reason of the fact that he is or was an Agent of the Company, or by reason of anything done ornot done by him in any such capacity, the Company shall indemnify and hold harmless the Indemniteeagainst any amounts paid in settlement of any such Proceeding and any and all Expenses, losses andliabilities of any type whatsoever (including, but not limited to, judgments, damages, liabilities,losses, fines, excise taxes, penalties and amounts paid in settlement) actually and reasonablyincurred by him in connection with the investigation, defense, settlement, or appeal of, orotherwise related to such Proceeding, if he acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company; except that noindemnification under this subsection shall be made with respect to any claim, issue or matter asto which such person has been finally adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the court in whichsuch Proceeding was brought shall determine upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, such person is fairly and reasonablyentitled to indemnity for such Expenses as the court shall deem proper.
     (c) Scope of Indemnification. If the General Corporation Law of the State of Delaware(the “Delaware Law”) or any other applicable law is amended after the date hereof to permitthe Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee withrespect to any action or Proceeding, not contemplated by this Agreement, then this Agreement(without any further action be either party hereto) shall automatically be deemed to be amended torequire that the Company indemnify Indemnitee to the fullest extent permitted by the Delaware Law.
     4. Advancement of Expenses. Subject to Sections 7(a) and (b) below,the Company shall advance all Expenses actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense, settlement or appeal of, or otherwise related to anyProceeding to which the Indemnitee is a party or is threatened to be made a party by reason of thefact that the Indemnitee is or was an Agent of the Company. Indemnitee hereby agrees to repay suchamounts advanced if it shall ultimately be determined pursuant to Section 6 below that theIndemnitee is not entitled to be indemnified by the Company.
     5. Indemnification Procedures.
     (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of thecommencement of or the threat of commencement of any Proceeding, the Indemnitee shall, if theIndemnitee believes that indemnification with respect thereto may be sought from the Company underthis Agreement, provide written notice to the Company of the commencement or threat of commencementthereof; provided that the failure to give such notice shall not impair Indemnitee’s rightsunder this Agreement.
     (b) Notice to Insurer. If, at the time of the receipt of a notice of the commencementof a Proceeding pursuant to Section 5(a) above, the Company has in effect an insurancepolicy or policies providing directors’ and officers’ liability insurance, the Company shall giveprompt notice of the commencement of such Proceeding to the insurers in accordance with theprocedures set forth in the respective policies. The Company shall thereafter take all necessaryor desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payableas a result of such Proceeding in accordance with the terms of such policies.
     (c) Assumption of Defense. In the event the Company shall be obligated to pay theExpenses of the Indemnitee with respect to any Proceeding, the Company shall be entitled to assumethe defense of such Proceeding, with counsel of its choosing, upon the delivery to the Indemniteeof written notice of its election to do so, which written notice shall be delivered within ten (10)calendar days after receipt of written notice of the Proceeding pursuant to Section 5(a)above. After delivery of such notice, the Company will not be liable to the Indemnitee under thisAgreement for any fees and Expenses of counsel which are subsequently incurred by the Indemniteewith respect to the same Proceeding; provided, however, that the Indemnitee shallhave the right to employ his counsel in any such Proceeding at the Indemnitee’s
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expense; and providedfurther, that if (i) the employment of counsel by theIndemnitee has been previously authorized by the Company, or (ii) the Indemnitee shall havereasonably concluded that there may be a conflict of interest between the Company and theIndemnitee in the conduct of any such defense or that Indemnitee may have separate defenses orcounterclaims to assert with respect to any issue which may not be consistent with the position ofother defendants in such Proceeding, or (iii) the Company shall not, in fact, have employed counselto assume the defense of such Proceeding in a timely manner, then, in any such case, the fees andExpenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if theCompany fails to comply with any of its obligations under this Agreement or in the event that theCompany or any other person takes any action to declare this Agreement void or unenforceable, orinstitutes any action, suit or Proceeding to deny or to recover from Indemnitee the benefitsintended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counselof Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection withany such matter. The Company shall not, without the prior written consent of Indemnitee, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional termthereof, the full release of Indemnitee from all liability in respect of such Proceeding, whichrelease shall be in form and substance reasonably satisfactory to Indemnitee. This Section5(c) shall not apply to a Proceeding brought by Indemnitee under Section 6 below orpursuant to Section 7(a) or (b) below.
     (d) Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee.Indemnitee shall execute all documents required and shall do everything that may be necessary tosecure such rights, including the execution of such documents necessary to enable the Company toeffectively bring suit to enforce such rights.
     (e) Cooperation by Indemnitee. Indemnitee shall give the Company such information andcooperation as it may reasonably require and as shall be within Indemnitee’s power.
     6. Determination of Right to Indemnification.
     (a) Successful Proceeding. To the extent the Indemnitee has been successful, on themerits or otherwise, in the defense of any Proceeding referred to in Section 3 above, theCompany shall indemnify the Indemnitee against any and all Expenses actually and reasonablyincurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee against any and all Expensesactually and reasonably incurred by or for him in connection with each successfully resolved claim,issue or matter.
     (b) Other Proceeding. In the event that Section 6(a) above is inapplicable,or applicable only in part, the Company shall nevertheless indemnify the Indemnitee unless it isdetermined in a form described below that the Indemnitee has not met the applicable standard ofconduct set forth in Section 3 above, if any, which entitles Indemnitee to suchindemnification.
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     (c) Forum in Event of Dispute. The Indemnitee shall be entitled to select the forumin which the validity of the Company’s claim under Section 6(b) hereof that the Indemniteeis not entitled to indemnification will be heard, from among the following (subject to provisionsof applicable law):
     (i) by a majority vote of the directors of the Board who are not parties to suchProceeding, even though less than a quorum; or
     (ii) by a committee of such directors designated by majority vote of such directors,even though less than a quorum; or
     (iii) if there are no such directors, or if such directors so direct, by independentlegal counsel in a written opinion; or
     (iv) by the stockholders.
     (d) Submission of Company’s Claim. As soon as practicable, and in no event later thanthirty (30) days after written notice of the Indemnitee’s choice of forum pursuant to Section6(c) above, the Company shall, at its own expense, submit to the selected forum in such manneras the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemniteeis not entitled to indemnification. The Company shall act in the utmost good faith to assure theIndemnitee a complete opportunity to defend against such claim.
     (e) Appeal to Court. Notwithstanding a determination by any forum listed inSection 6(c) above that Indemnitee is not entitled to indemnification with respect to aspecific Proceeding, the Indemnitee shall have the right to apply to the court in which thatProceeding is or was pending or any other court of competent jurisdiction, for the purpose ofenforcing the Indemnitee’s right to indemnification pursuant to this Agreement.
     (f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding any otherprovision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against allExpenses incurred by the Indemnitee in connection with any hearing or Proceeding under thisSection 6 involving the Indemnitee and against all Expenses incurred by the Indemnitee inconnection with any other Proceeding between the Company and the Indemnitee involving theinterpretation or enforcement of the rights of the Indemnitee under this Agreement unless a courtof competent jurisdiction finds that the claims and/or defenses of the Indemnitee in any suchProceeding was frivolous or made in bad faith.
     (g) Effect of Certain Resolutions. Neither the settlement or termination of anyProceeding nor the failure of the Company to award indemnification or to determine thatindemnification is payable shall create a presumption that Indemnitee is not entitled toindemnification hereunder. In addition, the termination of any Proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent shallnot create a presumption that Indemnitee did not act in good faith and in a manner which Indemniteereasonably believed to be in or not opposed to the best interests of the Company or, with respectto any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.
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     (h) Failure To Act Not a Defense. The failure of the Company (including its Board ofDirectors or any committee thereof, independent legal counsel, or stockholders) to make adetermination concerning the permissibility of indemnification hereunder or the advancement ofExpenses under this Agreement shall not be a defense in any action brought under Section 6above, and shall not create a presumption that such indemnification or advancement is notpermissible.
     7. Exceptions.
     (a) Excluded Action or Omissions. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated to indemnify or advance Expenses to Indemniteewith respect to Proceedings or claims arising out of acts, omissions or transactions for whichIndemnitee is prohibited from receiving indemnification under applicable law.
     (b) Claims Initiated by Indemnitee. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify or advance Expenses to the Indemnitee with respect to Proceedings or claims initiated orbrought voluntarily by the Indemnitee and not by way of defense or counterclaims asserted byIndemnitee in any Proceeding brought against Indemnitee, except with respect to Proceedings broughtto establish or enforce a right to indemnification under this Agreement or any other statute or lawor otherwise as required under the General Corporation Law of the State of Delaware, but suchindemnification or advancement of Expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate.
     (c) Lack of Good Faith. Any other provision herein to the contrary notwithstanding,the Company shall not be obligated pursuant to the terms of this Agreement to indemnify theIndemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted bythe Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdictiondetermines that each of the material assertions made by the Indemnitee in such Proceeding wasfrivolous or made in bad faith.
     (d) Unauthorized Settlements. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify the Indemnitee for any amount paid in settlement of a Proceeding effected without theprior written consent of the Company. The Company agrees not to unreasonably withhold its consentto any settlement.
     (e) No Duplicative Payment. The Company shall not be liable under this Agreement tomake any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemniteehas otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.
     8. Non-exclusivity. **The provisions for indemnification and advancement of Expensesset forth in this Agreement shall not be deemed exclusive of any other rights which the Indemniteemay have under any provision of law, the Certificate of Incorporation or Amended and RestatedBylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, orotherwise, both as to action in his official**
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**capacity and as to action in another capacity while occupying a position as an Agent of theCompany.**
     9. Interpretation of Agreement; Scope. It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnification to theIndemnitee to the fullest extent now or hereafter permitted by applicable law. The benefits ofthis Agreement shall inure to the Indemnitee both with respect to acts done or not done by him bothbefore and after this date.
     10. Burden of Proof. In making a determination with respect to entitlement toindemnification hereunder, the person or persons or entity making such determination shall presumethat Indemnitee is entitled to indemnification under this Agreement, and the Company shall have theburden of proof to overcome that presumption in connection with the making by any person, personsor entity of any determination contrary to that presumption.
     11. Severability. If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision held to be invalid,illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not inany way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions ofthis Agreement (including, without limitation, all portions of any paragraph of this Agreementcontaining any such provision held to be invalid, illegal or unenforceable, that are not themselvesinvalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable and to give effect to Section 9hereof.
     12. Modification and Waiver. Except as contemplated by Section 3(c), nosupplement, modification or amendment of this Agreement shall be binding unless executed in writingby all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.
     13. Survival, Successors and Assigns. The Indemnitee’s rights under this Agreementshall continue after the Indemnitee has ceased acting as an Agent of the Company. The terms ofthis Agreement shall be binding on and inure to the benefit of the Company and its successors andassigns and shall be binding on and inure to the benefit of Indemnitee and Indemnitee’s heirs,executors and administrators.
     14. Gender. The masculine, feminine or neuter pronouns used herein shall beinterpreted without regard to gender, and the use of the singular or plural shall be deemed toinclude the other whenever the context so requires.
     15. Notice. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receivedby the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date. All notice to either party will be sent to theapplicable address below, or as subsequently modified by written notice.
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     If to the Company:    Coinmach Service Corp. 303 Sunnyside Blvd., Suite 70 Plainview, NY 11803 Attention: Robert M. Doyle
     If to Indemnitee, at such Indemnitee’s primary address listed in the records of the Company.
     16. Governing Law. This Agreement, and all rights, remedies, liabilities, powers andduties of the parties to this Agreement, shall be governed exclusively by and construed accordingto the laws of the State of Delaware without regard to principles of conflicts of laws.
     17. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or Proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.
     18. Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all such counterparts shall together constitute one andthe same instrument.
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     The parties hereto have entered into this Indemnity Agreement effective as of the date firstabove written.       COINMACH SERVICE CORP.      By: /s/ Stephen R. Kerrigan          Title: Chief Executive Officer      INDEMNITEE: /s/ David A. Donnini    
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**INDEMNITY AGREEMENT**
     This Indemnity Agreement, dated as of November 24, 2004 (the “Agreement”) is made byand between Coinmach Service Corp., a Delaware corporation (the “Company”) and Robert M.Doyle, (the “Indemnitee”).
**RECITALS**
     A. The Company is aware that competent and experienced persons are increasingly reluctant toserve as directors or officers of corporations unless they are protected by adequateindemnification, due to increased exposure to litigation costs and risk resulting from theirservice to such corporations, and due to the fact that the exposure may bear no reasonablerelationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors and officers areoften difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directorsand officers with adequate, reliable knowledge of legal risks to which they are exposed orinformation regarding the proper course of action to take;
     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be sogreat (whether or not the case is meritorious), that the defense and/or settlement of suchlitigation may be beyond the personal resources of directors and officers;
     D. The Board of Directors of the Company (the “Board”) has concluded that, to retainand attract talented and experienced individuals to serve as officers and directors of the Companyand to encourage such individuals to make the business decisions necessary or appropriate for thesuccess of the Company and its Subsidiaries (as defined in Section 1 below), it isnecessary for the Company to contractually indemnify its directors and certain of its officers, andcertain of the directors and officers of its Subsidiaries, and to assume for itself maximumpermissible liability for Expenses, losses, liabilities and damages in connection with claimsagainst such officers and directors relating to their service in such capacities, and has furtherconcluded that the failure to provide such contractual indemnification could result in significantharm to the Company and its Subsidiaries and the Company’s stockholders;
     E. The provisions of the Amended and Restated Certificate of Incorporation of the Company (the“Certificate of Incorporation”) specifically state that the rights to indemnification andpayment of expenses described therein are not exclusive, and thereby contemplate that contractswith respect to indemnification and payment of Expenses by the Company and similar obligations ofthe Company may be entered into by and between the Company and persons entitled to such rightsdescribed in the Certificate of Incorporation; and
     F. The Company desires the Indemnitee to serve or continue to serve as a director or officerof the Company and/or one or more of its Subsidiaries without undue concern for claims for damagesarising out of or related to such services to the Company and/or one or more of its Subsidiaries.
 

 

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
     1. Definitions. For the purposes of this Agreement, the following terms shall havethe meanings set forth below:
     (a) Agent. “Agent” means any person who (i) is or was a director, officer,employee, or other agent of the Company or a Subsidiary of the Company, (ii) is or wasserving at the request of, for the convenience of, or to represent the “interest of theCompany” or a Subsidiary of the Company as a director, officer, trustee, partner, employee,fiduciary or agent of another foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, foundation, association, organization or otherlegal entity or enterprise or (iii) is or was serving in any capacity with respect to anyemployee, fiduciary benefits plans of the Company or any Subsidiary. For purposes ofsubsection (ii) of this Section 1(a), if Indemnitee is serving or has served as adirector, officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,Indemnitee shall be deemed to be serving at the request of the Company.
     (b) Controlled. “Controlled” means subject to the power to exercise acontrolling influence over the management or policies of a corporation, partnership, jointventure, trust or other entity.
     (c) Expenses. “Expenses” includes all direct and indirect costs, fees andexpenses of any type or nature whatsoever (including, without limitation, attorneys’ feesand related disbursements and retainers, other out-of-pocket costs such as fees anddisbursements of expert witnesses, private investigators and professional advisors, courtcosts, transcript costs, fees of experts, duplicating, printing and binding costs, telephoneand fax transmission charges, postage, delivery services, secretarial services and otherdisbursements and Expenses and reasonable compensation for time spent by the Indemnitee forwhich he is not otherwise compensated by the Company or any third party) actually andreasonably incurred by the Indemnitee in connection with either the investigation, defense,settlement or appeal of, or otherwise related to a Proceeding or establishing or enforcing aright to indemnification under this Agreement or otherwise.
     (d) Proceeding. “Proceeding” means any threatened, pending, or completedclaim, action, suit, arbitration, alternate dispute resolution process, investigation,administrative hearing, appeal or any other proceeding, whether civil, criminal,administrative, investigative or any other type whatsoever, whether formal or informal,including a proceeding initiated by Indemnitee pursuant to Section 6 of thisAgreement to enforce Indemnitee’s rights hereunder.
     (e) Subsidiary. “Subsidiary” means (i) any corporation of which 50% or more ofthe outstanding voting securities are owned directly or indirectly by the Company, or whichis otherwise controlled by the Company, (ii) any partnership, joint venture, limitedliability company, trust or other entity of which 50% or more of the equity interest isowned directly or indirectly by the Company, or which is otherwise controlled by the
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Company or (iii) the Company owns a general partner or managing member or similarinterest.
     2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to serve as anAgent of the Company, at its will (or under separate agreement, if such agreement exists), in thecapacity Indemnitee currently serves as an Agent of the Company; provided, however,that nothing contained in this Agreement is intended to or shall (i) restrict the ability of theIndemnitee to resign at any time and for any reason from any current or future position orpositions, (ii) create any right to continued employment of the Indemnitee in any current or futureposition or positions, or (iii) restrict the ability of the Company to terminate the employment oragency of Indemnitee at any time and for any reason (subject to compliance with the terms of anyemployment or other applicable agreement to which the Company (or any of its Subsidiaries) and theIndemnitee are parties).
     3. Indemnification as Agent.
     (a) Third Party Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding (other than an action by or in the right of the Company) by reasonof the fact that he is or was an Agent of the Company, or by reason of anything done or not done byhim in any such capacity or otherwise at the request of the Company or any of its officers,directors, or stockholders, the Company shall indemnify and hold harmless the Indemnitee againstany and all Expenses, losses and liabilities of any type whatsoever (including, but not limited to,judgments, damages, liabilities, losses, fines, excise taxes, penalties and amounts paid insettlement) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal of, or otherwise related to such Proceeding, if he acted in good faith and ina manner he reasonably believed to be in, or not opposed to, the best interests of the Company,and, with respect to any criminal action or Proceeding, if he had no reasonable cause to believehis conduct was unlawful. The termination of any Proceeding, or any claim, issue or matter in sucha Proceeding by reason of settlement, judgment, order or otherwise, shall be deemed to be asuccessful result as to such Proceeding, claim, issue or matter, so long as there has been nofinding (either adjudicated or pursuant to Section 6(c) below) that Indemnitee (i) did notact in good faith, or (ii) did not act in a manner reasonably believed to be in, or not opposed to,the best interests of the Company, or (iii) with respect to any criminal Proceeding, had reasonablecause to believe his conduct was unlawful.
     (b) Derivative Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding by or in the right of the Company to procure a judgment in its favorby reason of the fact that he is or was an Agent of the Company, or by reason of anything done ornot done by him in any such capacity, the Company shall indemnify and hold harmless the Indemniteeagainst any amounts paid in settlement of any such Proceeding and any and all Expenses, losses andliabilities of any type whatsoever (including, but not limited to, judgments, damages, liabilities,losses, fines, excise taxes, penalties and amounts paid in settlement) actually and reasonablyincurred by him in connection with the investigation, defense, settlement, or appeal of, orotherwise related to such Proceeding, if he acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company; except that noindemnification under this subsection shall be made with respect to any claim, issue or matter asto which such person has been finally adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the court in whichsuch Proceeding was brought shall determine upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, such person is fairly and reasonablyentitled to indemnity for such Expenses as the court shall deem proper.
     (c) Scope of Indemnification. If the General Corporation Law of the State of Delaware(the “Delaware Law”) or any other applicable law is amended after the date hereof to permitthe Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee withrespect to any action or Proceeding, not contemplated by this Agreement, then this Agreement(without any further action be either party hereto) shall automatically be deemed to be amended torequire that the Company indemnify Indemnitee to the fullest extent permitted by the Delaware Law.
     4. Advancement of Expenses. Subject to Sections 7(a) and (b) below,the Company shall advance all Expenses actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense, settlement or appeal of, or otherwise related to anyProceeding to which the Indemnitee is a party or is threatened to be made a party by reason of thefact that the Indemnitee is or was an Agent of the Company. Indemnitee hereby agrees to repay suchamounts advanced if it shall ultimately be determined pursuant to Section 6 below that theIndemnitee is not entitled to be indemnified by the Company.
     5. Indemnification Procedures.
     (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of thecommencement of or the threat of commencement of any Proceeding, the Indemnitee shall, if theIndemnitee believes that indemnification with respect thereto may be sought from the Company underthis Agreement, provide written notice to the Company of the commencement or threat of commencementthereof; provided that the failure to give such notice shall not impair Indemnitee’s rightsunder this Agreement.
     (b) Notice to Insurer. If, at the time of the receipt of a notice of the commencementof a Proceeding pursuant to Section 5(a) above, the Company has in effect an insurancepolicy or policies providing directors’ and officers’ liability insurance, the Company shall giveprompt notice of the commencement of such Proceeding to the insurers in accordance with theprocedures set forth in the respective policies. The Company shall thereafter take all necessaryor desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payableas a result of such Proceeding in accordance with the terms of such policies.
     (c) Assumption of Defense. In the event the Company shall be obligated to pay theExpenses of the Indemnitee with respect to any Proceeding, the Company shall be entitled to assumethe defense of such Proceeding, with counsel of its choosing, upon the delivery to the Indemniteeof written notice of its election to do so, which written notice shall be delivered within ten (10)calendar days after receipt of written notice of the Proceeding pursuant to Section 5(a)above. After delivery of such notice, the Company will not be liable to the Indemnitee under thisAgreement for any fees and Expenses of counsel which are subsequently incurred by the Indemniteewith respect to the same Proceeding; provided, however, that the Indemnitee shallhave the right to employ his counsel in any such Proceeding at the Indemnitee’s
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expense; and providedfurther, that if (i) the employment of counsel by theIndemnitee has been previously authorized by the Company, or (ii) the Indemnitee shall havereasonably concluded that there may be a conflict of interest between the Company and theIndemnitee in the conduct of any such defense or that Indemnitee may have separate defenses orcounterclaims to assert with respect to any issue which may not be consistent with the position ofother defendants in such Proceeding, or (iii) the Company shall not, in fact, have employed counselto assume the defense of such Proceeding in a timely manner, then, in any such case, the fees andExpenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if theCompany fails to comply with any of its obligations under this Agreement or in the event that theCompany or any other person takes any action to declare this Agreement void or unenforceable, orinstitutes any action, suit or Proceeding to deny or to recover from Indemnitee the benefitsintended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counselof Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection withany such matter. The Company shall not, without the prior written consent of Indemnitee, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional termthereof, the full release of Indemnitee from all liability in respect of such Proceeding, whichrelease shall be in form and substance reasonably satisfactory to Indemnitee. This Section5(c) shall not apply to a Proceeding brought by Indemnitee under Section 6 below orpursuant to Section 7(a) or (b) below.
     (d) Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee.Indemnitee shall execute all documents required and shall do everything that may be necessary tosecure such rights, including the execution of such documents necessary to enable the Company toeffectively bring suit to enforce such rights.
     (e) Cooperation by Indemnitee. Indemnitee shall give the Company such information andcooperation as it may reasonably require and as shall be within Indemnitee’s power.
     6. Determination of Right to Indemnification.
     (a) Successful Proceeding. To the extent the Indemnitee has been successful, on themerits or otherwise, in the defense of any Proceeding referred to in Section 3 above, theCompany shall indemnify the Indemnitee against any and all Expenses actually and reasonablyincurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee against any and all Expensesactually and reasonably incurred by or for him in connection with each successfully resolved claim,issue or matter.
     (b) Other Proceeding. In the event that Section 6(a) above is inapplicable,or applicable only in part, the Company shall nevertheless indemnify the Indemnitee unless it isdetermined in a form described below that the Indemnitee has not met the applicable standard ofconduct set forth in Section 3 above, if any, which entitles Indemnitee to suchindemnification.
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     (c) Forum in Event of Dispute. The Indemnitee shall be entitled to select the forumin which the validity of the Company’s claim under Section 6(b) hereof that the Indemniteeis not entitled to indemnification will be heard, from among the following (subject to provisionsof applicable law):
     (i) by a majority vote of the directors of the Board who are not parties to suchProceeding, even though less than a quorum; or
     (ii) by a committee of such directors designated by majority vote of such directors,even though less than a quorum; or
     (iii) if there are no such directors, or if such directors so direct, by independentlegal counsel in a written opinion; or
     (iv) by the stockholders.
     (d) Submission of Company’s Claim. As soon as practicable, and in no event later thanthirty (30) days after written notice of the Indemnitee’s choice of forum pursuant to Section6(c) above, the Company shall, at its own expense, submit to the selected forum in such manneras the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemniteeis not entitled to indemnification. The Company shall act in the utmost good faith to assure theIndemnitee a complete opportunity to defend against such claim.
     (e) Appeal to Court. Notwithstanding a determination by any forum listed inSection 6(c) above that Indemnitee is not entitled to indemnification with respect to aspecific Proceeding, the Indemnitee shall have the right to apply to the court in which thatProceeding is or was pending or any other court of competent jurisdiction, for the purpose ofenforcing the Indemnitee’s right to indemnification pursuant to this Agreement.
     (f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding any otherprovision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against allExpenses incurred by the Indemnitee in connection with any hearing or Proceeding under thisSection 6 involving the Indemnitee and against all Expenses incurred by the Indemnitee inconnection with any other Proceeding between the Company and the Indemnitee involving theinterpretation or enforcement of the rights of the Indemnitee under this Agreement unless a courtof competent jurisdiction finds that the claims and/or defenses of the Indemnitee in any suchProceeding was frivolous or made in bad faith.
     (g) Effect of Certain Resolutions. Neither the settlement or termination of anyProceeding nor the failure of the Company to award indemnification or to determine thatindemnification is payable shall create a presumption that Indemnitee is not entitled toindemnification hereunder. In addition, the termination of any Proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent shallnot create a presumption that Indemnitee did not act in good faith and in a manner which Indemniteereasonably believed to be in or not opposed to the best interests of the Company or, with respectto any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.
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     (h) Failure To Act Not a Defense. The failure of the Company (including its Board ofDirectors or any committee thereof, independent legal counsel, or stockholders) to make adetermination concerning the permissibility of indemnification hereunder or the advancement ofExpenses under this Agreement shall not be a defense in any action brought under Section 6above, and shall not create a presumption that such indemnification or advancement is notpermissible.
     7. Exceptions.
     (a) Excluded Action or Omissions. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated to indemnify or advance Expenses to Indemniteewith respect to Proceedings or claims arising out of acts, omissions or transactions for whichIndemnitee is prohibited from receiving indemnification under applicable law.
     (b) Claims Initiated by Indemnitee. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify or advance Expenses to the Indemnitee with respect to Proceedings or claims initiated orbrought voluntarily by the Indemnitee and not by way of defense or counterclaims asserted byIndemnitee in any Proceeding brought against Indemnitee, except with respect to Proceedings broughtto establish or enforce a right to indemnification under this Agreement or any other statute or lawor otherwise as required under the General Corporation Law of the State of Delaware, but suchindemnification or advancement of Expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate.
     (c) Lack of Good Faith. Any other provision herein to the contrary notwithstanding,the Company shall not be obligated pursuant to the terms of this Agreement to indemnify theIndemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted bythe Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdictiondetermines that each of the material assertions made by the Indemnitee in such Proceeding wasfrivolous or made in bad faith.
     (d) Unauthorized Settlements. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify the Indemnitee for any amount paid in settlement of a Proceeding effected without theprior written consent of the Company. The Company agrees not to unreasonably withhold its consentto any settlement.
     (e) No Duplicative Payment. The Company shall not be liable under this Agreement tomake any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemniteehas otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.
     8. Non-exclusivity. **The provisions for indemnification and advancement of Expensesset forth in this Agreement shall not be deemed exclusive of any other rights which the Indemniteemay have under any provision of law, the Certificate of Incorporation or Amended and RestatedBylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, orotherwise, both as to action in his official**
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**capacity and as to action in another capacity while occupying a position as an Agent of theCompany.**
     9. Interpretation of Agreement; Scope. It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnification to theIndemnitee to the fullest extent now or hereafter permitted by applicable law. The benefits ofthis Agreement shall inure to the Indemnitee both with respect to acts done or not done by him bothbefore and after this date.
     10. Burden of Proof. In making a determination with respect to entitlement toindemnification hereunder, the person or persons or entity making such determination shall presumethat Indemnitee is entitled to indemnification under this Agreement, and the Company shall have theburden of proof to overcome that presumption in connection with the making by any person, personsor entity of any determination contrary to that presumption.
     11. Severability. If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision held to be invalid,illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not inany way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions ofthis Agreement (including, without limitation, all portions of any paragraph of this Agreementcontaining any such provision held to be invalid, illegal or unenforceable, that are not themselvesinvalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable and to give effect to Section 9hereof.
     12. Modification and Waiver. Except as contemplated by Section 3(c), nosupplement, modification or amendment of this Agreement shall be binding unless executed in writingby all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.
     13. Survival, Successors and Assigns. The Indemnitee’s rights under this Agreementshall continue after the Indemnitee has ceased acting as an Agent of the Company. The terms ofthis Agreement shall be binding on and inure to the benefit of the Company and its successors andassigns and shall be binding on and inure to the benefit of Indemnitee and Indemnitee’s heirs,executors and administrators.
     14. Gender. The masculine, feminine or neuter pronouns used herein shall beinterpreted without regard to gender, and the use of the singular or plural shall be deemed toinclude the other whenever the context so requires.
     15. Notice. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receivedby the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date. All notice to either party will be sent to theapplicable address below, or as subsequently modified by written notice.
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     If to the Company:    Coinmach Service Corp. 303 Sunnyside Blvd., Suite 70 Plainview, NY 11803 Attention: Robert M. Doyle
     If to Indemnitee, at such Indemnitee’s primary address listed in the records of the Company.
     16. Governing Law. This Agreement, and all rights, remedies, liabilities, powers andduties of the parties to this Agreement, shall be governed exclusively by and construed accordingto the laws of the State of Delaware without regard to principles of conflicts of laws.
     17. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or Proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.
     18. Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all such counterparts shall together constitute one andthe same instrument.
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     The parties hereto have entered into this Indemnity Agreement effective as of the date firstabove written.       COINMACH SERVICE CORP.      By: /s/ Stephen R. Kerrigan     Title: Chief Executive Officer      INDEMNITEE: /s/ Robert M. Doyle    
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**INDEMNITY AGREEMENT**
     This Indemnity Agreement, dated as of November 24, 2004 (the “Agreement”) is made byand between Coinmach Service Corp., a Delaware corporation (the “Company”) and Bruce V.Rauner, (the “Indemnitee”).
**RECITALS**
     A. The Company is aware that competent and experienced persons are increasingly reluctant toserve as directors or officers of corporations unless they are protected by adequateindemnification, due to increased exposure to litigation costs and risk resulting from theirservice to such corporations, and due to the fact that the exposure may bear no reasonablerelationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors and officers areoften difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directorsand officers with adequate, reliable knowledge of legal risks to which they are exposed orinformation regarding the proper course of action to take;
     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be sogreat (whether or not the case is meritorious), that the defense and/or settlement of suchlitigation may be beyond the personal resources of directors and officers;
     D. The Board of Directors of the Company (the “Board”) has concluded that, to retainand attract talented and experienced individuals to serve as officers and directors of the Companyand to encourage such individuals to make the business decisions necessary or appropriate for thesuccess of the Company and its Subsidiaries (as defined in Section 1 below), it isnecessary for the Company to contractually indemnify its directors and certain of its officers, andcertain of the directors and officers of its Subsidiaries, and to assume for itself maximumpermissible liability for Expenses, losses, liabilities and damages in connection with claimsagainst such officers and directors relating to their service in such capacities, and has furtherconcluded that the failure to provide such contractual indemnification could result in significantharm to the Company and its Subsidiaries and the Company’s stockholders;
     E. The provisions of the Amended and Restated Certificate of Incorporation of the Company (the“Certificate of Incorporation”) specifically state that the rights to indemnification andpayment of expenses described therein are not exclusive, and thereby contemplate that contractswith respect to indemnification and payment of Expenses by the Company and similar obligations ofthe Company may be entered into by and between the Company and persons entitled to such rightsdescribed in the Certificate of Incorporation; and
     F. The Company desires the Indemnitee to serve or continue to serve as a director or officerof the Company and/or one or more of its Subsidiaries without undue concern for claims for damagesarising out of or related to such services to the Company and/or one or more of its Subsidiaries.
 

 

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
     1. Definitions. For the purposes of this Agreement, the following terms shall havethe meanings set forth below:
     (a) Agent. “Agent” means any person who (i) is or was a director, officer,employee, or other agent of the Company or a Subsidiary of the Company, (ii) is or wasserving at the request of, for the convenience of, or to represent the “interest of theCompany” or a Subsidiary of the Company as a director, officer, trustee, partner, employee,fiduciary or agent of another foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, foundation, association, organization or otherlegal entity or enterprise or (iii) is or was serving in any capacity with respect to anyemployee, fiduciary benefits plans of the Company or any Subsidiary. For purposes ofsubsection (ii) of this Section 1(a), if Indemnitee is serving or has served as adirector, officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,Indemnitee shall be deemed to be serving at the request of the Company.
     (b) Controlled. “Controlled” means subject to the power to exercise acontrolling influence over the management or policies of a corporation, partnership, jointventure, trust or other entity.
     (c) Expenses. “Expenses” includes all direct and indirect costs, fees andexpenses of any type or nature whatsoever (including, without limitation, attorneys’ feesand related disbursements and retainers, other out-of-pocket costs such as fees anddisbursements of expert witnesses, private investigators and professional advisors, courtcosts, transcript costs, fees of experts, duplicating, printing and binding costs, telephoneand fax transmission charges, postage, delivery services, secretarial services and otherdisbursements and Expenses and reasonable compensation for time spent by the Indemnitee forwhich he is not otherwise compensated by the Company or any third party) actually andreasonably incurred by the Indemnitee in connection with either the investigation, defense,settlement or appeal of, or otherwise related to a Proceeding or establishing or enforcing aright to indemnification under this Agreement or otherwise.
     (d) Proceeding. “Proceeding” means any threatened, pending, or completedclaim, action, suit, arbitration, alternate dispute resolution process, investigation,administrative hearing, appeal or any other proceeding, whether civil, criminal,administrative, investigative or any other type whatsoever, whether formal or informal,including a proceeding initiated by Indemnitee pursuant to Section 6 of thisAgreement to enforce Indemnitee’s rights hereunder.
     (e) Subsidiary. “Subsidiary” means (i) any corporation of which 50% or more ofthe outstanding voting securities are owned directly or indirectly by the Company, or whichis otherwise controlled by the Company, (ii) any partnership, joint venture, limitedliability company, trust or other entity of which 50% or more of the equity interest isowned directly or indirectly by the Company, or which is otherwise controlled by the
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Company or (iii) the Company owns a general partner or managing member or similarinterest.
     2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to serve as anAgent of the Company, at its will (or under separate agreement, if such agreement exists), in thecapacity Indemnitee currently serves as an Agent of the Company; provided, however,that nothing contained in this Agreement is intended to or shall (i) restrict the ability of theIndemnitee to resign at any time and for any reason from any current or future position orpositions, (ii) create any right to continued employment of the Indemnitee in any current or futureposition or positions, or (iii) restrict the ability of the Company to terminate the employment oragency of Indemnitee at any time and for any reason (subject to compliance with the terms of anyemployment or other applicable agreement to which the Company (or any of its Subsidiaries) and theIndemnitee are parties).
     3. Indemnification as Agent.
     (a) Third Party Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding (other than an action by or in the right of the Company) by reasonof the fact that he is or was an Agent of the Company, or by reason of anything done or not done byhim in any such capacity or otherwise at the request of the Company or any of its officers,directors, or stockholders, the Company shall indemnify and hold harmless the Indemnitee againstany and all Expenses, losses and liabilities of any type whatsoever (including, but not limited to,judgments, damages, liabilities, losses, fines, excise taxes, penalties and amounts paid insettlement) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal of, or otherwise related to such Proceeding, if he acted in good faith and ina manner he reasonably believed to be in, or not opposed to, the best interests of the Company,and, with respect to any criminal action or Proceeding, if he had no reasonable cause to believehis conduct was unlawful. The termination of any Proceeding, or any claim, issue or matter in sucha Proceeding by reason of settlement, judgment, order or otherwise, shall be deemed to be asuccessful result as to such Proceeding, claim, issue or matter, so long as there has been nofinding (either adjudicated or pursuant to Section 6(c) below) that Indemnitee (i) did notact in good faith, or (ii) did not act in a manner reasonably believed to be in, or not opposed to,the best interests of the Company, or (iii) with respect to any criminal Proceeding, had reasonablecause to believe his conduct was unlawful.
     (b) Derivative Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding by or in the right of the Company to procure a judgment in its favorby reason of the fact that he is or was an Agent of the Company, or by reason of anything done ornot done by him in any such capacity, the Company shall indemnify and hold harmless the Indemniteeagainst any amounts paid in settlement of any such Proceeding and any and all Expenses, losses andliabilities of any type whatsoever (including, but not limited to, judgments, damages, liabilities,losses, fines, excise taxes, penalties and amounts paid in settlement) actually and reasonablyincurred by him in connection with the investigation, defense, settlement, or appeal of, orotherwise related to such Proceeding, if he acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company; except that noindemnification under this subsection shall be made with respect to any claim, issue or matter asto which such person has been finally adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the court in whichsuch Proceeding was brought shall determine upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, such person is fairly and reasonablyentitled to indemnity for such Expenses as the court shall deem proper.
     (c) Scope of Indemnification. If the General Corporation Law of the State of Delaware(the “Delaware Law”) or any other applicable law is amended after the date hereof to permitthe Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee withrespect to any action or Proceeding, not contemplated by this Agreement, then this Agreement(without any further action be either party hereto) shall automatically be deemed to be amended torequire that the Company indemnify Indemnitee to the fullest extent permitted by the Delaware Law.
     4. Advancement of Expenses. Subject to Sections 7(a) and (b) below,the Company shall advance all Expenses actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense, settlement or appeal of, or otherwise related to anyProceeding to which the Indemnitee is a party or is threatened to be made a party by reason of thefact that the Indemnitee is or was an Agent of the Company. Indemnitee hereby agrees to repay suchamounts advanced if it shall ultimately be determined pursuant to Section 6 below that theIndemnitee is not entitled to be indemnified by the Company.
     5. Indemnification Procedures.
     (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of thecommencement of or the threat of commencement of any Proceeding, the Indemnitee shall, if theIndemnitee believes that indemnification with respect thereto may be sought from the Company underthis Agreement, provide written notice to the Company of the commencement or threat of commencementthereof; provided that the failure to give such notice shall not impair Indemnitee’s rightsunder this Agreement.
     (b) Notice to Insurer. If, at the time of the receipt of a notice of the commencementof a Proceeding pursuant to Section 5(a) above, the Company has in effect an insurancepolicy or policies providing directors’ and officers’ liability insurance, the Company shall giveprompt notice of the commencement of such Proceeding to the insurers in accordance with theprocedures set forth in the respective policies. The Company shall thereafter take all necessaryor desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payableas a result of such Proceeding in accordance with the terms of such policies.
     (c) Assumption of Defense. In the event the Company shall be obligated to pay theExpenses of the Indemnitee with respect to any Proceeding, the Company shall be entitled to assumethe defense of such Proceeding, with counsel of its choosing, upon the delivery to the Indemniteeof written notice of its election to do so, which written notice shall be delivered within ten (10)calendar days after receipt of written notice of the Proceeding pursuant to Section 5(a)above. After delivery of such notice, the Company will not be liable to the Indemnitee under thisAgreement for any fees and Expenses of counsel which are subsequently incurred by the Indemniteewith respect to the same Proceeding; provided, however, that the Indemnitee shallhave the right to employ his counsel in any such Proceeding at the Indemnitee’s
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expense; and providedfurther, that if (i) the employment of counsel by theIndemnitee has been previously authorized by the Company, or (ii) the Indemnitee shall havereasonably concluded that there may be a conflict of interest between the Company and theIndemnitee in the conduct of any such defense or that Indemnitee may have separate defenses orcounterclaims to assert with respect to any issue which may not be consistent with the position ofother defendants in such Proceeding, or (iii) the Company shall not, in fact, have employed counselto assume the defense of such Proceeding in a timely manner, then, in any such case, the fees andExpenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if theCompany fails to comply with any of its obligations under this Agreement or in the event that theCompany or any other person takes any action to declare this Agreement void or unenforceable, orinstitutes any action, suit or Proceeding to deny or to recover from Indemnitee the benefitsintended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counselof Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection withany such matter. The Company shall not, without the prior written consent of Indemnitee, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional termthereof, the full release of Indemnitee from all liability in respect of such Proceeding, whichrelease shall be in form and substance reasonably satisfactory to Indemnitee. This Section5(c) shall not apply to a Proceeding brought by Indemnitee under Section 6 below orpursuant to Section 7(a) or (b) below.
     (d) Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee.Indemnitee shall execute all documents required and shall do everything that may be necessary tosecure such rights, including the execution of such documents necessary to enable the Company toeffectively bring suit to enforce such rights.
     (e) Cooperation by Indemnitee. Indemnitee shall give the Company such information andcooperation as it may reasonably require and as shall be within Indemnitee’s power.
     6. Determination of Right to Indemnification.
     (a) Successful Proceeding. To the extent the Indemnitee has been successful, on themerits or otherwise, in the defense of any Proceeding referred to in Section 3 above, theCompany shall indemnify the Indemnitee against any and all Expenses actually and reasonablyincurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee against any and all Expensesactually and reasonably incurred by or for him in connection with each successfully resolved claim,issue or matter.
     (b) Other Proceeding. In the event that Section 6(a) above is inapplicable,or applicable only in part, the Company shall nevertheless indemnify the Indemnitee unless it isdetermined in a form described below that the Indemnitee has not met the applicable standard ofconduct set forth in Section 3 above, if any, which entitles Indemnitee to suchindemnification.
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     (c) Forum in Event of Dispute. The Indemnitee shall be entitled to select the forumin which the validity of the Company’s claim under Section 6(b) hereof that the Indemniteeis not entitled to indemnification will be heard, from among the following (subject to provisionsof applicable law):
     (i) by a majority vote of the directors of the Board who are not parties to suchProceeding, even though less than a quorum; or
     (ii) by a committee of such directors designated by majority vote of such directors,even though less than a quorum; or
     (iii) if there are no such directors, or if such directors so direct, by independentlegal counsel in a written opinion; or
     (iv) by the stockholders.
     (d) Submission of Company’s Claim. As soon as practicable, and in no event later thanthirty (30) days after written notice of the Indemnitee’s choice of forum pursuant to Section6(c) above, the Company shall, at its own expense, submit to the selected forum in such manneras the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemniteeis not entitled to indemnification. The Company shall act in the utmost good faith to assure theIndemnitee a complete opportunity to defend against such claim.
     (e) Appeal to Court. Notwithstanding a determination by any forum listed inSection 6(c) above that Indemnitee is not entitled to indemnification with respect to aspecific Proceeding, the Indemnitee shall have the right to apply to the court in which thatProceeding is or was pending or any other court of competent jurisdiction, for the purpose ofenforcing the Indemnitee’s right to indemnification pursuant to this Agreement.
     (f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding any otherprovision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against allExpenses incurred by the Indemnitee in connection with any hearing or Proceeding under thisSection 6 involving the Indemnitee and against all Expenses incurred by the Indemnitee inconnection with any other Proceeding between the Company and the Indemnitee involving theinterpretation or enforcement of the rights of the Indemnitee under this Agreement unless a courtof competent jurisdiction finds that the claims and/or defenses of the Indemnitee in any suchProceeding was frivolous or made in bad faith.
     (g) Effect of Certain Resolutions. Neither the settlement or termination of anyProceeding nor the failure of the Company to award indemnification or to determine thatindemnification is payable shall create a presumption that Indemnitee is not entitled toindemnification hereunder. In addition, the termination of any Proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent shallnot create a presumption that Indemnitee did not act in good faith and in a manner which Indemniteereasonably believed to be in or not opposed to the best interests of the Company or, with respectto any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.
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     (h) Failure To Act Not a Defense. The failure of the Company (including its Board ofDirectors or any committee thereof, independent legal counsel, or stockholders) to make adetermination concerning the permissibility of indemnification hereunder or the advancement ofExpenses under this Agreement shall not be a defense in any action brought under Section 6above, and shall not create a presumption that such indemnification or advancement is notpermissible.
     7. Exceptions.
     (a) Excluded Action or Omissions. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated to indemnify or advance Expenses to Indemniteewith respect to Proceedings or claims arising out of acts, omissions or transactions for whichIndemnitee is prohibited from receiving indemnification under applicable law.
     (b) Claims Initiated by Indemnitee. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify or advance Expenses to the Indemnitee with respect to Proceedings or claims initiated orbrought voluntarily by the Indemnitee and not by way of defense or counterclaims asserted byIndemnitee in any Proceeding brought against Indemnitee, except with respect to Proceedings broughtto establish or enforce a right to indemnification under this Agreement or any other statute or lawor otherwise as required under the General Corporation Law of the State of Delaware, but suchindemnification or advancement of Expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate.
     (c) Lack of Good Faith. Any other provision herein to the contrary notwithstanding,the Company shall not be obligated pursuant to the terms of this Agreement to indemnify theIndemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted bythe Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdictiondetermines that each of the material assertions made by the Indemnitee in such Proceeding wasfrivolous or made in bad faith.
     (d) Unauthorized Settlements. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify the Indemnitee for any amount paid in settlement of a Proceeding effected without theprior written consent of the Company. The Company agrees not to unreasonably withhold its consentto any settlement.
     (e) No Duplicative Payment. The Company shall not be liable under this Agreement tomake any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemniteehas otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.
     8. Non-exclusivity. **The provisions for indemnification and advancement of Expensesset forth in this Agreement shall not be deemed exclusive of any other rights which the Indemniteemay have under any provision of law, the Certificate of Incorporation or Amended and RestatedBylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, orotherwise, both as to action in his official**
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**capacity and as to action in another capacity while occupying a position as an Agent of theCompany.**
     9. Interpretation of Agreement; Scope. It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnification to theIndemnitee to the fullest extent now or hereafter permitted by applicable law. The benefits ofthis Agreement shall inure to the Indemnitee both with respect to acts done or not done by him bothbefore and after this date.
     10. Burden of Proof. In making a determination with respect to entitlement toindemnification hereunder, the person or persons or entity making such determination shall presumethat Indemnitee is entitled to indemnification under this Agreement, and the Company shall have theburden of proof to overcome that presumption in connection with the making by any person, personsor entity of any determination contrary to that presumption.
     11. Severability. If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision held to be invalid,illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not inany way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions ofthis Agreement (including, without limitation, all portions of any paragraph of this Agreementcontaining any such provision held to be invalid, illegal or unenforceable, that are not themselvesinvalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable and to give effect to Section 9hereof.
     12. Modification and Waiver. Except as contemplated by Section 3(c), nosupplement, modification or amendment of this Agreement shall be binding unless executed in writingby all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.
     13. Survival, Successors and Assigns. The Indemnitee’s rights under this Agreementshall continue after the Indemnitee has ceased acting as an Agent of the Company. The terms ofthis Agreement shall be binding on and inure to the benefit of the Company and its successors andassigns and shall be binding on and inure to the benefit of Indemnitee and Indemnitee’s heirs,executors and administrators.
     14. Gender. The masculine, feminine or neuter pronouns used herein shall beinterpreted without regard to gender, and the use of the singular or plural shall be deemed toinclude the other whenever the context so requires.
     15. Notice. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receivedby the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date. All notice to either party will be sent to theapplicable address below, or as subsequently modified by written notice.
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     If to the Company:    Coinmach Service Corp. 303 Sunnyside Blvd., Suite 70 Plainview, NY 11803 Attention: Robert M. Doyle
     If to Indemnitee, at such Indemnitee’s primary address listed in the records of the Company.
     16. Governing Law. This Agreement, and all rights, remedies, liabilities, powers andduties of the parties to this Agreement, shall be governed exclusively by and construed accordingto the laws of the State of Delaware without regard to principles of conflicts of laws.
     17. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or Proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.
     18. Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all such counterparts shall together constitute one andthe same instrument.
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     The parties hereto have entered into this Indemnity Agreement effective as of the date firstabove written.       COINMACH SERVICE CORP.      By: /s/ Stephen R. Kerrigan          Title: Chief Executive Officer      INDEMNITEE: /s/ Bruce V. Rauner    
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**INDEMNITY AGREEMENT**
     This Indemnity Agreement, dated as of November 24, 2004 (the “Agreement”) is made byand between Coinmach Service Corp., a Delaware corporation (the “Company”) and John R.Scheessele, (the “Indemnitee”).
**RECITALS**
     A. The Company is aware that competent and experienced persons are increasingly reluctant toserve as directors or officers of corporations unless they are protected by adequateindemnification, due to increased exposure to litigation costs and risk resulting from theirservice to such corporations, and due to the fact that the exposure may bear no reasonablerelationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors and officers areoften difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directorsand officers with adequate, reliable knowledge of legal risks to which they are exposed orinformation regarding the proper course of action to take;
     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be sogreat (whether or not the case is meritorious), that the defense and/or settlement of suchlitigation may be beyond the personal resources of directors and officers;
     D. The Board of Directors of the Company (the “Board”) has concluded that, to retainand attract talented and experienced individuals to serve as officers and directors of the Companyand to encourage such individuals to make the business decisions necessary or appropriate for thesuccess of the Company and its Subsidiaries (as defined in Section 1 below), it isnecessary for the Company to contractually indemnify its directors and certain of its officers, andcertain of the directors and officers of its Subsidiaries, and to assume for itself maximumpermissible liability for Expenses, losses, liabilities and damages in connection with claimsagainst such officers and directors relating to their service in such capacities, and has furtherconcluded that the failure to provide such contractual indemnification could result in significantharm to the Company and its Subsidiaries and the Company’s stockholders;
     E. The provisions of the Amended and Restated Certificate of Incorporation of the Company (the“Certificate of Incorporation”) specifically state that the rights to indemnification andpayment of expenses described therein are not exclusive, and thereby contemplate that contractswith respect to indemnification and payment of Expenses by the Company and similar obligations ofthe Company may be entered into by and between the Company and persons entitled to such rightsdescribed in the Certificate of Incorporation; and
     F. The Company desires the Indemnitee to serve or continue to serve as a director or officerof the Company and/or one or more of its Subsidiaries without undue concern for claims for damagesarising out of or related to such services to the Company and/or one or more of its Subsidiaries.
 

 

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
     1. Definitions. For the purposes of this Agreement, the following terms shall havethe meanings set forth below:
     (a) Agent. “Agent” means any person who (i) is or was a director, officer,employee, or other agent of the Company or a Subsidiary of the Company, (ii) is or wasserving at the request of, for the convenience of, or to represent the “interest of theCompany” or a Subsidiary of the Company as a director, officer, trustee, partner, employee,fiduciary or agent of another foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, foundation, association, organization or otherlegal entity or enterprise or (iii) is or was serving in any capacity with respect to anyemployee, fiduciary benefits plans of the Company or any Subsidiary. For purposes ofsubsection (ii) of this Section 1(a), if Indemnitee is serving or has served as adirector, officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,Indemnitee shall be deemed to be serving at the request of the Company.
     (b) Controlled. “Controlled” means subject to the power to exercise acontrolling influence over the management or policies of a corporation, partnership, jointventure, trust or other entity.
     (c) Expenses. “Expenses” includes all direct and indirect costs, fees andexpenses of any type or nature whatsoever (including, without limitation, attorneys’ feesand related disbursements and retainers, other out-of-pocket costs such as fees anddisbursements of expert witnesses, private investigators and professional advisors, courtcosts, transcript costs, fees of experts, duplicating, printing and binding costs, telephoneand fax transmission charges, postage, delivery services, secretarial services and otherdisbursements and Expenses and reasonable compensation for time spent by the Indemnitee forwhich he is not otherwise compensated by the Company or any third party) actually andreasonably incurred by the Indemnitee in connection with either the investigation, defense,settlement or appeal of, or otherwise related to a Proceeding or establishing or enforcing aright to indemnification under this Agreement or otherwise.
     (d) Proceeding. “Proceeding” means any threatened, pending, or completedclaim, action, suit, arbitration, alternate dispute resolution process, investigation,administrative hearing, appeal or any other proceeding, whether civil, criminal,administrative, investigative or any other type whatsoever, whether formal or informal,including a proceeding initiated by Indemnitee pursuant to Section 6 of thisAgreement to enforce Indemnitee’s rights hereunder.
     (e) Subsidiary. “Subsidiary” means (i) any corporation of which 50% or more ofthe outstanding voting securities are owned directly or indirectly by the Company, or whichis otherwise controlled by the Company, (ii) any partnership, joint venture, limitedliability company, trust or other entity of which 50% or more of the equity interest isowned directly or indirectly by the Company, or which is otherwise controlled by the
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Company or (iii) the Company owns a general partner or managing member or similarinterest.
     2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to serve as anAgent of the Company, at its will (or under separate agreement, if such agreement exists), in thecapacity Indemnitee currently serves as an Agent of the Company; provided, however,that nothing contained in this Agreement is intended to or shall (i) restrict the ability of theIndemnitee to resign at any time and for any reason from any current or future position orpositions, (ii) create any right to continued employment of the Indemnitee in any current or futureposition or positions, or (iii) restrict the ability of the Company to terminate the employment oragency of Indemnitee at any time and for any reason (subject to compliance with the terms of anyemployment or other applicable agreement to which the Company (or any of its Subsidiaries) and theIndemnitee are parties).
     3. Indemnification as Agent.
     (a) Third Party Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding (other than an action by or in the right of the Company) by reasonof the fact that he is or was an Agent of the Company, or by reason of anything done or not done byhim in any such capacity or otherwise at the request of the Company or any of its officers,directors, or stockholders, the Company shall indemnify and hold harmless the Indemnitee againstany and all Expenses, losses and liabilities of any type whatsoever (including, but not limited to,judgments, damages, liabilities, losses, fines, excise taxes, penalties and amounts paid insettlement) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal of, or otherwise related to such Proceeding, if he acted in good faith and ina manner he reasonably believed to be in, or not opposed to, the best interests of the Company,and, with respect to any criminal action or Proceeding, if he had no reasonable cause to believehis conduct was unlawful. The termination of any Proceeding, or any claim, issue or matter in sucha Proceeding by reason of settlement, judgment, order or otherwise, shall be deemed to be asuccessful result as to such Proceeding, claim, issue or matter, so long as there has been nofinding (either adjudicated or pursuant to Section 6(c) below) that Indemnitee (i) did notact in good faith, or (ii) did not act in a manner reasonably believed to be in, or not opposed to,the best interests of the Company, or (iii) with respect to any criminal Proceeding, had reasonablecause to believe his conduct was unlawful.
     (b) Derivative Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding by or in the right of the Company to procure a judgment in its favorby reason of the fact that he is or was an Agent of the Company, or by reason of anything done ornot done by him in any such capacity, the Company shall indemnify and hold harmless the Indemniteeagainst any amounts paid in settlement of any such Proceeding and any and all Expenses, losses andliabilities of any type whatsoever (including, but not limited to, judgments, damages, liabilities,losses, fines, excise taxes, penalties and amounts paid in settlement) actually and reasonablyincurred by him in connection with the investigation, defense, settlement, or appeal of, orotherwise related to such Proceeding, if he acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company; except that noindemnification under this subsection shall be made with respect to any claim, issue or matter asto which such person has been finally adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the court in whichsuch Proceeding was brought shall determine upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, such person is fairly and reasonablyentitled to indemnity for such Expenses as the court shall deem proper.
     (c) Scope of Indemnification. If the General Corporation Law of the State of Delaware(the “Delaware Law”) or any other applicable law is amended after the date hereof to permitthe Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee withrespect to any action or Proceeding, not contemplated by this Agreement, then this Agreement(without any further action be either party hereto) shall automatically be deemed to be amended torequire that the Company indemnify Indemnitee to the fullest extent permitted by the Delaware Law.
     4. Advancement of Expenses. Subject to Sections 7(a) and (b) below,the Company shall advance all Expenses actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense, settlement or appeal of, or otherwise related to anyProceeding to which the Indemnitee is a party or is threatened to be made a party by reason of thefact that the Indemnitee is or was an Agent of the Company. Indemnitee hereby agrees to repay suchamounts advanced if it shall ultimately be determined pursuant to Section 6 below that theIndemnitee is not entitled to be indemnified by the Company.
     5. Indemnification Procedures.
     (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of thecommencement of or the threat of commencement of any Proceeding, the Indemnitee shall, if theIndemnitee believes that indemnification with respect thereto may be sought from the Company underthis Agreement, provide written notice to the Company of the commencement or threat of commencementthereof; provided that the failure to give such notice shall not impair Indemnitee’s rightsunder this Agreement.
     (b) Notice to Insurer. If, at the time of the receipt of a notice of the commencementof a Proceeding pursuant to Section 5(a) above, the Company has in effect an insurancepolicy or policies providing directors’ and officers’ liability insurance, the Company shall giveprompt notice of the commencement of such Proceeding to the insurers in accordance with theprocedures set forth in the respective policies. The Company shall thereafter take all necessaryor desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payableas a result of such Proceeding in accordance with the terms of such policies.
     (c) Assumption of Defense. In the event the Company shall be obligated to pay theExpenses of the Indemnitee with respect to any Proceeding, the Company shall be entitled to assumethe defense of such Proceeding, with counsel of its choosing, upon the delivery to the Indemniteeof written notice of its election to do so, which written notice shall be delivered within ten (10)calendar days after receipt of written notice of the Proceeding pursuant to Section 5(a)above. After delivery of such notice, the Company will not be liable to the Indemnitee under thisAgreement for any fees and Expenses of counsel which are subsequently incurred by the Indemniteewith respect to the same Proceeding; provided, however, that the Indemnitee shallhave the right to employ his counsel in any such Proceeding at the Indemnitee’s
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expense; and providedfurther, that if (i) the employment of counsel by theIndemnitee has been previously authorized by the Company, or (ii) the Indemnitee shall havereasonably concluded that there may be a conflict of interest between the Company and theIndemnitee in the conduct of any such defense or that Indemnitee may have separate defenses orcounterclaims to assert with respect to any issue which may not be consistent with the position ofother defendants in such Proceeding, or (iii) the Company shall not, in fact, have employed counselto assume the defense of such Proceeding in a timely manner, then, in any such case, the fees andExpenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if theCompany fails to comply with any of its obligations under this Agreement or in the event that theCompany or any other person takes any action to declare this Agreement void or unenforceable, orinstitutes any action, suit or Proceeding to deny or to recover from Indemnitee the benefitsintended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counselof Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection withany such matter. The Company shall not, without the prior written consent of Indemnitee, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional termthereof, the full release of Indemnitee from all liability in respect of such Proceeding, whichrelease shall be in form and substance reasonably satisfactory to Indemnitee. This Section5(c) shall not apply to a Proceeding brought by Indemnitee under Section 6 below orpursuant to Section 7(a) or (b) below.
     (d) Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee.Indemnitee shall execute all documents required and shall do everything that may be necessary tosecure such rights, including the execution of such documents necessary to enable the Company toeffectively bring suit to enforce such rights.
     (e) Cooperation by Indemnitee. Indemnitee shall give the Company such information andcooperation as it may reasonably require and as shall be within Indemnitee’s power.
     6. Determination of Right to Indemnification.
     (a) Successful Proceeding. To the extent the Indemnitee has been successful, on themerits or otherwise, in the defense of any Proceeding referred to in Section 3 above, theCompany shall indemnify the Indemnitee against any and all Expenses actually and reasonablyincurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee against any and all Expensesactually and reasonably incurred by or for him in connection with each successfully resolved claim,issue or matter.
     (b) Other Proceeding. In the event that Section 6(a) above is inapplicable,or applicable only in part, the Company shall nevertheless indemnify the Indemnitee unless it isdetermined in a form described below that the Indemnitee has not met the applicable standard ofconduct set forth in Section 3 above, if any, which entitles Indemnitee to suchindemnification.
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     (c) Forum in Event of Dispute. The Indemnitee shall be entitled to select the forumin which the validity of the Company’s claim under Section 6(b) hereof that the Indemniteeis not entitled to indemnification will be heard, from among the following (subject to provisionsof applicable law):
     (i) by a majority vote of the directors of the Board who are not parties to suchProceeding, even though less than a quorum; or
     (ii) by a committee of such directors designated by majority vote of such directors,even though less than a quorum; or
     (iii) if there are no such directors, or if such directors so direct, by independentlegal counsel in a written opinion; or
     (iv) by the stockholders.
     (d) Submission of Company’s Claim. As soon as practicable, and in no event later thanthirty (30) days after written notice of the Indemnitee’s choice of forum pursuant to Section6(c) above, the Company shall, at its own expense, submit to the selected forum in such manneras the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemniteeis not entitled to indemnification. The Company shall act in the utmost good faith to assure theIndemnitee a complete opportunity to defend against such claim.
     (e) Appeal to Court. Notwithstanding a determination by any forum listed inSection 6(c) above that Indemnitee is not entitled to indemnification with respect to aspecific Proceeding, the Indemnitee shall have the right to apply to the court in which thatProceeding is or was pending or any other court of competent jurisdiction, for the purpose ofenforcing the Indemnitee’s right to indemnification pursuant to this Agreement.
     (f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding any otherprovision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against allExpenses incurred by the Indemnitee in connection with any hearing or Proceeding under thisSection 6 involving the Indemnitee and against all Expenses incurred by the Indemnitee inconnection with any other Proceeding between the Company and the Indemnitee involving theinterpretation or enforcement of the rights of the Indemnitee under this Agreement unless a courtof competent jurisdiction finds that the claims and/or defenses of the Indemnitee in any suchProceeding was frivolous or made in bad faith.
     (g) Effect of Certain Resolutions. Neither the settlement or termination of anyProceeding nor the failure of the Company to award indemnification or to determine thatindemnification is payable shall create a presumption that Indemnitee is not entitled toindemnification hereunder. In addition, the termination of any Proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent shallnot create a presumption that Indemnitee did not act in good faith and in a manner which Indemniteereasonably believed to be in or not opposed to the best interests of the Company or, with respectto any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.
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     (h) Failure To Act Not a Defense. The failure of the Company (including its Board ofDirectors or any committee thereof, independent legal counsel, or stockholders) to make adetermination concerning the permissibility of indemnification hereunder or the advancement ofExpenses under this Agreement shall not be a defense in any action brought under Section 6above, and shall not create a presumption that such indemnification or advancement is notpermissible.
     7. Exceptions.
     (a) Excluded Action or Omissions. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated to indemnify or advance Expenses to Indemniteewith respect to Proceedings or claims arising out of acts, omissions or transactions for whichIndemnitee is prohibited from receiving indemnification under applicable law.
     (b) Claims Initiated by Indemnitee. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify or advance Expenses to the Indemnitee with respect to Proceedings or claims initiated orbrought voluntarily by the Indemnitee and not by way of defense or counterclaims asserted byIndemnitee in any Proceeding brought against Indemnitee, except with respect to Proceedings broughtto establish or enforce a right to indemnification under this Agreement or any other statute or lawor otherwise as required under the General Corporation Law of the State of Delaware, but suchindemnification or advancement of Expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate.
     (c) Lack of Good Faith. Any other provision herein to the contrary notwithstanding,the Company shall not be obligated pursuant to the terms of this Agreement to indemnify theIndemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted bythe Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdictiondetermines that each of the material assertions made by the Indemnitee in such Proceeding wasfrivolous or made in bad faith.
     (d) Unauthorized Settlements. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify the Indemnitee for any amount paid in settlement of a Proceeding effected without theprior written consent of the Company. The Company agrees not to unreasonably withhold its consentto any settlement.
     (e) No Duplicative Payment. The Company shall not be liable under this Agreement tomake any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemniteehas otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.
     8. Non-exclusivity. **The provisions for indemnification and advancement of Expensesset forth in this Agreement shall not be deemed exclusive of any other rights which the Indemniteemay have under any provision of law, the Certificate of Incorporation or Amended and RestatedBylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, orotherwise, both as to action in his official**
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**capacity and as to action in another capacity while occupying a position as an Agent of theCompany.**
     9. Interpretation of Agreement; Scope. It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnification to theIndemnitee to the fullest extent now or hereafter permitted by applicable law. The benefits ofthis Agreement shall inure to the Indemnitee both with respect to acts done or not done by him bothbefore and after this date.
     10. Burden of Proof. In making a determination with respect to entitlement toindemnification hereunder, the person or persons or entity making such determination shall presumethat Indemnitee is entitled to indemnification under this Agreement, and the Company shall have theburden of proof to overcome that presumption in connection with the making by any person, personsor entity of any determination contrary to that presumption.
     11. Severability. If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision held to be invalid,illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not inany way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions ofthis Agreement (including, without limitation, all portions of any paragraph of this Agreementcontaining any such provision held to be invalid, illegal or unenforceable, that are not themselvesinvalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable and to give effect to Section 9hereof.
     12. Modification and Waiver. Except as contemplated by Section 3(c), nosupplement, modification or amendment of this Agreement shall be binding unless executed in writingby all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.
     13. Survival, Successors and Assigns. The Indemnitee’s rights under this Agreementshall continue after the Indemnitee has ceased acting as an Agent of the Company. The terms ofthis Agreement shall be binding on and inure to the benefit of the Company and its successors andassigns and shall be binding on and inure to the benefit of Indemnitee and Indemnitee’s heirs,executors and administrators.
     14. Gender. The masculine, feminine or neuter pronouns used herein shall beinterpreted without regard to gender, and the use of the singular or plural shall be deemed toinclude the other whenever the context so requires.
     15. Notice. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receivedby the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date. All notice to either party will be sent to theapplicable address below, or as subsequently modified by written notice.
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     If to the Company:    Coinmach Service Corp. 303 Sunnyside Blvd., Suite 70 Plainview, NY 11803 Attention: Robert M. Doyle
     If to Indemnitee, at such Indemnitee’s primary address listed in the records of the Company.
     16. Governing Law. This Agreement, and all rights, remedies, liabilities, powers andduties of the parties to this Agreement, shall be governed exclusively by and construed accordingto the laws of the State of Delaware without regard to principles of conflicts of laws.
     17. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or Proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.
     18. Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all such counterparts shall together constitute one andthe same instrument.
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     The parties hereto have entered into this Indemnity Agreement effective as of the date firstabove written.       COINMACH SERVICE CORP.      By: /s/ Stephen R. Kerrigan          Title: Chief Executive Officer      INDEMNITEE:  /s/ John R. Scheessele    
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**INDEMNITY AGREEMENT**
     This Indemnity Agreement, dated as of November 24, 2004 (the “Agreement”) is made byand between Coinmach Service Corp., a Delaware corporation (the “Company”) and Stephen R.Kerrigan, (the “Indemnitee”).
**RECITALS**
     A. The Company is aware that competent and experienced persons are increasingly reluctant toserve as directors or officers of corporations unless they are protected by adequateindemnification, due to increased exposure to litigation costs and risk resulting from theirservice to such corporations, and due to the fact that the exposure may bear no reasonablerelationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors and officers areoften difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directorsand officers with adequate, reliable knowledge of legal risks to which they are exposed orinformation regarding the proper course of action to take;
     C. Plaintiffs often seek damages in such large amounts and the costs of litigation may be sogreat (whether or not the case is meritorious), that the defense and/or settlement of suchlitigation may be beyond the personal resources of directors and officers;
     D. The Board of Directors of the Company (the “Board”) has concluded that, to retainand attract talented and experienced individuals to serve as officers and directors of the Companyand to encourage such individuals to make the business decisions necessary or appropriate for thesuccess of the Company and its Subsidiaries (as defined in Section 1 below), it isnecessary for the Company to contractually indemnify its directors and certain of its officers, andcertain of the directors and officers of its Subsidiaries, and to assume for itself maximumpermissible liability for Expenses, losses, liabilities and damages in connection with claimsagainst such officers and directors relating to their service in such capacities, and has furtherconcluded that the failure to provide such contractual indemnification could result in significantharm to the Company and its Subsidiaries and the Company’s stockholders;
     E. The provisions of the Amended and Restated Certificate of Incorporation of the Company (the“Certificate of Incorporation”) specifically state that the rights to indemnification andpayment of expenses described therein are not exclusive, and thereby contemplate that contractswith respect to indemnification and payment of Expenses by the Company and similar obligations ofthe Company may be entered into by and between the Company and persons entitled to such rightsdescribed in the Certificate of Incorporation; and
     F. The Company desires the Indemnitee to serve or continue to serve as a director or officerof the Company and/or one or more of its Subsidiaries without undue concern for claims for damagesarising out of or related to such services to the Company and/or one or more of its Subsidiaries.
 

 

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
     1. Definitions. For the purposes of this Agreement, the following terms shall havethe meanings set forth below:
     (a) Agent. “Agent” means any person who (i) is or was a director, officer,employee, or other agent of the Company or a Subsidiary of the Company, (ii) is or wasserving at the request of, for the convenience of, or to represent the “interest of theCompany” or a Subsidiary of the Company as a director, officer, trustee, partner, employee,fiduciary or agent of another foreign or domestic corporation, partnership, limitedliability company, joint venture, trust, foundation, association, organization or otherlegal entity or enterprise or (iii) is or was serving in any capacity with respect to anyemployee, fiduciary benefits plans of the Company or any Subsidiary. For purposes ofsubsection (ii) of this Section 1(a), if Indemnitee is serving or has served as adirector, officer, trustee, partner, employee, fiduciary or agent of a Subsidiary,Indemnitee shall be deemed to be serving at the request of the Company.
     (b) Controlled. “Controlled” means subject to the power to exercise acontrolling influence over the management or policies of a corporation, partnership, jointventure, trust or other entity.
     (c) Expenses. “Expenses” includes all direct and indirect costs, fees andexpenses of any type or nature whatsoever (including, without limitation, attorneys’ feesand related disbursements and retainers, other out-of-pocket costs such as fees anddisbursements of expert witnesses, private investigators and professional advisors, courtcosts, transcript costs, fees of experts, duplicating, printing and binding costs, telephoneand fax transmission charges, postage, delivery services, secretarial services and otherdisbursements and Expenses and reasonable compensation for time spent by the Indemnitee forwhich he is not otherwise compensated by the Company or any third party) actually andreasonably incurred by the Indemnitee in connection with either the investigation, defense,settlement or appeal of, or otherwise related to a Proceeding or establishing or enforcing aright to indemnification under this Agreement or otherwise.
     (d) Proceeding. “Proceeding” means any threatened, pending, or completedclaim, action, suit, arbitration, alternate dispute resolution process, investigation,administrative hearing, appeal or any other proceeding, whether civil, criminal,administrative, investigative or any other type whatsoever, whether formal or informal,including a proceeding initiated by Indemnitee pursuant to Section 6 of thisAgreement to enforce Indemnitee’s rights hereunder.
     (e) Subsidiary. “Subsidiary” means (i) any corporation of which 50% or more ofthe outstanding voting securities are owned directly or indirectly by the Company, or whichis otherwise controlled by the Company, (ii) any partnership, joint venture, limitedliability company, trust or other entity of which 50% or more of the equity interest isowned directly or indirectly by the Company, or which is otherwise controlled by the
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Company or (iii) the Company owns a general partner or managing member or similarinterest.
     2. Agreement To Serve. The Indemnitee agrees to serve and/or continue to serve as anAgent of the Company, at its will (or under separate agreement, if such agreement exists), in thecapacity Indemnitee currently serves as an Agent of the Company; provided, however,that nothing contained in this Agreement is intended to or shall (i) restrict the ability of theIndemnitee to resign at any time and for any reason from any current or future position orpositions, (ii) create any right to continued employment of the Indemnitee in any current or futureposition or positions, or (iii) restrict the ability of the Company to terminate the employment oragency of Indemnitee at any time and for any reason (subject to compliance with the terms of anyemployment or other applicable agreement to which the Company (or any of its Subsidiaries) and theIndemnitee are parties).
     3. Indemnification as Agent.
     (a) Third Party Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding (other than an action by or in the right of the Company) by reasonof the fact that he is or was an Agent of the Company, or by reason of anything done or not done byhim in any such capacity or otherwise at the request of the Company or any of its officers,directors, or stockholders, the Company shall indemnify and hold harmless the Indemnitee againstany and all Expenses, losses and liabilities of any type whatsoever (including, but not limited to,judgments, damages, liabilities, losses, fines, excise taxes, penalties and amounts paid insettlement) actually and reasonably incurred by him in connection with the investigation, defense,settlement or appeal of, or otherwise related to such Proceeding, if he acted in good faith and ina manner he reasonably believed to be in, or not opposed to, the best interests of the Company,and, with respect to any criminal action or Proceeding, if he had no reasonable cause to believehis conduct was unlawful. The termination of any Proceeding, or any claim, issue or matter in sucha Proceeding by reason of settlement, judgment, order or otherwise, shall be deemed to be asuccessful result as to such Proceeding, claim, issue or matter, so long as there has been nofinding (either adjudicated or pursuant to Section 6(c) below) that Indemnitee (i) did notact in good faith, or (ii) did not act in a manner reasonably believed to be in, or not opposed to,the best interests of the Company, or (iii) with respect to any criminal Proceeding, had reasonablecause to believe his conduct was unlawful.
     (b) Derivative Actions. If the Indemnitee was or is a party or is threatened to bemade a party to any Proceeding by or in the right of the Company to procure a judgment in its favorby reason of the fact that he is or was an Agent of the Company, or by reason of anything done ornot done by him in any such capacity, the Company shall indemnify and hold harmless the Indemniteeagainst any amounts paid in settlement of any such Proceeding and any and all Expenses, losses andliabilities of any type whatsoever (including, but not limited to, judgments, damages, liabilities,losses, fines, excise taxes, penalties and amounts paid in settlement) actually and reasonablyincurred by him in connection with the investigation, defense, settlement, or appeal of, orotherwise related to such Proceeding, if he acted in good faith and in a manner he reasonablybelieved to be in or not opposed to the best interests of the Company; except that noindemnification under this subsection shall be made with respect to any claim, issue or matter asto which such person has been finally adjudged to have been liable to the Company, unless and
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only to the extent that the Court of Chancery of the State of Delaware or the court in whichsuch Proceeding was brought shall determine upon application that, despite the adjudication ofliability but in view of all the circumstances of the case, such person is fairly and reasonablyentitled to indemnity for such Expenses as the court shall deem proper.
     (c) Scope of Indemnification. If the General Corporation Law of the State of Delaware(the “Delaware Law”) or any other applicable law is amended after the date hereof to permitthe Company to indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee withrespect to any action or Proceeding, not contemplated by this Agreement, then this Agreement(without any further action be either party hereto) shall automatically be deemed to be amended torequire that the Company indemnify Indemnitee to the fullest extent permitted by the Delaware Law.
     4. Advancement of Expenses. Subject to Sections 7(a) and (b) below,the Company shall advance all Expenses actually and reasonably incurred by the Indemnitee inconnection with the investigation, defense, settlement or appeal of, or otherwise related to anyProceeding to which the Indemnitee is a party or is threatened to be made a party by reason of thefact that the Indemnitee is or was an Agent of the Company. Indemnitee hereby agrees to repay suchamounts advanced if it shall ultimately be determined pursuant to Section 6 below that theIndemnitee is not entitled to be indemnified by the Company.
     5. Indemnification Procedures.
     (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of thecommencement of or the threat of commencement of any Proceeding, the Indemnitee shall, if theIndemnitee believes that indemnification with respect thereto may be sought from the Company underthis Agreement, provide written notice to the Company of the commencement or threat of commencementthereof; provided that the failure to give such notice shall not impair Indemnitee’s rightsunder this Agreement.
     (b) Notice to Insurer. If, at the time of the receipt of a notice of the commencementof a Proceeding pursuant to Section 5(a) above, the Company has in effect an insurancepolicy or policies providing directors’ and officers’ liability insurance, the Company shall giveprompt notice of the commencement of such Proceeding to the insurers in accordance with theprocedures set forth in the respective policies. The Company shall thereafter take all necessaryor desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payableas a result of such Proceeding in accordance with the terms of such policies.
     (c) Assumption of Defense. In the event the Company shall be obligated to pay theExpenses of the Indemnitee with respect to any Proceeding, the Company shall be entitled to assumethe defense of such Proceeding, with counsel of its choosing, upon the delivery to the Indemniteeof written notice of its election to do so, which written notice shall be delivered within ten (10)calendar days after receipt of written notice of the Proceeding pursuant to Section 5(a)above. After delivery of such notice, the Company will not be liable to the Indemnitee under thisAgreement for any fees and Expenses of counsel which are subsequently incurred by the Indemniteewith respect to the same Proceeding; provided, however, that the Indemnitee shallhave the right to employ his counsel in any such Proceeding at the Indemnitee’s
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expense; and providedfurther, that if (i) the employment of counsel by theIndemnitee has been previously authorized by the Company, or (ii) the Indemnitee shall havereasonably concluded that there may be a conflict of interest between the Company and theIndemnitee in the conduct of any such defense or that Indemnitee may have separate defenses orcounterclaims to assert with respect to any issue which may not be consistent with the position ofother defendants in such Proceeding, or (iii) the Company shall not, in fact, have employed counselto assume the defense of such Proceeding in a timely manner, then, in any such case, the fees andExpenses of Indemnitee’s counsel shall be at the expense of the Company. In addition, if theCompany fails to comply with any of its obligations under this Agreement or in the event that theCompany or any other person takes any action to declare this Agreement void or unenforceable, orinstitutes any action, suit or Proceeding to deny or to recover from Indemnitee the benefitsintended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counselof Indemnitee’s choice, at the expense of the Company, to represent Indemnitee in connection withany such matter. The Company shall not, without the prior written consent of Indemnitee, consentto the entry of any judgment against Indemnitee or enter into any settlement or compromise which(i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional termthereof, the full release of Indemnitee from all liability in respect of such Proceeding, whichrelease shall be in form and substance reasonably satisfactory to Indemnitee. This Section5(c) shall not apply to a Proceeding brought by Indemnitee under Section 6 below orpursuant to Section 7(a) or (b) below.
     (d) Subrogation. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee.Indemnitee shall execute all documents required and shall do everything that may be necessary tosecure such rights, including the execution of such documents necessary to enable the Company toeffectively bring suit to enforce such rights.
     (e) Cooperation by Indemnitee. Indemnitee shall give the Company such information andcooperation as it may reasonably require and as shall be within Indemnitee’s power.
     6. Determination of Right to Indemnification.
     (a) Successful Proceeding. To the extent the Indemnitee has been successful, on themerits or otherwise, in the defense of any Proceeding referred to in Section 3 above, theCompany shall indemnify the Indemnitee against any and all Expenses actually and reasonablyincurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceedingbut is successful, on the merits or otherwise, as to one or more but less than all claims, issuesor matters in such Proceeding, the Company shall indemnify Indemnitee against any and all Expensesactually and reasonably incurred by or for him in connection with each successfully resolved claim,issue or matter.
     (b) Other Proceeding. In the event that Section 6(a) above is inapplicable,or applicable only in part, the Company shall nevertheless indemnify the Indemnitee unless it isdetermined in a form described below that the Indemnitee has not met the applicable standard ofconduct set forth in Section 3 above, if any, which entitles Indemnitee to suchindemnification.
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     (c) Forum in Event of Dispute. The Indemnitee shall be entitled to select the forumin which the validity of the Company’s claim under Section 6(b) hereof that the Indemniteeis not entitled to indemnification will be heard, from among the following (subject to provisionsof applicable law):
     (i) by a majority vote of the directors of the Board who are not parties to suchProceeding, even though less than a quorum; or
     (ii) by a committee of such directors designated by majority vote of such directors,even though less than a quorum; or
     (iii) if there are no such directors, or if such directors so direct, by independentlegal counsel in a written opinion; or
     (iv) by the stockholders.
     (d) Submission of Company’s Claim. As soon as practicable, and in no event later thanthirty (30) days after written notice of the Indemnitee’s choice of forum pursuant to Section6(c) above, the Company shall, at its own expense, submit to the selected forum in such manneras the Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemniteeis not entitled to indemnification. The Company shall act in the utmost good faith to assure theIndemnitee a complete opportunity to defend against such claim.
     (e) Appeal to Court. Notwithstanding a determination by any forum listed inSection 6(c) above that Indemnitee is not entitled to indemnification with respect to aspecific Proceeding, the Indemnitee shall have the right to apply to the court in which thatProceeding is or was pending or any other court of competent jurisdiction, for the purpose ofenforcing the Indemnitee’s right to indemnification pursuant to this Agreement.
     (f) Indemnity for Expenses in Enforcement of Agreement. Notwithstanding any otherprovision in this Agreement to the contrary, the Company shall indemnify the Indemnitee against allExpenses incurred by the Indemnitee in connection with any hearing or Proceeding under thisSection 6 involving the Indemnitee and against all Expenses incurred by the Indemnitee inconnection with any other Proceeding between the Company and the Indemnitee involving theinterpretation or enforcement of the rights of the Indemnitee under this Agreement unless a courtof competent jurisdiction finds that the claims and/or defenses of the Indemnitee in any suchProceeding was frivolous or made in bad faith.
     (g) Effect of Certain Resolutions. Neither the settlement or termination of anyProceeding nor the failure of the Company to award indemnification or to determine thatindemnification is payable shall create a presumption that Indemnitee is not entitled toindemnification hereunder. In addition, the termination of any Proceeding by judgment, order,settlement, conviction, or upon a plea of nolocontendere or its equivalent shallnot create a presumption that Indemnitee did not act in good faith and in a manner which Indemniteereasonably believed to be in or not opposed to the best interests of the Company or, with respectto any criminal Proceeding, had reasonable cause to believe that Indemnitee’s action was unlawful.
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     (h) Failure To Act Not a Defense. The failure of the Company (including its Board ofDirectors or any committee thereof, independent legal counsel, or stockholders) to make adetermination concerning the permissibility of indemnification hereunder or the advancement ofExpenses under this Agreement shall not be a defense in any action brought under Section 6above, and shall not create a presumption that such indemnification or advancement is notpermissible.
     7. Exceptions.
     (a) Excluded Action or Omissions. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated to indemnify or advance Expenses to Indemniteewith respect to Proceedings or claims arising out of acts, omissions or transactions for whichIndemnitee is prohibited from receiving indemnification under applicable law.
     (b) Claims Initiated by Indemnitee. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify or advance Expenses to the Indemnitee with respect to Proceedings or claims initiated orbrought voluntarily by the Indemnitee and not by way of defense or counterclaims asserted byIndemnitee in any Proceeding brought against Indemnitee, except with respect to Proceedings broughtto establish or enforce a right to indemnification under this Agreement or any other statute or lawor otherwise as required under the General Corporation Law of the State of Delaware, but suchindemnification or advancement of Expenses may be provided by the Company in specific cases if theBoard finds it to be appropriate.
     (c) Lack of Good Faith. Any other provision herein to the contrary notwithstanding,the Company shall not be obligated pursuant to the terms of this Agreement to indemnify theIndemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted bythe Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdictiondetermines that each of the material assertions made by the Indemnitee in such Proceeding wasfrivolous or made in bad faith.
     (d) Unauthorized Settlements. Any other provision herein to the contrarynotwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement toindemnify the Indemnitee for any amount paid in settlement of a Proceeding effected without theprior written consent of the Company. The Company agrees not to unreasonably withhold its consentto any settlement.
     (e) No Duplicative Payment. The Company shall not be liable under this Agreement tomake any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemniteehas otherwise actually received such payment under any insurance policy, contract, agreement orotherwise.
     8. Non-exclusivity. **The provisions for indemnification and advancement of Expensesset forth in this Agreement shall not be deemed exclusive of any other rights which the Indemniteemay have under any provision of law, the Certificate of Incorporation or Amended and RestatedBylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, orotherwise, both as to action in his official**
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**capacity and as to action in another capacity while occupying a position as an Agent of theCompany.**
     9. Interpretation of Agreement; Scope. It is understood that the parties heretointend this Agreement to be interpreted and enforced so as to provide indemnification to theIndemnitee to the fullest extent now or hereafter permitted by applicable law. The benefits ofthis Agreement shall inure to the Indemnitee both with respect to acts done or not done by him bothbefore and after this date.
     10. Burden of Proof. In making a determination with respect to entitlement toindemnification hereunder, the person or persons or entity making such determination shall presumethat Indemnitee is entitled to indemnification under this Agreement, and the Company shall have theburden of proof to overcome that presumption in connection with the making by any person, personsor entity of any determination contrary to that presumption.
     11. Severability. If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including, without limitation, allportions of any paragraphs of this Agreement containing any such provision held to be invalid,illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not inany way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions ofthis Agreement (including, without limitation, all portions of any paragraph of this Agreementcontaining any such provision held to be invalid, illegal or unenforceable, that are not themselvesinvalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable and to give effect to Section 9hereof.
     12. Modification and Waiver. Except as contemplated by Section 3(c), nosupplement, modification or amendment of this Agreement shall be binding unless executed in writingby all parties hereto. No waiver of any of the provisions of this Agreement shall be deemed orshall constitute a waiver of any other provisions hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.
     13. Survival, Successors and Assigns. The Indemnitee’s rights under this Agreementshall continue after the Indemnitee has ceased acting as an Agent of the Company. The terms ofthis Agreement shall be binding on and inure to the benefit of the Company and its successors andassigns and shall be binding on and inure to the benefit of Indemnitee and Indemnitee’s heirs,executors and administrators.
     14. Gender. The masculine, feminine or neuter pronouns used herein shall beinterpreted without regard to gender, and the use of the singular or plural shall be deemed toinclude the other whenever the context so requires.
     15. Notice. All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receivedby the party addressee or (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date. All notice to either party will be sent to theapplicable address below, or as subsequently modified by written notice.
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     If to the Company:    Coinmach Service Corp. 303 Sunnyside Blvd., Suite 70 Plainview, NY 11803 Attention: Robert M. Doyle
     If to Indemnitee, at such Indemnitee’s primary address listed in the records of the Company.
     16. Governing Law. This Agreement, and all rights, remedies, liabilities, powers andduties of the parties to this Agreement, shall be governed exclusively by and construed accordingto the laws of the State of Delaware without regard to principles of conflicts of laws.
     17. Consent to Jurisdiction. The Company and the Indemnitee each hereby irrevocablyconsent to the jurisdiction of the courts of the State of Delaware for all purposes in connectionwith any action or Proceeding which arises out of or relates to this Agreement and agree that anyaction instituted under this Agreement shall be brought only in the state courts of the State ofDelaware.
     18. Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed an original, but all such counterparts shall together constitute one andthe same instrument.
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     The parties hereto have entered into this Indemnity Agreement effective as of the date firstabove written.       COINMACH SERVICE CORP.      By: /s/ Robert M. Doyle          Title: Chief Financial Officer, Senior VicePresident, Secretary and Treasurer      INDEMNITEE: /s/ Stephen R. Kerrigan    
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