EXHIBIT 10.37
RCL ACQUISITIONS, L.L.C.
PROMISSORY NOTE
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$120,700 May 5, 1998
For value received, Herman W. Beach ("Executive") promises to pay to
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RCL Acquisitions, L.L.C., a Delaware limited liability company (the "Company"),
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the aggregate principal sum of $120,700, together with interest thereon
calculated from the date hereof (the "Date of Issuance") in accordance with the
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provisions of this Promissory Note (this "Note"). This Note was issued pursuant
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to and is subject to the terms of that certain Executive Unit Purchase Agreement
(the "Executive Agreement"), dated as of the date hereof, by and between the
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Company and Executive. Any capitalized terms used herein and not defined shall
have the meaning assigned to them in Section 4 hereof.
1. Payment and Capitalization of Interest.
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(a) Interest shall accrue on the outstanding principal amount of this
Note (including any portion thereof which is Capitalized Interest) at a rate
equal to the lesser of (i) a rate which shall equal 5.94% per annum or (ii) the
highest rate permitted by applicable law. On each anniversary of the Date of
Issuance (a "Capitalization Date") on which any portion of the unpaid principal
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amount of this Note remains outstanding, all accrued interest as of such date
shall be capitalized and made part of the unpaid principal amount hereunder as
of such date (the "Capitalized Interest"). Interest shall be computed on the
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basis of a 365-day year and the actual number of days elapsed. Any accrued
interest (including Capitalized Interest) which for any reason has not
theretofore been paid shall be paid in full on the date on which the final
principal payment on this Note is paid.
2. Payment of Principal on Note.
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(a) Scheduled Payments. Executive shall pay the entire principal
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amount of this Note (including any portion thereof which is Capitalized
Interest), plus all accrued and unpaid interest, on June 2, 2008 (the "Maturity
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Date").
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(b) Voluntary Prepayment. Executive may prepay, at any time and from
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time to time, without premium or penalty, all or any portion of the outstanding
principal amount of this Note.
(c) Mandatory Prepayment. Executive shall prepay, without premium or
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penalty, amounts due under this Note as follows:
(i) Immediately upon receipt of any cash proceeds Executive
receives in connection with his or her ownership of the Executive Units
(other than distributions made for the payment of taxes), Executive shall
prepay an amount of this Note equivalent to the amount of all such cash
proceeds received.
(ii) If there is a consummation of a Sale of the Company prior to
the Maturity Date, Executive shall prepay all of the outstanding principal
amount of this Note as of the date of the consummation of a Sale of the
Company.
(iii) If prior to the Maturity Date Executive ceases to be
employed by Alliance for any reason (including by reason of death or total
and permanent disability of the Executive), then this Note shall become due
and payable on the 45th day after the Termination Date.
3. Collateral. The amounts due under this Note are secured by a
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pledge of 465.30 of the Company's Class A Units, 51.70 of the Company's Class L
Units, 387.92 of the Company's Class B Units and 412.681 the Company's Class C
Units, pursuant to a certain Unit Pledge Agreement, dated as of the date hereof,
by and between Executive and Company (the "Pledge Agreement").
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4. Definitions.
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"Alliance" means Alliance Laundry Systems LLC.
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"Cause" shall have the meaning assigned to it in the Executive
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Agreement.
"Class A Units" means the Class A Common Units of the Company.
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"Class B Units" means the Class B Common Units of the Company.
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"Class C Units" means the Class C Common Units of the Company.
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"Class L Units" means the Class L Common Units of the Company.
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"Common Units" means, collectively, Class A Units, Class L Units,
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Class B Units, Class C Units and any other common units authorized by the
Company.
"Executive Units" shall have the meaning assigned to it in the
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Executive Agreement.
"Investors" shall have the meaning assigned to it in the Executive
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Agreement.
"Merger Agreement" means that certain Agreement and Plan of Merger,
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dated February 21, 1998, by and among Bain/RCL, L.L.C., a Delaware limited
liability company, the Company, Raytheon Commercial Laundry LLC, a Delaware
limited liability company and Raytheon Company, a Delaware corporation.
"Operating Agreement" means the limited liability company agreement of
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the Company, dated as of the date hereof.
"Public Sale" means any sale pursuant to a registered public offering
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under the Securities Act or any sale to the public pursuant to Rule 144
promulgated under the Securities Act effected through a broker, dealer or market
maker.
"Sale of the Company" means (i) any sale of all or substantially all
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(as defined in the Model Business Corporation Act) of the assets of the Company
and its subsidiaries on a consolidated basis in one transaction or series of
related transactions, (ii) any sale of all or substantially all of the Common
Units in one transaction or series of related transactions, excluding any sales
of Common Units in a Public Sale or (iii) a merger or consolidation which
accomplishes one of the foregoing; provided that the transactions contemplated
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by the Merger Agreement do not constitute a Sale of the Company.
"Securities Act" means the Securities Act of 1933, as amended from
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time to time.
"Termination Date" means the date that Executive ceases to be employed
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by Alliance for any reason.
5. Miscellaneous.
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(a) In the event Executive fails to pay any amounts due hereunder when
due, Executive shall pay to the holder hereof, in addition to such amounts due,
all costs of collection, including reasonable attorneys fees.
(b) Executive, or his successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
nonpayment of this
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Note, and expressly agrees that this Note, or any payment hereunder, may be
extended from time to time and that the holder hereof may accept security for
this Note or release security for this Note, all without in any way affecting
the liability of Executive hereunder.
(c) This Note shall be governed by the internal laws, not the laws of
conflicts, of the State of New York.
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IN WITNESS WHEREOF, Executive has executed and delivered this Promissory Note
as of the date first written above.
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HERMAN W. BEACH