PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement, dated as of September 1, 1994
(the "Agreement"), is made by and among Roller Bearing Company of America, Inc.,
a Delaware corporation (the "Company"), Heller Financial, Inc., a Delaware
corporation ("Heller"), and Mark Twain Bank, St. Louis, Missouri, a Missouri
banking corporation (the "Trustee"), as Trustee under two Trust Indentures, each
dated as of September 1, 1994 (collectively, the "Indentures"), and each between
the South Carolina Jobs-Economic Development Authority (the "Issuer") and the
Trustee.
RECITALS
A. The Company and Heller have entered into a Letter of Credit
Agreement, dated as of September 1, 1994 (the "Letter of Credit Agreement"),
pursuant to which Heller has agreed to issue the Letter of Credit (as defined in
the Letter of Credit Agreement) in favor of the Trustee for the account of the
Company.
B. It is a condition precedent under the Letter of Credit Agreement
to the obligation of Heller to issue the Letter of Credit that the Company and
the Trustee shall have executed and delivered this Agreement.
AGREEMENT
The Company and the Trustee each agree with Heller as follows:
Section 1. Defined Terms. Capitalized terms not defined herein shall
have the meanings ascribed to such terms in the Letter of Credit Agreement or,
if not inconsistent with the Letter of Credit Agreement, the Indentures.
Section 2. Pledge. The Company hereby pledges, assigns, transfers,
hypothecates and delivers to Heller all of its right, title and interest in, and
grants to Heller a first-priority Lien upon, (i) the Pledged Bonds as the same
may from time to time be delivered to or held by the Trustee as collateral agent
for Heller pursuant to Section 307(d) of the Indentures, and (ii) all proceeds
of the Pledged Bonds (collectively, the "Collateral"), all as collateral
security for the prompt and complete payment when due of all amounts payable by
the Company to Heller, and the prompt and complete performance of all other
obligations of the Company to Heller, whether now existing or hereafter arising,
under or in respect of the Letter of Credit Agreement, the Letter of Credit,
this Agreement and the Bond Documents (collectively, the "Liabilities"). The
Company hereby agrees that the Trustee shall act as the agent and bailee of
Heller for the purpose of perfecting the Lien of this Agreement and of holding
the Collateral for the benefit of Heller pursuant to the Indentures.
Section 3. Payments on Collateral. If, while this Agreement is in
effect, the Company shall become entitled to receive or shall receive any
interest or other payment in respect of the Collateral, the Company agrees to
accept the same as Heller's agent, to hold the
same in trust on behalf of Heller and to deliver the same forthwith to Heller.
The Company instructs and authorizes the Trustee to hold and receive on Heller's
behalf and to deliver forthwith to Heller any payment received by it in respect
of the Collateral (including the proceeds of any remarketing of the Pledged
Bonds). All such payments in respect of the Collateral that are paid to Heller
shall be credited against the Liabilities as Heller may determine.
Section 4. Release of Pledged Bonds. Heller agrees to release from
the Lien of this Agreement Pledged Bonds if and only if Heller has given notice
to the Trustee of the reinstatement of the Letter of Credit in an amount equal
to the Original Purchase Price of the Pledged Bonds so released.
Section 5. Representations and Warranties. The Company represents
and warrants that: (a) on the date of delivery of the Pledged Bonds to or for
the benefit of Heller, to the Company's knowledge, no other Person shall have
any right, title or interest in and to the Pledged Bonds; (b) the Company has,
and on the date of delivery to or for the benefit of Heller of any of the
Pledged Bonds will have, full power, authority and legal right to pledge all of
its right, title and interest in and to the Pledged Bonds pursuant to this
Agreement; and (c) the pledge, assignment and delivery of the Pledged Bonds
pursuant to this Agreement will create a valid first Lien on, and a perfected
first-priority security interest in, all right, title and interest of the
Company in and to the Collateral, subject to no prior Lien on the Property or
assets of the Company that would include the Pledged Bonds. The Company makes
each of the representations and warranties in the Credit Agreement and the Bond
Documents, to the extent material, to and for the benefit of Heller as if the
same were set forth in full herein. Unless the Company shall have previously
advised Heller in writing that one or more of the above statements is no longer
true, the Company shall be deemed to have represented and warranted to Heller on
the date of each Liquidity Drawing under the Letter of Credit that the
statements contained herein are true and correct.
Section 6. Rights of Heller. Heller shall not be liable for any
failure to collect or realize upon all or any part of the Liabilities or any
collateral security (including the Collateral) or guaranty for the Liabilities,
or for any delay in so doing, and Heller shall be under no obligation to take
any action whatsoever with regard to the Liabilities or any such collateral
security or guaranty. If an Event of Default under the Letter of Credit
Agreement has occurred and is continuing, Heller may, without notice, exercise
all rights, privileges or options pertaining to any Pledged Bonds as if it were
the absolute owner of such Pledged Bonds, upon such terms and conditions as it
may determine, all without liability except to account for Property actually
received by it, but Heller shall have no duty to exercise any of those rights,
privileges or options, and shall not be responsible for any failure to do so or
delay in so doing.
Section 7. Remedies. In the event that any portion of the
Liabilities has been declared due and payable, to the fullest extent permitted
by applicable law Heller may, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of the
time and place of public or private sale) to or upon the Company or any other
Person (all and each of which demands, advertisements or notices are hereby
expressly waived), in its sole discretion (a) exercise any or all of its rights
and remedies under the Letter of Credit Agreement, the Letter of Credit, this
Agreement, the Credit Documents, the Bond
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Documents and any other instruments and agreements securing, evidencing or
relating to the Liabilities or under applicable law (including all of the rights
and remedies of a secured creditor under the Illinois Uniform Commercial Code or
the commercial code of any other applicable jurisdiction), (b) forthwith
collect, receive, appropriate and realize upon all or any part of the
Collateral, (c) forthwith sell, assign, give an option or options to purchase,
contract to sell or otherwise dispose of and deliver all or any part of the
Collateral in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of Heller's offices or elsewhere, in a
commercially reasonable manner (subject to the provisions of Section 9 hereof),
upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk, with the right to Heller upon any such sale or sales, public
or private, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Company, which right or equity is
hereby expressly waived and released, or (d) take all or any combination of the
foregoing actions. After deducting all reasonable costs and expenses of every
kind incurred in taking any of the foregoing actions, or incidental to the care,
safekeeping or otherwise of any and all of the Collateral, or in any way
relating to the rights of Heller hereunder, including reasonable attorneys' fees
and legal expenses, after payment of all of the Liabilities in such order as
Heller may elect (the Company remaining liable for any deficiency remaining
unpaid after such application) and after payment by Heller of any other amount
required or permitted by any provision of law, Heller shall pay to the Company
the surplus, if any, of any amounts realized by Heller under this Section 7. To
the fullest extent permitted by applicable law, the Company agrees that Heller
need not give more than 10 days' notice of the time and place of any public sale
or of the time after which a private sale or other intended disposition is to
take place, and that such notice is reasonable notification of such matters. To
the fullest extent permitted by applicable law, no notification need be given to
the Company if it has signed after default a statement renouncing or modifying
any right to notification of sale or other intended disposition. To the fullest
extent permitted by applicable law, the Company further agrees to waive and
agrees not to assert any rights or privileges that it may acquire under Section
9-112 of the Illinois Uniform Commercial Code (or the equivalent section of the
Uniform Commercial Code of any other applicable jurisdiction), and the Company
shall be liable for the deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all amounts to which
Heller is entitled, including the fees and costs of any attorneys employed by
Heller to collect such deficiency.
Section 8. No Disposition. The Company agrees that it will not sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Collateral, and that it will not create, incur or permit to
exist any Lien with respect to all or any part of the Collateral, except for the
Lien of this Agreement.
Section 9. Sale of Collateral. (a) The Company recognizes that
Heller may be unable to effect a public sale of any or all of the Pledged Bonds
by reason of certain prohibitions contained in the Securities Act of 1933 and
applicable state securities laws, but may be compelled to resort to one or more
private sales to a restricted group of purchasers that will be obligated to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to distribution or resale in a manner that would
violate Federal or state securities laws. The Company acknowledges and agrees
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale,
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and, notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner. Heller shall be
under no obligation to delay a sale of any of the Pledged Bonds for the period
of time necessary to permit the Issuer to register such securities for public
sale under the Securities Act of 1933 or under applicable state securities laws,
even if the Issuer would agree to do so.
(b) The Company further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of all or
any part of the Pledged Bonds valid and binding and in compliance with any and
all applicable laws, rules, regulations, orders or decrees, all at the Company's
expense. The Company further agrees that a breach of any of the covenants
contained in this Section 9 will cause irreparable injury to Heller for which
Heller would have no adequate remedy at law in respect of such breach, and, as a
consequence, agrees that each and every covenant contained in this Section 9
shall be specifically enforceable against the Company, and the Company waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Letter of Credit Agreement.
Section 10. Further Assurances. The Company agrees that at any time
and from time to time upon the written request of Heller, the Company will
execute and deliver such further documents and do such further acts and things
as Heller may reasonably request in order to effect the purposes of this
Agreement.
Section 11. Collateral Agency Agreement. (a) Heller hereby appoints
the Trustee as agent and bailee for Heller on the terms and conditions of this
Section 11, and the Trustee hereby accepts such appointment and agrees with
Heller to act as agent without compensation separate from that provided to the
Trustee pursuant to the Indentures.
(b) The duties of the Trustee as agent under this Agreement shall he
as follows:
(i) the Trustee shall hold in trust for Heller all Pledged
Bonds purchased by the Trustee with drawings under the Letter Credit
pursuant to Section 301 or 302 of the Indentures, all proceeds
thereof and all other amounts held by the Trustee and payable to
Heller pursuant to the Indentures (collectively, the "Indenture
Collateral"); and
(ii) upon the remarketing of Pledged Bonds, the Trustee shall
deliver to Heller the proceeds of such remarketing and all other
amounts received by the Trustee and payable to Heller pursuant to
the Indentures.
(c) The Trustee shall not pledge, hypothecate, transfer or release
all or any part of the Collateral to any other Person or in any manner not in
accordance with this Section 11 without the prior written consent of Heller.
(d) The Trustee shall transfer the benefits or obligations of this
Agreement or the Indentures only with the prior written consent of Heller and
only if any such transferee shall
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have agreed in writing to be bound by the terms and conditions of this Section
11 and the Indentures.
(e) Neither the Trustee nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Section 11 (except for its or such Person's own negligence
or willful misconduct). The Trustee undertakes to perform only such duties as
are expressly set forth herein. The Trustee may rely, and shall be protected in
acting or refraining from acting, upon any written notice, instruction or
request furnished to it hereunder and believed by it to be genuine and to have
been signed or presented by the proper party. The Trustee may consult with
counsel of its own choice and shall have full and complete authorization and
protection for any action taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel. Notwithstanding any provision to
the contrary contained herein, the Trustee shall not be relieved of liability
arising in connection with its own negligence or willful misconduct.
Section 12. Notices. Unless otherwise specifically provided herein,
any notice or other communication required or permitted to be given hereunder
shall be in writing addressed to the respective party as set forth below, and
may be personally served, telecopied or sent by overnight courier service or
United States mail, and shall be deemed to have been given: (a) if delivered in
person, when delivered; (b) if delivered by telecopy, on the date of
transmission if transmitted on a Business Day before 4:00 p.m. (Chicago,
Illinois time) or, if not, on the next succeeding Business Day; (c) if delivered
by overnight courier, two days after delivery to such courier properly
addressed; or (d) if by United States mail, four Business Days after deposit in
the United States mail, with postage prepaid and properly addressed. Notices
hereunder shall he effective when received and shall be addressed:
Party Address
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Company: Roller Bearing Company of America, Inc.
140 Terry Drive
Newtown, Pennsylvania 18940
Attention: Executive Vice President
Telephone: (215) 579-4300
Telecopier: (215) 579-4318
With a copy to: Gibson, Dunn & Crutcher
2029 Century Park east, Suite 4000
Los Angeles, California 90067
Attention: Bruce D. Meyer, Esq.
Telephone: (310) 552-8686
Telecopier: (310) 277-5827
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Heller: Heller Financial, Inc.
500 West Monroe Street
12th Floor
Chicago, Illinois 60661
Attention: Portfolio Manager, Portfolio
Organization, Corporate Finance Group
Telephone: (312) 441-7500
Telecopier: (312) 441-7367
With a copy to: Heller Financial, Inc.
500 West Monroe Street
12th Floor
Chicago, Illinois 60661
Attention: Legal Department, Portfolio
Organization, Corporate Finance Group
Telephone: (312) 441-7500
Telecopier: (312) 441-7367
Trustee: Mark Twain Bank
8820 Ladue Road
St. Louis, Missouri 63124
Attention: Corporate Trust Division
Telephone: (314) 889-0753
Telecopier: (314) 889-0736
Section 13. Amendments and Waiver. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Company or the
Trustee from any such provision shall in any event be effective unless the same
shall be in writing and signed by Heller. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 14. No Waiver; Remedies. No failure on the part of Heller to
exercise, and no delay in exercising, any right under this Agreement shall
operate as a waiver of such right, and no single or partial exercise of any
right under this Agreement shall preclude any further exercise of such right or
the exercise of any other right. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law.
Section 15. Severability. Any provision of this Agreement that is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions of this Agreement or affecting the validity, enforceability or
legality of such provision in any other jurisdiction.
Section 16. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Illinois
without giving application to the choice-of-law principles thereof.
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Section 17. Headings. Section headings in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
Section 18. Counterparts. This Agreement may be signed in any number
of counterpart copies, and all such copies shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered as of the date first above written.
HELLER FINANCIAL, INC.
By: /s/ Karen L. Finnerty
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Assistant Vice President
ROLLER BEARING COMPANY OF
AMERICA, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------
CFO and Treasurer
MARK TWAIN BANK,
as Trustee
By: /s/ [ILLEGIBLE]
-------------------------------------
Vice President
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