Exhibit 10.31
PLEDGE
AGREEMENT
This PLEDGE AGREEMENT, dated as of
June 29, 2004 (together with all amendments, if any, from time
to time hereto, this “ Agreement ”) between
ROLLER BEARING COMPANY OF AMERICA, INC., a Delaware corporation
(the “ Pledgor ”), and GENERAL ELECTRIC CAPITAL
CORPORATION, in its capacity as SCIL Agent for SCIL Lenders
(“ SCIL Agent ”).
W I
T N E S S E T H:
WHEREAS, pursuant to that certain SCIL Credit
Agreement dated as of the date hereof by and among Pledgor, the
Persons named therein as Credit Parties, SCIL Agent and the Persons
signatory thereto from time to time as SCIL Lenders (including all
annexes, exhibits and schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified (the “
Credit Agreement ”), the SCIL Lenders have agreed to
make a second collateralized institutional loan to Borrower (the
“ SCIL ”);
WHEREAS, Pledgor is the record and beneficial
owner of the shares of Stock listed in Part A of
Schedule I hereto and the owner of the promissory notes
and instruments listed in Part B of Schedule I
hereto;
WHEREAS, Pledgor benefits from the credit
facilities made available to Borrower under the Credit
Agreement;
WHEREAS, in order to induce SCIL Agent and SCIL
Lenders to make the SCIL as provided for in the Credit Agreement,
Pledgor has agreed to pledge the Pledged Collateral to SCIL Agent
in accordance herewith;
NOW, THEREFORE, in consideration of the
premises and the covenants hereinafter contained and to induce SCIL
Lenders to make the SCIL under the Credit Agreement, it is agreed
as follows:
1.
Definitions . Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined,
and the following shall have (unless otherwise provided elsewhere
in this Agreement) the following respective meanings (such meanings
being equally applicable to both the singular and plural form of
the terms defined):
“ Bankruptcy Code ” means
title 11, United States Code, as amended from time to time, and any
successor statute thereto.
“ Pledged Collateral ” has
the meaning assigned to such term in Section 2
hereof.
“ Pledged Entity ” means an
issuer of Pledged Shares or Pledged Indebtedness.
“ Pledged Indebtedness ”
means the Indebtedness evidenced by promissory notes and
instruments listed on Part B of Schedule I
hereto;
“ Pledged Shares ” means
those shares of Stock listed on Part A of
Schedule I hereto.
“ Secured Obligations ” has
the meaning assigned to such term in Section 3
hereof.
“Senior Lien Termination Date”
means the “Termination Date” as defined in the Senior
Credit Agreement
2.
Pledge . Pledgor hereby pledges to SCIL Agent, and
grants to SCIL Agent for itself and the ratable benefit of SCIL
Lenders, a security interest in all of the following (collectively,
the “ Pledged Collateral ”):
a.
the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, distributions, cash, instruments and
other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or
all of the Pledged Shares; and
b.
such portion, as determined by SCIL Agent as provided in
Section 6(d) below, of any additional shares of
Stock of a Pledged Entity from time to time acquired by Pledgor in
any manner (which shares of Stock shall be deemed to be part of the
Pledged Shares), and the certificates representing such additional
shares, and all dividends, distributions, cash, instruments and
other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or
all of such Stock; and
c.
the Pledged Indebtedness and the promissory notes or instruments
evidencing the Pledged Indebtedness, and all interest, cash,
instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of the
Pledged Indebtedness; and
d.
all additional Indebtedness arising after the date hereof and owing
to Pledgor and evidenced by promissory notes or other instruments,
together with such promissory notes and instruments, and all
interest, cash, instruments and other property and assets from time
to time received, receivable or otherwise distributed in respect of
that Pledged Indebtedness.
3.
Security For Obligations . This Agreement secures, and
the Pledged Collateral is security for, the prompt payment in full
when due, whether at stated maturity, by acceleration or otherwise,
and performance of all Obligations (collectively, the “
Secured Obligations ”).
4.
Delivery of Pledged Collateral . At all times
following the Senior Lien Termination Date, all certificates and
all promissory notes and instruments evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of SCIL
Agent, for itself and the ratable benefit of SCIL Lenders, pursuant
hereto. All Pledged Shares shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and
substance satisfactory to SCIL Agent and all promissory notes or
other instruments evidencing the Pledged Indebtedness shall be
endorsed by Pledgor.
5.
Representations and Warranties . Pledgor represents
and warrants to SCIL Agent that:
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a.
Pledgor is, and at the time of delivery of the Pledged Shares to
Senior Agent will be, the sole holder of record and the sole
beneficial owner of such Stock free and clear of any Lien thereon
or affecting the title thereto, except for any Lien created by the
Loan Documents and the prior Lien of Senior Agent on such Stock
(such prior Lien, the “ Senior Lien ”); Pledgor
is and at the time of delivery of the Pledged Indebtedness to
Senior Agent will be, the sole owner of such Pledged Indebtedness
free and clear of any Lien thereon or affecting title thereto,
except for any Lien created by the Loan Documents and the Senior
Lien;
b.
All of the Pledged Shares have been duly authorized, validly issued
and are fully paid and non-assessable; the Pledge Indebtedness has
been duly authorized, authenticated or issued and delivered by, and
is the legal, valid and binding obligations of, the Pledged Entity
issuing such Pledged Indebtedness, and no such Pledged Entity is in
default thereunder.
c.
Pledgor has the power and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged as provided
herein.
d.
All of the Pledged Shares are presently owned by Pledgor, and are
presently represented by the certificates listed on Part A of
Schedule I hereto. As of the date hereof, there are no
existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Shares;
e.
No consent, approval, authorization or other order or other action
by, and no notice to or filing with, any Governmental Authority or
any other Person is required (i) for the pledge by Pledgor of
the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor, or
(ii) for the exercise by SCIL Agent of (A) the voting or
other rights provided for in this Agreement or (B) the
remedies in respect of the Pledged Collateral pursuant to this
Agreement, except as may be required by the Code or laws affecting
the offering and sale of securities generally;
f.
The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement will create a valid Lien on and a
perfected security interest in favor of the SCIL Agent for its
benefit and the ratable benefit of SCIL Lenders in the Pledged
Collateral in accordance with Section 2, securing the payment
of the Secured Obligations, subject to no other Lien;
g.
This Agreement has been duly authorized, executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of
Pledgor enforceable against Pledgor in accordance with its
terms;
h.
The Pledged Shares constitute 100% of the issued and outstanding
shares of Stock of the Pledgor’s Domestic Subsidiaries and
66% of the Stock of RBC Schaublin Holding S.A. and RBC Mexico S. DE
R.L. DE C.V.
i.
Except as disclosed on Part B of Schedule I , none
of the Pledged Indebtedness is subordinated in right of payment to
other Indebtedness (except for the Secured Obligations) or subject
to the terms of an indenture.
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The
representations and warranties set forth in this
Section 5 shall survive the execution and delivery of
this Agreement.
6.
Covenants. Pledgor covenants and agrees that until the
Termination Date:
a.
Without the prior written consent of SCIL Agent, Pledgor will not
sell, assign, transfer, pledge, or otherwise encumber any of its
rights in or to the Pledged Collateral, or any unpaid dividends,
interest or other distributions or payments with respect to the
Pledged Collateral or grant a Lien in the Pledged Collateral,
unless otherwise expressly permitted by the Credit Agreement;
b.
Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and take all such actions as SCIL
Agent from time to time may reasonably request in order to ensure
to SCIL Agent and SCIL Lenders the benefits of the Liens in and to
the Pledged Collateral intended to be created by this Agreement,
including the filing of any necessary Code financing statements,
which may be filed by SCIL Agent with or (to the extent permitted
by law) without the signature of Pledgor, and will cooperate with
SCIL Agent, at Pledgor’s expense, in obtaining all necessary
approvals and making all necessary filings under federal, state,
local or foreign law in connection with such Liens or any sale or
transfer of the Pledged Collateral in accordance with
Section 8;
c.
Pledgor has and will defend the title to the Pledged Collateral and
the Liens of SCIL Agent in the Pledged Collateral against the claim
of any Person and will maintain and preserve such Liens; and
d.
Pledgor will, upon obtaining ownership of any additional Stock or
promissory notes or instruments of a Pledged Entity or Stock or
promissory notes or instruments otherwise required to be pledged to
SCIL Agent pursuant to any of the Loan Documents, which Stock,
notes or instruments are not already Pledged Collateral, promptly
(and in any event within three (3) Business Days) deliver to
SCIL Agent a Pledge Amendment, duly executed by Pledgor, in
substantially the form of Schedule II hereto (a “
Pledge Amendment ”) in respect of any such additional
Stock, notes or instruments, pursuant to which Pledgor shall pledge
to SCIL Agent all of such additional Stock, notes and instruments.
Pledgor hereby authorizes SCIL Agent to attach each Pledge
Amendment to this Agreement and agrees that all Pledged Shares and
Pledged Indebtedness listed on any Pledge Amendment delivered to
Senior Agent (or, after the Senior Lien Termination Date, to SCIL
Agent) shall for all purposes hereunder be considered Pledged
Collateral.
7.
Pledgor’s Rights . As long as no Default or
Event of Default shall have occurred and be continuing and until
written notice shall be given to Pledgor in accordance with
Section 8(a) hereof:
a.
Pledgor shall have the right, from time to time, to vote and give
consents with respect to the Pledged Collateral, or any part
thereof; provided , however , that no vote shall be
cast, and no consent shall be given or action taken, which would
have the effect of impairing the position or interest of SCIL Agent
in respect of the Pledged Collateral or which would
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authorize, effect or consent to (unless and to
the extent expressly permitted by the Credit Agreement):
(i)
the dissolution or liquidation, in whole or in part, of a Pledged
Entity;
(ii)
the consolidation or merger of a Pledged Entity with any other
Person;
(iii)
the sale, disposition or encumbrance of all or substantially all of
the assets of a Pledged Entity, except for Liens in favor of SCIL
Agent and Senior Agent;
(iv)
the issuance of any additional shares of its Stock to any Person
other than Pledgor (and if to Pledgor, only so long as such
additional shares are upon issuance promptly pledged to SCIL
Agent); or
(v)
the alteration of the voting rights with respect to the Stock of a
Pledged Entity; and
b.
(i) Pledgor
shall be entitled, from time to time, to collect and receive for
its own use all cash dividends and interest paid in respect of the
Pledged Shares and Pledged Indebtedness to the extent not in
violation of the Credit Agreement other than any and all:
(A) dividends and other distributions paid or payable in cash
in respect of any Pledged Shares in connection with a partial or
total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in capital of a Pledged Entity;
and (B) cash paid, payable or otherwise distributed, in
respect of principal of, or in redemption of, or in exchange for,
any Pledged Collateral; provided , however , that
until actually paid all rights to such distributions shall remain
subject to the Lien created by this Agreement; and
(ii)
All dividends and other payments (other than such cash dividends
and interest as are permitted to be paid to Pledgor in accordance
with clause (i) above) and all other distributions in
respect of any of the Pledged Shares or Pledged Indebtedness,
whenever paid or made, shall be delivered to Senior Agent (or,
after the Senior Lien Termination Date, to SCIL Agent) to hold as
Pledged Collateral and shall, if received by Pledgor, be received
in trust for the benefit of Senior Agent and SCIL Agent, be
segregated from the other property or funds of Pledgor, and be
forthwith delivered to SCIL Agent as Pledged Collateral in the same
form as so received (with any necessary indorsement).
8.
Defaults and Remedies; Proxy.
a.
Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, and concurrently with
written notice to Pledgor, SCIL Agent (personally or through an
SCIL Agent) is hereby authorized and empowered to transfer and
register in its name or in the name of its nominee the whole or any
part of the Pledged Collateral, to exchange certificates or
instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations, to
exercise the voting and a
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