Exhibit 10.28
PLEDGE AGREEMENT
This PLEDGE AGREEMENT, dated as of May 30, 2002
(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 Agent
for Lenders (“Agent”).
W I
T N E S S E T H:
WHEREAS, pursuant to that certain Credit
Agreement dated as of the date hereof by and among Pledgor, the
Persons named therein as Credit Parties, Agent and the Persons
signatory thereto from time to time as Lenders (including all
annexes, exhibits and schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified (the
“CREDIT AGREEMENT”) the Lenders have agreed to make
Loans to, and incur Letter of Credit Obligations for the benefit
of, Borrower;
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 Agent and Lenders
to make the Loans and to incur the Letter of Credit Obligations as
provided for in the Credit Agreement, Pledgor has agreed to pledge
the Pledged Collateral to Agent in accordance herewith;
NOW, THEREFORE, in consideration of the
premises and the covenants hereinafter contained and to induce
Lenders to make Loans and to incur Letter of Credit Obligations
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.
2.
PLEDGE. Pledgor hereby pledges to Agent, and grants to Agent for
itself and the ratable benefit of Lenders, a first priority
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 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. All certificates and all promissory
notes and instruments evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of Agent, for itself and the
ratable benefit of 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
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
Agent that:
a.
Pledgor is, and at the time of delivery of the Pledged Shares to
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; Pledgor is and at the time of delivery of the Pledged
Indebtedness to Agent will be, the sole
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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;
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 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 first priority Lien
on and a first priority perfected security interest in favor of the
Agent for its benefit and the ratable benefit of 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
[100%/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.
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:
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a.
Without the prior written consent of 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 Agent
from time to time may reasonably request in order to ensure to
Agent and 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 Agent with or (to the extent permitted by law) without the
signature of Pledgor, and will cooperate with 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 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
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 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 Agent all of such
additional Stock, notes and instruments. Pledgor hereby authorizes
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 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 Agent in respect of the
Pledged Collateral or which would 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;
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(iii)
the sale, disposition or encumbrance of all or substantially all of
the assets of a Pledged Entity, except for Liens in favor of
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 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 Agent to hold as Pledged Collateral and
shall, if received by Pledgor, be received in trust for the benefit
of Agent, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to 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, Agent (personally or through an 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 all other rights as a holder with respect thereto, to
collect and receive all cash dividends, interest, principal and
other distributions made thereon, to sell in one or more sales
after ten (10) days’ notice of the time and place of any
public sale or of the time at which a private sale is to take place
(which notice Pledgor agrees is commercially reasonable) the whole
or any part of the Pledged Collateral and to otherwise act with
respect to the Pledged Collateral as though Agent was the outright
owner thereof. Any sale shall be made at public or private sale at
Agent’s place of business, or at any place to be named in the
notice of sale, either for cash or upon credit or for future
delivery at such price as Agent may deem fair,
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