Exhibit 10.9


 


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

  
	
   

  	
   

  	
   

  
	
  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

  	
   

  
	
   

  	
   

  	
  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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