EXHIBIT 10.27


 


SECURITY AGREEMENT


 


SECURITY
AGREEMENT, dated as of May 30, 2002, among ROLLER BEARING COMPANY OF AMERICA,
INC., a Delaware corporation (“BORROWER”), the other Credit Parties signatory
hereto (each “Guarantor” collectively “Guarantors”, Borrower and each Guarantor
are sometimes collectively referred to herein as “Grantors” and individually as
a “Grantor”), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation,
individually and in its capacity as Agent for Lenders.


 


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 Grantors, Agent and Lenders (including all annexes, exhibits and
schedules thereto, and as from time to time amended, restated, supplemented or
otherwise modified, the “CREDIT AGREEMENT”), Lenders have agreed to make the
Loans and to incur Letter of Credit Obligations on behalf of Borrower;


 


WHEREAS,
the Guarantors have guaranteed the Obligations of Borrower under the Credit
Agreement and will benefit directly from the Loans and financial accommodations
provided thereunder; and


 


WHEREAS,
in order to induce Agent and Lenders to enter into the Credit Agreement and
other Loan Documents and to induce Lenders to make the Loans and to incur
Letter of Credit Obligations as provided for in the Credit Agreement, Grantors
have agreed to grant a continuing Lien on the Collateral (as hereinafter
defined) to secure the Obligations;


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


 


1.          DEFINED TERMS.


 


a.   All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement or in
ANNEX A thereto. All other terms contained in this Security Agreement, unless
the context indicates otherwise, have the meanings provided for by the Code to
the extent the same are used or defined therein.


 


b.   “Uniform Commercial Code jurisdiction” means
any jurisdiction that has adopted all or substantially all of Article 9 as
contained in the 2000 Official Text of the Uniform Commercial Code, as
recommended by the National Conference of Commissioners on Uniform State Laws and
the American Law Institute, together with any subsequent amendments or
modifications to the Official Text.


 


2.          GRANT OF LIEN.


 


a.   To secure the prompt and complete payment,
performance and observance of all of the Obligations, each Grantor hereby grants,
assigns, conveys, mortgages, pledges, hypothecates and transfers to Agent, for
itself and the benefit of Lenders, a Lien upon all of its


 





















 


right, title and interest in,
to and under all personal property and other assets, whether now owned by or
owing to, or hereafter acquired by or arising in favor of such Grantor
(including under any trade names, styles or derivations thereof), and whether
owned or consigned by or to, or leased from or to, such Grantor, and regardless
of where located (all of which being hereinafter collectively referred to as
the “Collateral”), including:


 


(i)                                     all Accounts;


 


(ii)                                  all Chattel Paper;


 


(iii)                               all Documents;


 


(iv)                              all General Intangibles (including payment
intangibles and Software);


 


(v)                                 all Goods (including Inventory, Equipment and
Fixtures);


 


(vi)                              all Instruments;


 


(vii)                           all Investment Property;


 


(viii)                        all Deposit Accounts, of any Grantor,
including all Blocked Accounts, Concentration Accounts, Disbursement Accounts,
and all other bank accounts and all deposits therein;


 


(ix)                                all money, cash or cash equivalents of any
Grantor;


 


(x)                                   all Supporting Obligations and
Letter-of-Credit Rights of any Grantor; and


 


(xi)                                to the extent not otherwise included, all
Proceeds, tort claims, insurance claims and other rights to payments not otherwise
included in the foregoing and products of the foregoing and all accessions to,
substitutions and replacements for, and rents and profits of, each of the foregoing.


 


b.   In addition, to secure the prompt and
complete payment, performance and observance of the Obligations and in order to
induce Agent and Lenders as aforesaid, each Grantor hereby grants to Agent, for
itself and the benefit of Lenders, a right of setoff against the property of
such Grantor held by Agent or any Lender, consisting of property described
above in SECTION 2(a) now or hereafter in the possession or custody of or
in transit to Agent or any Lender, for any purpose, including safe keeping,
collection or pledge, for the account of such Grantor, or as to which such
Grantor may have any right or power.


 


3.          AGENT’S AND LENDERS’ RIGHTS: LIMITATIONS ON AGENT’S AND LENDERS’
OBLIGATIONS.


 


a.   It is expressly agreed by Grantors that,
anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of its Contracts and each of its


 


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Licenses to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder. Neither Agent nor any Lender shall have any obligation or liability
under any Contract or License by reason of or arising out of this Security
Agreement or the granting herein of a Lien thereon or the receipt by Agent or
any Lender of any payment relating to any Contract or License pursuant hereto.
Neither Agent nor any Lender shall be required or obligated in any manner to
perform or fulfill any of the obligations of any Grantor under or pursuant to
any Contract or License, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the sufficiency
of any performance by any party under any Contract or License, or to present or
file any claims, or to take any action to collect or enforce any performance or
the payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.


 


b.   Agent may at any time after an Event of
Default has occurred and is continuing without prior notice to any Grantor,
notify Account Debtors and other Persons obligated on the Collateral that Agent
has a security interest therein, and that payments shall be made directly to
Agent. Furthermore, if Agent determines that Account Debtors’ contra-accounts
or set-off rights may cause an Event of Default or Borrowing Availability to be
less than zero, Agent may notify Account Debtors that Agent has a security
interest therein, and that payments shall be made directly to Agent. In such
circumstances and upon the request of Agent, each Grantor shall so notify
Account Debtors and other Persons obligated on Collateral. Once any such notice
has been given to any Account Debtor or other Person obligated on the
Collateral, the affected Grantor shall not give any contrary instructions to
such Account Debtor or other Person without Agent’s prior written consent.


 


c.   Agent may at any time in Agent’s own name,
in the name of a nominee of Agent or in the name of any Grantor communicate (by
mail, telephone, facsimile or otherwise) with Account Debtors, parties to
Contracts and obligors in respect of Instruments to verify with such Persons,
to Agent’s satisfaction, the existence, amount terms of, and any other matter
relating to, Accounts, Instruments, Chattel Paper and/or payment intangibles.
If an Event of Default shall have occurred and be continuing, each Grantor, at
its own expense, shall cause the independent certified public accountants then
engaged by such Grantor to prepare and deliver to Agent and each Lender at any
time and from time to time promptly upon Agent’s reasonable request the
following reports with respect to each Grantor: (i) a reconciliation of all
Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test
verification of such Accounts as Agent may reasonably request. Each Grantor, at
its own expense, shall deliver to Agent the results of each physical
verification, if any, which such Grantor may in its discretion have made, or
caused any other Person to have made on its behalf, of all or any portion of
its Inventory.


 


4.   REPRESENTATIONS AND WARRANTIES. Each Grantor
represents and warrants that:


 


a.   Each Grantor has rights in and the power to
transfer each item of the Collateral upon which it purports to grant a Lien
hereunder free and clear of any and all Liens other than Permitted
Encumbrances.


 


b.   No effective security agreement, financing
statement, equivalent security or Lien instrument or continuation statement
covering all or any part of the Collateral is on file or of record in any
public office, except such as may have been filed (i) by any Grantor in favor


 


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of Agent pursuant to this
Security Agreement or the other Loan Documents, and (ii) in connection with any
other Permitted Encumbrances.


 


c.   This Security Agreement is effective to
create a valid and continuing Lien on and, upon the filing of the appropriate
financing statements listed on SCHEDULE I hereto, a perfected Lien in
favor of Agent, for itself and the benefit of Lenders, on the Collateral with
respect to which a Lien may be perfected by filing pursuant to the Code. Such
Lien is prior to all other Liens, except Permitted Encumbrances, and is
enforceable as such as against any and all creditors of Grantor (other than
beneficiaries of the Permitted Encumbrances).


 


d.   SCHEDULE II-A hereto lists all Instruments,
Letter of Credit Rights and Chattel Paper of each Grantor. All action by any
Grantor necessary or desirable to protect and perfect the Lien of Agent on each
item set forth on SCHEDULE II-B (including the delivery of all originals
thereof to Agent and the legending of all Chattel Paper as required by SECTION 5(b)
hereof) has been duly taken. The Lien of Agent, for the benefit of Agent and
Lenders, on the Collateral listed on SCHEDULE II-B hereto is prior to all
other Liens, except Permitted Encumbrances, and is enforceable as such against
any and all creditors of Grantor (other than beneficiaries of the Permitted
Encumbrances)..


 


e.   Each Grantor’s name as it appears in
official filings in the state of its incorporation or other organization, the
type of entity of each Grantor (including corporation, partnership, limited
partnership or limited liability company), organizational identification number
issued by each Grantor’s state of incorporation or organization or a statement
that no such number has been issued, each Grantor’s state of organization or
incorporation, the location of each Grantor’s chief executive office, principal
place of business, offices, all warehouses and premises where Collateral is
stored or located, and the locations of its books and records concerning the
Collateral are set forth on SCHEDULE III-A, SCHEDULE III-B, SCHEDULE III-C,
SCHEDULE III-D, SCHEDULE III-E, SCHEDULE III-F, SCHEDULE III-G,
or SCHEDULE III-H, respectively, hereto. Each Grantor has only one state
of incorporation or organization.


 


f.   With respect to the Accounts, except as
specifically disclosed (x) in the most recent Collateral Report delivered to
Agent, or (y) in writing to Agent, (i) they represent bona fide sales of
Inventory or rendering of services to Account Debtors in the ordinary course of
each Grantor’s business and are not evidenced by a judgment, Instrument or
Chattel Paper; (ii) there are no setoffs, claims or disputes existing or
asserted with respect thereto and no Grantor has made any agreement with any
Account Debtor for any extension of time for the payment thereof, any
compromise or settlement for less than the full amount thereof, any release of
any Account Debtor from liability therefor, or any deduction therefrom except a
discount or allowance allowed by such Grantor in the ordinary course of its
business for prompt payment and disclosed to Agent; (iii) to each Grantor’s
knowledge, there are no facts, events or occurrences which in any way impair
the validity or enforceability thereof or could reasonably be expected to
reduce the amount payable thereunder as shown on any Grantor’s books and
records and any invoices, statements and Collateral Reports delivered to Agent
and Lenders with respect thereto; (iv) no Grantor has received any notice of
proceedings or actions which are threatened or pending against any Account
Debtor which might result in any adverse change in such Account Debtor’s
financial condition; and (v) no Grantor has knowledge that any Account Debtor
is unable generally to pay its debts as they become due. Further with respect
to the


 


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Accounts (x) the amounts
shown on all invoices, statements and Collateral Reports which may be delivered
to the Agent with respect thereto are actually and absolutely owing to such
Grantor as indicated thereon and are not in any way contingent; (y) no payments
have been or shall be made thereon except payments immediately delivered to the
applicable Blocked Accounts or the Agent as required pursuant to the terms of
ANNEX C to the Credit Agreement; and (z) to each Grantor’s knowledge, all
Account Debtors have the capacity to contract.


 


g.   With respect to any Inventory scheduled or
listed on the most recent Collateral Report delivered to Agent, (i) such
Inventory is located at one of the applicable Grantor’s locations set forth on SCHEDULE III-A,
SCHEDULE III-B, SCHEDULE III-C, SCHEDULE III-D, SCHEDULE III-E,
SCHEDULE III-F, SCHEDULE III-G, or SCHEDULE III-H hereto, as
applicable, (ii) no such Inventory is now, or shall at any time or times
hereafter be stored at any other location without except (A) locations added in
connection with a Permitted Acquisition, or (B) otherwise with Agent’s prior
consent, and if Agent gives such consent, each applicable Grantor will
concurrently therewith obtain, to the extent required by the Credit Agreement,
bailee, landlord and mortgagee agreements in form reasonably acceptable to
Agent, (iii) the applicable Grantor has good, indefeasible and merchantable
title to such Inventory and such Inventory is not subject to any Lien or
security interest or document whatsoever except for the Lien granted to Agent,
for the benefit of Agent and Lenders, and except for Permitted Encumbrances,
(iv) except as specifically disclosed in the most recent Collateral Report
delivered to Agent, such Inventory is Eligible Inventory of good and
merchantable quality, free from any material defects, (v) such Inventory is not
subject to any licensing, patent, royalty, trademark, trade name or copyright
agreements with any third parties which would require any consent of any third
party upon sale or disposition of that Inventory or the payment of any monies
to any third party upon such sale or other disposition, and (vi) the completion
of manufacture, sale or other disposition of such Inventory by Agent following
an Event of Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which any
Grantor is a party or to which such Inventory is subject.


 


h.   No Grantor has any interest in, or title to,
any Patent, Trademark or Copyright except as set forth in SCHEDULE IV-A, SCHEDULE IV-B,
or SCHEDULE IV-C hereto. This Security Agreement is effective to create a
valid and continuing Lien on and, upon timely filing of the Copyright Security
Agreements with the United States Copyright Office and timely filing of the
Patent Security Agreements and the Trademark Security Agreements with the
United State Patent and Trademark Office, perfected Liens in favor of Agent on
each Grantor’ s Patents, Trademarks and Copyrights and such perfected Liens are
enforceable as such as against any and all creditors of any Grantor.


 


5.   COVENANTS. Each Grantor covenants and agrees
with Agent, for the benefit of Agent and Lenders, that from and after the date
of this Security Agreement and until the Termination Date:


 


a.   FURTHER ASSURANCES: PLEDGE OF INSTRUMENTS;
CHATTEL PAPER.


 


(i)                                     At any time and from time to time, upon the
written request of Agent and at the sole expense of Grantors, each Grantor
shall promptly and duly execute and deliver any and all such further


 


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instruments
and documents and take such further actions as  Agent may reasonably deem desirable to obtain
the full benefits of this
Security Agreement and of the rights and powers herein granted, including (A) using commercially reasonable efforts to secure all consents and
approvals necessary or
appropriate for the assignment to or for the benefit of Agent of any License or Contract held by such Grantor and to enforce the security interests
granted hereunder; and (B) filing
any financing or continuation statements
under the Code with respect to the Liens granted hereunder or under any other Loan Document as to those jurisdictions that are not Uniform
Commercial Code jurisdictions.


 


(ii)                                  If requested by Agent, each Grantor shall
deliver to Agent all Collateral
consisting of negotiable Documents, certificated securities, Chattel Paper and Instruments (in each case, accompanied by stock powers,
allonges or other instruments of
transfer executed in blank) promptly after such Credit Party receives the same.


 


(iii)                               Each Grantor shall, in accordance with the
terms of the Credit Agreement,
obtain or use commercially reasonable efforts to obtain waivers or subordinations of Liens from landlords and mortgagees, and each Credit
Party shall in all instances
obtain signed acknowledgements of Agent’s Liens from bailees having possession of any Grantor’s Goods that they hold for the benefit of Agent.


 


(iv)                              Each Grantor that is or becomes the
beneficiary of a letter of credit
shall promptly, and in any event within two (2) Business Days after becoming a beneficiary, notify Agent thereof and enter into a tri-party agreement
with Agent and the issuer and/or
confirmation bank with respect to
Letter-of-Credit Rights assigning such Letter-of-Credit Rights to Agent and directing all payments
thereunder to the Collection
Account, all in form and substance reasonably
satisfactory to Agent. 


 


(v)                                 If requested by Agent, each Grantor shall take
all steps necessary to grant the
Agent control of all electronic chattel
paper in accordance with the Code and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic
Signatures in Global and National
Commerce Act.


 


(vi)                              Each Grantor hereby irrevocably authorizes the
Agent at any time and from time
to time to file in any filing office
in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets
of such Grantor or words of
similar effect, regardless of whether 


 


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any
particular asset comprised in the Collateral falls  within the scope of Article 9 of the Code
or such jurisdiction, or (ii) as
being of an equal or lesser scope or
with greater detail, and (b) contain any other information required by part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance of any financing
statement or amendment, including (i) whether such Grantor is an organization, the type of organization and any organization identification number
issued to such Grantor, and (ii)
in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real
property to which the Collateral relates.
Each Grantor agrees to furnish any such information to the Agent promptly upon request. Each Grantor also ratifies its authorization for
the Agent to have filed in any
Uniform Commercial Code jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof.


 


b.   MAINTENANCE OF RECORDS. Grantors shall keep
and maintain, at their own cost and expense, satisfactory and complete records
of the Collateral, including a record of any and all payments received and any
and all credits granted with respect to the Collateral and all other dealings
with the Collateral. Grantors shall mark their books and records pertaining to
the Collateral to evidence this Security Agreement and the Liens granted
hereby. If any Grantor retains possession of any Chattel Paper or Instruments
with Agent’s consent, such Chattel Paper and Instruments shall be marked with
the following legend: “This writing and the obligations evidenced or secured
hereby are subject to the security interest of General Electric Capital
Corporation, as Agent, for the benefit of Agent and certain Lenders.”


 


c.   COVENANTS REGARDING PATENT, TRADEMARK AND
COPYRIGHT COLLATERAL.


 


(i)                                     Grantors shall notify Agent immediately if
they know or have reason to know
that any application or registration relating to any Patent, Trademark or Copyright (now or hereafter existing) that is material to the
conduct of its business may
become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or
development in, any proceeding in
the United States Patent and Trademark
Office, the United States Copyright Office or any court) regarding any Grantor’s ownership of any Patent, Trademark or Copyright that is
material to the conduct of its
business, its right to register the same, or to keep and maintain the same.


 


(ii)                                  In no event shall any Grantor, either itself
or through any agent, employee,
licensee or designee, file an application
for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency
without giving Agent prior


 


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written
notice thereof, and, upon request of Agent,  Grantor shall execute and deliver any and all
Patent Security Agreements,
Copyright Security Agreements or Trademark
Security Agreements as Agent may request to evidence Agent’s Lien on such Patent, Trademark or Copyright, and the General Intangibles of such
Grantor relating thereto or
represented thereby.


 


(iii)                               Grantors shall take all actions necessary or
requested by Agent to maintain
and pursue each application, to obtain the relevant registration and to maintain the registration of each of the Patents, Trademarks and
Copyrights (now or hereafter
existing), including the filing of applications for renewal, affidavits of use, affidavits of non-contestability and opposition and
interference and cancellation
proceedings, unless the applicable Grantor shall determine that such Patent, Trademark or Copyright is not material to the conduct of its
business.


 


(iv)                              In the event that a Grantor becomes aware of
any of the Patent, Trademark or
Copyright Collateral is infringed upon,
or misappropriated or diluted by a third party, such Grantor shall notify Agent of the same and,
unless such Patent, Trademark or
Copyright Collateral is not material to the conduct of its business or as otherwise consented by Agent, shall enter into a supplement to
this Security Agreement granting
to Agent a Lien on a commercial tort claim (as defined in the Code) related thereto. Such Grantor shall, unless such Grantor shall
reasonably determine that such
Patent, Trademark or Copyright Collateral
is not material to the conduct of its business, promptly sue for infringement, misappropriation or dilution and to recover any and all damages
for such infringement,
misappropriation or dilution, and shall take such other actions as Agent shall deem appropriate under the circumstances to protect such Patent,
Trademark or Copyright
Collateral.


 


d.   INDEMNIFICATION. In any suit, proceeding or
action brought by Agent or any Lender relating to any Collateral for any sum
owing with respect thereto or to enforce any rights or claims with respect
thereto, each Grantor will save, indemnify and keep Agent and Lenders harmless
from and against all expense (including reasonable attorneys’ fees and
expenses), loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the Account
Debtor or other Person obligated on the Collateral, arising out of a breach by
any Grantor of any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to, or in favor of, such obligor or
its successors from such Grantor, except in the case of Agent or any Lender, to
the extent such expense, loss, or damage is attributable solely to the gross
negligence or willful misconduct of Agent or such Lender as finally determined
by a court of competent jurisdiction. All such obligations of Grantors shall be
and remain enforceable against and only against Grantors and shall not be
enforceable against Agent or any Lender.


 


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e.   LIMITATION ON LIENS ON COLLATERAL. No
Grantor will create, permit or suffer to exist, and each Grantor will defend
the Collateral against, and take such other action as is necessary to remove,
any Lien on the Collateral except Permitted Encumbrances, and will defend the
right, title and interest of Agent and Lenders in and to any of such Grantor’s
rights under the Collateral against the claims and demands of all Persons
whomsoever (other than the beneficiaries of the Permitted Encumbrances.


 


f.   NOTICES. Each Grantor will advise Agent
promptly, in reasonable detail, of any Lien (other than Permitted Encumbrances)
or claim made or asserted against any of the Collateral of which such Grantor
is aware.


 


g.   GOOD STANDING CERTIFICATES. If requested by
Agent, but not more frequently than once during each calendar quarter, each
Grantor shall provide to Agent a certificate of good standing from its state of
incorporation or organization.


 


h.   NO REINCORPORATION. Without limiting the
prohibitions on mergers involving the Grantors contained in the Credit
Agreement, no Grantor shall reincorporate or reorganize itself under the laws
of any jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof without the prior written consent of Agent.


 


i.   TERMINATIONS; AMENDMENTS NOT AUTHORIZED.
Each Grantor acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing
statement evidencing a Lien granted hereunder without the prior written consent
of Agent and agrees that it will not do so without the prior written consent of
Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the
Code.


 


j.   AUTHORIZED TERMINATIONS. Agent will promptly
deliver to each Grantor for filing or authorize each Grantor to prepare and
file termination statements and releases in accordance with SECTION 11.2(e)
of the Credit Agreement.


 


6.   AGENT’S APPOINTMENT AS ATTORNEY-IN-FACT.


 


On
the Closing Date each Grantor shall execute and deliver to Agent a power of
attorney (the “POWER OF ATTORNEY”) substantially in the form attached hereto as
Exhibit A. The power of attorney granted pursuant to the Power of Attorney is a
power coupled with an interest and shall be irrevocable until the Termination
Date. The powers conferred on Agent, for the benefit of Agent and Lenders,
under the Power of Attorney are solely to protect Agent’s interests (for the
benefit of Agent and Lenders) in the Collateral and shall not impose any duty
upon Agent or any Lender to exercise any such powers. Agent agrees that (a)
except for the powers granted in clause (h) of the Power of Attorney, it shall
not exercise any power or authority granted under the Power of Attorney unless
an Event of Default has occurred and is continuing, and (b) Agent shall account
for any moneys received by Agent in respect of any foreclosure on or
disposition of Collateral pursuant to the Power of Attorney provided that none
of Agent or any Lender shall have any duty as to any Collateral, and Agent and
Lenders shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers. NONE OF AGENT, LENDERS OR THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY


 


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GRANTOR FOR ANY ACT OR
FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF
DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.


 


7.   REMEDIES: RIGHTS UPON DEFAULT.


 


a.   In addition to all other rights and remedies
granted to it under this Security Agreement, the Credit Agreement, the other
Loan Documents and under any other instrument or agreement securing, evidencing
or relating to any of the Obligations, if any Event of Default shall have
occurred and be continuing, Agent may exercise all rights and remedies of a
secured party under the Code. Without limiting the generality of the foregoing,
each Grantor expressly agrees that in any such event Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
such Grantor or any other Person (all and each of which demands, advertisements
and notices are hereby expressly waived to the maximum extent permitted by the
Code and other applicable law), may forthwith enter upon the premises of such
Grantor where any Collateral is located through self-help, without judicial
process, without first obtaining a final judgment or giving such Grantor or any
other Person notice and opportunity for a hearing on Agent’s claim or action
and may collect, receive, assemble, process, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, license,
assign, give an option or options to purchase, or sell or otherwise dispose of
and deliver said Collateral (or contract to do so), or any part thereof, in one
or more parcels at a public or private sale or sales, at any exchange at such
prices as it may deem acceptable, for cash or on credit or for future delivery
without assumption of any credit risk. Agent or any Lender shall have the right
upon any such public sale or sales and, to the extent permitted by law, upon
any such private sale or sales, to purchase for the benefit of Agent and
Lenders, the whole or any part of said Collateral so sold, free of any right or
equity of redemption, which equity of redemption each Grantor hereby releases.
Such sales may be adjourned and continued from time to time with or without
notice. Agent shall have the right to conduct such sales on any Grantor’s
premises or elsewhere and shall have the right to use any Grantor’s premises
without charge for such time or times as Agent deems necessary or advisable.


 


If
any Event of Default shall have occurred and be continuing, each Grantor
further agrees, at Agent’s request, to assemble the Collateral and make it
available to Agent at a place or places designated by Agent which are
reasonably convenient to Agent and such Grantor, whether at such Grantor’s
premises or elsewhere. Until Agent is able to effect a sale, lease, or other
disposition of Collateral, Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for
the purpose of preserving Collateral or its value or for any other purpose
deemed appropriate by Agent. Agent shall have no obligation to any Grantor to
maintain or preserve the rights of such Grantor as against third parties with
respect to Collateral while Collateral is in the possession of Agent. Agent
may, if it so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of Agent’s remedies (for the
benefit of Agent and Lenders), with respect to such appointment without prior
notice or hearing as to such appointment. Agent shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale to
the Obligations as


 


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provided in the Credit
Agreement, and only after so paying over such net proceeds, and after the
payment by Agent of any other amount required by any provision of law, need
Agent account for the surplus, if any, to any Grantor. To the maximum extent
permitted by applicable law, each Grantor waives all claims, damages, and
demands against Agent or any Lender arising out of the repossession, retention
or sale of the Collateral except such as arise solely out of the gross
negligence or willful misconduct of Agent or such Lender as finally determined
by a court of competent jurisdiction. Each Grantor agrees that ten (10) days
prior notice by Agent of the time and place of any public sale or of the time
after which a private sale may take place is reasonable notification of such
matters. Grantors shall remain liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all Obligations,
including any attorneys’ fees and other expenses incurred by Agent or any
Lender to collect such deficiency.


 


b.   Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice
(to the maximum extent permitted by applicable law) of any kind in connection
with this Security Agreement or any Collateral.


 


c.   To the extent that applicable law imposes
duties on the Agent to exercise remedies in a commercially reasonable manner,
each Grantor acknowledges and agrees that it is not commercially unreasonable
for the Agent (i) to fail to incur expenses reasonably deemed significant by
the Agent to prepare Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to
Collateral to be disposed of, or to obtain or, if not required by other law, to
fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to
exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove Liens on or any adverse claims against Collateral,
(iv) to exercise collection remedies against Account Debtors and other Persons
obligated on Collateral directly or through the use of collection agencies and
other collection specialists, (v) to advertise dispositions of Collateral
through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other Persons, whether
or not in the same business as the Grantor, for expressions of interest in
acquiring all or any portion of such Collateral, (vii) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or
not the Collateral is of a specialized nature, (viii) to dispose of assets in
wholesale rather than retail markets, (ix) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (x) to purchase insurance or
credit enhancements to insure the Agent against risks of loss, collection or
disposition of Collateral or to provide to the Agent a guaranteed return from
the collection or disposition of Collateral, or (xi) to the extent deemed
appropriate by the Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist the Agent in the
collection or disposition of any of the Collateral. Each Grantor acknowledges
that the purpose of this Section 7(c) is to provide non-exhaustive
indications of what actions or omissions by the Agent would not be commercially
unreasonable in the Agent’s exercise of remedies against the Collateral and
that other actions or omissions by the Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 7(c).
Without limitation upon the foregoing, nothing contained in this Section 7(c)
shall be construed to grant any rights to any Grantor or to impose any duties
on Agent that would not have been granted or imposed by this Security Agreement
or by applicable law in the absence of this Section 7(c).


 


11





















 


d.   Neither the Agent nor the Lenders shall be
required to make any demand upon, or pursue or exhaust any of their rights or
remedies against, any Grantor, any other obligor, guarantor, pledgor or any
other Person with respect to the payment of the Obligations or to pursue or
exhaust any of their rights or remedies with respect to any Collateral therefor
or any direct or indirect guarantee thereof. Neither the Agent nor the Lenders
shall be required to marshal the Collateral or any guarantee of the Obligations
or to resort to the Collateral or any such guarantee in any particular order,
and all of its and their rights hereunder or under any other Loan Document
shall be cumulative. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage
of, and covenants not to assert against the Agent or any Lender, any valuation,
stay, appraisement, extension, redemption or similar laws and any and all
rights or defenses it may have as a surety now or hereafter existing which, but
for this provision, might be applicable to the sale of any Collateral made
under the judgment, order or decree of any court, or privately under the power
of sale conferred by this Security Agreement, or otherwise.


 


8.   GRANT OF LICENSE TO USE INTELLECTUAL PROPERTY
COLLATERAL. For the purpose of enabling Agent to exercise rights and remedies
under SECTION 7 hereof (including, without limiting the terms of SECTION 7
hereof, in order to take possession of, hold, preserve, process, assemble,
prepare for sale, market for sale, sell or otherwise dispose of Collateral) at
such time and for so long as Agent shall be lawfully entitled to exercise such
rights and remedies, each Grantor hereby grants to Agent, for the benefit of
Agent and Lenders, a nonexclusive license (exercisable without payment of
royalty or other compensation to such Grantor) to use, license or sublicense
any intellectual property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof.


 


9.   LIMITATION ON AGENT’S AND LENDERS’ DUTY IN
RESPECT OF COLLATERAL. Agent and each Lender shall use reasonable care with
respect to the Collateral in its possession or under its control. Neither Agent
nor any Lender shall have any other duty as to any Collateral in its possession
or control or in the possession or control of any Agent or nominee of Agent or
such Lender, or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto.


 


10.  REINSTATEMENT. This Security Agreement shall
remain in full force and effect and continue to be effective should any
petition be filed by or against any Grantor for liquidation or reorganization,
should any Grantor become insolvent or make an assignment for the benefit of
any Creditor or Creditors or should a receiver or trustee be appointed for all
or any significant part of any Grantor’s assets, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment or performance had not
been made. In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.


 


12





















 


11.  NOTICES. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other party, or whenever any of the parties
desires to give and serve upon any other party any communication with respect
to this Security Agreement, each such notice, demand, request, consent,
approval, declaration or other communication shall be in writing and shall be
given in the manner, and deemed received, as provided for in the Credit
Agreement.


 


12.  SEVERABILITY. Whenever possible, each
provision of this Security Agreement shall be interpreted in a manner as to be
effective and valid under applicable law, but if any provision of this Security
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Security Agreement. This Security Agreement is to be read,
construed and applied together with the Credit Agreement and the other Loan
Documents which, taken together, set forth the complete understanding and
agreement of Agent, Lenders and Grantors with respect to the matters referred
to herein and therein.


 


13.  NO WAIVER; CUMULATIVE REMEDIES. Neither Agent
nor any Lender shall by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies hereunder, and no waiver shall be valid
unless in writing, signed by Agent and then only to the extent therein set
forth. A waiver by Agent of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which Agent would
otherwise have had on any future occasion. No failure to exercise nor any delay
in exercising on the part of Agent or any Lender, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
future exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law. None of the terms or provisions of this security agreement may
be waived, altered, modified or amended except by an instrument in writing,
duly executed by Agent and Grantors.


 


14.  LIMITATION BY LAW. All rights, remedies and
powers provided in this Security Agreement may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
all the provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Security
Agreement invalid, unenforceable, in whole or in part, or not entitled to be
recorded, registered or filed under the provisions of any applicable law.


 


15.  TERMINATION OF THIS SECURITY AGREEMENT.
Subject to SECTION 10 hereof, this Security Agreement shall terminate upon
the Termination Date.


 


16.  SUCCESSORS AND ASSIGNS. This Security
Agreement and all Obligations of Grantors hereunder shall be binding upon the
successors and assigns of each Grantor (including any debtor-in-possession on
behalf of such Grantor) and shall, together with the rights and remedies of
Agent, for the benefit of Agent and Lenders, hereunder, inure to the benefit of
Agent and


 


13





















 


Lenders, all future holders
of any instrument evidencing any of the Obligations and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or instrument
evidencing the Obligations or any portion thereof or interest therein shall in
any manner impair the Lien granted to Agent, for the benefit of Agent and
Lenders, hereunder. No Grantor may assign, sell, hypothecate or otherwise
transfer any interest in or Obligation under this Security Agreement.


 


17.  COUNTERPARTS. This Security Agreement may be
authenticated in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement. This Security Agreement
may be authenticated by manual signature, facsimile or, if approved in writing
by Agent, electronic means, all of which shall be equally valid.


 


18.  GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES
OF AMERICA. EACH GRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK, SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
GRANTORS, AGENT AND LENDERS PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND
GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, AND, PROVIDED, FURTHER, NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH GRANTOR EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH GRANTOR
AT THE ADDRESS SET FORTH ON ANNEX I TO THE CREDIT AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.


 


14





















 


19. 
WAIVER OF JURY TRIAL. Because disputes arising in connection with
complex financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that disputes
arising hereunder or relating hereto be resolved by a judge applying such
applicable laws. Therefore, to achieve the best combination of the benefits of
the judicial system and of arbitration, the parties hereto waive all right to
trial by jury in any action, suit or proceeding brought to resolve any dispute,
whether sounding in contract, tort, or otherwise, among Agent, Lenders, and
Grantors arising out of, connected with, related to, or incidental to the
relationship established in connection with, this Security Agreement or any of
the other loan documents or the transactions related hereto or thereto.


 


20.  SECTION TITLES. The Section titles
contained in this Security Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the Agreement
between the parties hereto.


 


21.  NO STRICT CONSTRUCTION. The parties hereto
have participated jointly in the negotiation and drafting of this Security
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Security Agreement shall be construed as if drafted jointly by the
parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Security Agreement.


 


22.  ADVICE OF COUNSEL. Each of the parties
represents to each other party hereto that it has discussed this Security
Agreement and, specifically, the provisions of SECTION 18 and SECTION 19,
with its counsel.


 


23.  BENEFIT OF LENDERS. All Liens granted or
contemplated hereby shall be for the benefit of Agent, individually, and
Lenders, and all proceeds or payments realized from Collateral in accordance
herewith shall be applied to the Obligations in accordance with the terms of
the Credit Agreement.


 


15





















 


IN
WITNESS WHEREOF, each of the parties hereto has caused this Security Agreement
to be executed and delivered by its duly authorized officer as of the date
first set forth above.


 


	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as Agent

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John Goodwin

  	
   

  
	
   

  	
   

  	
  Duly Authorized Signatory

  
	
   

  	
   

  
	
   

  	
  ROLLER BEARING COMPANY OF
  AMERICA,

  
	
   

  	
  INC., AS BORROWER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  INDUSTRIAL TECTONICS
  BEARINGS

  CORPORATION, as Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  RBC NICE BEARINGS INC., as
  Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
					



 


[Signature Page to the Security Agreement]


 





















 


	
   

  	
  BREMEN BEARINGS, INC., as
  Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  TYSON BEARING COMPANY,
  INC., as Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  RBC LINEAR PRECISION
  PRODUCTS, INC., as

  Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
  MILLER BEARING COMPANY,
  INC., as Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  RBC OKLAHOMA, INC., as
  Grantor

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Anthony S. Cavalieri

  	
   

  
	
   

  	
  Name: 

  	
  Anthony S. Cavalieri

  	
   

  
	
   

  	
  Title: 

  	
  Chief Financial Officer

  	
   

  
					



 





















 


SCHEDULE I

to

SECURITY AGREEMENT


 


FILING JURISDICTIONS


 





















 


SCHEDULE II

to

SECURITY AGREEMENT


 


INSTRUMENTS

CHATTEL PAPER

AND

LETTER OF CREDIT RIGHTS


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-A

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING ROLLER BEARING COMPANY OF AMERICA, INC.

(“RBC”) COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization of RBC:


 


V.                                     Chief Executive Office and principal place of
business of RBC:


 


VI.                                 Corporate Offices of RBC:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-B

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING INDUSTRIAL TECTONICS BEARINGS CORPORATION

(“INDUSTRIAL”) COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of
business of Industrial:


 


VI.                                 Corporate Offices of Industrial:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-C

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING RBC NICE BEARINGS, INC. (“RBC

NICE”)COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of
business of RBC Nice


 


VI.                                 Corporate Offices of RBC Nice:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-D

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING BREMEN BEARINGS, INC. (“BREMEN”) COLLATERAL


 


I.                                         Grantor’s official name:


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of
business of Bremen:


 


VI.                                 Corporate Offices of Bremen:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-E

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING TYSON BEARING COMPANY, INC. (“TYSON”)

COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of
business of Tyson:


 


VI.                                 Corporate Offices of Tyson:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-F

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING RBC LINEAR PRODUCTS, INC. (“RBC LINEAR”)

COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of business of RBC Linear:


 


VI.                                 Corporate Offices of RBC Linear:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-G

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING MILLER BEARING COMPANY, INC. (“MILLER”)

COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such number
has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of
business of Miller:


 


VI.                                 Corporate Offices of Miller:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE III-H

to

SECURITY AGREEMENT


 


SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL

AND RECORDS CONCERNING RBC OKLAHOMA, INC. (“RBC OKLAHOMA”)

COLLATERAL


 


I.                                         Grantor’s official name: 
                                                       


 


II.                                     Type of entity (e.g. corporation, partnership,
business trust, limited partnership, limited liability company):


 


III.                                 Organizational identification number issued by
Grantor’s state of incorporation or organization or a statement that no such
number has been issued:


 


IV.                                 State or Incorporation or Organization:


 


V.                                     Chief Executive Office and principal place of
business of RBC Oklahoma:


 


VI.                                 Corporate Offices of RBC Oklahoma:


 


VII.                             Warehouses:


 


VIII.                         Other Premises at which Collateral is Stored
or Located:


 


IX.                                Locations of Records Concerning Collateral:


 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE IV-A

to

SECURITY AGREEMENT


 


PATENTS, TRADEMARKS AND COPYRIGHTS


 


	
  RBC

  	
   

  	
  INDUSTRIAL

  



 


[TO BE COMPLETED BY GRANTORS]


 





















 


SCHEDULE IV-B

to

SECURITY AGREEMENT


 


PATENTS, TRADEMARKS AND COPYRIGHTS


 


	
  RBC NICE

  	
  BREMEN

  	
  TYSON

  



 





















 


SCHEDULE IV-C

to

SECURITY AGREEMENT


 


PATENTS, TRADEMARKS AND COPYRIGHTS


 


	
  RBC LINEAR

  	
  MILLER

  	
  RBC OKLAHOMA

  



 





















 


EXHIBIT A


 


POWER OF ATTORNEY


 


This
Power of Attorney is executed and delivered by                                                ,
a                                                
corporation (“Grantor”) to General Electric Capital Corporation, a Delaware
corporation (hereinafter referred to as “Attorney”), as Agent for the benefit
of Agent and Lenders, under a Credit Agreement and a Security Agreement, both
dated as of May             ,
2002, and other related documents (the “Loan Documents”). No person to whom
this Power of Attorney is presented, as authority for Attorney to take any
action or actions contemplated hereby, shall be required to inquire into or
seek confirmation from Grantor as to the authority of Attorney to take any
action described below, or as to the existence of or fulfillment of any
condition to this Power of Attorney, which is intended to grant to Attorney
unconditionally the authority to take and perform the actions contemplated
herein, and Grantor irrevocable waives any right to commence any suit or
action, in law or equity, against any person or entity which acts in reliance
upon or acknowledges the authority granted under this Power of Attorney. The
power of attorney granted hereby is coupled with an interest, and may not be
revoked or canceled by Grantor without Attorney’ s written consent.


 


Grantor
hereby irrevocably constitutes and appoints Attorney (and all officers,
employees or Agents designated by Attorney), with full power of substitution,
as Grantor’s true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of Grantor and in the name of Grantor or in
its own name, from time to time in Attorney’s discretion, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
the Loan Documents and, without limiting the generality of the foregoing,
Grantor hereby grants to Attorney the power and right, on behalf of Grantor,
without notice to or assent by Grantor, and at any time, to do the following:
(a) change the mailing address of Grantor, open a post office box on behalf of
Grantor, open mail for Grantor, and ask, demand, collect, give acquittances and
receipts for, take possession of, endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, and notices in connection with any property of
Grantor; (b) effect any repairs to any asset of Grantor, or continue or obtain
any insurance and pay all or any part of the premiums therefor and costs
thereof, and make, settle and adjust all claims under such policies of
insurance, and make all determinations and decisions with respect to such
policies; (c) pay or discharge any taxes, liens, security interests, or other
encumbrances levied or placed on or threatened against Grantor or its property;
(d) defend any suit, action or proceeding brought against Grantor if Grantor
does not defend such suit, action or proceeding or if Attorney believes that
Grantor is not pursuing such defense in a manner that will maximize the
recovery to Attorney, and settle, compromise or adjust any suit, action, or
proceeding described above and, in connection therewith, give such discharges
or releases as Attorney may deem appropriate; (e) file or prosecute any claim,
litigation, suit or proceeding in any court of competent jurisdiction or before
any arbitrator, or take any other action otherwise deemed appropriate by
Attorney for the purpose of collecting any and all such moneys due to Grantor
whenever payable and to enforce any other right in respect of Grantor’s
property; (f) cause the certified public accountants then engaged by Grantor to


 





















 


prepare and deliver to
Attorney at any time and from time to time, promptly upon Attorney’s request,
the following reports: (1) a reconciliation of all accounts, (2) an aging of
all accounts, (3) trial balances, (4) test verifications of such accounts as
Attorney may request, and (5) the results of each physical verification of
inventory; (g) communicate in its own name with any party to any Contract with
regard to the assignment of the right, title and interest of such Grantor in
and under the Contracts and other matters relating thereto; (h) to file such
financing statements with respect to the Security Agreement, with or without
Grantor’s signature, or to file a photocopy of the Security Agreement in
substitution for a financing statement, as the Agent may deem appropriate and
to execute in Grantor’s name such financing statements and amendments thereto
and continuation statements which may require the Grantor’s signature; and (i)
execute, in connection with any sale provided for in any Loan Document, any
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral and to otherwise direct such sale or resale, all as
though Attorney were the absolute owner of the property of Grantor for all
purposes, and to do, at Attorney’s option and Grantor’s expense, at any time or
from time to time, all acts and other things that Attorney reasonably deems
necessary to perfect, preserve, or realize upon Grantor’s property or assets
and Attorney’s Liens thereon, all as fully and effectively as Grantor might do.
Grantor hereby ratifies, to the extent permitted by law, all that said Attorney
shall lawfully do or cause to be done by virtue hereof.


 


IN
WITNESS WHEREOF, this Power of Attorney is executed by Grantor, and Grantor has
caused its seal to be affixed pursuant to the authority of its board of
directors this                            
day of May, 2002.


 


	
   

  	
  [

  	
   

  	
  GRANTOR

  	
  ]

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								



 


NOTARY PUBLIC CERTIFICATE


 


On
this                
day of May, 2002, [officer’s name] who is personally known to me appeared
before me in his/her capacity as the [title] of [Grantor] (“Grantor”) and
executed on behalf of Grantor the Power of Attorney in favor of General
Electric Capital Corporation to which this Certificate is attached.


 


	
   

  	
   

  	
   

  
	
   

  	
  Notary Public