Exhibit 10.31


 


PLEDGE
AGREEMENT


 


This PLEDGE AGREEMENT, dated as of June 29, 2004 (together with
all amendments, if any, from time to time hereto, this “Agreement”)
between ROLLER BEARING COMPANY OF AMERICA, INC., a Delaware corporation (the “Pledgor”),
and GENERAL ELECTRIC CAPITAL CORPORATION, in its capacity as SCIL Agent for
SCIL Lenders (“SCIL Agent”).


 


W I T N
E S S E T H:


 


WHEREAS, pursuant to that certain SCIL Credit Agreement dated as of the
date hereof by and among Pledgor, the Persons named therein as Credit Parties,
SCIL Agent and the Persons signatory thereto from time to time as SCIL Lenders
(including all annexes, exhibits and schedules thereto, and as from time to
time amended, restated, supplemented or otherwise modified (the “Credit
Agreement”), the SCIL Lenders have agreed to make a second collateralized
institutional loan to Borrower (the “SCIL”);


 


WHEREAS, Pledgor is the record and beneficial owner of the shares of
Stock listed in Part A of Schedule I hereto and the owner of
the promissory notes and instruments listed in Part B of Schedule I
hereto;


 


WHEREAS, Pledgor benefits from the credit facilities made available to
Borrower under the Credit Agreement;


 


WHEREAS, in order to induce SCIL Agent and SCIL Lenders to make the
SCIL as provided for in the Credit Agreement, Pledgor has agreed to pledge the
Pledged Collateral to SCIL Agent in accordance herewith;


 


NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained and to induce SCIL Lenders to make the SCIL under the
Credit Agreement, it is agreed as follows:


 


1.                                       Definitions.  Unless otherwise defined
herein, terms defined in the Credit Agreement are used herein as therein
defined, and the following shall have (unless otherwise provided elsewhere in
this Agreement) the following respective meanings (such meanings being equally
applicable to both the singular and plural form of the terms defined):


 


“Bankruptcy Code” means title 11, United States Code, as amended
from time to time, and any successor statute thereto.


 


“Pledged Collateral” has the meaning assigned to such term in Section 2
hereof. 


 


“Pledged Entity” means an issuer of Pledged Shares or Pledged
Indebtedness.


 


“Pledged Indebtedness” means the Indebtedness evidenced by
promissory notes and instruments listed on Part B of Schedule I
hereto;


 





















 


 


“Pledged Shares” means those shares of Stock listed on Part A
of Schedule I hereto.


 


“Secured Obligations” has the meaning assigned to such term in Section 3
hereof.


 


“Senior Lien Termination Date” means the “Termination Date” as defined
in the Senior Credit Agreement


 


2.                                       Pledge.  Pledgor hereby pledges to SCIL
Agent, and grants to SCIL Agent for itself and the ratable benefit of SCIL
Lenders, a security interest in all of the following (collectively, the “Pledged
Collateral”):


 


a.                                       the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares; and


 


b.                                      such portion, as determined by SCIL Agent as
provided in Section 6(d) below, of any additional shares of
Stock of a Pledged Entity from time to time acquired by Pledgor in any manner
(which shares of Stock shall be deemed to be part of the Pledged Shares), and
the certificates representing such additional shares, and all dividends,
distributions, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such Stock; and


 


c.                                       the Pledged Indebtedness and the promissory
notes or instruments evidencing the Pledged Indebtedness, and all interest,
cash, instruments and other property and assets from time to time received,
receivable or otherwise distributed in respect of the Pledged Indebtedness; and


 


d.                                      all additional Indebtedness arising after the
date hereof and owing to Pledgor and evidenced by promissory notes or other
instruments, together with such promissory notes and instruments, and all
interest, cash, instruments and other property and assets from time to time
received, receivable or otherwise distributed in respect of that Pledged
Indebtedness.


 


3.                                       Security For Obligations.  This
Agreement secures, and the Pledged Collateral is security for, the prompt
payment in full when due, whether at stated maturity, by acceleration or otherwise,
and performance of all Obligations (collectively, the “Secured Obligations”).


 


4.                                       Delivery of Pledged Collateral.  At
all times following the Senior Lien Termination Date, all certificates and all
promissory notes and instruments evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of SCIL Agent, for itself and the ratable
benefit of SCIL Lenders, pursuant hereto. All Pledged Shares shall be
accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to SCIL Agent and all promissory notes
or other instruments evidencing the Pledged Indebtedness shall be endorsed by
Pledgor.


 


5.                                       Representations and Warranties.  Pledgor
represents and warrants to SCIL Agent that:


 


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a.                                       Pledgor is, and at the time of delivery of
the Pledged Shares to Senior Agent will be, the sole holder of record and the
sole beneficial owner of such Stock free and clear of any Lien thereon or
affecting the title thereto, except for any Lien created by the Loan Documents
and the prior Lien of Senior Agent on such Stock (such prior Lien, the “Senior
Lien”); Pledgor is and at the time of delivery of the Pledged Indebtedness
to Senior Agent will be, the sole owner of such Pledged Indebtedness free and
clear of any Lien thereon or affecting title thereto, except for any Lien created
by the Loan Documents and the Senior Lien;


 


b.                                      All of the Pledged Shares have been duly
authorized, validly issued and are fully paid and non-assessable; the Pledge
Indebtedness has been duly authorized, authenticated or issued and delivered
by, and is the legal, valid and binding obligations of, the Pledged Entity
issuing such Pledged Indebtedness, and no such Pledged Entity is in default
thereunder.


 


c.                                       Pledgor has the power and requisite authority
to pledge, assign, transfer, deliver, deposit and set over the Pledged as
provided herein.


 


d.                                      All of the Pledged Shares are presently owned
by Pledgor, and are presently represented by the certificates listed on Part A
of Schedule I hereto. As of the date hereof, there are no existing
options, warrants, calls or commitments of any character whatsoever relating to
the Pledged Shares;


 


e.                                       No consent, approval, authorization or other
order or other action by, and no notice to or filing with, any Governmental
Authority or any other Person is required (i) for the pledge by Pledgor of
the Pledged Collateral pursuant to this Agreement or for the execution,
delivery or performance of this Agreement by Pledgor, or (ii) for the
exercise by SCIL Agent of (A) the voting or other rights provided for in
this Agreement or (B) the remedies in respect of the Pledged Collateral
pursuant to this Agreement, except as may be required by the Code or laws
affecting the offering and sale of securities generally;


 


f.                                         The pledge, assignment and delivery of the
Pledged Collateral pursuant to this Agreement will create a valid Lien on and a
perfected security interest in favor of the SCIL Agent for its benefit and the
ratable benefit of SCIL Lenders in the Pledged Collateral in accordance with Section 2,
securing the payment of the Secured Obligations, subject to no other Lien;


 


g.                                      This Agreement has been duly authorized,
executed and delivered by Pledgor and constitutes a legal, valid and binding
obligation of Pledgor enforceable against Pledgor in accordance with its terms;


 


h.                                      The Pledged Shares constitute 100% of the
issued and outstanding shares of Stock of the Pledgor’s Domestic Subsidiaries
and 66% of the Stock of RBC Schaublin Holding S.A. and RBC Mexico S. DE R.L. DE
C.V.


 


i.                                          Except as disclosed on Part B of Schedule I,
none of the Pledged Indebtedness is subordinated in right of payment to other
Indebtedness (except for the Secured Obligations) or subject to the terms of an
indenture.


 


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The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.


 


6.                                       Covenants. Pledgor covenants and agrees that until the Termination Date:


 


a.                                       Without the prior written consent of SCIL
Agent, Pledgor will not sell, assign, transfer, pledge, or otherwise encumber
any of its rights in or to the Pledged Collateral, or any unpaid dividends,
interest or other distributions or payments with respect to the Pledged
Collateral or grant a Lien in the Pledged Collateral, unless otherwise
expressly permitted by the Credit Agreement;


 


b.                                      Pledgor will, at its expense, promptly
execute, acknowledge and deliver all such instruments and take all such actions
as SCIL Agent from time to time may reasonably request in order to ensure to
SCIL Agent and SCIL Lenders the benefits of the Liens in and to the Pledged
Collateral intended to be created by this Agreement, including the filing of
any necessary Code financing statements, which may be filed by SCIL Agent with
or (to the extent permitted by law) without the signature of Pledgor, and will
cooperate with SCIL Agent, at Pledgor’s expense, in obtaining all necessary
approvals and making all necessary filings under federal, state, local or
foreign law in connection with such Liens or any sale or transfer of the Pledged
Collateral in accordance with Section 8;


 


c.                                       Pledgor has and will defend the title to the
Pledged Collateral and the Liens of SCIL Agent in the Pledged Collateral
against the claim of any Person and will maintain and preserve such Liens; and


 


d.                                      Pledgor will, upon obtaining ownership of any
additional Stock or promissory notes or instruments of a Pledged Entity or
Stock or promissory notes or instruments otherwise required to be pledged to
SCIL Agent pursuant to any of the Loan Documents, which Stock, notes or
instruments are not already Pledged Collateral, promptly (and in any event
within three (3) Business Days) deliver to SCIL Agent a Pledge Amendment,
duly executed by Pledgor, in substantially the form of Schedule II
hereto (a “Pledge Amendment”) in respect of any such additional Stock,
notes or instruments, pursuant to which Pledgor shall pledge to SCIL Agent all
of such additional Stock, notes and instruments. Pledgor hereby authorizes SCIL
Agent to attach each Pledge Amendment to this Agreement and agrees that all
Pledged Shares and Pledged Indebtedness listed on any Pledge Amendment
delivered to Senior Agent (or, after the Senior Lien Termination Date, to SCIL
Agent) shall for all purposes hereunder be considered Pledged Collateral.


 


7.                                       Pledgor’s Rights.  As
long as no Default or Event of Default shall have occurred and be continuing
and until written notice shall be given to Pledgor in accordance with Section 8(a) hereof:


 


a.                                       Pledgor shall have the right, from time to
time, to vote and give consents with respect to the Pledged Collateral, or any
part thereof; provided, however, that no vote shall be cast, and
no consent shall be given or action taken, which would have the effect of
impairing the position or interest of SCIL Agent in respect of the Pledged
Collateral or which would


 


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authorize,
effect or consent to (unless and to the extent expressly permitted by the
Credit Agreement):


 


(i)                                     the dissolution or liquidation, in whole or
in part, of a Pledged Entity;


 


(ii)                                  the consolidation or merger of a Pledged
Entity with any other Person;


 


(iii)                               the sale, disposition or encumbrance of all
or substantially all of the assets of a Pledged Entity, except for Liens in
favor of SCIL Agent and Senior Agent;


 


(iv)                              the issuance of any additional shares of its
Stock to any Person other than Pledgor (and if to Pledgor, only so long as such
additional shares are upon issuance promptly pledged to SCIL Agent); or


 


(v)                                 the alteration of the voting rights with
respect to the Stock of a Pledged Entity; and


 


b.                                      (i)          Pledgor
shall be entitled, from time to time, to collect and receive for its own use
all cash dividends and interest paid in respect of the Pledged Shares and
Pledged Indebtedness to the extent not in violation of the Credit Agreement other
than any and all: (A) dividends and other distributions paid or
payable in cash in respect of any Pledged Shares in connection with a partial
or total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in capital of a Pledged Entity; and (B) cash paid,
payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, any Pledged Collateral; provided, however,
that until actually paid all rights to such distributions shall remain subject
to the Lien created by this Agreement; and


 


(ii)                                  All dividends and other payments (other than
such cash dividends and interest as are permitted to be paid to Pledgor in
accordance with clause (i) above) and all other distributions in
respect of any of the Pledged Shares or Pledged Indebtedness, whenever paid or
made, shall be delivered to Senior Agent (or, after the Senior Lien Termination
Date, to SCIL Agent) to hold as Pledged Collateral and shall, if received by
Pledgor, be received in trust for the benefit of Senior Agent and SCIL Agent,
be segregated from the other property or funds of Pledgor, and be forthwith
delivered to SCIL Agent as Pledged Collateral in the same form as so received
(with any necessary indorsement).


 


8.                                       Defaults and Remedies; Proxy.


 


a.                                       Upon the occurrence of an Event of Default
and during the continuation of such Event of Default, and concurrently with
written notice to Pledgor, SCIL Agent (personally or through an SCIL Agent) is
hereby authorized and empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral, to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations,
to exercise the voting and 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


 


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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 SCIL Agent was the outright owner thereof. Any sale shall
be made at public or private sale at SCIL 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 SCIL Agent may deem fair, and SCIL Agent may
be the purchaser of the whole or any part of the Pledged Collateral so sold and
hold the same thereafter in its own right free from any claim of Pledgor or any
right of redemption. Each sale shall be made to the highest bidder, but SCIL
Agent reserves the right to reject any and all bids at such sale which, in its
discretion, it shall deem inadequate. Demands of performance, except as
otherwise herein specifically provided for, notices of sale, advertisements and
the presence of property at sale are hereby waived and any sale hereunder may
be conducted by an auctioneer or any officer or agent of SCIL Agent. PLEDGOR
HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS SCIL AGENT AS THE PROXY AND
ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING
THE RIGHT TO VOTE THE PLEDGED SHARES, WITH FULL POWER OF SUBSTITUTION TO DO SO.
THE APPOINTMENT OF SCIL AGENT AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN
INTEREST AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE. IN ADDITION TO
THE RIGHT TO VOTE THE PLEDGED SHARES, THE APPOINTMENT OF SCIL AGENT AS PROXY
AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS,
POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE PLEDGED SHARES WOULD
BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS,
CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH
PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED SHARES OR ANY
OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.
NOTWITHSTANDING THE FOREGOING, SCIL AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE
ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE
TO DO SO OR FOR ANY DELAY IN DOING SO.


 


b.                                      If, at the original time or times appointed
for the sale of the whole or any part of the Pledged Collateral, the highest
bid, if there be but one sale, shall be inadequate to discharge in full all the
Secured Obligations, or if the Pledged Collateral be offered for sale in lots,
if at any of such sales, the highest bid for the lot offered for sale would
indicate to SCIL Agent, in its discretion, that the proceeds of the sales of
the whole of the Pledged Collateral would be unlikely to be sufficient to
discharge all the Secured Obligations, SCIL Agent may, on one or more occasions
and in its discretion, postpone any of said sales by public announcement at the
time of sale or the time of previous postponement of sale, and no other notice
of such postponement or postponements of sale need be given, any other notice
being hereby waived; provided, however, that any sale or sales
made after such postponement shall be after ten (10) days’ notice to
Pledgor.


 


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c.                                       If, at any time when SCIL Agent shall
determine to exercise its right to sell the whole or any part of the Pledged
Collateral hereunder, such Pledged Collateral or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act of 1933, as amended (or any similar statute then in effect) (the
“Act”), SCIL Agent may, in its discretion (subject only to applicable
requirements of law), sell such Pledged Collateral or part thereof by private
sale in such manner and under such circumstances as SCIL Agent may deem
necessary or advisable, but subject to the other requirements of this Section 8,
and shall not be required to effect such registration or to cause the same to
be effected. Without limiting the generality of the foregoing, in any such
event, SCIL Agent in its discretion (x) may, in accordance with applicable
securities laws, proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Collateral
or part thereof could be or shall have been filed under said Act (or similar
statute), (y) may approach and negotiate with a single possible purchaser to
effect such sale, and (z) may restrict such sale to a purchaser who is an
accredited investor under the Act and who will represent and agree that such
purchaser is purchasing for its own account, for investment and not with a view
to the distribution or sale of such Pledged Collateral or any part thereof. In
addition to a private sale as provided above in this Section 8, if any
of the Pledged Collateral shall not be freely distributable to the public
without registration under the Act (or similar statute) at the time of any
proposed sale pursuant to this Section 8, then SCIL Agent shall not
be required to effect such registration or cause the same to be effected but,
in its discretion (subject only to applicable requirements of law), may require
that any sale hereunder (including a sale at auction) be conducted subject to
restrictions:


 


(i)                                     as to the financial sophistication and
ability of any Person permitted to bid or purchase at any such sale;


 


(ii)                                  as to the content of legends to be placed
upon any certificates representing the Pledged Collateral sold in such sale,
including restrictions on future transfer thereof;


 


(iii)                               as to the representations required to be made
by each Person bidding or purchasing at such sale relating to that Person’s
access to financial information about Pledgor and such Person’s intentions as
to the holding of the Pledged Collateral so sold for investment for its own
account and not with a view to the distribution thereof; and


 


(iv)                              as to such other matters as SCIL Agent may,
in its discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Act and all applicable state securities laws.


 


d.                                      Pledgor recognizes that SCIL Agent may be
unable to effect a public sale of any or all the Pledged Collateral and may be
compelled to resort to one or more private sales thereof in accordance with clause
(c) above. Pledgor also acknowledges 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 and, notwithstanding such circumstances, agrees that any
such private sale shall not


 


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Be
deemed to have been made in a commercially unreasonable manner solely by virtue
of such sale being private. SCIL Agent shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary to
permit the Pledged Entity to register such securities for public sale under the
Act, or under applicable state securities laws, even if Pledgor and the Pledged
Entity would agree to do so.


 


e.                                       Pledgor agrees to the maximum extent
permitted by applicable law that following the occurrence and during the
continuance of an Event of Default it will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so. Pledgor agrees that it will not interfere with any right,
power and remedy of SCIL Agent provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by SCIL Agent of any one or more of such
rights, powers or remedies. No failure or delay on the part of SCIL Agent to
exercise any such right, power or remedy and no notice or demand which may be
given to or made upon Pledgor by SCIL Agent with respect to any such remedies
shall operate as a waiver thereof, or limit or impair SCIL Agent’s right to
take any action or to exercise any power or remedy hereunder, without notice or
demand, or prejudice its rights as against Pledgor in any respect.


 


f.                                         Pledgor further agrees that a breach of any
of the covenants contained in this Section 8 will cause irreparable
injury to SCIL Agent, that SCIL Agent shall 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 8 shall be specifically
enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that the Secured Obligations are not then due and payable
in accordance with the agreements and instruments governing and evidencing such
obligations.


 


9.                                       Waiver.  No delay on SCIL Agent’s part
in exercising any power of sale, Lien, option or other right hereunder, and no
notice or demand which may be given to or made upon Pledgor by SCIL Agent with
respect to any power of sale, Lien, option or other right hereunder, shall
constitute a waiver thereof, or limit or impair SCIL Agent’s right to take any
action or to exercise any power of sale, Lien, option, or any other right
hereunder, without notice or demand, or prejudice SCIL Agent’s rights as
against Pledgor in any respect.


 


10.                                 Assignment.  SCIL Agent may assign, indorse
or transfer any instrument evidencing all or any part of the Secured
Obligations as provided in, and in accordance with, the Credit Agreement, and
the holder of such instrument shall be entitled to the benefits of this
Agreement.


 


11.                                 Termination.  Immediately following the
Termination Date, SCIL Agent shall deliver to Pledgor the Pledged Collateral
pledged by Pledgor in the possession of SCIL Agent at the time subject to this
Agreement and all instruments of assignment executed in connection therewith,
free and clear of the Liens hereof and, except as otherwise provided herein or
therein,


 


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all
of Pledgor’s Obligations hereunder or under the other Loan Documents shall at
such time terminate.


 


12.                                 Lien Absolute.  All
rights of SCIL Agent hereunder, and all Obligations of Pledgor hereunder, shall
be absolute and unconditional irrespective of:


 


a.                                       any lack of validity or enforceability of the
Credit Agreement, any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;


 


b.                                      any change in the time, manner or place of
payment of, or in any other term of, all or any part of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument governing or evidencing any Secured Obligations;


 


c.                                       any exchange, release or non-perfection of
any other Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;


 


d.                                      the insolvency of any Credit Party; or


 


e.                                       any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Pledgor.


 


13.                                 Release.  Pledgor consents and agrees
that SCIL Agent may at any time, or from time to time, in its discretion:


 


a.                                       renew, extend or change the time of payment,
and/or the manner, place or terms of payment of all or any part of the Secured
Obligations; and


 


b.                                      exchange, release and/or surrender all or any
of the Collateral (including the Pledged Collateral), or any part thereof, by
whomsoever deposited, which is now or may hereafter be held by SCIL Agent in
connection with all or any of the Secured Obligations; all in such manner and
upon such terms as SCIL Agent may deem proper, and without notice to or further
assent from Pledgor, it being hereby agreed that Pledgor shall be and remain
bound upon this Agreement, irrespective of the value or condition of any of the
Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time, exceed the aggregate principal
amount thereof set forth in the Credit Agreement, or any other agreement
governing any Secured Obligations. Pledgor hereby waives notice of acceptance
of this Agreement, and also presentment, demand, protest and notice of dishonor
of any and all of the Secured Obligations, and promptness in commencing suit
against any party hereto or liable hereon, and in giving any notice to or of
making any claim or demand hereunder upon Pledgor. No act or omission of any
kind on SCIL Agent’s part shall in any event affect or impair this Agreement.


 


14.                                 Reinstatement.  This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against Pledgor or any Pledged Entity for


 


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liquidation
or reorganization, should Pledgor or any Pledged Entity become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of Pledgor’s or a Pledged Entity’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 Secured 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 Secured
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 Secured Obligations shall be reinstated and deemed reduced only
by such amount paid and not so rescinded, reduced, restored or returned.


 


15.                                 Miscellaneous.


 


a.                                       SCIL Agent may execute any of its duties
hereunder by or through agents or employees and shall be entitled to advice of
counsel concerning all matters pertaining to its duties hereunder.


 


b.                                      Pledgor agrees to promptly reimburse SCIL
Agent for actual out-of-pocket expenses, including, without limitation,
reasonable counsel fees, incurred by SCIL Agent in connection with the
administration and enforcement of this Agreement.


 


c.                                       Neither SCIL Agent, nor any of its respective
officers, directors, employees,
agents or counsel shall be liable for any action lawfully taken or omitted to
be taken by it or them hereunder or in connection herewith, except for its or
their own gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction.


 


d.                                      THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR
AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF
PLEDGOR), AND SHALL INURE TO THE BENEFIT OF, AND BE ENFORCEABLE BY, SCIL AGENT
AND ITS SUCCESSORS AND ASSIGNS, AND 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 NONE OF THE TERMS OR PROVISIONS
OF THIS AGREEMENT MAY BE WAIVED, ALTERED, MODIFIED OR AMENDED EXCEPT IN
WRITING DULY SIGNED FOR AND ON BEHALF OF SCIL AGENT AND PLEDGOR.


 


16.                                 Severability.  If
for any reason any provision or provisions hereof are determined to be invalid
and contrary to any existing or future law, such invalidity shall not impair the
operation of or effect those portions of this Agreement which are valid.


 


17.                                 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 or serve upon any other a communication with respect to
this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and either shall be
delivered in person or sent by registered or certified mail, return


 


10





















 


receipt
requested, with proper postage prepaid, or by facsimile transmission and
confirmed by delivery of a copy by personal delivery or United States mail as
otherwise provided herein:


 


	
   

  	
  a.

  	
   

  	
  If
  to SCIL Agent, at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
   

  	
  100
  California Street, 10th Floor

  
	
   

  	
   

  	
  San
  Francisco, CA 94111

  
	
   

  	
   

  	
  Attention:

  	
  Daniel
  Shapiro and Neel Morey

  
	
   

  	
   

  	
  Facsimile:

  	
  (415)
  277-7443

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Latham &
  Watkins

  
	
   

  	
   

  	
  233
  S. Wacker Drive

  
	
   

  	
   

  	
  Sears
  Tower, Suite 5800

  
	
   

  	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
   

  	
  Attention:  David
  Crumbaugh

  
	
   

  	
   

  	
  Fax
  No.: 312-993-9767

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  General
  Electric Capital Corporation

  
	
   

  	
   

  	
  500
  W. Monroe Street, 16th Floor

  
	
   

  	
   

  	
  Chicago,
  IL 60661

  
	
   

  	
   

  	
  Attention:

  	
  Andrew
  Packer

  
	
   

  	
   

  	
  Facsimile:

  	
  (312)
  441-6876

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  to Pledgor, at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Roller
  Bearing Company of America, Inc.

  
	
   

  	
   

  	
  60
  Round Hill Road

  
	
   

  	
   

  	
  Fairfield,
  Connecticut 06430

  
	
   

  	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
   

  	
  Fax
  No.: 203-256-0775

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kirkland &
  Ellis LLP

  
	
   

  	
   

  	
  153
  East 53rd Street

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
  Attention:
  Frederick Tanne and Armand A. Della Monica

  
	
   

  	
   

  	
  Fax
  No.: 212-446-4900

  
						



 


or
at such other address as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such


 


11





















 


notice.
Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly served, given or
delivered (a) upon the earlier of actual receipt and three (3) Business
Days after deposit in the United States Mail, registered or certified mail,
return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by personal
delivery or United States Mail as otherwise provided in this Section 17,
(c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid, or (d) when delivered, if hand-delivered
by messenger. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to the persons
designated above to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.


 


18.                                 Section Titles.  The Section titles
contained in this 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.


 


19.                                 Counterparts.  This
Agreement may be executed in any number of counterparts, which shall,
collectively and separately, constitute one agreement.


 


20.                                 Benefit of SCIL Lenders.  All
Security Interests granted or contemplated hereby shall be for the benefit of SCIL
Agent and SCIL Lenders, and all proceeds or payments realized from the Pledged
Collateral in accordance herewith shall be applied to the Obligations in accordance
with the terms of the Credit Agreement.


 


21.                                 Subordination.  Notwithstanding
anything herein to the contrary, the security interest granted to SCIL Agent in
favor of SCIL Lenders hereunder and the rights of such parties in respect
hereof shall be subordinate to the Senior Lien to the extent provided in the Intercreditor
Agreement.


 


22.                                 Performance of Pledgor.  Notwithstanding
anything herein to the contrary, Pledgor shall not be required to perform any
covenant or obligation under this Agreement to the extent that compliance with
such covenant or performance of such act would conflict with the terms of any
agreement of Pledgor in favor of Senior Agent until the Senior Lien Termination
Date shall have occurred.


 


[signature page follows]


 


12





















 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.


 


 


	
   

  	
  ROLLER BEARING COMPANY
  OF AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Daniel
  A. Bergerun

  	
   

  
	
   

  	
  Name:

  	
   DANIEL
  A. BERGERUN

  	
   

  
	
   

  	
  Title:

  	
  VP &
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC
  CAPITAL CORPORATION, as

  SCIL Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Scott J.
  Lorimer

  	
   

  
	
   

  	
  Name:

  	
  Scott J. Lorimer

  	
   

  
	
   

  	
  It’s Duly Authorized
  Signatory

  
									



 


 


[Signature page to SCIL Pledge
Agreement]