Document:

Exhibit 10.8

 

INDENTURE OF LEASE made as of March 30, 2004 by and
between RAYMOND HUNICKE, LLC, a Connecticut
limited liability company (hereinafter “Lessor”) and ROLLER
BEARING COMPANY OF AMERICA, INC., a Delaware corporation
(hereinafter “Lessee”).

 

WITNESSETH:

 

In consideration of the
mutual promises, covenants and agreements herein contained and in consideration
of the rents hereinafter reserved, Lessor does hereby let to Lessee, and Lessee
does hereby take and lease from Lessor the demised premises hereinafter
described for commercial use upon all of the terms, promises, covenants and
agreements hereinafter set forth.

 

1.             Description of
Demised Premises.

 

1.1           The premises subject
to this lease are real property and a commercial building located thereon containing
approximately 41,395 square feet, situated at 102 Willenbrock Road, Oxford, CT,
all as more particularly described in Exhibit A attached hereto and
made a part hereof.

 

1.2           The premises
referred to in paragraph 1.1 hereof, together with any land improvements such
as grading and paving, are referred to hereafter as the “Demised Premises”.

 

2.             Term.

 

2.1           The initial term of
this lease (the “Initial Term”) shall commence on July 1, 2004 (the “Commencement
Date”).  Lessor shall deliver the Demised
Premises to Lessee on the Commencement Date totally vacant, with all building
systems in good working order and the roof in watertight condition.  The Initial Term shall continue for a period
of ten (10) years and three (3) months thereafter (ending September 30,
2014), at a rental as computed under the terms this lease.  Notwithstanding anything to the contrary
herein, if Lessor fails to deliver the Demised Premises on the Commencement
Date to Lessee totally vacant, with all building systems in good working order
and the roof in watertight condition, Lessee shall have the right to terminate
this lease by providing written notice to Lessor, effective on the date of
Lessee’s termination notice.

 

2.2           Notwithstanding
anything to the contrary herein, during the first three (3) months of the
Lease Term, Lessee shall not be required to pay the Fixed Annual Rental as
defined in Section 3.1 hereof, but shall be required to pay, as additional
rent, all utilities, taxes, insurance premiums and expenses set forth in this lease.

 

2.3           Lessee shall have
two (2), five (5)-year options to extend this lease upon the same terms and
conditions as are set forth herein except as to rent which shall be as set
forth in Section 3.5.  Lessee shall
exercise the options herein granted by notice in writing to Lessor given no
later than one hundred eighty (180) days prior to the expiration of the lease
term or option period then expiring.  The
“Term” shall mean the Initial Term as may be extended by the foregoing option
periods, unless sooner terminated pursuant to the terms hereof.

 

3.             Rent.

 

3.1           Lessee shall pay to
Lessor, at Lessor’s address shown in Article 37, or at such other address
as Lessor may from time to time designate in writing to Lessee, a fixed annual
rental (the “Fixed Annual Rental”) in accordance with the Rental Schedule set
forth below (the “Rental Schedule”), payable in equal consecutive monthly
installments of one-twelfth (1/12) of said Fixed Annual Rental. Each such
monthly installment shall be due and payable in advance on the first day of
each calendar

 

 

month during the Term of
this Lease. Lessee shall, upon the execution of this Lease, pay to Lessor the
rental for the first month of the Lease.

 

3.2           The Rental Schedule is
set forth below:

 

	
  Period

  	
   

  	
  Fixed
  Annual Rental

  	
   

  	
  Monthly

  
	
  October 1,
  2004 – September 30, 2014

  	
   

  	
  $

  	
  217,320.00

  	
   

  	
  $

  	
  18,110.00

  
							

 

3.3           Lessee has deposited
with Lessor as security for Lessee’s performance under this Lease an amount
equal to one month’s Fixed Annual Rental hereunder (the “Security Deposit”), such
sum to be held by Lessor until the expiration of the Term unless otherwise used
by Lessor to cure Lessee defaults under this lease in accordance with Article 30
below.  The Security Deposit shall not
bear interest. If Lessee shall not be in default under this lease beyond the
expiration of any notice and cure period on the last day of the Term, Lessor
shall return to Lessee the balance of the Security Deposit within fifteen (15)
days.  In the event of a sale of the
Demised Premises, Lessor shall transfer the Security Deposit to the buyer
provided the buyer accepts such transfer, or return the Security Deposit to
Lessee, and in either case Lessor shall thereupon be released from all
liability for the return of the Security Deposit.  Lessor shall notify Lessee of such transfer
in writing, in which case Lessee shall look solely to the buyer for the return
of the Security Deposit.

 

3.4           Lessee has deposited
with Lessor the first month’s Fixed Annual Rental monthly payment.

 

3.5           Fixed Annual Rental
for each option period shall be the greater of the rental being paid for the
Lease Term (or Option Term) immediately preceding or adjusted as of the first
day of the option period based upon the consumer price index (“CPI”) then in
effect compared to the CPI in effect as of the initial date of this Lease (or
the initial date of the first option period), subject however, to a maximum
annual CPI increase of five percent (5%) for the first option period or for the
second option period.  The CPI used shall
be the Wage Earners and Clerical Workers Index, all items, U.S.

 

4.             Taxes and
Assessments.

 

4.1           Lessee shall, as
additional rent, pay and discharge punctually, as and when the same shall
become due and payable without penalty, all assessments, water rents, rates and
charges, sewer rents and charges, and other governmental impositions and
charges of every kind and nature whatsoever, special and several, extraordinary
as well as ordinary, and each and every installment thereof, which shall or may
during the Term be charged, laid, levied, assessed, imposed, become due and
payable, or become liens upon the Demised Premises or any part thereof and all
improvements thereon, or any appurtenances or equipment owned by Lessee or any
sublessee thereon or therein or any part thereof, under or by virtue of all
present or future Legal Requirements (collectively, “Taxes”). “Legal
Requirements” shall mean all laws, ordinances, requirements, orders,
directions, rules or regulations of the federal, state, county and city
governments and of all other governmental authorities whatsoever. Nothing
herein contained, however, shall require Lessee to pay any municipal, state or
federal income taxes assessed against Lessor or any municipal, state or federal
capital, estate, succession, inheritance or transfer taxes of Lessor.  Lessee shall upon submission of a billing
therefor with a copy of the applicable Tax bill(s) attached, pay to Lessor
within thirty (30) days of receipt of such billing any Taxes that are not
billed directly to Lessee. Lessee shall have the right to apply for the
conversion of any assessment for local improvements in order to cause the same
to be payable in annual installments and Lessee shall pay the assessment in
installments if permitted to do so by the taxing authority. Lessee shall,
within ten (10) days after the time above provided for the payment by
Lessee of any tax, assessment, water, rent, rate and charge, sewer rent, and

 

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other governmental
imposition and charge, produce and have available to Lessor for inspection
official receipts and other satisfactory evidence of such payment at the Lessee’s
principal office during Lessee’s normal business hours, subject to Lessee’s
reasonable confidentiality requirements.

 

4.2           Except as otherwise
provided in paragraph 4.1, all Taxes that shall become payable during each of
the calendar or fiscal years, as the case may be, in which the Term commences
and in which the Term terminates, shall be apportioned and Lessee shall pay a
share of same in accordance with the portions of each such year during which
the Term shall be in effect.

 

4.3           Lessee shall have
the right to contest or review by legal proceedings, or in such other manner as
it may deem suitable (which, if instituted, Lessee shall conduct promptly at
its own expense, and free of any expense to Lessor, and if necessary, in the
name of Lessor) any Tax. Nevertheless, Lessee shall promptly pay all Taxes if
at any time the Demised Premises or any part thereof shall be in danger of being
forfeited or lost. The full amount recovered as a result of such review or
proceedings shall belong solely to Lessee.

 

4.4           Lessee shall be
liable for and shall pay or cause to be paid before delinquency all taxes
levied or assessed against trade fixtures, equipment, furnishings, merchandise
and other personal property of whatsoever kind and to whomsoever belonging
situate or installed in or upon the Demised Premises whether or not affixed to
the realty, provided however, Lessee shall have the same power of contest or
review of the same as is accorded in paragraph 4.3.

 

5.             Quiet Enjoyment.

 

5.1           Lessor covenants
with Lessee that it has good right to lease the Demised Premises in the manner
aforesaid, that the Demised Premises are free and clear of all encumbrances
except as specified in Exhibit A, and that it will suffer and
permit the Lessee (it keeping all the covenants on its part, as hereinafter
contained) to occupy, possess, and enjoy said premises during the Term
aforesaid, without hindrance or molestation from it or any person claiming by,
from or under it.

 

6.             Fire and Extended Coverage Insurance.

 

6.1           During the Term of
this lease Lessee shall keep all present and future buildings, improvements and
fixtures on, in, or appurtenant to the Demised Premises and all improvements
thereon adequately insured against loss or damage by fire, the perils including
in Extended Coverage, vandalism and malicious mischief, explosion by boiler and
other causes, rent insurance, flood and war risk insurance if the same becomes
available at reasonable rates during the Term of this lease. Each policy of
insurance shall name Lessor and Lessee and People’s Bank as insureds, as their
respective interests may appear under this Lease, and shall be placed with
companies qualified to do business in the state of Connecticut. Each policy
shall be in an amount equal to the full replacement value of the property so
insured. Lessee shall at Lessor’s request furnish Lessor with certificates of
all of the foregoing policies. Such policies shall be endorsed from time to
time to show the interest of any mortgagee of the Demised Premises. Lessee
shall insure that each such policy shall provide that the same may not be
cancelled or reduced without thirty (30) days’ written notice to Lessor and any
mortgagee of the Demised Premises whose name and address have been given to
Lessee in writing.

 

7.             Public Liability Insurance.

 

7.1           It is further agreed
that Lessee shall, at its own expense, during the entire Term of this lease,
carry owner’s and lessee’s general liability and property damage insurance
covering the Demised Premises and Improvements thereon with limits of
$2,000,000 for personal injury and

 

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$1,000,000 for property
damage, the policies for the same to be written in standard forms; and Lessee
shall name Lessor as a named insured therein and deliver certificates of said
policies to Lessor, but if such policies in such amounts may not be
commercially reasonably available, Lessee shall use reasonable diligence to
procure such insurance coverage as shall nearly approximate such coverage.
Lessee covenants and agrees to assume exclusive control of the Demised
Premises, and all tort liabilities incident to the control or leasing thereof,
to defend and to save Lessor harmless from all claims or damage arising on
account of any injury or damage to any person or property on said premises or
otherwise resulting from the use and maintenance and occupancy of the premises
or anything on said premises or facility kept or used thereon.

 

8.             Utilities.

 

8.1           Lessee shall pay all
electricity, water, gas, fuel, and all other utilities consumed at the Demised
Premises during the Term. Lessor represents and warrants that all necessary
utilities, including without limitation water, sewer, gas, electricity, and
heat are available and separately metered to the Demised Premises.

 

9.             Compliance with
Laws and Ordinances.

 

9.1           Lessee further
covenants to comply with and to conform to all Legal Requirements and Insurance
Underwriting requirements applicable to the Demised Premises.  Lessee agrees to save Lessor harmless from
all fines, penalties or costs for violation of or noncompliance with the same,
except as such is the result of a condition pre-existing the Commencement
Date.  Lessee may contest by due legal
proceedings any Legal Requirement in good faith and may defer compliance during
the period of such contest to the extent permitted under such Legal
Requirements.

 

10.           Assignment -
Sublease.

 

10.1         Lessee may not, without
the written consent of Lessor (not to be unreasonably withheld, conditioned or
delayed), assign this lease or sublease all or any part of the Demised
Premises. Any such assignment or sublease approved by Lessor shall not release
Lessee from liability hereunder and Lessee shall remain jointly and severally
liable with such assignee or sublessee for performance under this Lease unless
expressly waived in writing by Lessor. 
Notwithstanding anything to the contrary herein, Lessee may, without the
prior notice to or consent of Lessor, assign this lease or sublease all or any
part of the Demised Premises to: (i) an entity controlled by, controlling
or under common control with Lessee, or in which Lessee owns a legitimate,
substantial and material interest for a legitimate purpose; or (ii) an
entity acquiring or succeeding to substantially all of the business, or
substantially all of a business unit, of Lessee, by merger, spin-off,
reorganization, consolidation, acquisition (of assets or equity) or otherwise.  For this purpose “control” shall mean the
possession of the power to direct or cause the direction of the management and
policies of such entity through the ownership of a sufficient percentage of
voting securities.

 

11.           Default.

 

11.1         Lessee shall be in
default under this lease if:

 

(a)           Lessee shall be in
default in the payment of any rent or additional rent for a period of fifteen
(15) days after receipt of written notice thereof from Lessee specifying the
default; or

 

(b)           Lessee shall be in
default in the performance of any other term, covenant or condition of this
lease and such default has not been cured within thirty (30) days after notice
by Lessor to

 

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Lessee specifying such
default and requiring it to be remedied, or where such default cannot
reasonably be remedied within such period of thirty (30) days, if Lessee shall
not have, in good faith, commenced the remedying thereof within such period of
time and shall not be proceeding with due diligence to remedy it; or

 

(c)           Lessee becomes
insolvent, files for bankruptcy (or is involuntarily placed in bankruptcy)
under the laws of the United States, makes an assignment of all its assets for
the benefit of creditors or is placed in receivership and said receiver,
insolvency or bankruptcy proceedings has not been discharged ninety (90) days
after such proceedings are instituted.

 

11.2         Subject to the
provisions of paragraph 11.1, if Lessee shall be in default under this Lease,
Lessor, at its option, may terminate this lease without further notice to
Lessee, and upon such termination, Lessee shall quit and surrender the Demised
Premises to Lessor, but such termination shall not affect Lessor’s rights to
recover damages or exercise any other rights as hereinafter provided.

 

11.3         Upon termination of
this lease as aforesaid, Lessor may (i) re-enter and resume possession of
the Demised Premises and remove all persons and property therefrom either by
summary process proceedings or by a suitable action or proceeding, at law or in
equity, or by force or any other legal means, without being liable for any
damages therefor and (ii) Lessor may relet the whole or any part of the
Demised Premises on behalf of Lessee for a period equal to, greater or less
than the remainder of the then Term of this Lease, at such rental and upon such
terms and conditions as Lessor shall deem reasonable, provided however, that
Lessor shall make a bona fide effort to obtain fair market rental, to any
lessee it may deem suitable and for any use and purpose it may deem
appropriate. Lessor shall not be liable, providing it is acting in good faith,
in any respect for the failure to relet the Demised Premises, or, in the event
of such reletting, for failure to collect the rent thereunder and any sums
received by Lessor on a reletting in excess of the rent reserved in this lease,
shall belong to Lessor.

 

11.4         Upon the termination
of this lease as aforesaid, Lessor shall forthwith be entitled to recover from
Lessee all damages sustained by Lessor as a result of Lessee’s default,
including, but not limited to, the following items:

 

(a)           If the annual rent
provided for in paragraph 3.1, 4.1, 4.2, 4.3 and 4.4 exceed the net sum
received by Lessor on any reletting, the amount of such excess as and when same
become due and payable.

 

(b)           All expenses of
operating the Demised Premises while they are vacant; all expenses, including
reasonable attorneys’ fees, incurred by Lessor in recovering possession of the
Demised Premises and reletting the same; and all costs of performing any work
to be done by Lessee under this lease.

 

(c)           Broker’s commission
at the then established rate incurred in good faith by Lessor, but limited to
the unexpired term only.

 

11.5         Lessor and Lessee
hereby expressly waive their right to a trial by jury in any action brought by
either party.

 

11.6         If Lessor shall
neglect or fail to perform or observe any of the covenants on the part of
Lessor herein contained, and such default shall continue more than thirty (30)
days, without Lessor having commenced the remedy of said default, after written
notice of such default is duly given by Lessee, or if Lessor shall fail to
continue to conclusion the action necessary to remedy said default with
diligence and dispatch, then Lessee may either itself cause such default to be
made good and deduct the

 

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cost and expense thereof
from the next succeeding installments of rent, it being understood and agreed
that the exercise of said right by Lessee or the exercise by Lessee of a right
or option under any other provision of this lease shall not preclude or limit
the right of the lessee to exercise any other option or any other rights that
it may have under this lease or by law.

 

11.7         Upon the correction
of any default, this lease shall be deemed to be in full force and effect.

 

11.8         If any party brings
an action or proceeding involving the Demised Premises to enforce the terms
hereof or to declare rights hereunder, the Prevailing Party (as defined below)
in any such proceeding, action, or appeal therefrom, shall be entitled to
reasonable attorneys’ fees.  Such fees
may be awarded in the same suit or recovered in a separate suit, whether or not
such action or proceeding is pursued to decision or judgment.  The term “Prevailing Party” shall include,
without limitation, a party who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment or the
abandonment by the other party of its claims or defense.  The attorneys’ fees award shall not be
computed in accordance with any court fee schedule but shall be such as to
fully reimburse all attorneys’ fees reasonably incurred.

 

12.           Termination.

 

12.1         At the expiration or
sooner termination of this lease, Lessee shall quit and surrender the Demised
Premises, and the improvements on said premises (excluding Lessee’s Property
(as defined below)) shall belong absolutely to Lessor and Lessee shall promptly
remove all of Lessee’s Property. “Lessee’s Property” shall mean all of Lessee’s
trade fixtures, furniture, equipment and supplies, including without limitation
racking, moveable partitions, panels, generators and computers provided or
installed by or for the benefit of Lessee. At Lessor’s option, however, Lessee
at its cost shall remove all improvements on the Demised Premises made by
Lessee and return the Demised Premises to substantially the condition existing
at the commencement of this lease, reasonable wear and tear excepted and
subject to Articles 23 and 24 below, and except that Lessee need not remove
such improvements to the Demised Premises as have been previously reviewed by
and approved by Lessor.  Improvements
made by Lessee to create office space within the Demised Premises and changes
made to the HVAC systems to accommodate Lessee’s improvements will become the
property of Lessor on the termination of this lease. Lessee shall have the
right to remove Lessee’s Property at any time during the Term.

 

13.           Subordination.

 

13.1         Lessor shall be under
no obligation to subordinate its fee interest in favor of any leasehold
mortgage or otherwise except at Lessor’s sole discretion.  Lessee is aware of the mortgage on the
property in the original face amount of $1,700,000.00.  Prior to the Commencement Date, at Lessor’s
cost Lessor shall cause the current mortgagee to enter into a recordable
subordination and non-disturbance agreement among the mortgagee, Lessor and
Lessee which states, among other things, that so long as Lessee is not in
default hereunder beyond the expiration of any applicable notice and cure
period, it will not disturb Lessee of its rights under this lease and will not
join Lessee as a defendant in any proceeding that may be instituted to
foreclose or enforce the mortgage. 
Lessee shall have the right to terminate this lease if Lessor defaults
under this Section 13.1; time is of the essence hereunder.

 

13.2         Lessee agrees upon
the written request of Lessor to subordinate all of its leasehold rights under
this lease to the right of any institutional or private first mortgage lender
upon such terms as such lender may reasonably request provided that such lender
agrees in a recordable writing entered into among lender, Lessor and Lessee
that, so long as Lessee is not in default hereunder beyond the expiration of any
applicable notice and cure period, it will not disturb Lessee of its rights
under this

 

6

 

lease and will not join
Lessee as a defendant in any proceeding that may be instituted to foreclose or
enforce the mortgage.

 

14.           Annual Rent to be
Net to Lessor.

 

14.1         It is the intention
of the parties hereto that the annual rent payable to Lessor pursuant to
paragraph 3 hereof shall be net to Lessor so that this lease shall yield to
Lessor said annual rent specified in said paragraph 3 during the Term of this
lease, and, to the extent specifically set forth herein, that all costs,
expenses and obligations relating to the Demised Premises shall be paid by
Lessee.

 

15.           Liability of
Lessor.

 

15.1         Lessor, its agents,
servants and employees, shall not be liable for any loss, damage, injury or
other casualty of whatsoever kind and nature or by whomsoever caused, to the
person or property of anyone (including Lessee) in, on or off the Demised
Premises arising out of or resulting from Lessee’s use, possession, improvement
or operation thereof, or from the installation, existence, use, maintenance,
condition, repair, alteration or removal of any equipment thereon, except if
due in whole or in part to intentional, reckless or negligent acts on the part
of Lessor, its agents, servants, contractors or employees and Lessee does not
receive insurance proceeds for such loss, damage, injury or other casualty from
insurance then carried by Lessee pursuant to the terms of paragraph 7 hereof.
Lessee hereby agrees to indemnify and hold Lessor, its agents, servants and
employees, harmless from and against all claims for loss, damage, injury or
other casualty arising from the use, possession, improvement or operation of
the Demised Premises by Lessee except as aforesaid.  Lessor shall indemnify and hold harmless
Lessee, its agents, servants and employees, from and against all claims for
loss, damage, injury or other casualty arising from the intentional, reckless
or negligent acts on the part of Lessor, its agents, servants, contractors or
employees. Notwithstanding anything to the contrary herein, to the full extent
permitted by law, each party waives, and the other shall not be liable to the
waiving party for, any claim against the other party or the other party’s
agents, invitees, employees or contractors, for loss of business opportunity,
loss of profits, loss of income, economic loss or other special or
consequential losses or damages or punitive damages.

 

16.           Waiver.

 

16.1         No receipt of monies
by Lessor from Lessee after the termination or cancellation of this lease shall
reinstate, continue or extend the Term of this lease, or affect any notice
theretofore given to Lessee, or operate as a waiver of the right of Lessor to
enforce the payment of the fixed or additional rent or rents then due or
thereafter falling due, or operate as a waiver of the right of Lessor to
recover possession of the Demised Premises by proper suit, action, proceeding
or remedy; it being agreed that after the service of notice to terminate or
cancel this lease, or the commencement of suit, action or summary process
proceedings or any other remedy, or after a final order or judgment for the
possession of the Demised Premises, Lessor may demand, receive and collect any
monies due or thereafter falling due, without in any manner affecting such
notice, proceedings, suit, action, order or judgment; and any and all such
monies collected shall be deemed to be payment on account of the use and
occupancy of the Demised Premises or, at the election of Lessor, on account of
Lessee’s liability hereunder.

 

16.2         The receipt by Lessor
of rent with knowledge of the breach of any of the terms, covenants, conditions
and agreements of this lease on the part of Lessee shall not be deemed a waiver
of such breach and Lessor may accept such payment without prejudice to Lessor’s
right to pursue any remedy in this lease provided. No payment by Lessee or
receipt by Lessor of a lesser amount than the fixed monthly rent herein
stipulated shall be deemed to be other than on account of said stipulated rent,
nor shall any endorsement or statement on any check or any letter accompanying
any check or payment of

 

7

 

rent be deemed an accord and
satisfaction and Lessor may accept such check or payment without prejudice to
Lessor’s right to receive the balance thereof, provided, however, that if
Lessee is the Lessor’s creditor and Lessee holds an assignment of the rents due
hereunder as security, nothing herein shall be deemed to limit or affect Lessee’s
rights under such assignment.

 

16.3         A waiver by either
party of any breach by the other of any of the terms, covenants, conditions and
agreements of this lease shall be limited to the particular instance and shall not
operate or be deemed as a waiver of any future breaches of said terms,
covenants, conditions and agreements of this lease; and the failure of either
party to enforce any agreement, condition, covenant or term, by reason of its
breach by the other party, after notice had, shall not be deemed to void or
affect the right of the non-defaulting party to enforce the same agreement,
condition, covenant or term on the occasion of such subsequent breach or
default.

 

16.4         No provision of this
lease shall be deemed to have been waived by either party unless such waiver
shall be in writing signed by the waiving party.

 

17.           Waiver of
Subrogation.

 

17.1         Lessee will obtain,
if available, for the benefit of Lessor, a waiver of the right of subrogation
on all policies required to be maintained by Lessee pursuant to Paragraphs 6
and 7 of this lease.

 

18.           Improvements and
Alterations.

 

18.1         Lessor acknowledges
that Lessee intends to make substantial alterations and improvements to the
Demised Premises. Lessee agrees that it will, prior to making any such
improvements or alterations, provide Lessor with plans and specifications
detailing the nature and extent of same for Lessor’s approval, which approval
will not be unreasonably withheld, conditioned or delayed. In the event that
Lessor disapproves, Lessor shall provide Lessee in writing with its reasons for
such disapproval and the parties thereafter agree to attempt to resolve any
difference by good faith negotiation. All such repairs, improvements and
alterations shall be at the sole expense of Lessee and shall fully comply with
all Legal Requirements. If Lessee fails to perform the work substantially in
accord with the approved plans, such failure shall be a default hereunder and
Lessor may complete said improvements and charge Lessee the costs of doing so,
or, if reasonable, remove the same with the intent of returning the Demised
Premises to their original condition with a charge to Lessee of doing so.

 

19.           Lessee’s
Obligation to Discharge Mechanic’s Lien.

 

19.1         If, as a result of
Lessee performing its obligations hereunder or in the making of any
improvements, repairs, replacements, alterations, installations, and/or changes
in or upon the Demised Premises as permitted hereunder, any mechanic’s or other
lien or order for the payment of money shall be filed against the Demised
Premises by reason of, or arising out of any labor or material furnished or
alleged to have been furnished or to be furnished to, or for, Lessee at the
Demised Premises or for or by reason of any change, alteration or addition by
Lessee, or the cost or expense thereof, or any contract relating thereto, or
against Lessor as fee owner thereof by reason of such work or contract of
Lessee, Lessee shall cause the same to be cancelled and discharged of record,
by bond or otherwise, at the election and expense of Lessee, within thirty (30)
days after having been requested in writing so to do by Lessor, and shall also
defend, on behalf of Lessor, at Lessee’s sole cost and expense, any action,
suit or proceeding which may be brought thereon or for the enforcement of such
lien, liens, or orders, and Lessee will pay any damages and discharge any
judgment entered therein and save Lessor harmless from and indemnify it against
any claim, damage or costs, including reasonable attorneys’ fees, resulting
therefrom.

 

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20.           Certificates.

 

20.1         Each party agrees
from time to time upon no less than fifteen (15) days’ prior written request of
the other to execute, acknowledge and deliver to the other a statement in
writing certifying that this lease is unmodified and in full force and effect
(or if there has been any modification, that the same is in full force and
effect as modified and stating the modifications) and the dates to which the
rent has been paid and whether, to its knowledge, there exists any uncured
default by the other party, and if so, the nature of such default. Any such
statement delivered pursuant to this paragraph may be relied upon by any
prospective purchaser or mortgagee of Lessor’s or Lessee’s interest in the
Demised Premises, by the holder of any mortgage of Lessor’s or Lessee’s
interest in the Demised Premises or by any sublessee of Lessee.

 

21.           Holding Over.

 

21.1         In the event Lessee
shall continue in occupancy of the Demised Premises after the expiration of the
Term of this lease or any renewal thereof, such occupancy shall not be deemed
to extend or renew the Term of this lease, but such occupancy shall continue as
a tenancy from month to month upon the terms, covenants, conditions and
provisions herein contained, and at a Fixed Annual Rental 25% greater than that
in effect during the last year of the term of this lease or any renewal
thereof,  prorated and payable for the
period of such occupancy.

 

22.           Conveyance by
Lessor and Limit of Liability.

 

22.1         Lessor shall be
entitled to convey and otherwise dispose of the Demised Premises and shall be
entirely free and released of all covenants and obligations of Lessor after the
Demised Premises are so conveyed, provided the transferee assumes in writing
all covenants and obligations of Lessor. Lessor shall not be subject to any
liability resulting from any act or omission or event occurring after such
conveyance. The purchaser, or any person who takes title to the Demised
Premises from Lessor or any person who subsequently holds title to the Demised
Premises, shall be deemed to have assumed and agreed to carry out any and all
covenants on Lessor’s part to be performed under this lease. No further
agreement will be required between Lessor and Lessee and any person holding
title subsequent to Lessor in connection with the assumption of the obligations
of Lessor hereunder.  Lessee shall owe
the same duties to any successor owner that Lessee owes to Lessor.  Lessor agrees to provide the security deposit
to any successor owner.

 

23.           Fire and Other
Casualty.

 

23.1         In the event of
damage to or destruction of any improvements comprising part of the Demised
Premises by fire or other casualty before the expiration of this lease, Lessee
shall restore, rebuild or reconstruct the improvements to a condition
substantially equivalent to their condition prior to such damage or destruction
and Lessee shall be entitled to all insurance proceeds payable because of such
damage or destruction unless the first mortgagee of Lessee’s leasehold interest
refuses to make such proceeds available, in which event the lease shall
terminate and the Lessee shall have no further obligations hereunder.

 

24.           Eminent Domain.

 

24.1         In the event the whole
of the Demised Premises shall be taken under the power of eminent domain, this
lease shall thereupon terminate as of the date possession shall be so taken.

 

24.2         In the event that at
any time during the Term, proceedings in eminent domain

 

9

 

shall have been instituted
with respect to less than the whole of the Demised Premises, and if such
proceedings in eminent domain and/or any action consequent thereon, in Lessee’s
judgment, which judgment, however, shall not be unreasonably or arbitrarily
exercised, renders the Demised Premises unusable for Lessee’s operations as
previously conducted thereon, Lessee shall have the right upon notice to
Lessor, with respect thereto (rendered within sixty (60) days after Lessee
shall have ascertained or been duly notified by Lessor (whichever shall first
occur) of the existence of such proceedings in eminent domain) to terminate
this lease effective as of the date possession shall be taken by or under the
condemner.

 

24.3         In the event this
lease shall be terminated, as provided in the preceding Paragraphs 24.1 or
24.2, the Demised Premises shall belong absolutely to Lessor, and Lessee shall
promptly remove all of Lessee’s Property and each party hereto shall thereupon
be released from every obligation hereunder to the other, except:

 

(a)           With respect to any
covenants the breach of which occurred prior to the lease termination date.

 

(b)           The obligation of
Lessor to refund to Lessee any rent paid to Lessor, and to reimburse Lessee in
the amount of any taxes (as respects the Demised Premises), in respect of any
period subsequent to termination date.

 

24.4         In the event a
portion of the Demised Premises shall be taken under the power of eminent
domain, and Lessee shall elect not to terminate the lease, as provided in
Paragraph 24.2 hereof, Lessor shall diligently attempt to restore the building
located on the Demised Premises to an architectural unit, and the Fixed Annual
Rental and all additional rent payable by Lessee hereunder shall be equitably
reduced (effective as of the date possession shall be taken by the condemner
under the power of eminent domain).  If
the parties shall be unable to agree upon such reduction, if any, then either
party may refer the disputed matter to arbitration and determination thereby,
as hereinafter provided.

 

25.           Use of Premises.

 

25.1         Lessee shall have the
right to use the Demised Premises only for the following purposes: corporate
offices; laboratory testing and manufacturing of Tenant’s products; and uses
incidental to the foregoing.  It shall be
Lessee’s sole obligation to obtain all licenses, permits and franchises
required by it for its use of the Demised Premises other than  the current Certificate of Occupancy to
be  provided by Lessor prior to the
Commencement Date, and no failure to obtain the same, nor any revocation
thereof by any governmental authority of any such licenses, permits or
franchises heretofore or hereafter granted by any such governmental authority
shall in any manner affect this lease or diminish the amount of rent or any
other payments or charges payable by Lessee hereunder.

 

26.           Repairs.

 

26.1         Lessee shall, at its
sole cost and expense, take good care of the Demised Premises and all
improvements thereon or hereafter erected thereon and keep and maintain the
interior and exterior of the same, structural and nonstructural, in good, safe
and substantial order and condition (reasonable wear and tear excepted), shall
not do or suffer any waste with respect thereto and Lessee shall, at its sole
cost and expense, make all necessary repairs to the Demised Premises and shall
keep the grounds and land improvements in good order and condition.  If any of the foregoing repairs or
maintenance is due to the negligence or willful misconduct of Lessor or its
agents, employees, contractors or invitees, Lessor shall reimburse Lessee for
such costs incurred within thirty (30) days after invoice. All of such repairs
are to be substantially equal in quality to the original work. In the event
that Lessor shall be of the opinion that

 

10

 

Lessee is not complying with
the provisions of this paragraph, it shall so notify Lessee in writing
specifying the fault or defect with respect to which non-compliance is claimed
and Lessee shall promptly remedy the same. In the event that Lessee shall be of
the opinion that the provisions of this paragraph are being complied with
respect to the alleged fault or defect, the issue shall be submitted to
arbitration as herein provided.

 

26.2         All work done by
Lessee in connection with any repairs or in connection with alterations,
installations and changes in the Demised Premises shall be in compliance with
applicable Legal Requirements and Insurance Underwriting requirements.

 

27.           Access to
Premises.

 

27.1         Lessee shall permit
Lessor or Lessor’s agents to enter the Demised Premises at all reasonable
hours, for the purpose of inspecting the same, or of making repairs or
performing any other work on the Demised Premises required or permitted to be
made by Lessor pursuant to this lease.

 

27.2         Lessee shall also
permit Lessor or Lessor’s agents to enter the Demised Premises at all
reasonable hours for the purpose of showing the Demised Premises to prospective
mortgagees or to persons wishing to purchase the same and, within five (5) months
prior to the expiration of the term of this lease, to persons wishing to hire
the Demised Premises; and Lessee shall, within five (5) months prior to
the expiration of the term of this lease, permit the usual notices of “To Let”
and “For Sale” to be placed upon the Demised Premises and to remain thereon
without molestation.

 

27.3         Notwithstanding the
foregoing, except in emergencies hereunder, all entries by Lessor shall be: (i) at
reasonable times and after at least twenty-four (24) hours’ prior oral or
written notice to Lessee; (ii) conducted so as not to unduly interfere
with Lessee’s use and occupancy of the Demised Premises; and (iii) subject
to Lessee’s reasonable security and confidentiality requirements from time to
time (including the accompaniment of a Lessee representative if necessary in
Lessee’s sole discretion)

 

28.           Environmental
Indemnity.

 

28.1         Lessee shall not use
or allow the Demised Premises to be used for the release, storage, use, treatment,
disposal or other handling of any hazardous substances, except in compliance
with applicable Legal Requirements. Lessee shall comply with all Legal
Requirements governing the release, discharge, emission, or disposal of any
hazardous substances on the Demised Premises. Lessee covenants and agrees to
indemnify, defend and hold Lessor harmless from and against any and all liens,
claims, demands, judgments, damages, penalties, fines, costs, loss or expenses
(including reasonable attorney, consultant and expert fees) that arise as a
result of the presence, suspected presence or discharge of toxic or hazardous
substances from, on or in the Demised Premises caused by the actions of Lessee,
its agents or employees and first occurring during Lessee’s possession of the
Demised Premises. Without limiting the generality of the foregoing, this
indemnification by Lessee shall include reasonable costs incurred in connection
with any site investigation  or any
remedial, removal or restoration work required to return the property to a
salable condition resulting from the events indemnified against. In any event,
as of the Commencement Date, Lessor has no knowledge of any toxic or hazardous
substances on or in the Demised Premises.

 

28.2         Lessor shall
indemnify, defend and hold Lessee harmless from and against any and all liens,
claims, demands, judgments, damages, penalties, fines, costs, loss or expenses
(including reasonable attorney, consultant and expert fees) that arise as a
result of the presence, suspected presence or discharge of toxic or hazardous
substances or materials at any time: (i) from, on, around or in the

 

11

 

Demised Premises, except to
the extent caused by the actions of Lessee, its agents or employees during
Lessee’s possession of the Demised Premises; or (ii) due to the act or
omission of Lessor or its agents, employees, invitees or contractors. Without
limiting the generality of the foregoing, this indemnification by Lessor shall
include reasonable costs incurred in connection with any site investigation of
any remedial, removal or restoration work resulting from the events indemnified
against.

 

28.3         Lessor represents and
warrants that there are, or will be, no underground or above ground storage
tanks at the Demised Premises on the Commencement Date and the removal of all
such tanks was conducted in accordance with all applicable Legal Requirements.

 

29.           Option to
Purchase.

 

29.1         In consideration of
and as a material inducement to Lessee to enter into this Lease, Lessor hereby
grants to Lessee the option to purchase the Demised Premises (the “Option”) on
and subject to the following terms and conditions:

 

(a)           Term.  The term of this Option shall commence 180
days prior to the expiration of the Initial Term and continue during each of
the 5 year renewal terms hereunder provided that this Lease is still in full
force and effect and has not been earlier terminated.

 

(b)           Purchase Price of
the Demised Premises.  The full
purchase price of the Demised Premises shall be two million dollars
($2,000,000.00) provided the option to purchase is exercised within 180 days
prior to the expiration of the Initial Term. The full purchase price of the
Demised Premises if the option to purchase is exercised after the expiration of
the Initial Term shall be the Fair Market Value of the Demised Premises as
determined by three real estate appraisers, one chosen by Lessor, one chosen by
Lessee and the third chosen by the other two appraisers. The cost of the
appraisal shall be equally borne by Lessor and Lessee.

 

(c)           Exercise of
Option.  Lessee may exercise the
Option by giving Lessor written notice thereof anytime prior to the expiration
of the term of this Option.

 

(d)           Closing and
Possession.  The closing of the sale
of the Demised Premises shall occur at a time and place designated by Lessee
within one hundred twenty (120) days after the date of Lessee’s notice that it
is exercising the Option.

 

(e)           Condition of
Title.  Lessor shall convey title to
the Demised Premises by general warranty deed, free and clear of all liens,
encumbrances, mortgages, easements, conditions, reservations and restrictions
except those matters shown on Exhibit A attached hereto and except
for easements for utilities or restrictions on use none of which render title
unmarketable under the standards of title of the Connecticut Bar Association.

 

30.           Curing Lessee’s
Defaults.

 

30.1         If Lessee shall be in
default under this lease beyond the expiration of any applicable notice and
cure period as set forth in Section 11.1 above, then Lessor may, but shall
not be obligated so to do, upon ten (10) days’ written notice to Lessee
(or such shorter period as shall be necessitated by the nature of the default,
or without notice if the default shall constitute an emergency) pay or perform
the same for the account of Lessee without waiving the performance of or
releasing Lessee from any of its agreements, obligations or covenants to be
paid or performed by it hereunder. Any amount paid, or any expense or liability
incurred, including reasonable attorneys’ fees, by Lessor for the account of
Lessee as aforesaid, shall be deemed to be additional rent which shall be paid
by Lessee,

 

12

 

together with interest at
the rate of nine percent (9%), upon submission of a bill therefor by Lessor.
Any dispute as to the amount due to the Lessor by reason of the foregoing
provisions of this paragraph shall be subject to arbitration.

 

31.           Arbitration.

 

31.1         Any dispute,
controversy, question or claim specifically made arbitrable by the terms of
this instrument shall be settled by arbitration in Connecticut at a location in
New Haven County pursuant to the laws of the State of Connecticut in effect
upon the date of such arbitration and the Arbitration Rules of the
American Arbitration Association in effect when any such arbitration shall be
initiated.

 

32.           Entire Agreement.

 

32.1         This instrument
contains the entire and only agreement between the parties and no oral
statements or representations or prior written matter not contained in this
instrument shall have any force or effect. This lease may only be changed,
modified or discharged by an agreement in writing executed by the parties
hereto.

 

33.           Lessor’s
Cooperation.

 

33.1         Lessor covenants and
agrees to reasonably cooperate with and assist Lessee (at the sole cost and
expense of Lessee) upon request therefor by Lessee in such cases where the
joinder or act of the fee titleholder of the Demised Premises shall be
necessary or expedient in all legislative, quasi-legislative, judicial,
quasi-judicial and/or administrative proceedings for the commercial use or
operation of the Demised Premises and improvements thereon permitted under this
lease, including without limitation in connection with a tax contest as set
forth in Section 4.3 above.

 

34.           Partial
Invalidity.

 

34.1         If any term,
covenant, condition or provision of this lease or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term, covenant,
condition and provision of this lease shall be valid and be enforced to the
fullest extent permitted by law.

 

35.           Short Form Lease.

 

35.1         Together with
execution of this Lease, the parties shall execute a notice of lease suitable
for recording containing information required by Section 47-19 of
the Connecticut General Statutes (Rev. 1958) but specifically excepting the
rental provisions hereof.  Landlord shall
promptly record the notice of lease on the Oxford land records and provide
Tenant with the recording information.

 

36.           Marginal Notes.

 

36.1         The marginal notes
used as headings for the various subject matters covered in this lease are used
only as a matter of convenience as an aid to finding the subject matters and
are not to be construed as part of this lease and shall not in any way limit or
amplify the terms or provisions hereof.

 

13

 

37.           Notices.

 

37.1         All notices,
requests, demands, approvals, consents, and other communications authorized or
required hereunder shall be in writing and shall be given by mailing the same
by certified mail or registered mail, return receipt requested, postage
prepaid, or by a nationally-recognized overnight courier with return receipt,
to the respective party for whom intended at the address set forth below or
such other address as such party may hereafter designate by notice to the other
party similarly given. Receipt of any notice shall be evidenced by the date of
receipt or rejection on the return receipt. 
Notices to either party may be given by the attorney for the other party
acting on behalf of such other party.

 

Lessor:                   Raymond L. Hunicke, LLC

8
Southbury Road

Roxbury,
CT 06783-1723

 

Lessee:                   Roller Bearing Company of
America, Inc.

Attn:
Robert W. Crawford

60
Round Hill Road

Fairfield,
CT 06824

 

38.           Construction.

 

38.1         This lease is made
and executed in and is to be construed under the laws of the State of
Connecticut.

 

39.           Successors and
Assigns.

 

39.1         Except as otherwise
provided herein, the agreements, conditions, covenants and terms herein
contained shall, in every case, apply to, be binding upon, and inure to the
benefit of the respective parties hereto and their respective heirs,
administrators, executors, successors and assigns, with the same force and
effect as if specifically mentioned in each instance where a party hereto is
named.

 

40.           Brokers.

 

40.1         Each of Lessor and
Lessee represents and warrants to the other that it has dealt with no real
estate broker in connection with this lease other than R. Calabrese Agency, LLC
of Waterbury, Connecticut (the “Broker”), and that no other broker is entitled
to any commission on account of this lease. 
Lessor is solely responsible for paying the commission of the Broker in
accordance with a separate agreement. 
Lessee shall defend, hold harmless and indemnify Lessor from any loss,
cost, damage or expense, including reasonable attorneys’ fees, arising from the
breach by Lessee of any representation or covenant in this Section.  Lessor shall defend, hold harmless and
indemnify Lessee from any loss, cost, damage or expense, including reasonable
attorneys’ fees, arising from the breach by Lessor of any representation or
covenant in this Section, including any claims by the Broker in connection with
this lease.

 

41.           Force Majeure.

 

41.1         Except as otherwise
specified herein, whenever a party hereto is required by the provisions of this
lease to perform an obligation and such party is prevented beyond its
reasonable control from doing so by reason of an Unavoidable Delay (as defined
below), such party shall be temporarily relieved of its obligation to perform
the obligation provided such party notifies the other party of the specific
delay and exercises due diligence to remove or overcome it.  “Unavoidable Delays” shall mean any and all
delays beyond a party’s reasonable control, including without limitation,
delays caused by the other party, governmental restrictions, governmental
regulations and controls, order of civil, military or

 

14

 

naval authority,
governmental preemption, strikes, labor disputes, lock-outs, acts of God, fire,
earthquake, floods, explosions, extreme weather conditions, enemy action, and
civil commotion, riot or insurrection, but expressly excluding insufficiency of
funds and casualty and condemnation covered under Articles 23 and 24 above.

 

42.           Counterparts.

 

42.1         This lease may be
executed in any number of counterparts, each of which upon execution and
delivery shall be considered an original for all purposes; provided, however,
all such counterparts shall, together, upon execution and delivery, constitute
one and the same instrument.

 

43.           Right of First
Refusal.

 

43.1         Prior to entering
into a contract for the sale or transfer of: (i) the Demised Premises; or (ii) the
approximately 2.9-acre parcel adjacent to the Demised Premises, provided
such parcel is owned by Lessor and not subject to a binding contract of sale on
the date hereof (in either case, the “ROFR Property”), Lessor shall send Lessee
a notice describing the consideration, closing date, and all other material
business terms of such proposal (the “First Refusal Notice”) and offering to
sell the Demised Premises to Lessee upon the business terms set forth in the
First Refusal Notice.

 

43.2         Lessee shall have a
period of thirty (30) days after receipt of the First Refusal Notice to give
Lessor notice that Lessee either accepts or rejects Lessor’s offer.   A First Refusal Notice may only be accepted
in whole, not in part.  Failure of Lessee
to accept Lessor’s offer within such period shall be deemed rejection of Lessor’s
offer.

 

43.3         If Lessee rejects, or
is deemed to have rejected, Lessor’s offer, Lessor shall be free to sell or
transfer the ROFR Property to the proposed purchaser upon substantially the
terms and conditions set forth in the First Refusal Notice, with no further
obligation to Lessee under this Section with respect to the ROFR Property,
unless either of the following conditions shall apply: (i) within ninety
(90) days after the rejection or deemed rejection of the First Refusal Notice,
Lessor has not entered into a contract for the sale or transfer of the ROFR
Property with the proposed purchaser on such terms; or (ii) Lessor does
not enter into a contract for the sale or transfer of the ROFR Property with
the proposed purchaser upon such terms, and either Lessor or a prospective
purchaser other than the above-referenced purchaser submits a written proposal
for the sale or transfer of the ROFR Property, the material economic terms of
which offer are more favorable to such other purchaser, in comparison with the
material economic terms of the First Refusal Notice, by more than five percent
(5%).  If either of clause (i) or (ii) preceding
shall apply, Lessor shall again offer the ROFR Property to Lessee under this
Paragraph 30 (which offer shall, if clause (ii) applies, be on the terms
of the triggering proposal).

 

43.4         If Lessee accepts
Lessor’s offer, the ROFR Property shall be conveyed to Lessee upon the business
terms set forth in the First Refusal Notice. 
The closing shall take place on or before one hundred twenty (120) days
following the acceptance of such offer, but in no event earlier than the
closing date specified in the First Refusal Notice.

 

43.5         At the closing,
Lessor shall convey title to the ROFR Property by general warranty deed, free
and clear of all liens, encumbrances, mortgages, easements, conditions,
reservations and restrictions except those matters shown on Exhibit A
attached hereto and except for easements for utilities or restrictions on use
none of which render title unmarketable under the standards of title of the
Connecticut Bar Association.

 

15

 

44.           Lessor
Representations and Warranties; Title Matters.

 

44.1         Lessor represents and
warrants as a condition of this Lease that: (i) it possesses good
marketable fee title to the Demised Premises, subject only to matters described
in Section 31.2; (ii) it is authorized to make this lease for the
Term; (iii) the certificate of occupancy for the Demised Premises allows,
or no later than the Commencement Date will allow, Lessee to use and enjoy the
Demised Premises for the purposes set forth in this lease; and (iv) the
Demised Premises and the uses thereof for the purposes specified in this lease
are, or on the Commencement Date will be, in compliance with all Legal
Requirements.

 

44.2         Lessor has delivered
to Lessee a copy of Lessor’s title insurance policy for the Demised Premises
and represents and warrants that the policy is a true and complete copy of the
original; that there have been no changes as of the date of this lease to any
matters set forth in such policy, and that on the date of this lease, the
policy is, and will continue during the Term to be, in full force and
effect.  A list of all encumbrances,
restrictions, agreements, covenants, declarations, lis pendens,
mechanics’ liens, and other matters affecting title, whether of record or known
by Lessor on the date hereof to exist, are listed on Exhibit A
attached hereto and made a part hereof.

 

45.           Authority.

 

45.1         Each of Landlord and
Tenant represents and warrants to the other that the individual executing this
lease on such party’s behalf is authorized to do so.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

16

 

IN WITNESS WHEREOF, the
parties hereto have set their names and seals on the day and year first above
written.

 

	
   

  	
  RAYMOND
  L. HUNICKE, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROLLER
  BEARING COMPANY OF

  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
					

 

17

 

STATE
OF CONNECTICUT                              )

)               ss:  Watertown

COUNTY
OF LITCHFIELD                                )

 

On
this the                  
day of March, 2004, before me the undersigned officer, personally appeared,                                                                      
who acknowledged himself to be a member of Raymond L. Hunicke, LLC,
a limited liability company, and that he as such member, being authorized so to
do, executed the foregoing instrument for purpose therein contained, by signing
the name of the corporation by himself as such officer.

 

IN
WITNESS WHEREOF, I hereunto set my hand.

 

 

	
   

  	
   

  
	
   

  	
  Commissioner of the Superior Court

  

 

STATE
OF CONNECTICUT              )

)               ss:  Watertown

COUNTY
OF LITCHFIELD                )

 

On
this the                  
day of March, 2004, before me the undersigned officer, personally appeared,                                                                     
who acknowledged himself to be a                                    
of Roller Bearing Company of America, Inc.,
a Delaware corporation, and that he as such                                    ,
being authorized so to do, executed the foregoing instrument for purpose
therein contained, by signing the name of the corporation by himself as such
officer.

 

IN
WITNESS WHEREOF, I hereunto set my hand.

 

 

	
   

  	
   

  
	
   

  	
  Commissioner of the Superior Court

  

 

18

 

EXHIBIT A

 

[LEGAL DESCRIPTION OF DEMISED PREMISES, INCLUDING ALL ENCUMBRANCES]

 

19Exhibit 10.9

 

PLEDGE AND SECURITY AGREEMENT

 

This
Pledge and Security Agreement, dated as of September 1, 1994 (the “Agreement”),
is made by and among Roller Bearing Company of America, Inc., a Delaware
corporation (the “Company”), Heller Financial, Inc., a Delaware
corporation (“Heller”), and Mark Twain Bank, St. Louis, Missouri, a Missouri
banking corporation (the “Trustee”), as Trustee under two Trust Indentures,
each dated as of September 1, 1994 (collectively, the “Indentures”), and
each between the South Carolina Jobs-Economic Development Authority (the “Issuer”)
and the Trustee.

 

RECITALS

 

A.
 The Company and Heller have entered into
a Letter of Credit Agreement, dated as of September 1, 1994 (the “Letter
of Credit Agreement”), pursuant to which Heller has agreed to issue the Letter
of Credit (as defined in the Letter of Credit Agreement) in favor of the
Trustee for the account of the Company.

 

B.
 It is a condition precedent under the
Letter of Credit Agreement to the obligation of Heller to issue the Letter of
Credit that the Company and the Trustee shall have executed and delivered this
Agreement.

 

AGREEMENT

 

The
Company and the Trustee each agree with Heller as follows:

 

Section 1.
 Defined Terms. Capitalized terms not
defined herein shall have the meanings ascribed to such terms in the Letter of
Credit Agreement or, if not inconsistent with the Letter of Credit Agreement,
the Indentures.

 

Section 2.
 Pledge. The Company hereby pledges,
assigns, transfers, hypothecates and delivers to Heller all of its right, title
and interest in, and grants to Heller a first-priority Lien upon, (i) the
Pledged Bonds as the same may from time to time be delivered to or held by the
Trustee as collateral agent for Heller pursuant to Section 307(d) of
the Indentures, and (ii) all proceeds of the Pledged Bonds (collectively,
the “Collateral”), all as collateral security for the prompt and complete
payment when due of all amounts payable by the Company to Heller, and the
prompt and complete performance of all other obligations of the Company to
Heller, whether now existing or hereafter arising, under or in respect of the
Letter of Credit Agreement, the Letter of Credit, this Agreement and the Bond
Documents (collectively, the “Liabilities”). The Company hereby agrees that the
Trustee shall act as the agent and bailee of Heller for the purpose of
perfecting the Lien of this Agreement and of holding the Collateral for the
benefit of Heller pursuant to the Indentures.

 

Section 3.
 Payments on Collateral. If, while this
Agreement is in effect, the Company shall become entitled to receive or shall
receive any interest or other payment in respect of the Collateral, the Company
agrees to accept the same as Heller’s agent, to hold the

 

 

same in trust on behalf of
Heller and to deliver the same forthwith to Heller. The Company instructs and
authorizes the Trustee to hold and receive on Heller’s behalf and to deliver
forthwith to Heller any payment received by it in respect of the Collateral
(including the proceeds of any remarketing of the Pledged Bonds). All such
payments in respect of the Collateral that are paid to Heller shall be credited
against the Liabilities as Heller may determine.

 

Section 4.
 Release of Pledged Bonds. Heller agrees
to release from the Lien of this Agreement Pledged Bonds if and only if Heller
has given notice to the Trustee of the reinstatement of the Letter of Credit in
an amount equal to the Original Purchase Price of the Pledged Bonds so
released.

 

Section 5.
 Representations and Warranties. The
Company represents and warrants that: (a) on the date of delivery of the
Pledged Bonds to or for the benefit of Heller, to the Company’s knowledge, no
other Person shall have any right, title or interest in and to the Pledged
Bonds; (b) the Company has, and on the date of delivery to or for the
benefit of Heller of any of the Pledged Bonds will have, full power, authority
and legal right to pledge all of its right, title and interest in and to the
Pledged Bonds pursuant to this Agreement; and (c) the pledge, assignment
and delivery of the Pledged Bonds pursuant to this Agreement will create a
valid first Lien on, and a perfected first-priority security interest in, all
right, title and interest of the Company in and to the Collateral, subject to
no prior Lien on the Property or assets of the Company that would include the
Pledged Bonds. The Company makes each of the representations and warranties in
the Credit Agreement and the Bond Documents, to the extent material, to and for
the benefit of Heller as if the same were set forth in full herein. Unless the
Company shall have previously advised Heller in writing that one or more of the
above statements is no longer true, the Company shall be deemed to have
represented and warranted to Heller on the date of each Liquidity Drawing under
the Letter of Credit that the statements contained herein are true and correct.

 

Section 6.
 Rights of Heller. Heller shall not be
liable for any failure to collect or realize upon all or any part of the
Liabilities or any collateral security (including the Collateral) or guaranty
for the Liabilities, or for any delay in so doing, and Heller shall be under no
obligation to take any action whatsoever with regard to the Liabilities or any
such collateral security or guaranty. If an Event of Default under the Letter
of Credit Agreement has occurred and is continuing, Heller may, without notice,
exercise all rights, privileges or options pertaining to any Pledged Bonds as
if it were the absolute owner of such Pledged Bonds, upon such terms and conditions
as it may determine, all without liability except to account for Property
actually received by it, but Heller shall have no duty to exercise any of those
rights, privileges or options, and shall not be responsible for any failure to
do so or delay in so doing.

 

Section 7.
 Remedies. In the event that any portion
of the Liabilities has been declared due and payable, to the fullest extent
permitted by applicable law Heller may, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified below
of the time and place of public or private sale) to or upon the Company or any
other Person (all and each of which demands, advertisements or notices are
hereby expressly waived), in its sole discretion (a) exercise any or all
of its rights and remedies under the Letter of Credit Agreement, the Letter of
Credit, this Agreement, the Credit Documents, the Bond

 

2

 

Documents and any other
instruments and agreements securing, evidencing or relating to the Liabilities
or under applicable law (including all of the rights and remedies of a secured
creditor under the Illinois Uniform Commercial Code or the commercial code of
any other applicable jurisdiction), (b) forthwith collect, receive,
appropriate and realize upon all or any part of the Collateral, (c) forthwith
sell, assign, give an option or options to purchase, contract to sell or
otherwise dispose of and deliver all or any part of the Collateral in one or
more parcels at public or private sale or sales, at any exchange, broker’s
board or at any of Heller’s offices or elsewhere, in a commercially reasonable
manner (subject to the provisions of Section 9 hereof), upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk, with the right to Heller upon any such sale or sales, public or private,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in the Company, which right or equity is hereby
expressly waived and released, or (d) take all or any combination of the
foregoing actions. After deducting all reasonable costs and expenses of every
kind incurred in taking any of the foregoing actions, or incidental to the
care, safekeeping or otherwise of any and all of the Collateral, or in any way
relating to the rights of Heller hereunder, including reasonable attorneys’
fees and legal expenses, after payment of all of the Liabilities in such order
as Heller may elect (the Company remaining liable for any deficiency remaining
unpaid after such application) and after payment by Heller of any other amount
required or permitted by any provision of law, Heller shall pay to the Company
the surplus, if any, of any amounts realized by Heller under this Section 7.
To the fullest extent permitted by applicable law, the Company agrees that
Heller need not give more than 10 days’ notice of the time and place of any
public sale or of the time after which a private sale or other intended
disposition is to take place, and that such notice is reasonable notification
of such matters. To the fullest extent permitted by applicable law, no
notification need be given to the Company if it has signed after default a
statement renouncing or modifying any right to notification of sale or other
intended disposition. To the fullest extent permitted by applicable law, the
Company further agrees to waive and agrees not to assert any rights or
privileges that it may acquire under Section 9-112 of the Illinois Uniform
Commercial Code (or the equivalent section of the Uniform Commercial Code
of any other applicable jurisdiction), and the Company shall be liable for the
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all amounts to which Heller is entitled, including the
fees and costs of any attorneys employed by Heller to collect such deficiency.

 

Section 8.
 No Disposition. The Company agrees that
it will not sell, assign, transfer, exchange or otherwise dispose of, or grant
any option with respect to, the Collateral, and that it will not create, incur
or permit to exist any Lien with respect to all or any part of the Collateral,
except for the Lien of this Agreement.

 

Section 9.
 Sale of Collateral. (a) The Company
recognizes that Heller may be unable to effect a public sale of any or all of
the Pledged Bonds by reason of certain prohibitions contained in the Securities
Act of 1933 and applicable state securities laws, but may be compelled to
resort to one or more private sales to a restricted group of purchasers that
will be obligated to agree, among other things, to acquire such securities for
their own account for investment and not with a view to distribution or resale
in a manner that would violate Federal or state securities laws. The Company
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale,

 

3

 

and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Heller shall be under no obligation
to delay a sale of any of the Pledged Bonds for the period of time necessary to
permit the Issuer to register such securities for public sale under the
Securities Act of 1933 or under applicable state securities laws, even if the
Issuer would agree to do so.

 

(b) 
The Company further agrees to do or cause to be done all such other acts and
things as may be necessary to make such sale or sales of all or any part of the
Pledged Bonds valid and binding and in compliance with any and all applicable
laws, rules, regulations, orders or decrees, all at the Company’s expense. The
Company further agrees that a breach of any of the covenants contained in this Section 9
will cause irreparable injury to Heller for which Heller would have no adequate
remedy at law in respect of such breach, and, as a consequence, agrees that
each and every covenant contained in this Section 9 shall be specifically
enforceable against the Company, and the Company waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Letter of Credit Agreement.

 

Section 10.
 Further Assurances. The Company agrees
that at any time and from time to time upon the written request of Heller, the
Company will execute and deliver such further documents and do such further
acts and things as Heller may reasonably request in order to effect the
purposes of this Agreement.

 

Section 11.
 Collateral Agency Agreement. (a) Heller
hereby appoints the Trustee as agent and bailee for Heller on the terms and
conditions of this Section 11, and the Trustee hereby accepts such
appointment and agrees with Heller to act as agent without compensation
separate from that provided to the Trustee pursuant to the Indentures.

 

(b) 
The duties of the Trustee as agent under this Agreement shall he as follows:

 

(i)  the Trustee shall hold in trust for Heller all Pledged  Bonds purchased by the Trustee with drawings
under the Letter Credit pursuant
to Section 301 or 302 of the Indentures, all proceeds thereof and all other amounts held by the
Trustee and payable to Heller
pursuant to the Indentures (collectively, the “Indenture Collateral”); and

 

(ii)  upon the remarketing of Pledged Bonds, the Trustee shall
deliver to Heller the proceeds of
such remarketing and all other amounts
received by the Trustee and payable to Heller pursuant to the Indentures.

 

(c) 
The Trustee shall not pledge, hypothecate, transfer or release all or any part
of the Collateral to any other Person or in any manner not in accordance with
this Section 11 without the prior written consent of Heller.

 

(d) 
The Trustee shall transfer the benefits or obligations of this Agreement or the
Indentures only with the prior written consent of Heller and only if any such
transferee shall

 

4

 

have agreed in writing to be
bound by the terms and conditions of this Section 11 and the Indentures.

 

(e) 
Neither the Trustee nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be liable for any action lawfully taken
or omitted to be taken by it or such Person under or in connection with this Section 11
(except for its or such Person’s own negligence or willful misconduct). The
Trustee undertakes to perform only such duties as are expressly set forth
herein. The Trustee may rely, and shall be protected in acting or refraining
from acting, upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party. The Trustee may consult with counsel of its own choice and
shall have full and complete authorization and protection for any action taken
or suffered by it hereunder in good faith and in accordance with the opinion of
such counsel. Notwithstanding any provision to the contrary contained herein,
the Trustee shall not be relieved of liability arising in connection with its
own negligence or willful misconduct.

 

Section 12.
 Notices. Unless otherwise specifically provided
herein, any notice or other communication required or permitted to be given
hereunder shall be in writing addressed to the respective party as set forth
below, and may be personally served, telecopied or sent by overnight courier
service or United States mail, and shall be deemed to have been given: (a) if
delivered in person, when delivered; (b) if delivered by telecopy, on the
date of transmission if transmitted on a Business Day before 4:00 p.m.
(Chicago, Illinois time) or, if not, on the next succeeding Business Day; (c) if
delivered by overnight courier, two days after delivery to such courier
properly addressed; or (d) if by United States mail, four Business Days
after deposit in the United States mail, with postage prepaid and properly
addressed. Notices hereunder shall he effective when received and shall be
addressed:

 

	
  Party

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
  Roller Bearing Company of
  America, Inc.

  
	
   

  	
   

  	
  140 Terry Drive

  
	
   

  	
   

  	
  Newtown, Pennsylvania 18940

  
	
   

  	
   

  	
  Attention: Executive Vice
  President

  
	
   

  	
   

  	
  Telephone: (215) 579-4300

  
	
   

  	
   

  	
  Telecopier: (215) 579-4318

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Gibson, Dunn &
  Crutcher

  
	
   

  	
   

  	
  2029 Century Park east, Suite 4000

  
	
   

  	
   

  	
  Los Angeles, California
  90067

  
	
   

  	
   

  	
  Attention: Bruce D. Meyer, Esq.

  
	
   

  	
   

  	
  Telephone: (310) 552-8686

  
	
   

  	
   

  	
  Telecopier: (310) 277-5827

  

 

5

 

	
  Heller:

  	
   

  	
  Heller Financial, Inc.

  
	
   

  	
   

  	
  500 West Monroe Street

  
	
   

  	
   

  	
  12th Floor

  
	
   

  	
   

  	
  Chicago, Illinois 60661

  
	
   

  	
   

  	
  Attention: Portfolio
  Manager, Portfolio

  
	
   

  	
   

  	
  Organization, Corporate Finance Group

  
	
   

  	
   

  	
  Telephone: (312) 441-7500

  
	
   

  	
   

  	
  Telecopier: (312) 441-7367

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Heller Financial, Inc.

  
	
   

  	
   

  	
  500 West Monroe Street

  
	
   

  	
   

  	
  12th Floor

  
	
   

  	
   

  	
  Chicago, Illinois 60661

  
	
   

  	
   

  	
  Attention: Legal
  Department, Portfolio

  
	
   

  	
   

  	
  Organization, Corporate Finance Group

  
	
   

  	
   

  	
  Telephone: (312) 441-7500

  
	
   

  	
   

  	
  Telecopier: (312) 441-7367

  
	
   

  	
   

  	
   

  
	
  Trustee:

  	
   

  	
  Mark Twain Bank

  
	
   

  	
   

  	
  8820 Ladue Road

  
	
   

  	
   

  	
  St. Louis, Missouri 63124

  
	
   

  	
   

  	
  Attention: Corporate Trust
  Division

  
	
   

  	
   

  	
  Telephone: (314) 889-0753

  
	
   

  	
   

  	
  Telecopier: (314) 889-0736

  

 

Section 13.
 Amendments and Waiver. No amendment or
waiver of any provision of this Agreement or consent to any departure by the
Company or the Trustee from any such provision shall in any event be effective
unless the same shall be in writing and signed by Heller. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

Section 14.
 No Waiver; Remedies. No failure on the
part of Heller to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver of such right, and no single or partial
exercise of any right under this Agreement shall preclude any further exercise
of such right or the exercise of any other right. The remedies provided in this
Agreement are cumulative and not exclusive of any remedies provided by law.

 

Section 15.
 Severability. Any provision of this
Agreement that is prohibited, unenforceable or not authorized in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or nonauthorization without invalidating the
remaining provisions of this Agreement or affecting the validity,
enforceability or legality of such provision in any other jurisdiction.

 

Section 16.
 Governing Law. This Agreement shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Illinois without giving application to the choice-of-law principles
thereof.

 

6

 

Section 17.
 Headings. Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

 

Section 18.
Counterparts. This Agreement may be signed in any number of counterpart copies,
and all such copies shall constitute one and the same instrument.

 

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

 

	
   

  	
  HELLER FINANCIAL, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Karen L. Finnerty

  	
   

  
	
   

  	
   

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ROLLER BEARING COMPANY OF

  	
   

  
	
   

  	
  AMERICA, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  CFO and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MARK TWAIN BANK,

  	
   

  
	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Vice President

  	
   

  

 

7

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