Exhibit 10.28


 


PLEDGE AGREEMENT


 


This
PLEDGE AGREEMENT, dated as of May 30, 2002 (together with all amendments, if
any, from time to time hereto, this “AGREEMENT”) between ROLLER BEARING COMPANY
OF AMERICA, INC., a Delaware corporation (the “PLEDGOR”), and GENERAL ELECTRIC
CAPITAL CORPORATION, in its capacity as Agent for Lenders (“Agent”).


 


W I T N E S S E T H:


 


WHEREAS,
pursuant to that certain Credit Agreement dated as of the date hereof by and
among Pledgor, the Persons named therein as Credit Parties, Agent and the
Persons signatory thereto from time to time as Lenders (including all annexes,
exhibits and schedules thereto, and as from time to time amended, restated,
supplemented or otherwise modified (the “CREDIT AGREEMENT”) the Lenders have
agreed to make Loans to, and incur Letter of Credit Obligations for the benefit
of, Borrower;


 


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


 


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


 


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


 


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


 


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


 


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


 


“PLEDGED
COLLATERAL” has the meaning assigned to such term in SECTION 2 hereof.


 


“PLEDGED
ENTITY” means an issuer of Pledged Shares or Pledged Indebtedness.


 


“PLEDGED
INDEBTEDNESS” means the Indebtedness evidenced by promissory notes and
instruments listed on Part B of SCHEDULE I hereto;


 





















 


“PLEDGED
SHARES” means those shares of Stock listed on Part A of SCHEDULE I hereto.


 


“SECURED
OBLIGATIONS” has the meaning assigned to such term in SECTION 3 hereof.


 


2.                                       PLEDGE. Pledgor hereby pledges to Agent, and
grants to Agent for itself and the ratable benefit of Lenders, a first priority
security interest in all of the following (collectively, the “PLEDGED
COLLATERAL”):


 


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


 


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


 


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


 


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


 


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


 


4.                                       DELIVERY OF PLEDGED COLLATERAL. All
certificates and all promissory notes and instruments evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of Agent, for itself
and the ratable benefit of Lenders, pursuant hereto. All Pledged Shares shall
be accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance satisfactory to Agent and all promissory notes or
other instruments evidencing the Pledged Indebtedness shall be endorsed by
Pledgor.


 


5.                                       REPRESENTATIONS AND WARRANTIES. Pledgor
represents and warrants to Agent that:


 


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


 


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owner of such Pledged
Indebtedness free and clear of any Lien thereon or affecting title thereto,
except for any Lien created by the Loan Documents;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


a.                                       Pledgor shall have the right, from time to
time, to vote and give consents with respect to the Pledged Collateral, or any
part thereof; PROVIDED, HOWEVER, that no vote shall be cast, and no consent
shall be given or action taken, which would have the effect of impairing the
position or interest of Agent in respect of the Pledged Collateral or which
would authorize, effect or consent to (unless and to the extent expressly
permitted by the Credit Agreement):


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


8.                                       Defaults and Remedies; Proxy.


 


a.                                       Upon the occurrence of an Event of Default and
during the continuation of such Event of Default, and concurrently with written
notice to Pledgor, Agent (personally or through an agent) is hereby authorized
and empowered to transfer and register in its name or in the name of its
nominee the whole or any part of the Pledged Collateral, to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations, to exercise the
voting and all other rights as a holder with respect thereto, to collect and
receive all cash dividends, interest, principal and other distributions made
thereon, to sell in one or more sales after ten (10) days’ notice of the time
and place of any public sale or of the time at which a private sale is to take
place (which notice Pledgor agrees is commercially reasonable) the whole or any
part of the Pledged Collateral and to otherwise act with respect to the Pledged
Collateral as though Agent was the outright owner thereof. Any sale shall be
made at public or private sale at Agent’s place of business, or at any place to
be named in the notice of sale, either for cash or upon credit or for future
delivery at such price as Agent may deem fair, and 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 Agent reserves
the right to reject any and all bids at such sale which, in its discretion, it
shall deem


 


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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
Agent. PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS 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 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 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, 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 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, 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.


 


c.                                       If, at any time when 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”), 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 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, 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


 


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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 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 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 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 be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. 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


 


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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 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 Agent of any one or
more of such rights, powers or remedies. No failure or delay on the part of
Agent to exercise any such right, power or remedy and no notice or demand which
may be given to or made upon Pledgor by Agent with respect to any such remedies
shall operate as a waiver thereof, or limit or impair 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
Agent, that 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 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 Agent with respect to any
power of sale, Lien, option or other right hereunder, shall constitute a waiver
thereof, or limit or impair 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 Agent’s rights as against Pledgor in any respect.


 


10.                                 ASSIGNMENT. 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, Agent shall deliver to Pledgor the Pledged Collateral pledged
by Pledgor 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, all of Pledgor’s
Obligations hereunder or under the other Loan Documents shall at such time
terminate.


 


12.                                 LIEN ABSOLUTE. All rights of 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;


 


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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
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 Agent in
connection with all or any of the Secured Obligations; all in such manner and
upon such terms as 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 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 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.                                       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.


 


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


 


c.                                       Neither 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, 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 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 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 Agent, at:


 


General
Electric Capital Corporation


100
California Street, 10th Floor


San
Francisco, CA    94111


Attention:       John
Goodwin and Neel Morey


Facsimile:
      (415) 277-7443


 


With
copies to:


 


Latham
& Watkins


5800
Sears Tower


Chicago,
Illinois 60606


Attention:
David Crumbaugh


Fax
No.: 312-993-9767


 


10





















 


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:


 


McDermott,
Will & Emery


50
Rockefeller Plaza


New
York, New York 10020


Attention:    C.
David Goldman, Esq.


Fax
No.: 212-547-5444


 


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 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.


 


11





















 


20.                                 BENEFIT OF LENDERS. All Security Interests
granted or contemplated hereby shall be for the benefit of Agent and 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.


 


[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/ Anthony S.
  Cavalieri

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
    Anthony S.
  Cavalieri

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Chief Financial
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John
  Goodwin

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
    John Goodwin

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its Duly Authorized
  Signatory

  
						



 


13





















 


SCHEDULE I


 


PART A


 


PLEDGED SHARES


 


	
  Pledged Entity

  	
   

  	
  Class

  of Stock

  	
   

  	
  Stock Certificate

  Number(s)

  	
   

  	
  Number

  of Shares

  	
   

  	
  Percentage of

  Outstanding Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBC
  Oklahoma, Inc.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBC Nice
  Bearings, Inc.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBC Linear
  Precision Products, Inc.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bremen
  Bearings, Inc.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Industrial
  Tectonics Bearings Corporation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Miller
  Bearing Company, Inc.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tyson
  Bearing Company, Inc.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBC
  Schaublin Holding SA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [100]% [66]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RBC Mexico,
  S.DE R.L. DE C.V.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [100]% [66]

  	
  %

  



 


PART B


 


PLEDGED INDEBTEDNESS


 


14





















 


 


	
  Pledged Entity

  	
   

  	
  Initial

  Principal Amount

  	
   

  	
  Issue Date

  	
   

  	
  Maturity Date

  	
   

  	
  Interest Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


15





















 


 


SCHEDULE II


 


PLEDGE AMENDMENT


 


This
Pledge Amendment, dated                                   ,         is
delivered pursuant to SECTION 6(d) of the Pledge Agreement referred to
below. All defined terms herein shall have the meanings ascribed thereto or
incorporated by reference in the Pledge Agreement. The undersigned hereby
certifies that the representations and warranties in SECTION 5 of the
Pledge Agreement are and continue to be true and correct, both as to the
promissory notes, instruments and shares pledged prior to this Pledge Amendment
and as to the promissory notes, instruments and shares pledged pursuant to this
Pledge Amendment. The undersigned further agrees that this Pledge Amendment may
be attached to that certain Pledge Agreement, dated May     ,
2002, between undersigned, as Pledgor, and General Electric Capital
Corporation, as Agent for Lenders, (the “Pledge Agreement”) and that the
Pledged Shares and Pledged Indebtedness listed on this Pledge Amendment shall
be and become a part of the Pledged Collateral referred to in said Pledge
Agreement and shall secure all Secured Obligations referred to in said Pledge
Agreement. The undersigned acknowledges that any promissory notes, instruments
or shares not included in the Pledged Collateral at the discretion of Agent may
not otherwise be pledged by Pledgor to any other Person or otherwise used as
security for any obligations other than the Secured Obligations.


 


	
   

  	
  ROLLER BEARING COMPANY OF
  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


 


	
  Name and

  Address of Pledgor

  	
   

  	
  Pledged Entity

  	
   

  	
  Class

  of Stock

  	
   

  	
  Certificate

  Number(s)

  	
   

  	
  Number

  of Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


	
  Pledged Entity

  	
   

  	
  Initial

  Principal Amount

  	
   

  	
  Issue Date

  	
   

  	
  Maturity Date

  	
   

  	
  Interest Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


16