Document:

Exhibit 10.24

 

ASSET
PURCHASE AGREEMENT

 

This ASSET PURCHASE
AGREEMENT (this “Agreement”), is made and entered into as of
September 28, 2001, by and between PRIME FINANCIAL CORPORATION, an Oklahoma
corporation (“Seller”) and OBB ACQUISITION CORP., a Delaware
corporation (“Buyer”).

 

RECITALS

 

A.                                   Seller
has acquired all right, title and interest in certain of the assets and
properties of DRIVELINE TECHNOLOGIES, INC., an Oklahoma corporation (“Driveline”).

 

B.                                     Buyer
desires to purchase certain assets formerly held by Driveline from Seller, and
Seller desires to sell such assets to Buyer, on the terms and subject to the
conditions of this Agreement.

 

C.                                     Accordingly,
Buyer and Seller are desirous of entering into this Agreement in order to
evidence the terms and conditions of such acquisition of assets by Buyer from
Seller.

 

NOW, THEREFORE, in
consideration of the mutual covenants, agreements, representations and
warranties contained in this Agreement, the parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

The terms defined in this
Article shall have the following respective meanings for all purposes of this
Agreement and for all schedules and exhibits hereto:

 

“Affiliate” means
with respect to any Person any other Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with, such first Person. 
For purposes of this definition, the term “control” (including the
correlative meanings of the terms “controls,” “controlled by,” and “under
direct or indirect control with”) as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of such Person, whether through
ownership of voting securities or by contract or otherwise.

 

“Agreement” shall
have the meaning given such term in the introductory paragraph hereof, and
shall include any and all amendments, modifications or supplements to this
Agreement.

 

“Bill of Sale”
means that certain Bill of Sale, in the form attached as Exhibit A to
this Agreement, to be executed and delivered by Seller to Buyer at the Closing.

 

“Business Day”
means a day other than a Saturday, Sunday or other day on which commercial
banks in Dallas, Texas or New York, New York are authorized or required by law
to close.

 

 

“Buyer” shall have
the meaning given to such term in the introductory paragraph hereof and shall
include successors and permitted assigns of Buyer.

 

“Buyer’s Documents”
shall have the meaning given to such term in Section 6.2(a).

 

“Closing” means
the consummation and effectuation of the transactions contemplated herein
pursuant to the terms and conditions of this Agreement, which shall take place
at the offices of Patton Boggs LLP, 2001 Ross Avenue, Suite 3000, Dallas, Texas  75201 on the same day this Agreement is
fully executed by Buyer and Seller, or at such other place as is mutually
agreed upon by the parties hereto.  Upon
consummation, the Closing shall be deemed to have taken place as of 12:01 a.m.
on the Closing Date.

 

“Closing Date”
means the date on which the Closing actually occurs.

 

“Driveline” shall
have the meaning given such term in Recital (A) hereof.

 

“Governmental
Authority” means any foreign, domestic, federal, territorial, state or
local governmental authority, quasi-governmental authority, instrumentality,
court, government or self-regulatory organization, commission, tribunal or
organization or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.

 

“Guaranty” means
that certain Guaranty in the form attached as Exhibit B to this
Agreement, to be executed by LSB Industries, Inc. and delivered by Seller to
Buyer at the Closing.

 

“Knowledge”,
whether capitalized or not, means a matter which is within the Person’s
‘knowledge’ or which is otherwise ‘known’ to such Person, and such Person has
“knowledge” of a matter if such Person or an executive officer of such Person
has actual knowledge of such matter or would reasonably be expected to have
actual knowledge of such matter following reasonable inquiry of the appropriate
employees and agents of such Person.

 

“Liability” means,
with respect to any Person, any liability or obligation of such Person of any
kind, character or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable, or otherwise and whether or not the same
is required to be accrued on the financial statements of such Person and
whether or not the same appears on any Schedule to this Agreement.

 

“Lien” means any
lien, pledge, mortgage, security interest, claim, lease, charge, option, right
of first refusal, easement, servitude, transfer restriction, competing claim of
ownership or any other encumbrance, restriction or limitation whatsoever.

 

“Losses” means any
and all claims, demands, losses, costs, expenses, obligations, Liabilities,
damages (including, without limitation, for physical injury including sickness,
disease or death or property damage), recoveries and deficiencies, including
interest, reasonable attorneys’ fees, and court costs.

 

2

 

“Permitted
Encumbrances” means Liens for current taxes and assessments not yet due and
payable, including, but not limited to, Liens for nondelinquent ad valorem
taxes and nondelinquent statutory Liens arising other than by reason of any
default on the part of Seller.

 

“Person” means an
individual, partnership, corporation, estate, joint-stock company, limited
liability company, trust, unincorporated organization, association, joint
venture or other entity or organization, including any Governmental Authority.

 

“Products” means
tapered thrust bearings, universal joints, synchronizing rings, and gtrag
bearings.

 

“Purchased Assets”
means those tools, items of equipment and other personal property which are
more particularly described and listed on Exhibit C.

 

“Purchase Price”
shall have the meaning given such term in Article IV.

 

“Seller” shall
have the meaning given such term in the introductory paragraph hereof.

 

“Seller’s Documents”
shall have the meaning given such term in Section 5.2.

 

ARTICLE II

PURCHASE AND SALE OF PURCHASED ASSETS

 

On the terms and subject
to the conditions hereof, Seller agrees at Closing to sell, assign and convey
to Buyer, and Buyer agrees to purchase at Closing from Seller, all of Seller’s
right, title and interest in and to the Purchased Assets free and clear of all
Liens and encumbrances, other than the Permitted Encumbrances, for the
consideration set forth in this Agreement.

 

ARTICLE III

LIABILITIES

 

It is expressly
understood and agreed that Buyer will not assume any Liability of Seller or its
Affiliates or Driveline or its Affiliates, including without limitation any
Liability relating to the operation of the business of Driveline or the
ownership, use or sale of Purchased Assets prior to August 20, 2001.  Anything to the contrary herein
notwithstanding, or in any other writing delivered in connection herewith,
nothing herein or in any such other writing shall be construed to constitute
the assumption, express or implied, by Buyer of any Liability of Seller or of
any Affiliate of Seller, or of Driveline, or any of its Affiliates.  Seller agrees that it shall pay any
Liability relating to or arising from its ownership of the Purchased Assets
prior to August 20, 2001, including any obligations to pay utilities,
maintenance expenses or personal property taxes that may be owed in connection
with the Purchased Assets.

 

ARTICLE IV

PURCHASE PRICE AND MANNER OF PAYMENT

 

As the consideration to
be paid by Buyer to Seller for the purchase by Buyer from Seller of all of the
Purchased Assets, Buyer will pay Seller Four Hundred Seventeen Thousand Five
Hundred and No/100 Dollars ($417,500.00) (the “Purchase Price”) on the Closing
Date,

 

3

 

provided all of the conditions set forth in this Agreement have been
fulfilled. On the Closing Date, Buyer will wire transfer the Purchase Price to
Seller in immediately available funds. Such wire transfer to Seller of the
Purchase Price shall be made in accordance with Seller’s written wire
instructions provided to Buyer no later than one (1) Business Day prior to the
Closing Date.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF
SELLER

 

Seller hereby represents
and warrants to Buyer as follows:

 

Section 5.1                                      Organization.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state in which it
was incorporated.  Seller has all
requisite corporate right, power and authority to own and sell all of the
Purchased Assets to Buyer pursuant to this Agreement.

 

Section 5.2                                      Authority;
Consents and Approvals.

 

(a)                                  Seller
has all requisite corporate right, power and authority to execute, deliver and
perform this Agreement and each other document and agreement referenced herein
to be executed and delivered by Seller pursuant hereto (together, the “Seller’s
Documents”).  The execution,
delivery, and performance of the Seller’s Documents by Seller has been duly and
validly authorized and approved by all necessary corporate action.  The Seller’s Documents constitute the legal,
valid and binding obligations of Seller, enforceable against it in accordance
with their respective terms.

 

(b)                                 The
execution, delivery and performance of the Seller’s Documents by Seller will
not (with or without the giving of notice or the passage of time, or both) (i)
violate any applicable provision of law or any rule or regulation of any
federal, state or local Governmental Authority applicable to Seller or the
Purchased Assets, or any order, writ, injunction, judgment or decree of any
court, administrative agency or other Governmental Authority applicable to
Seller or the Purchased Assets, (ii) violate either the Seller’s Certificate of
Incorporation or Bylaws, as each is amended to the Closing Date, (iii) require
any consent under, conflict with or constitute a breach or default under any
agreement, indenture, mortgage, deed of trust, lease, or other instrument to
which Seller is a party or by which it is bound, or any license, permit or
certificate held by Seller, or (iv) require any consent of, approval by, notice
to or registration with any Governmental Authority.

 

Section 5.3                                      Title
to Purchased Assets.  Seller is the
sole and absolute owner of the Purchased Assets and has good and marketable
title to and the right to assign and convey the Purchased Assets free and clear
of any and all Liens of any kind whatsoever. Seller’s ownership of the
Purchased Assets is not subject to any pending or, to Seller’s knowledge,
threatened claim, defense, action or proceeding of any other Person.  At Closing, Seller will convey to Buyer, and
Buyer upon delivery to it of the Bill of Sale by Seller at Closing will
receive, all legal and beneficial title in and to all of the Purchased Assets,
free and clear of any and all Liens thereon of any kind whatsoever.

 

4

 

Section 5.4                                      No
Injunctions or Orders.  Seller is
not a party to any agreement, and Seller is not subject to nor, to the
knowledge of Seller, threatened with, any injunctions of any court or orders of
any other Governmental Authority with respect to the Purchased Assets.

 

Section 5.5                                      Compliance
with Laws.  Seller has not received
any written notice claiming it is in violation of any order, law, ordinance,
statute, rule or regulation applicable to the Purchased Assets where the
consequences of such violation would have an adverse effect on the Purchased
Assets.

 

Section 5.6                                      Litigation.  There is no suit, action, administrative
proceeding, arbitration, grievance or other proceeding or governmental
investigation pending or, to the knowledge of Seller, threatened, against
Seller which individually or in the aggregate could adversely affect the
Purchased Assets.

 

Section 5.7                                      Brokers.  No agent, broker, investment banker, or
other Person acting on behalf of Seller or under its authority is or will be
entitled to any broker’s or finder’s fee or any other commission or similar
fee, directly or indirectly, in connection with the transactions contemplated
by this Agreement.

 

Section 5.8                                      Disclosures.  The representations, warranties or
statements by Seller herein and in the Exhibits and Schedules attached hereto
are true, complete and correct in all material respects and do not contain any
untrue statement of a material fact.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF
BUYER

 

Buyer hereby represents and
warrants to Seller as follows:

 

Section 6.1                                      Organization.
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the state in which it was incorporated.  Buyer has all requisite corporate right,
power and authority to purchase the Purchased Assets from Seller pursuant to
this Agreement.

 

Section 6.2                                      Authority.

 

(a)                                  Buyer
has all requisite corporate right, power and authority to execute, deliver and
perform this Agreement and each other document and agreement referenced herein
to be executed and delivered by Buyer pursuant hereto (together, the “Buyer’s
Documents”).  The execution,
delivery and performance of the Buyer’s Documents by Buyer have been duly and
validly authorized and approved by all necessary corporate action.  The Buyer’s Documents constitute the legal,
valid and binding obligations of Buyer, enforceable against it in accordance
with their respective terms.

 

(b)                                 The
execution, delivery and performance of the Buyer’s Documents by Buyer will not
(with or without the giving of notice or the passage of time or both) (i)
violate any applicable provision of law or any rule or regulation of any
federal, state or local Governmental Authority applicable to Buyer, or any
order, writ, injunction, judgment or decree of any court, administrative agency
or other Governmental Authority applicable to Buyer,

 

5

 

(ii) violate Buyer’s Certificate of Incorporation or Bylaws, as each is
amended to the Closing Date, (iii) require any consent under, conflict with or
constitute a breach or default under any agreement, indenture, mortgage, deed
of trust, lease, license or other instrument to which Buyer is a party or by
which it or any Purchased Asset is bound, or any license, permit or certificate
held by Buyer, or (iv) require any consent of, approval by, notice to or
registration with any Governmental Authority.

 

Section 6.3                                      Compliance
with Laws.  Buyer has not received
any written notice claiming Seller is in violation of, any order, law,
ordinance, statute, rule or regulation applicable to the Purchased Assets where
the consequences of such violation would have an adverse effect on the
Purchased Assets.

 

Section 6.4                                      Disclosures.  The representations, warranties or
statements by Buyer herein and in the Exhibits and Schedules attached hereto
are true, complete and correct in all material respects and do not contain any
untrue statement of a material fact.

 

Section 6.5                                      Brokers.  No agent, broker, investment banker, or
other Person acting on behalf of Seller or under its authority is or will be
entitled to any broker’s or finder’s fee or any other commission or similar
fee, directly or indirectly, in connection with the transaction contemplated by
this Agreement.

 

ARTICLE VII

CLOSING DELIVERIES

 

The obligations of Buyer
and Seller hereunder are subject to the satisfaction of the following Closing
deliveries that are conditions precedent unless specifically waived by the
parties.

 

Section 7.1                                      Seller’s
Closing Deliveries.  Seller shall execute
and deliver, or cause to be executed and delivered, to Buyer on the Closing
Date, each of the following:

 

(a)                                  This
Agreement;

 

(b)                                 The
Bill of Sale;

 

(c)                                  The
Guaranty; and

 

(d)                                 Executed
UCC-3 Partial Releases in form sufficient to evidence the full and complete
release of any and all Liens on the Purchased Assets.

 

Section 7.2                                      Buyer’s
Closing Deliveries.  Buyer shall
have executed and delivered, or caused to be executed and delivered, to Seller
at the Closing each of the following:

 

(a)                                  This
Agreement; and

 

(b)                                 The
Purchase Price, paid in the manner required by the provisions of Article IV.

 

6

 

ARTICLE VIII

INDEMNIFICATION

 

Section 8.1                                      Indemnification
of Buyer by Seller.  Subject to the
limitation imposed by Section 8.5 below, notwithstanding any investigation by
Buyer or its representatives, the Seller, its successors and assigns, will
indemnify and hold the Buyer, and its Affiliates, harmless from and fully pay
any and all Losses, that Buyer, or any of its Affiliates, may suffer or incur
as a result of or relating to (a) the breach of any representations or
warranties made by Seller in Article V and elsewhere in this Agreement, or in
any other document delivered by Seller to Buyer pursuant hereto to include,
without limitation, the Bill of Sale (collectively, the “Transaction
Documents”), or any allegation by a third party that, if true, would
constitute such a breach, or (b) the breach of any covenant or agreement of
Seller in this Agreement or the Transaction Documents.

 

Section 8.2                                      Indemnification
of Seller by Buyer.  Notwithstanding
any investigation by Seller or its representatives, the Buyer, its successors
and assigns, will indemnify and hold Seller, and its Affiliates, harmless from
and fully pay any and all Losses that Seller, or any of its Affiliates, may
suffer or incur as a result of or relating to (a) the breach of any
representations or warranties made by Buyer in Article VI and elsewhere in this
Agreement, or any allegation by a third party that, if true, would constitute
such a or (b) the breach of any covenant or agreement of Seller in this
Agreement.

 

Section 8.3                                      Notice.  If a party is entitled to receive
indemnification or to recover from the other party for any Losses incurred
pursuant to this Article VIII (the “Indemnified Party”), the Indemnified
Party agrees to give prompt written notice to the other party (the “Indemnifying
Parties”) upon the occurrence of any indemnifiable or recoverable Loss or
the assertion of any claim or the commencement of any action or proceeding by
any third party in respect of which such a Loss may reasonably be expected to
occur (a “Claim”), but the Indemnified Party’s failure to give such
notice will not affect the obligations of the Indemnifying Party under this
Article VIII except to the extent that the Indemnifying Party is materially
prejudiced thereby.  Such written notice
will include a reference to the event or events forming the basis of such Loss
or Claim and the amount involved, unless such amount is uncertain or
contingent, in which event the Indemnified Party will give a later written
notice when the amount becomes fixed.

 

Section 8.4                                      Defense
of Claims.  The Indemnifying Party
may elect to assume and control the defense of any Claim, including the employment
of counsel reasonably satisfactory to the Indemnified Party and the payment of
expenses related thereto, if (a) the Indemnifying Party acknowledges its
obligation to indemnify the Indemnified Party for any Losses resulting from
such third party Claim and provides reasonable evidence to the Indemnified
Party of its financial ability to satisfy such obligation; (b) the Claim does
not seek to impose any liability or obligation on the Indemnified Party other
than for money damages; and (c) the Claim does not relate to the Indemnified
Party’s relationship with its customers or employees. If such conditions are
satisfied and the Indemnifying Party elects to assume and control the defense
of a Claim, then (i) the Indemnifying Party will not be liable for any
settlement of such Claim effected without its consent, which consent will not
be unreasonably withheld; (ii) the Indemnifying Party may settle such Claim
without the consent of the Indemnified Party; and (iii) the Indemnified Party
may employ separate counsel and participate in the defense thereof, but the
Indemnified Party will be

 

7

 

responsible for the fees and expenses of such counsel unless (A) the
Indemnifying Party has failed to adequately assume the defense of such Claim or
to employ counsel with respect thereto or (B) a conflict of interest exists
between the interests of the Indemnified Party and the Indemnifying Party that
requires representation by separate counsel, in which case the fees and expenses
of such separate counsel will be paid by the Indemnifying Party.  If such conditions are not satisfied, the
Indemnified Party may assume and control the defense of the Claim at the
Indemnifying Party’s cost and expense.

 

Section 8.5                                      Limitation
on Maximum Amount of Liability of Seller for Indemnification Claims or Losses.
The maximum aggregate amount of Losses for which any Indemnifying Party, shall
be obligated to pay to an Indemnified Party, pursuant to its obligations under
Section 8.1 or 8.2 above, as the case may be, shall not, in any event,
exceed a total sum equal to the amount of the Purchase Price.

 

ARTICLE IX

COVENANT NOT TO COMPETE

 

Section 9.1                                      Non-Compete.

 

(a)                                  From
and after the Closing Date, Seller will not, and will cause its Affiliates to
not, directly or indirectly, individually or collectively, engage in any
Competitive Activity for twelve (12) months after the Closing Date (the “Covered
Period”); provided, however, that, notwithstanding the
foregoing, (i) neither Seller, nor any of its Affiliates, shall be deemed to be
engaged in a Competitive Activity solely by virtue of the ownership of less
than twenty percent (20%) of the outstanding voting stock or debt securities of
any publicly held company of which it (and its Affiliates) do not have voting
or day-to-day operational control, the stock or debt securities of which are
traded on an United States or foreign stock exchange or quoted on the National
Association of Securities Dealers Automated Quotation System; (ii) Seller
and any of its Affiliates may acquire a Person or business engaged in a
Competitive Activity if in the calendar year immediately preceding the
acquisition, the revenues derived from Competitive Activities do not exceed
thirty-four percent (34%) of the total revenues of such Person or business; and
(iii) neither Seller, nor any of its Affiliates, shall be deemed to be engaged
in a Competitive Activity by virtue of any sale of universal joints, universal
joint parts, or universal joints constructed from parts which are  existing in the inventory of Driveline on the
Closing Date or have been repossessed by Congress Financial Corporation
(Southwest), Seller or LSB Industries, Inc. or their Affiliates as of the
Closing Date.

 

(b)                                 For
purposes of this Section 9.1, “Competitive Activity” shall mean (i) the
sale in the Americas (i.e. North, Central and South America) of (A) any Product
or (B) any similar product for the same application as the Products or (ii) the
sale to any Person on Schedule 9.1 of (A) any Product or (B) any similar
product for the same application as the Products.

 

Section 9.2                                      Severability.  The invalidity or unenforceability of this
Article IX in any respect shall not affect the validity or enforceability of
this Article IX in any other respect, or of any other provision of this
Agreement.  In the event that any
provision of this Article IX shall be held invalid or unenforceable by a court
of competent jurisdiction by reason of the geographic or

 

8

 

business scope or the duration thereof or for any other reason, such
invalidity or unenforceability shall attach only to the particular aspect of
such provision found invalid or unenforceable as applied and shall not affect
or render invalid or unenforceable any other provision of this Article IX or
the enforcement of such provision in other circumstances, and, to the fullest
extent permitted by law, this Article IX shall be construed as if the
geographic or business scope or the duration of such provision or other basis
on which such provision has been challenged had been more narrowly drafted so
as not to be invalid or unenforceable.

 

Section 9.3                                      Enforcement.  Seller acknowledges and agrees that Buyer
and its Affiliates are engaged in a highly competitive business and that the
protections of Buyer and each such Affiliate set forth in this Article IX are
fair and reasonable and are of vital concern to Buyer and its Affiliates.  Further, Seller acknowledges and agrees that
monetary damages for any violation of this Article IX will not adequately
compensate Buyer and its Affiliates with respect to any such violation.  Therefore, in the event of a breach by
Seller of any of the terms and provisions contained in this Article IX, Buyer
shall be entitled to enforce the specific performance of this Article IX by
Seller and to enjoin Seller from any further violations.  The remedies available to Buyer pursuant to
this Section 9.3 may be exercised cumulatively by Buyer in conjunction with all
other rights and remedies provided by law.

 

ARTICLE X

FURTHER AGREEMENTS

 

Section 10.1                                Title
and Risk of Loss.  Title to and risk
of loss of the Purchased Assets shall pass to Buyer from Seller as of the
Closing.

 

Section 10.2                                Additional
Actions Seller and Buyer.  On and
after the Closing Date, Seller and Buyer shall execute and deliver such
documents and do and perform all such other acts as may reasonably be required
in order fully to effectuate the intent of this Agreement.

 

Section 10.3                                Costs
and Transfer Taxes.  Except as
otherwise set forth in this Agreement, each party hereto shall pay its own
costs and expenses (including legal fees and expenses) incurred in connection
with due diligence reviews, the preparation, negotiation and execution of this
Agreement and all other agreements, certificates, instruments and documents
delivered hereunder and all other matters relating to the consummation of the
transactions contemplated hereby, whether or not the proposed transaction is
consummated.  All sales, documentary
stamp taxes and other transfer taxes in connection with the sale and delivery
of the Purchased Assets hereunder shall be paid by Seller.

 

Section 10.4                                Books
and Records after Closing.  From and
after the Closing, Buyer shall have free and open access to all books and
records which Seller may have relating in any manner to the Purchased Assets
and Seller shall furnish Buyer with copies thereof.

 

ARTICLE XI

MISCELLANEOUS

 

Section 11.1                                Entire
Understanding, Waiver, Etc.  This
Agreement (including all schedules and exhibits attached hereto) and all other
agreements executed and delivered at the Closing set forth the entire
understanding of the parties and supersede any and all prior or

 

9

 

contemporaneous agreements, arrangements and understandings relating to
the subject matter hereof, and the provisions hereof may not be changed,
modified, waived or altered except by an agreement in writing signed by the
parties hereto.  A waiver by any party
of any of the terms or conditions of this Agreement, or of any breach thereof,
shall not be deemed a waiver of such term or condition for the future, or of
any other term or condition hereof, or of any subsequent breach thereof.

 

Section 11.2                                Severability.  If any provision of this Agreement or the
application of such provision shall be held by a court of competent
jurisdiction to be unenforceable, the remaining provision of this Agreement
shall remain in full force and effect.

 

Section 11.3                                Captions.  The captions herein are for convenience only
and shall not be considered a party of this Agreement for any purpose,
including, without limitation, the construction or interpretation of any
provision hereof.

 

Section 11.4                                Notices.
All notices, requests, demands, claims and other communications hereunder shall
be in writing.  Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly given (a)
if personally delivered, when so delivered, (b) if mailed, two Business Days
after having been sent by registered or certified with return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below, (c) if given by facsimile, once such notice or other communication is
transmitted to the facsimile number specified below and the appropriate answer
back or telephonic confirmation is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the provisions
of clause (b) above or (d) if sent through an overnight delivery service in
circumstances in which such service guarantees next day delivery, the day
following being so sent:

 

	
  (i)

  	
   

  	
  If to Seller:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Prime Financial
  Corporation

  
	
   

  	
   

  	
  16 South Pennsylvania
  Avenue

  
	
   

  	
   

  	
  Oklahoma City, Oklahoma
  73107

  
	
   

  	
   

  	
  Attention:  David
  R. Goss, Vice President

  
	
   

  	
   

  	
  Telephone:  (405)
  235-4546

  
	
   

  	
   

  	
  Facsimile:  (405)
  235-5067

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Prime Financial
  Corporation

  
	
   

  	
   

  	
  16 South Pennsylvania
  Avenue

  
	
   

  	
   

  	
  Oklahoma City, Oklahoma
  73107

  
	
   

  	
   

  	
  Attention:  General
  Counsel

  
	
   

  	
   

  	
  Telephone:  (405)
  235-4546

  
	
   

  	
   

  	
  Facsimile:  (405)
  236-1209

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Copy to:

  

 

10

 

	
  (ii) 

  	
   

  	
  If to Buyer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OBB Acquisition Corp.

  
	
   

  	
   

  	
  c/o Roller Bearing
  Company of America, Inc.

  
	
   

  	
   

  	
  60 Round Hill Road

  
	
   

  	
   

  	
  Fairfield, Connecticut
  06430

  
	
   

  	
   

  	
  Attention:       Chief
  Executive Officer

  
	
   

  	
   

  	
  Telephone Number:

  	
  (203) 255-1511

  
	
   

  	
   

  	
  Facsimile Number:

  	
  (203) 256-0775

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C. David Goldman

  
	
   

  	
   

  	
  McDermott, Will &
  Emery

  
	
   

  	
   

  	
  50 Rockefeller Plaza

  
	
   

  	
   

  	
  New York, New York
  10020

  
	
   

  	
   

  	
  Telephone Number: (212)
  547-5512

  
	
   

  	
   

  	
  Facsimile Number: (212)
  547-5444

  

 

Any
party may give any notice, request, demand, claim or other communication
hereunder using any other means (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
individual for whom it is intended.  Any
party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.

 

Section 11.5                                Successors
and Assigns.  Neither this Agreement
nor any of the rights or obligations arising hereunder shall be assignable
without the prior written consent of the parties hereto.  Nothing in this Agreement, express or
implied, shall confer upon any Person, other than the parties hereto, and their
successors and permitted assigns any rights or remedies under or by reason of
this Agreement.

 

Section 11.6                                Survival
of Representations and Warranties. 
The representations, warranties, covenants and agreements made by Seller
and by Buyer, respectively, in this Agreement shall survive the Closing Date
hereunder and shall also survive and shall be unaffected by (and shall not be
deemed waived by) any investigation, audit, appraisal, or inspection at any
time made by or on behalf of Buyer.

 

Section 11.7                                Schedules
and Exhibits.  The schedules and
exhibits attached hereto shall form a part of this Agreement and are hereby
incorporated into this Agreement by reference.

 

Section 11.8                                Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one and the same instrument.

 

Section 11.9                                Construction
of Terms.  Any reference herein to
the masculine or neuter shall include the masculine, the feminine and the
neuter, and any reference herein to the singular or plural shall include the
opposite thereof.  The parties to this
Agreement acknowledge that each

 

11

 

party and counsel to each party has participated in the drafting of
this Agreement and agree that this Agreement shall not be interpreted against
one party or the other based upon who drafted it.

 

Section 11.10                          Attorneys’
Fees and Costs.  Unless otherwise
provided herein to the contrary, in the event any action or proceeding is
commenced by any party to this Agreement to (a) determine rights, duties
or obligations under this Agreement, (b) determine a breach of this Agreement
and obtain damages as a result of such breach or (c) otherwise enforce this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover from the non-prevailing party all of the prevailing party’s
out-of-pocket costs and expenses, including, without limitation, all reasonable
attorneys’ fees, disbursements and related charges.  A party will be considered the prevailing party if (i) it
initiated the litigation and substantially obtains the relief it sought, either
through a judgment or arbitration award or the losing party’s voluntary action
before arbitration, trial, or judgment, (ii) the other party withdraws its
action without substantially obtaining the relief it sought, or (iii) such
party did not initiate the litigation and judgment is entered into for any
party, but without substantially granting the relief sought by the initiating
party or granting more substantial relief to the non-initiating party with
respect to any counterclaim, asserted by the non-initiating party in connection
with such litigation.

 

Section 11.11                          Governing
Law.  THIS AGREEMENT SHALL BE
CONTROLLED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT
STATE, WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT
MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

Section 11.12                          Facsimile
Execution.  Each counterpart of this
Agreement may be executed and transmitted by facsimile transmission.  The parties will initially accept facsimile
signature pages.  The original documents
shall be delivered by hand or courier within one (1) Business Day of the execution
of the documents. Counsel for the parties will substitute and provide original
signature pages to the other parties as soon as they are received.

 

12

 

IN WITNESS WHEREOF, the parties have duly executed
this Agreement on the day and year first above written.

 

	
  SELLER:

  	
  PRIME FINANCIAL CORPORATION.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/David
  R. Goss

  	
   

  
	
   

  	
  Name:

  	
  David
  R. Goss

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  BUYER:

  	
  OBB ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Michael
  S. Gostomski

  	
   

  
	
   

  	
  Name:

  	
  Michael
  S. Gostomski

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President

  	
   

  
					

 

13

 

SCHEDULE 9.1

 

CUSTOMERS SUBJECT TO NON-COMPETE

 

1                                          Dana
Kirkstall Specialty Axle

 

2                                          Holland
Hitch International

 

3                                          Westport
Axle Corporation

 

4                                          Bergstrom
Company

 

14Exhibit 10.31

 

 

PREFERRED STOCK

 

PURCHASE AGREEMENT

 

 

by and among

 

 

ROLLER BEARING
HOLDING COMPANY, INC.,

 

ROLLER BEARING
COMPANY OF AMERICA, INC.,

 

WHITNEY V, L.P.

 

And

 

Dr. Michael J.
Hartnett

 

 

Dated as of February
6, 2003

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  1 DEFINITIONS

  
	
  1.01

  	
  Definitions

  
	
  1.02

  	
  Accounting Terms: Financial Statements

  
	
  1.03

  	
  Knowledge
  of the Company

  
	
   

  	
   

  
	
  ARTICLE
  2 PURCHASE AND SALE OF THE CLASS A SHARES

  
	
  2.01

  	
  Purchase and Sale of the Class A Shares

  
	
  2.02

  	
  Closing

  
	
  2.03

  	
  Payment for and Delivery of Class A Shares

  
	
  2.04

  	
  Whitney
  Fees and Expenses

  
	
   

  	
   

  
	
  ARTICLE
  3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  
	
  3.01

  	
  Existence and Power

  
	
  3.02

  	
  Authorization; No Contravention

  
	
  3.03

  	
  Governmental Authorization; Third Party Consents

  
	
  3.04

  	
  Binding Effect

  
	
  3.05

  	
  Compliance with Laws; Private Sale; Voting Agreements

  
	
  3.06

  	
  No
  Default or Breach

  
	
  3.07

  	
  Capitalization; Class A Shares and Conversion Shares

  
	
  3.08

  	
  Subsidiaries

  
	
  3.09

  	
  SEC Reports; Financial Condition

  
	
  3.10

  	
  Disclosure

  
	
  3.11

  	
  Absence of Certain Changes or Events

  
	
  3.12

  	
  Broker’s, Finder’s or Similar Fees

  
	
  3.13

  	
  Potential Conflicts of Interest

  
	
  3.14

  	
  Cure
  of December Defaults

  
	
  3.15

  	
  Restated
  Charter

  
	
  3.16

  	
  Inducement

  
	
   

  	
   

  
	
  ARTICLE
  4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

  
	
  4.01

  	
  Representations and Warranties of Whitney V

  
	
  4.02

  	
  Representations and Warranties of Hartnett

  
	
   

  	
   

  
	
  ARTICLE
  5 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS TO PURCHASE THE CLASS A
  SHARES

  
	
  5.01

  	
  Representations and Warranties

  
	
  5.02

  	
  Consents and Approvals

  
	
  5.03

  	
  No Material Judgment or Order

  
	
  5.04

  	
  No
  Litigation

  
	
  5.05

  	
  Purchase of Securities Permitted by
  Applicable Laws

  
	
  5.06

  	
  Restated
  Charter

  
	
  5.07

  	
  Opinions
  of Counsel

  

 

i

 

	
  5.08

  	
  Good Standing Certificates

  
	
  5.09

  	
  Officer’s Certificate

  
	
  5.10

  	
  RBCA
  Officer’s Certificate

  
	
  5.11

  	
  Amended Stockholders Agreement

  
	
  5.12

  	
  Contemporaneous Participation

  
	
  5.13

  	
  Payment
  of Whitney Fees

  
	
   

  	
   

  
	
  ARTICLE
  6 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO SELL AND ISSUE THE CLASS A
  SHARES

  
	
  6.01

  	
  Purchase
  Price

  
	
  6.02

  	
  Representations and Warranties

  
	
  6.03

  	
  No
  Material Judgment or Order

  
	
  6.04

  	
  No Litigation

  
	
  6.05

  	
  Sale of Securities Permitted by Applicable Laws

  
	
   

  	
   

  
	
  ARTICLE
  7 COVENANTS

  
	
  7.01

  	
  Public
  Announcements

  
	
  7.02

  	
  Use of Proceeds

  
	
  7.03

  	
  Schaublin Refinancing; Redesignation

  
	
  7.04

  	
  Trustee
  Matters

  
	
  7.05

  	
  Covenant
  to Consult with Whitney

  
	
  7.06

  	
  Restrictive
  Covenants

  
	
   

  	
   

  
	
  ARTICLE
  8 INDEMNIFICATION

  
	
  8.01

  	
  Indemnification

  
	
  8.02

  	
  Procedure;
  Notification

  
	
  8.03

  	
  Manner
  of Payment

  
	
  8.04

  	
  Taxes

  
	
  8.05

  	
  Exclusive
  Remedy

  
	
   

  	
   

  
	
  ARTICLE
  9 COVENANTS REGARDING SENIOR PREFERRED SHARES

  
	
  9.01

  	
  Special Call Option on Class A Shares

  
	
  9.02

  	
  Priority of Preferred Stock

  
	
  9.03

  	
  Reservation of Shares; Other Assurances

  
	
   

  	
   

  
	
  ARTICLE
  10 MISCELLANEOUS

  
	
  10.01

  	
  Survival of Representations and Warranties

  
	
  10.02

  	
  Notices

  
	
  10.03

  	
  E-Documents

  
	
  10.04

  	
  Successors
  and Assigns

  
	
  10.05

  	
  Amendment
  and Waiver

  
	
  10.06

  	
  Signatures; Counterparts

  
	
  10.07

  	
  Headings

  
	
  10.08

  	
  GOVERNING LAW

  
	
  10.09

  	
  JURISDICTION,
  WAIVER OF JURY TRIAL, ETC.

  

 

ii

 

	
  10.10

  	
  Severability

  
	
  10.11

  	
  Rules of Construction

  
	
  10.12

  	
  Entire Agreement

  
	
  10.13

  	
  Expenses

  
	
  10.14

  	
  Publicity

  
	
  10.15

  	
  Further
  Assurances

  
	
  10.16

  	
  No Strict Construction

  

 

Disclosure Schedules

 

	
  Schedule
  3.03

  	
  —

  	
  Governmental
  Authorizations;  Third Party Consents

  
	
  Schedule
  3.06

  	
  —

  	
  Defaults

  
	
  Schedule
  3.08

  	
  —

  	
  Subsidiaries

  
	
  Schedule
  3.11

  	
  —

  	
  Certain
  Changes and Events

  

 

Exhibits

 

	
  Exhibit A

  	
  —

  	
  Restated Charter and Bylaws

  
	
  Exhibit B

  	
  —

  	
  Trustee Notice

  
	
  Exhibit C

  	
  —

  	
  Opinion to Trustee

  
	
  Exhibit D

  	
  —

  	
  Opinion to Purchasers Regarding Bond
  Matters

  
	
  Exhibit E

  	
  —

  	
  Opinion to Purchasers Regarding Other
  Customary Matters

  
	
  Exhibit F

  	
  —

  	
  Amended Stockholders Agreement

  

 

iii

 

PREFERRED STOCK
PURCHASE AGREEMENT

 

This PREFERRED
STOCK PURCHASE AGREEMENT is dated as of February 6, 2003 (this “Agreement”), and made
by and among Roller Bearing Holding Company, Inc., a Delaware corporation (the
“Company”), Roller
Bearing Company of America, Inc., a Delaware corporation and wholly-owned
Subsidiary of the Company (“RBCA”), Whitney V, L.P., a
Delaware limited partnership (“Whitney V”), and Dr. Michael J. Hartnett (“Hartnett” and
together with Whitney V, the “Purchasers”). 
The Purchasers, the Company and RBCA are sometimes referred to herein
collectively as the “Parties” and each individually as a “Party”.

 

Pursuant to
(i) the right of first offer granted to Whitney V in Section 3 of the
Stockholders Agreement, and (ii) the participation rights granted to Hartnett
in Section 3 of the Stockholders Agreement, the Purchasers desire to
purchase from the Company, and the Company desires to sell and issue to the
Purchasers, an aggregate amount of 1,008.41 shares of the Company’s
Class A Preferred Stock, par value $.01 per share (the “Class A Preferred Stock”),
for an aggregate purchase price equal to $3,025,230.

 

In
consideration of the mutual covenants and agreements set forth herein and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties hereto agree as follows:

 

ARTICLE
1

 

DEFINITIONS

 

1.01        Definitions. 
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:

 

“Affiliate” shall mean
any Person (a) directly or indirectly controlling, controlled by, or under
common control with, the Company, (b) directly or indirectly owning or
holding five percent (5%) or more of any equity interest in the Company, or
(c) five percent (5%) or more of whose voting stock or other equity
interest is directly or indirectly owned or held by the Company.  For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling”, “controlled by”
and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Amended Stockholders Agreement”
shall mean the Second Amended and Restated Stockholders Agreement, of the date
hereof in the form attached hereto as Exhibit F.

 

“Audited Financial Statements”
shall have the meaning assigned to that term in Section 3.09(b).

 

“Blockage Amount’
shall have the meaning assigned to that term in Section 8.03.

 

“Blockage Opinion”
shall have the meaning assigned to that term in Section 8.03.

 

 

“Board of Directors”  shall mean
the board of directors of the Company.

 

“Business Day” shall
mean any day other than a Saturday, Sunday or other day on which commercial
banks in the City of New York are authorized or required by law or executive
order to close.

 

“By-laws” shall mean,
unless the context in which such term is used otherwise requires, the By-laws
of the Company as in effect on the date hereof (a copy of which is attached
hereto (together with the Restated Charter) as Exhibit A).

 

“Call Price” shall
mean, with respect to any Class A Share, the Stated Value of such share plus
all accumulated and accrued and unpaid but not yet accumulated dividends
thereon (calculated in accordance with the terms of the Restated Charter).

 

“Capital Contribution”
shall have the meaning assigned to that term in Section 7.02.

 

“Class A Common” shall
mean the Class A Common Stock, par value $.01 per share, of the Company.

 

“Class A Preferred Stock”
shall have the meaning assigned to that term in the recitals to this Agreement.

 

“Class A Shares” shall
have the meaning assigned to that term in Section 2.01.

 

“Class B Common” shall
mean the Class B Supervoting Common Stock, $0.01 par value per share, of the
Company.

 

“Class B Preferred Stock”
shall mean the Class B Exchangeable Convertible Participating Preferred Stock,
$0.01 par value per share, of the Company.

 

“Class C Preferred Stock”
means the Class C Redeemable Preferred Stock, par value $.01 per share, of
the Company.

 

“Class D Preferred Stock”
means the Class D Redeemable Preferred Stock, par value $.01 per share, of
the Company.

 

“Closing” shall have
the meaning assigned to that term in Section 2.02.

 

“Closing Date” shall
have the meaning assigned to that term in Section 2.02.

 

“Commission” shall
mean the Securities and Exchange Commission or any similar agency then having
jurisdiction to enforce the Securities Act.

 

“Common Stock” shall
mean, collectively, the Class A Common and the Class B Common.

 

2

 

“Company” shall have
the meaning assigned to that term in the first paragraph of this Agreement.

 

“Company Indenture”
shall mean the Indenture dated as of June 15, 1997, among the Company and
United States Trust Company of New York, as Trustee.

 

“Condition of the Company”
shall mean the assets, business, properties, prospects, operations or financial
condition of the Company and its Subsidiaries, taken as a whole.

 

“Contingent Obligation”
as applied to any Person, shall mean any direct or indirect liability,
contingent or otherwise, of that Person: 
(i) with respect to any indebtedness, lease, dividend or other
obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto; (ii) with respect to any letter of credit
issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings; or (iii) under any foreign exchange
contract, currency swap agreement, interest rate swap agreement or other
similar agreement or arrangement designed to alter the risks of that Person
arising from fluctuations in currency values or interest rates.  Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (other than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another,
(b) the obligation to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, and
(c) any liability of such Person for the obligations of another through
any agreement to purchase, repurchase or otherwise acquire such obligation or
any property constituting security therefor, to provide funds for the payment
or discharge of such obligation or to maintain the solvency, financial
condition or any balance sheet item or level of income of another.  The amount of any Contingent Obligation will
be equal to the amount of the obligation so guaranteed or otherwise supported
or, if not a fixed and determined amount, the maximum amount so guaranteed.

 

“Contractual Obligations”
shall mean as to any Person, any provision of any security issued by such
Person or of any agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument or arrangement (whether in writing or otherwise) to
which such Person is a party or by which it or any of such Person’s property is
bound.

 

“Credit Agreement”
shall mean the Credit Agreement dated as of May 30, 2002, by and among RBCA,
certain of its Subsidiaries, the lenders signatory thereto and General Electric
Capital Corporation and GECC Capital Markets Group, Inc. (including without
limitation the term loans and revolving loans thereunder, any guarantees and
security documents), as amended, extended, renewed, restated, supplemented or
otherwise modified (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) from time to time.

 

3

 

“December Defaults”
shall mean, collectively, the defaults under Section 4.04 of the RBCA Indenture
caused by the following cash payments: (i) the $518,700 payment by RBCA to
Schaublin on December 10, 2002; (ii) the $450,000 payment by RBCA to Schaublin
on December 13, 2002; and (iii) the $2,506,530 payment by RBCA to Holdings on
December 13, 2002.

 

“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder.

 

“Existing Warrants”
shall have the meaning assigned to that term in Section 3.07(a).

 

“Financial Statements”  shall mean the
Audited Financial Statements and the Unaudited Financial Statements.

 

“First Purchase Agreement”
shall mean that certain Stock Purchase Agreement dated as of November 20, 2000,
among the Company, Michael J. Hartnett, Hartnett Family Investments, L.P. and
Whitney Acquisition II, Inc.

 

“GAAP” shall mean
generally accepted accounting principles in effect from time to time within the
United States, consistently applied.

 

“Governmental Authority”
shall mean the government of any nation, state, city, locality or other
political subdivision of any thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, regulation or compliance, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.

 

“Hartnett” shall have
the meaning assigned to that term in the first paragraph of this Agreement.

 

“Indebtedness” shall
mean as to any Person (i) all obligations of such Person for borrowed
money (including, without limitation, reimbursement and all other obligations
with respect to surety bonds, unfunded credit commitments, letters of credit
and bankers’ acceptances, whether or not matured), (ii) all indebtedness,
obligations or liability of such Person (whether or not evidenced by notes,
bonds, debentures or similar instruments) whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or
joint or several, that should be classified as liabilities in accordance with
GAAP, including, without limitation, any items so classified on a balance sheet
and any reimbursement obligations in respect of letters of credit or
obligations in respect of bankers acceptances, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable and accrued commercial or trade liabilities arising in
the ordinary course of business, (iv) all interest rate and currency
swaps, caps, collars and similar agreements or hedging devices under which
payments are obligated to be made by such Person, whether periodically or upon
the happening of a contingency, (v) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the

 

4

 

rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all obligations of such
Person under leases which have been or should be, in accordance with GAAP,
recorded as capital leases, (vii) all indebtedness secured by any Lien
(other than Liens in favor of lessors under leases other than leases included
in clause (vi) above) on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is non-recourse to the credit of that Person, and
(viii) any Contingent Obligation of such Person.

 

“Indemnification Shares”
shall have the meaning assigned to that term in Section 8.03.

 

“Junior Securities”  shall mean all
series and classes of capital stock of the Company or its successor other than
the Class A Preferred Stock.

 

“Lien” shall mean any
mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other), charge, claim, restriction or preference, priority, right
or other security interest or preferential arrangement of any kind or nature
whatsoever including, without limitation, (i) those created under applicable
community property laws or similar laws, (ii) those created by, arising under
or evidenced by any conditional sale or other title retention agreement, (iii)
the interest of a lessor under a capital lease obligation, or (iv) any
financing lease having substantially the same economic effect as any of the
foregoing.

 

“MWE” shall have the
meaning assigned to that term in Section 5.07 of this Agreement.

 

“Party” and “Parties” shall have
the meanings assigned to those terms in the first paragraph of this Agreement.

 

“Person” shall mean
any individual, firm, corporation, limited liability company, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, Governmental Authority or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.

 

“Prior Purchase Agreements”
shall mean, collectively, the First Purchase Agreement and the Second Purchase
Agreement.

 

“Purchasers” shall
have the meaning assigned to that term in the first paragraph of this
Agreement.

 

“Purchase Price shall
have the meaning assigned to that term in Section 2.01.

 

“RBCA”  shall have the
meaning assigned to that term in the first paragraph of this Agreement.

 

“RBCA Board” shall
mean the board of directors of RBCA.

 

5

 

“RBCA Indenture” shall
mean the Indenture dated as of June 15, 1997, among RBCA, certain Subsidiaries
of RBCA, and United States Trust Company of New York, as Trustee.

 

“Requirements of Law”
shall mean as to any Person, provisions of the Certificate of Incorporation and
By-laws or other organizational or governing documents of such Person, or any
law, treaty, code, rule, regulation, right, privilege, qualification, license
or franchise or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable or binding upon such Person or any of such
Person’s property or to which such Person or any of such Person’s property is
subject or pertaining to any or all of the transactions contemplated or
referred to herein.

 

“Restated Charter”
shall mean the Amended and Restated Certificate of Incorporation of the Company
which shall be in effect as of the Closing in the form attached hereto
(together with the By-Laws) as Exhibit A.

 

“Schaublin” means Schaublin Holdings S.A., a Subsidiary of RBCA.

 

“SEC Reports”  shall mean all forms,
reports, statements and other documents (including exhibits, annexes,
supplements and amendments to such documents) required to be filed by the
Company or any of its Subsidiaries, or sent or made available by any such
Person to its security holders, under the Exchange Act or the Securities Act
since January 1, 1998.

 

“Second Purchase Agreement”
shall mean that certain Preferred Stock Purchase Agreement dated as of July 25,
2002, among the Company, RBCA, Michael J. Hartnett and Whitney V.

 

“Securities Act” shall
mean the Securities Act of 1933, as amended, or any similar federal statute,
and the rules and regulations thereunder as the same shall be in effect at the
time.

 

“Senior Preferred Shares”
means, collectively, the Class A Shares and the Indemnification Shares.

 

“Stated Value” shall
mean, with respect to each Class A Share, an amount equal to $3,000.

 

“Stockholders Agreement”
shall mean the Amended and Restated Stockholders’ Agreement of the Company
entered into on July 25, 2002, by and among the Purchasers, the Company and
certain other stockholders of the Company.

 

“Subsidiary” shall
mean, with respect to any Person, a corporation or other entity of which 50% or
more of the voting power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person. 
Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.

 

6

 

“Transactions” means
the purchase and sale transaction contemplated under Section 2.01 hereof,
together with all other transactions contemplated hereunder or incidental
thereto.

 

“Trustee” means The
Bank of New York in its capacity as trustee under the RBCA Indenture, as
successor to United States Trust Company of New York.

 

“Unaudited Financial Statements”
shall have the meaning assigned to that term in Section 3.09(b).

 

“Whitney” shall mean
Whitney & Co, LLC.

 

“Whitney V” shall have
the meaning assigned to that term in the first paragraph of this Agreement.

 

“Whitney Fees” shall
have the meaning assigned to that term in Section 2.04..

 

1.02        Accounting
Terms: Financial Statements.  All accounting terms used herein and not
expressly defined in this Agreement shall have the respective meanings given to
them in conformance with GAAP.

 

1.03        Knowledge of
the Company.  All references to the knowledge of the Company or to facts known
by the Company shall mean actual knowledge or notice of Hartnett, Anthony S.
Cavalieri, Robert Crawford or Jane Bohrer.

 

ARTICLE
2

 

PURCHASE AND SALE OF THE CLASS A SHARES

 

2.01        Purchase and
Sale of the Class A Shares.  Subject to the terms and conditions set
forth herein, at the Closing the Company shall issue and sell to the Purchasers
(in the amounts set forth on the attached Schedule I), and the
Purchasers shall purchase from the Company, 1,008.41 shares of Class A
Preferred Stock (the “Class A Shares”) for an aggregate cash purchase price of
$3,025,230 (the “Purchase Price”).

 

2.02        Closing. 
The closing of the purchase and sale of the Class A Shares hereunder
(the “Closing”)
shall take place at the offices of Kirkland & Ellis at 153 East 53rd
Street, New York, New York 10022, at 10:00 A.M. local time on February 4, 2003,
or at such other place and hour as the parties may mutually agree.  The date upon which the Closing occurs is
referred to herein as the “Closing Date”.

 

2.03        Payment
for and Delivery of Class A Shares.  At the Closing, the Company shall issue and
deliver to each Purchaser stock certificates duly executed and registered in
the name of such Purchaser evidencing ownership of the number of Class A Shares
set forth opposite such Purchaser’s name on the attached Schedule I,
against payment by such Purchaser of the portion of the Purchase Price set
forth opposite such Purchaser’s name on the attached

 

7

 

Schedule I
by wire transfer of immediately available funds to the account designated by
the Company.

 

2.04        Whitney Fees and Expenses.  As consideration for purchasing the Class A
Shares hereunder, at the Closing the Company or RBCA shall (i) pay a closing
fee to Whitney in an amount equal to $151,261.50 and (ii) reimburse Whitney for
all fees and expenses (including, but without limitation, reasonable fees,
charges and disbursements of counsel and consultants) incurred in connection
with (A) the preparation, negotiation, execution, delivery and performance of
this Agreement and any other documents relating to the Transactions, (B) Whitney’s
due diligence investigation of the Company in connection with the Transactions,
and (C) the investigation of the events and circumstances leading up to the
investment hereunder.  The Company or
RBCA will pay the closing fee and expenses contemplated by this Section 2.04
(collectively, the “Whitney Fees”)
on the Closing Date by wire transfer of immediately available funds to an
account or accounts designated by Whitney. 
In addition, in the event the Transactions are not consummated, the
Company or RBCA will promptly reimburse Whitney for all fees and expenses
described in clause (ii) above.

 

ARTICLE
3

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Each of the
Company and RBCA hereby jointly and severally represents and warrants to the
Purchasers as follows:

 

3.01        Existence
and Power.  Each of the Company and its Subsidiaries (i)
is a corporation, limited liability company, partnership or similar entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation and (ii) has the power and
authority to execute, deliver and perform its obligations hereunder and in
connection with the Transactions.  Each
of the Company and its Subsidiaries (a) has all requisite power and authority
to own and operate its property, to lease the property it operates as lessee
and to conduct the business in which it is currently, or is currently proposed
to be, engaged, and (b) is duly qualified as a foreign corporation or
business  entity,
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except in the case of this clause (b) where the
failure to be so qualified would not reasonably be expected to have a material
and adverse effect on the Condition of the Company.

 

3.02        Authorization;
No Contravention. 
The execution, delivery and performance by the Company and RBCA of this
Agreement and the Amended Stockholders Agreement, and the consummation of the
Transactions: (i) has been duly authorized by all necessary corporate
action on the part of the Company and RBCA; (ii) do not and shall not
contravene the terms of the Restated Charter, the Bylaws or similar governing
documents of RBCA, or any Requirement of Law applicable to the Company or
RBCA’s assets, business or properties; (iii) do not and will not (a) conflict
with, contravene, result in any violation or breach of or default under (with
or without the giving of notice or the lapse of time or both), (b) create in
any other Person a right or

 

8

 

claim of termination or
amendment, or (c) require modification, acceleration or cancellation of
any Contractual Obligation of the Company or any of its Subsidiaries
(including, without limitation, the RBCA Indenture, the Company Indenture and
the Credit Agreement), and (iv) do not and shall not result in the creation of
any Lien (or obligation to create a Lien) against any property, asset or
business of the Company or any of its Subsidiaries (other than in connection
with the Credit Agreement), except in the case of clause (iii) above as it
pertains to Contractual Obligations other than the Company Indenture, the RBCA
Indenture or the Credit Agreement, where such conflict, violation, breach or
default or right, claim or requirement would not reasonably be expected to have
a material adverse effect on the Condition of the Company.

 

3.03        Governmental
Authorization; Third Party Consents.  Except as set forth on Schedule 3.03,
no approval, consent or, compliance, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority or any other
Person in respect of any Requirement of Law or Contractual Obligation, and no
lapse of a waiting period under a Requirement of Law or Contractual Obligation,
is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Company or its Subsidiaries of this
Agreement, the Amended Stockholders Agreement or the consummation of the
Transactions (including, without limitation, the payment of the Whitney Fees
and the creation and performance of the obligations under Article 8
hereof).

 

3.04        Binding Effect.  Each of this Agreement and the Amended Stockholders
Agreement has been duly executed and delivered by the Company and RBCA and this
Agreement constitutes the legal, valid and binding obligation of the Company
and RBCA enforceable against the Company and RBCA in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors’ rights generally and
by general principles of equity relating to enforceability.

 

3.05        Compliance with Laws; Private Sale; Voting
Agreements.

 

(a)           Since
July 25, 2002, neither the Company nor any of its Subsidiaries have failed to
comply with any Requirement of Law in any material respect (other than any
instance of noncompliance reflected in Schedule 3.06 to the Second Purchase
Agreement).

 

(b)           The
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale and issuance of any of its capital stock.  Assuming the accuracy of the Purchaser’s
representations and warranties contained herein, neither the offer, sale and
issuance of the Class A Shares hereunder nor the issuance and delivery of any
Indemnification Shares hereunder requires or will require registration under
the Securities Act or any state securities laws.

 

(c)           To
the Company’s knowledge, other than the Stockholders Agreement there are no
agreements obligating any of its stockholders to vote as directed by another
Person or any proxies granted by any stockholder.

 

9

 

3.06        No Default or Breach.  Except for the December Defaults and as set
forth on Schedule 3.06, the Company and its Subsidiaries are in compliance
with all obligations arising under the Credit Agreement, the Indenture, the
Company Indenture and each other material Contractual Obligation of the Company
or its Subsidiaries, except in the case of such other material Contractual
Obligation of the Company or its Subsidiaries as would not reasonably be
expected to have a material adverse effect on the Condition of the Company.  Neither the creation nor performance of any
of the obligations of the Company or RBCA under this Agreement or the Amended
Stockholders Agreement or the consummation of the Transactions constitute, nor
with the giving of notice or lapse of time or both would constitute, a default
under or with respect to the Credit Agreement, the RBCA Indenture, the Company
Indenture or any other material Contractual Obligation of the Company or any
Subsidiary, except in the case of such other material Contractual Obligation of
the Company or its Subsidiaries as would not reasonably be expected to have a
material adverse effect on the Condition of the Company.

 

3.07        Capitalization; Class A Shares and
Conversion Shares.

 

(a)           As
of the date hereof prior to the issuance of the Senior Preferred Shares: (i)
the authorized capital stock of the Company consists of 10,000,000 shares
of Class A Common, 10,000,000 shares of Class B Common, 15,500  shares of Preferred Stock, 240,000 shares
of Class B Preferred Stock, 900,000 shares of Class C Preferred Stock, and
240,000 shares of Class D Preferred Stock; (ii) the issued and outstanding
capital stock of the Company consists of 2,475,460.8 shares of
Class A Common, 100 shares of Class B Common and 240,000 shares
of Class B Preferred Stock; (iii) no shares of Preferred Stock, Class C
Preferred Stock or Class D Preferred Stock are issued or outstanding;
(iv) sufficient  shares of
Class A Common are reserved for issuance upon conversion of the
Class B Common; (v) sufficient number of Class A Common Stock, Class
C Preferred Stock and Class D Preferred Stock are reserved for issuance upon
conversion or exchange of the Class B Preferred Stock; (vi) 476,847 shares
of Class A Common and 549,146 shares of Class B Common are reserved for
issuance upon the exercise of outstanding warrants (the “Existing Warrants”); and (vii) sufficient shares of
Class A Common are reserved for issuance pursuant to the exercise of stock
options issued or issuable in accordance with the terms of one or more stock
option plans of the Company, which plans shall have been approved by the Board
of Directors (“Management Options”).  The Management Options, the Existing
Warrants and all outstanding shares of capital stock of the Company have been
duly authorized by all necessary corporate action.  All outstanding shares of capital stock of the Company are, and
shares of Common Stock, Class C Preferred Stock and Class D Preferred Stock
issuable upon exercise of the outstanding Class B Preferred Stock, Management
Options or the Existing Warrants or upon the conversion of the Class B Common
Stock, when issued and paid for in accordance with the provisions of those
instruments, shall be, validly issued, fully paid and nonassessable and shall
be free and clear of all Liens (other than Liens arising under the Stockholders
Agreement or pursuant to applicable securities laws) other than Liens on the
assets of, or arising from actions of, the holders of such securities.  Other than the outstanding Class B Preferred
Stock, the Management Options and the Existing Warrants, as of the date hereof
there are no outstanding securities convertible into or exchangeable for
capital stock of the Company or options, warrants or other rights to purchase
or subscribe to capital stock of the Company or contracts, commitments,
agreements, understandings or arrangements of any kind to which the

 

10

 

Company is a party relating to
the issuance of any capital stock of the Company, any such convertible or exchangeable
securities or any such options, warrants or rights.

 

(b)           The
Class A Shares have been duly authorized and, when issued, paid for and
delivered in accordance with this Agreement, will be validly issued, fully paid
and nonassessable, and will be free of any Liens (other than any restrictions
on transfer under state and/or federal securities laws or the Stockholders
Agreement) other than Liens on the assets of, or arising from actions of, the
Purchasers.  If issued in accordance
with the provisions hereof, the Indemnification Shares will be duly authorized,
validly issued, fully paid and nonassessable, and will be free of any Liens
(other than any restrictions on transfer under state and/or federal securities
laws or the Stockholders Agreement) other than Liens on the assets of, or
arising from actions of, the Purchasers. 
The Indemnification Shares have been duly reserved for issuance pursuant
to Article 8 hereof.  The issuance
and delivery of the Class A Shares and the Indemnification Shares are not subject
to any preemptive right of any stockholder of the Company or to any right of
first refusal or other similar right in favor of any Person which has not been
waived.

 

3.08        Subsidiaries.

 

(a)           Schedule
3.08 sets forth a complete and accurate list of all of the Subsidiaries of
the Company together with their respective jurisdictions of incorporation or
organization.  All of the outstanding
shares of capital stock of, or other equity interests in, the Subsidiaries are
validly issued, fully paid and nonassessable. 
Except as set forth on Schedule 3.08, as of the Closing Date, all
of the outstanding shares of capital stock of, or other ownership interests in,
each of the Subsidiaries are owned by the Company or by a wholly owned
Subsidiary free and clear of any Liens other than those related to the Company
Indenture and the Credit Agreement.  No
Subsidiary has outstanding options, warrants, subscriptions, calls, rights,
convertible securities or other agreements or commitments obligating the
Subsidiary to issue, transfer or sell any securities of the Subsidiary.

 

(b)           Except
for the Subsidiaries of the Company, the Company does not own of record or
beneficially, directly or indirectly, (i) any shares of outstanding capital
stock or securities convertible into capital stock of any other corporation,
and (ii) any equity, voting or participating interest in any limited liability
company, partnership, joint venture or other non-corporate business
enterprises.

 

3.09        SEC Reports; Financial Condition.

 

(a)           The
Company and its Subsidiaries have filed all SEC Reports and have made available
to the Purchasers each SEC Report.  The
SEC Reports, including, without limitation, any financial statements or
schedules included or incorporated therein by reference, (i) comply in all
material respects with the requirements of the Exchange Act or the Securities
Act or both, as the case may be, applicable to those SEC Reports and (ii) did
not at the time they were filed contain any untrue statement of a material fact
or omit to state a material fact required

 

11

 

to be stated or necessary in
order to make the statements made in those SEC Reports, in light of the
circumstances under which they were made, not misleading.

 

(b)           The
Company has furnished the Purchasers with true and complete copies of (i) the
audited consolidated balance sheets of the Company and its Subsidiaries as of
their fiscal year end for each of 1999, 2000, 2001 and the related consolidated
statements of income, stockholders’ equity and cash flow, together with the
notes thereto, of the Company and its Subsidiaries for the years then ended,
together with the report of, with respect to fiscal years 1900 and 2000, Arthur
Andersen LLP, and with respect to fiscal year 2001, Ernst & Young, LLP
thereon (the “Audited Financial Statements”), and (ii)
the unaudited consolidated balance sheets of the Company and its Subsidiaries
as of September 30, 2002 and the related consolidated statements of income,
stockholders’ equity and cash flow, together with the notes thereto, of the
Company and its Subsidiaries for the fiscal quarter ended September 30, 2002
(the “Unaudited Financial Statements”).  The Audited Financial Statements and the
Unaudited Financial Statements accurately and fairly present, in all material
respects, the consolidated financial position of the Company and its
Subsidiaries as of the respective dates thereof, and the consolidated results
of operations and cash flows of the Company and its Subsidiaries as of the respective
dates or for the respective periods set forth therein, all in conformity with
GAAP consistently applied during the periods involved, except as otherwise set
forth in the notes thereto and subject, in the case of the Unaudited Financial
Statements, to normal year-end audit adjustments.  As of the dates of the Financial Statements, the Company had no
obligation, indebtedness or liability (whether accrued, absolute, contingent or
otherwise, known or unknown, and whether due or to become due), which was not
reflected or reserved against in the balance sheets or the notes thereto which
are part of the Financial Statements, except for those incurred in the ordinary
course of business and which are fully reflected on the Company’s books of
account and which, individually or in the aggregate, would not have a material
adverse effect on the Condition of the Company.

 

3.10        Disclosure.  This Agreement, together with all exhibits
and schedules hereto, and the agreements, certificates and other documents
furnished to the Purchasers or their Affiliates by the Company and its
Subsidiaries at the Closing, do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which they
were made, not misleading.

 

3.11        Absence
of Certain Changes or Events.  Since September 28, 2002, except as set
forth on Schedule 3.15 to the Second Purchase Agreement or Schedule
3.11 hereto, neither the Company nor any of its Subsidiaries has
(i) issued any stock, bonds or other corporate securities,
(ii) borrowed any amount or incurred any liabilities (absolute or
contingent), other than in the ordinary course of business, in excess of
$100,000, (iii) discharged or satisfied any Lien or incurred or paid any
obligation or liability (absolute or contingent), other than in the ordinary
course of business, in excess of $100,000, (iv) declared or made any
payment or distribution to stockholders or purchased or redeemed any shares of
its capital stock or other securities, (v) mortgaged, pledged or subjected
to Lien any of its assets, tangible or intangible, (vi) sold, assigned or
transferred any of its tangible assets, other than sales of inventory or obsolete
equipment in the ordinary course of business, or canceled any debts or claims,
(vii) sold,

 

12

 

assigned, licensed (other than
grant of non-exclusive licenses in the ordinary course of business) or
transferred any patents, trademarks, trade names, copyrights, trade secrets or
other intangible assets, (viii) suffered any losses of property, or waived
any rights of substantial value, (ix) suffered any adverse change in the
Condition of the Company, (x) granted any bonuses or extraordinary salary
increases other than in the ordinary course of business, (xi) entered into
any transaction involving consideration in excess of $250,000 other than in the
ordinary course of business or as contemplated hereby or (xii) entered into
any agreement or transaction, or amended or terminated any agreement, with an
Affiliate (other than this Agreement).

 

3.12        Broker’s,
Finder’s or Similar Fees.  Except as provided in Section 2.04 or fees
payable to lenders under the Credit Agreement, there are no brokerage
commissions, finder’s fees or similar fees or commissions payable in connection
with the Transactions based on any agreement, arrangement or understanding with
the Company or any of its Subsidiaries or on any action taken by any such Person.

 

3.13        Potential
Conflicts of Interest.  Except as set forth in Schedule 3.21
to the Second Purchase Agreement and except for the arrangements provided in
this Agreement, no officer, director, stockholder or other security holder of
the Company or any of its Subsidiaries (other than any Purchaser or its
Affiliates):  (i) owns, directly or
indirectly, any interest in (excepting less than 5% stock holdings for
investment purposes in securities of publicly held and traded companies), or is
an officer, director, employee or consultant of, any Person that is, or is
engaged in business as, a competitor, lessor, lessee, supplier, distributor,
sales agent or customer of, or lender to or borrower from, the Company or any
of its Subsidiaries; (ii) owns, directly or indirectly, in whole or in part,
any tangible or intangible property that the Company or any of its Subsidiaries
uses in the conduct of business; or (iii) has any cause of action or other
claim whatsoever against, or owes or has advanced any amount to, the Company or
any of its Subsidiaries, except for claims in the ordinary course of business
such as for accrued vacation pay, accrued benefits under employee benefit
plans, and similar matters and agreements existing on the date hereof.

 

3.14        Cure of December Defaults.  Upon the Closing of the sale and issuance of
the Class A Shares, the contribution of the proceeds therefrom to RBCA as
contemplated by Section 7.02 and the redesignation of Schaublin Holdings S.A.,
Schaublin SA, J. Bovagnet SA and Myonic SAS Les Ulis (F) as “restricted
subsidiaries” under the RBCA Indenture and the Company Indenture, the December
Defaults will have been cured, will cease to be continuing and will no longer
serve as the basis for an “Event of Default” under the RBCA Indenture.

 

3.15        Restated Charter. 
The Restated Charter has not been amended, restated, altered or modified
since July 25, 2002.

 

3.16        Inducement.  The Company and RBCA acknowledge that the
Purchasers have been induced to enter into this Agreement and the Transactions
by, among other things, the representations and warranties contained in this
Article 3.

 

13

 

ARTICLE
4

 

REPRESENTATIONS AND

WARRANTIES OF THE PURCHASERS

 

4.01        Representations
and Warranties of Whitney V.  Whitney V hereby represents and warrants to
the Company and RBCA as follows:

 

(a)           Authorization;
No Contravention.  The execution,
delivery and performance by it of this Agreement and the Amended Stockholders
Agreement (i) is within its power and authority and has been duly authorized by
all necessary action, (ii) does not contravene the terms of its organizational
documents or any amendment thereof, and (iii) shall not violate, conflict with
or result in any breach or contravention of any Requirement of Law or any of
its Contractual Obligations, or any order or decree directly relating to it.

 

(b)           Binding
Effect.  This Agreement and the
Amended Stockholders Agreement has been duly executed and delivered by it and
each of such agreements constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.

 

(c)           Securities
Laws Matters.  The Senior Preferred
Shares to be acquired by Whitney V pursuant to this Agreement are being or
shall be acquired for its own account and with no intention of distributing or
reselling such securities or any part thereof in any transaction that would be
in violation of the securities laws of the United States of America, or any
state, without prejudice, however, to its right at all times to sell or
otherwise dispose of all or any part of its Senior Preferred Shares under an
effective registration statement under the Securities Act, or under an
exemption from such registration available under the Securities Act, and
subject, nevertheless, to the disposition of its property being at all times
within its control.  If Whitney V should
in the future decide to dispose of any of its Senior Preferred Shares, Whitney
V understands and agrees that it may do so only in compliance with the
Securities Act, applicable state securities laws and the Stockholders
Agreement, each as then in effect. 
Whitney V agrees to the imprinting of a legend on the certificates
representing all of its Senior Preferred Shares in the form and substance set
forth in Section 2.1 of the Stockholders Agreement.

 

(d)           Governmental
Authorization; Third Party Consent. 
No approval, consent, compliance, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any
other Person in respect of any Requirement of Law, and no lapse of a waiting
period under a Requirement of Law, is necessary or required in connection with
the execution, delivery or performance by it or enforcement against it of this
Agreement or the transactions contemplated hereby.

 

(e)           Broker’s,
Finder’s or Similar Fees.  Except as
provided in Section 2.04, there are no brokerage commissions, finder’s fees or
similar fees or commissions payable in

 

14

 

connection with the
transactions contemplated hereby based on any agreement, arrangement or
understanding with Whitney V or any of its Affiliates or on any action taken by
any such Person.

 

4.02        Representations
and Warranties of Hartnett.  Hartnett hereby represents and warrants to
the Company as follows:

 

(a)           Authorization;
No Contravention.  Hartnett is
competent and has all requisite authority to execute, deliver and perform his
obligations under this Agreement and the Amended Stockholders Agreement.  The execution, delivery and performance by
Hartnett of this Agreement and the Amended Stockholders Agreement shall not
violate, conflict with or result in any breach or contravention of any
Requirement of Law or any of his, the Company’s or its Subsidiaries’
Contractual Obligations, or any order or decree directly relating to him or
such other Persons.

 

(b)           Binding
Effect.  Each of this Agreement and
the Amended Stockholders Agreement constitutes a legal, valid and binding
obligation of Hartnett, enforceable against him in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
or similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability.

 

(c)           Securities
Laws Matters.  The Senior Preferred
Shares to be acquired by Hartnett pursuant to this Agreement are being or shall
be acquired for his own account and with no intention of distributing or
reselling such securities or any part thereof in any transaction that would be
in violation of the securities laws of the United States of America, or any
state, without prejudice, however, to his right at all times to sell or
otherwise dispose of all or any part of his Senior Preferred Shares under an
effective registration statement under the Securities Act, or under an
exemption from such registration available under the Securities Act, and
subject, nevertheless, to the disposition of its property being at all times
within its control.  If Hartnett should
in the future decide to dispose of any of his Senior Preferred Shares, Hartnett
understands and agrees that he may do so only in compliance with the Securities
Act, applicable state securities laws and the Stockholders Agreement, each as
then in effect.  Hartnett agrees to the
imprinting of a legend on the certificates representing his Senior Preferred
Shares in the form and substance set forth in Section 2.1 of the Stockholders
Agreement.

 

(d)           Broker’s,
Finder’s or Similar Fees.  There are
no brokerage commissions, finder’s fees or similar fees or commissions payable
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with Hartnett or any action taken by Hartnett.

 

(e)           Governmental
Authorization; Third Party Consent. 
No approval, consent, compliance, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority or any
other Person in respect of any Requirement of Law, and no lapse of a waiting
period under a Requirement of Law, is necessary or required in connection with
the execution, delivery or performance by Hartnett or enforcement against
Hartnett of this Agreement or the transactions contemplated hereby.

 

15

 

ARTICLE
5

 

CONDITIONS TO THE OBLIGATIONS OF THE

PURCHASERS TO PURCHASE THE CLASS A SHARES

 

The obligation
of the Purchasers to purchase the Class A Shares from the Company at the
Closing shall be subject to the satisfaction of, or waiver by the Purchasers
of, the following conditions precedent on or before the Closing Date; provided, however,
that the waiver by the Purchasers of any condition set forth in this Article 5
shall not be deemed a waiver of any breach of any representation, warranty,
agreement, term or covenant or of any misrepresentation by the Company, except
to the extent expressly so waived.

 

5.01        Representations
and Warranties. 
The representations and warranties of the Company and RBCA
contained herein shall be true and correct in all material respects (other than
any such representations and warranties that are qualified by materiality or
material adverse effect, which shall be true and correct in all respects) at
and as of the Closing Date (except for representations and warranties made as
to a specific date, which representations and warranties shall be true and correct
at and as of such date).

 

5.02        Consents
and Approvals.  All consents, exemptions, authorizations, or
other actions by, or notices to, or filings with, Governmental Authorities and
other Persons in respect of all Requirements of Law and with respect to those
material Contractual Obligations of the Company and its Subsidiaries necessary,
desirable, or required in connection with the execution, delivery or
performance by the Company and RBCA, or enforcement against the Company and
RBCA, of this Agreement shall have been obtained and be in full force and
effect, and the Purchasers shall have been furnished with appropriate evidence
thereof.

 

5.03        No
Material Judgment or Order.  There shall not be any judgment or order of
a court of competent jurisdiction or any ruling of any Governmental Authority
or any condition imposed under any Requirement of Law which, in the reasonable
judgment of the Purchasers, would prohibit the purchase of the Class A Shares
hereunder or subject the Purchasers to any material penalty or other
commercially unreasonable condition under or pursuant to any Requirement of Law
if the Class A Shares were to be purchased hereunder.

 

5.04        No Litigation. 
No action, suit, investigation or proceeding before any court or any
Governmental Authority shall have been commenced against the Purchasers, the
Company or any of its Subsidiaries (i) seeking to restrain, prevent or
change the transactions contemplated hereby or questioning the validity or
legality of any of such transactions, or (ii) which would, if resolved
adversely to any such Person, severally or in the aggregate, have a material
adverse effect on the Condition of the Company.

 

5.05        Purchase
of Securities Permitted by Applicable Laws.  The acquisition of and payment for the Class
A Shares hereunder and the consummation of each of the other Transactions (i)
shall not be prohibited by any Requirement of Law, (ii) shall not subject the
Purchasers to any material penalty or other commercially unreasonable condition
under or

 

16

 

pursuant to any Requirement of
Law, and (iii) shall be permitted by all Requirements of Law to which the
Purchasers or the Transactions are subject.

 

5.06        Restated Charter.  The Company shall have delivered to the
Purchasers a copy of the Restated Charter certified by the Secretary of State
of Delaware as of a recent date.

 

5.07        Opinions of Counsel.  The Purchasers shall have received the
opinions of McDermott, Will & Emery, the Company and RBCA’s legal counsel
(“MWE”), dated as of the Closing Date, in form and substance attached
hereto as Exhibit D and Exhibit E.

 

5.08        Good
Standing Certificates.  The Company shall have delivered to the
Purchasers as of the Closing Date, good standing certificates for the Company
and RBCA for each of their respective jurisdictions of incorporation, in each
case dated within five (5) days of the Closing Date.

 

5.09        Officer’s
Certificate.  The Purchasers shall have received a certificate of the Company’s
chief executive officer and chief financial officer dated as of the Closing
Date certifying:

 

(i)            that the closing conditions set
forth in Sections 5.01 through 5.06 have been satisfied;

 

(ii)           that the resolutions of the Board of
Directors attached thereto (which resolutions shall have, among other things,
(A) authorized all of the Transactions to which the Company is a party, (B)
approved this Agreement and the Amended Stockholders Agreement, (C) authorized
the Company to make the Capital Contribution; and (D) set forth the Board of
Directors’ determination that the terms of the Transactions are no less
favorable to the Company or its Subsidiaries than those that could be obtained
as of the Closing Date in arms’-length dealings with a Person who is not an
Affiliate of the Company or its Subsidiaries) were duly adopted and have not
been rescinded or amended;

 

(iii)          that the resolutions of the
“disinterested” members of the Board of Directors attached thereto (which
resolutions shall have, among other things, (A) authorized all of the
Transactions to which the Company is a party, (B) approved this Agreement, and
(C) determined that the terms of the Transactions are no less favorable to the
Company or its Subsidiaries than those that could be obtained as of the Closing
Date in arms’-length dealings with a Person who is not an Affiliate of the
Company or its Subsidiaries) were duly adopted and have not been rescinded or
amended;

 

(iv)          that other than the December Defaults,
there are no “defaults” or “events of default” in existence and continuing
under the RBCA Indenture, the Company Indenture or the Credit Agreement; and

 

17

 

(v)           as to the incumbency and specimen
signature of each officer of the Company executing this Agreement on behalf of
the Company.

 

5.10        RBCA Officer’s
Certificate.  The Purchasers shall have received a certificate of RBCA’s chief
executive officer and chief financial officer dated as of the Closing Date
certifying:

 

(i)            that the closing conditions set
forth in Sections 5.01 through 5.06 have been satisfied;

 

(ii)           that the resolutions of the RBCA
Board attached thereto (which resolutions shall have, among other things, (A)
authorized all of the Transactions to which RBCA is a party, (B) approved this
Agreement, (C) authorized RBCA to accept the Capital Contribution; and (D)
determined that the terms of the Transactions are no less favorable to the
Company or its Subsidiaries than those that could be obtained as of the Closing
Date in arms’-length dealings with a Person who is not an Affiliate of the
Company or its Subsidiaries) were duly adopted and have not been rescinded or
amended;

 

(iii)          that the resolutions of the
“disinterested” members of the RBCA Board attached thereto (which resolutions
shall have, among other things, (A) authorized all of the Transactions to which
RBCA is a party, (B) approved this Agreement, and (C) determined that the terms
of the Transactions are no less favorable to the Company or its Subsidiaries
than those that could be obtained as of the Closing Date in arms’-length
dealings with a Person who is not an Affiliate of the Company or its
Subsidiaries) were duly adopted and have not been rescinded or amended;

 

(iv)          that other than the December Defaults,
there are no “defaults” or “events of default” in existence and continuing
under the RBCA Indenture, the Company Indenture or the Credit Agreement; and

 

(v)           as to the incumbency and specimen
signature of each officer of RBCA executing this Agreement on behalf of the
RBCA.

 

5.11        Amended Stockholders Agreement.  With respect to each Purchaser, the Amended
Stockholders Agreement shall have been duly executed and delivered by all of
the parties thereto (other than such Purchaser).

 

5.12        Contemporaneous Participation.  With respect to each Purchaser, the other
Purchaser shall have contemporaneously funded its portion of the Purchase Price
as contemplated in Section 2.03.

 

5.13        Payment of Whitney Fees.  With respect to Whitney V, the Company or
RBCA shall have paid the Whitney Fees to Whitney and its counsel, as applicable,
in accordance with Whitney’s written instructions.

 

18

 

ARTICLE
6

 

CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

TO SELL AND ISSUE THE CLASS A SHARES

 

The
obligations of the Company to sell and issue the Class A Shares to the
Purchasers shall be subject to the satisfaction of, or waived by, the Company
of the following conditions precedent on or before the Closing Date.

 

6.01        Purchase Price.  The Purchasers shall have delivered the
Purchase Price to the Company as contemplated under Section 2.03.

 

6.02        Representations and Warranties.  The representations and warranties of the
Purchasers contained herein shall be true and correct in all material respects
(other than any such representations and warranties that are qualified by
materiality or material adverse effect, which shall be true and correct in all
respects) at and as of the Closing Date (except for representations and
warranties made as to a specific date, which representations and warranties
shall be true and correct at and as of such date).

 

6.03        No Material
Judgment or Order.  There shall not be on the Closing Date any
judgment or order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which, in the reasonable judgment of the Company, would prohibit the purchase
of the Class A Shares hereunder or subject the Company to any penalty or other
commercially unreasonable condition under or pursuant to any Requirement of Law.

 

6.04        No Litigation.  No action, suit, investigation or proceeding
before any court or any Governmental Authority shall have been commenced
against the Purchasers, the Company, or any of its Subsidiaries seeking to
restrain, prevent or change the transactions contemplated hereby or questioning
the validity or legality of any of such transactions.

 

6.05        Sale of Securities Permitted by
Applicable Laws. 
The sale and issuance of the Class A Shares hereunder and the
consummation of each of the other Transactions shall not be prohibited by any
Requirement of Law.

 

6.06        Amended
Stockholders Agreement.  The Amended Stockholders Agreement shall have been duly executed
and delivered by all of the parties thereto (other than the Company).

 

ARTICLE
7

 

COVENANTS

 

7.01        Public
Announcements.  The Parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the Transactions and, except as may be required by applicable
law or the rules of, or any listing

 

19

 

agreement with, any national
securities exchange, shall not issue any such press release or make any such
public statement prior to such consultation.

 

7.02        Use of Proceeds.  Immediately upon receipt of the cash
proceeds from the sale of the Class A Shares hereunder, the Company shall
contribute such proceeds to the capital of RBCA (the “Capital Contribution”).

 

7.03        Schaublin Refinancing; Redesignation.  The Company and RBCA hereby covenant and
agree that promptly following the Closing, the Company and RBCA will cause all
indebtedness of Schaublin to be refinanced pursuant to an amendment of the
Credit Agreement to be entered into by the Company and certain of its
Subsidiaries immediately following the Closing.  Promptly following consummation of the refinancing of the
Schaublin indebtedness and the release of the related Liens on the capital
stock and assets of Schaublin and its Subsidiaries, the Company and RBCA will
redesignate each of Schaublin Holdings S.A., Schaublin SA, J. Bovagnet SA and
Myonic SAS Les Ulis (F) as a “restricted subsidiary” under the Company
Indenture and the RBCA Indenture.  The
Company and RBCA acknowledge that the Purchasers have been induced to enter
into this Agreement and the Transactions by, among other things, the covenants
and agreements contained in this Section 7.03.

 

7.04        Trustee Matters.  The Company and RBCA hereby covenant and
agree that not later than the next Business Day after the Closing Date, RBCA
will, and the Company shall cause RBCA to, deliver to the Trustee a notice in
the exact form and substance attached hereto as Exhibit B, together with
the opinion of MWE in the exact form and substance attached hereto as Exhibit
C.  The Company and RBCA acknowledge
that the Purchasers have been induced to enter into this Agreement and the
Transactions by, among other things, the covenants and agreements contained in
this Section 7.04.

 

7.05        Covenant to Consult with Whitney.  The Company and RBCA hereby covenant and
agree, and they agree to cause their respective executive officers, to consult
with representatives of Whitney regarding significant events or circumstances
affecting the Company or its Subsidiaries’ compliance with obligations arising
under the RBCA Indenture, the Company Indenture, the Credit Agreement, the
Exchange Act and the rules and regulations of the Commission (i) when possible,
prior to the occurrence of such events or circumstances, and (ii) when prior
consultation is not possible, promptly following the occurrence of such events
or circumstances.  For the avoidance of
doubt, any event or circumstance that would or could reasonably be expected to
result in a default or event of default under any of the foregoing shall be
deemed to be a “significant event or circumstance” under this Section
7.04.  The Company and RBCA acknowledge
that Whitney V has been induced to enter into this Agreement and the
Transactions by, among other things, the covenants and agreements contained in
this Section 7.05.  This Section
7.05 will survive so long as Whitney V or its Affiliates continue to hold 20%
of the aggregate capital stock of the Company they collectively hold as of the
Closing.

 

7.06        Restrictive Covenants.  So long as any Class A Shares are
outstanding, except as expressly contemplated in connection with the
Transactions, neither the Company nor any of its Subsidiaries will make any
payment outside the ordinary course of business (including, without

 

20

 

limitation, any (i) dividends
or repurchases of capital stock (other than in respect of the Senior Preferred
Stock), (ii) investments or (iii) capital expenditures (other than capital
expenditures contemplated in the Company’s budget as approved by the Board of
Directors with the affirmative participation of directors designated by Whitney
or its Affiliates) without the prior written consent of the holders of a
majority of the outstanding Senior Preferred Shares.

 

ARTICLE
8

 

INDEMNIFICATION

 

8.01        Indemnification.  In addition to all other sums due hereunder
or provided for in this Agreement, the Company agrees to indemnify and hold
harmless the Purchasers and their Affiliates and each of their respective
officers, directors, agents, employees, Subsidiaries, partners, members,
attorneys, accountants and controlling persons (each, an “Indemnified Party”) to the
fullest extent permitted by law from and against any and all losses, claims,
damages (other than consequential damages or lost profits), expenses (including,
without limitation, reasonable fees, disbursements and other charges of counsel
and costs of investigation incurred by an Indemnified Party in any action or
proceeding between the Company (or any of its Subsidiaries) and such
Indemnified Party (or Indemnified Parties) or between an Indemnified Party (or
Indemnified Parties) and any third party or otherwise) or other liabilities,
losses, or diminution in value (collectively, “Liabilities”) resulting from
or arising out of any breach of any representation or warranty, covenant or
agreement of the Company or any of its Subsidiaries in this Agreement,
including without limitation, the failure to make payment when due of amounts
owing pursuant to this Agreement, on the due date thereof; provided, however, that the
Company shall not be liable under this Section 8.01 to an Indemnified Party:
(a) for any amount paid by the Indemnified Party in settlement of claims by the
Indemnified Party without the Company’s consent (which consent shall not be
unreasonably withheld), (b) to the extent that it is finally judicially
determined that such Liabilities resulted primarily from the willful misconduct
or gross negligence of such Indemnified Party or (c) to the extent that it is
finally judicially determined that such Liabilities resulted primarily from the
breach by such Indemnified Party of any representation, warranty, covenant or
other agreement of such Indemnified Party contained in this Agreement; provided,
further, that if and to the extent that such indemnification is
unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of such Liabilities which shall be permissible
under applicable laws.  In connection
with the obligation of the Company to indemnify for expenses as set forth
above, the Company further agrees, upon presentation of appropriate invoices
containing reasonable detail, to reimburse each Indemnified Party for all such
expenses (including, without limitation, fees, disbursements and other charges
of counsel and costs of investigation incurred by an Indemnified Party in any
action or proceeding between the Company (or any of its Subsidiaries) and such
Indemnified Party (or Indemnified Parties) or between an Indemnified Party (or
Indemnified Parties) and any third party or otherwise) as they are incurred by
such Indemnified Party; provided, however, that if an Indemnified
Party is reimbursed hereunder for any expenses, such reimbursement of expenses
shall be refunded to the extent it is finally judicially determined that the
Liabilities in question resulted primarily from (i) the willful misconduct or
gross negligence of such Indemnified Party or (ii) the breach by such
Indemnified Party of any

 

21

 

representation, warranty,
covenant or other agreement of such Indemnified Party contained in this
Agreement.

 

8.02        Procedure; Notification.  Each Indemnified Party under this Article 8
shall, promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought from the Company under this Article 8,
notify the Company in writing of the commencement thereof.  The omission of any Indemnified Party so to
notify the Company of any such action shall not relieve the Company from any
liability which it may have to such Indemnified Party unless, and only to the
extent that, such omission results in the forfeiture by any such Person of
substantive rights or defenses.  In case
any such action, claim or other proceeding shall be brought against any
Indemnified Party and it shall notify the Company of the commencement thereof,
the Company shall be entitled to assume the defense thereof at its own expense,
with counsel satisfactory to such Indemnified Party in its reasonable judgment;
provided,
however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense.  Notwithstanding the foregoing, in any action, claim or proceeding
in which the Company, on the one hand, and an Indemnified Party, on the other
hand, is, or is reasonably likely to become, a party, such Indemnified Party
shall have the right to employ separate counsel at the expense of the Company
and to control its own defense of such action, claim or proceeding if, in the
reasonable opinion of counsel to such Indemnified Party, a conflict or
potential conflict exists between the Company, on the one hand, and such
Indemnified Party, on the other hand, that would make such separate
representation advisable; provided, however, that in no event shall
the Company be required to pay fees and expenses under this Article 8 for more
than one firm of attorneys in any jurisdiction in any one legal action or group
of related legal actions.  The Company
agrees that it shall not, without the prior written consent of the Purchasers,
settle, compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding relating to the matters contemplated
hereby (if any Indemnified Party is a party thereto or has been actually
threatened to be made a party thereto) unless such settlement, compromise or
consent includes an unconditional release of the Purchasers and each other
Indemnified Party from all liability arising or that may arise out of such
claim, action or proceeding.  The
Company shall not be liable for any settlement of any claim, action or
proceeding effected against an Indemnified Party without its written consent,
which consent shall not be unreasonably withheld.

 

8.03        Manner of Payment.  Any indemnification of the Indemnified
Parties pursuant to Section 8.01 shall be paid by the Company by wire transfer
of immediately available funds to an account designated by the applicable
Purchaser.  Notwithstanding the
foregoing to the contrary, if the Company delivers to the Purchasers an opinion
of outside counsel of the Company (a “Blockage Opinion”), relying upon any facts
provided by the Company and cited in such opinion, in form and substance reasonably
satisfactory to the Purchasers, to the effect that a Contractual Obligation
governing the Company or its Subsidiaries’ Indebtedness would prohibit the
Company from paying all or any portion of an indemnification payment as
described above, the Company shall promptly pay the prohibited portion of such
payment (the “Blockage Amount”) by issuing to each Purchaser (or its
designee) that number of shares of Preferred Stock determined by dividing (i)
the Blockage Amount by (ii) $3,000. 
Each Blockage Opinion shall

 

22

 

describe in reasonable detail
the basis for any prohibition on the relevant indemnification payment, which
description shall, among other things, identify the relevant Contractual
Obligations.  The Company agrees that at
such time as the prohibitions described in any Blockage Opinion would no longer
prohibit the payment by the Company in cash of the applicable indemnification
payment, the Company shall repurchase from each Purchaser (or its Permitted
Transferees) the maximum number of Indemnification Shares permitted to be
repurchased by the Company under applicable law.  If the Company’s (or its Subsidiaries’) funds which are legally
available for repurchase of the Indemnification Shares are insufficient to
repurchase all of the Indemnification Shares outstanding, (i) the Company shall
use commercially reasonably efforts to arrange for financing sufficient to
repurchase all of the Indemnification Shares outstanding and (ii) in the event
that the Company is unable to arrange for such financing, at any time
thereafter when additional funds of the Company (or its Subsidiaries) are
legally available for the repurchase of the Indemnification Shares, such funds
will immediately be used to repurchase the balance of the Indemnification
Shares which the Company has become obligated to repurchase hereunder but which
it has not repurchased.  For purposes
hereof, the term “Indemnification Shares” shall mean all shares of Preferred
Stock issued pursuant to this Section 8.03.

 

8.04        Taxes.  In addition to the rights provided in
Section 8.01 above, if against the intention of the Parties hereto, the receipt
of the Call Price by a Purchaser is required to be treated by such Purchaser or
its partners as taxable income, then the Company and RBCA hereby agree to
indemnify and hold harmless such Purchaser and its partners against any
liability for federal, state or local income taxes and/or any loss or
diminution in such Purchaser or its partners’ tax attributes that may result
from such treatment.  Any
indemnification of the Purchasers or their partners pursuant to this Section
8.04 shall be paid by the Company or RBCA within five (5) Business Days of the
Company’s receipt of notice thereof from the applicable Purchaser.  Such payment shall be made by wire transfer
of immediately available funds to the account(s) designated by the applicable
Purchaser.

 

8.05        Exclusive Remedy.  Except as set forth in Section 9.01(e) and
except with respect to losses arising from the Company’s gross negligence or
willful misconduct, this Article 8 shall be the exclusive remedy of the
Purchasers with regard for losses, claims, damages, expenses or other
liabilities arising from the transactions contemplated by this Agreement.

 

ARTICLE
9

 

COVENANTS REGARDING SENIOR PREFERRED SHARES

 

9.01        Special
Call Option on Class A Shares.

 

(a)           Special
Call Option.  The Company shall be
entitled at anytime and from time to time to compel the Purchasers to sell to
the Company (the “Special Call Option”)
all of the Class A Shares at a per share purchase price equal to the Call
Price.  For the avoidance of doubt, the
Company may not exercise the Special Call Option unless it contemporaneously
purchases all of the Class A Shares held by each Purchaser.

 

23

 

(b)           Board
Designee.  If the Company fails to
exercise the Special Call Option and pay the entire Call Price owing with
respect thereto prior to 5:00 p.m. E.S.T. on Tuesday, February 11,
2003, then the size of the Board of Directors and the RBCA Board shall each
immediately be increased by one (1) and Whitney V shall immediately become
entitled to designate an individual to fill such newly created directorships; provided,
that such individual, if not an employee of Whitney, shall be reasonably
acceptable to Hartnett.  Such individual
will serve until his or her earlier death, resignation or removal by Whitney V
in accordance with Section 5.1 of the Amended Stockholders Agreement.  Thereafter, any resulting vacancy in such
directorships may only be filled by Whitney V as provided in the Amended
Stockholders Agreement.  The parties
hereto agree to take all actions necessary or desirable to give effect to the
provisions of this Section 9.01(b) without delay.

 

(c)           Method
of Exercise.  The Company may elect
to exercise the Special Call Option by delivering written notice (the “Special Call Notice”) to the Purchasers of such
election.

 

(d)           Obligation
to Sell/Purchase; Closing.  In the
event that the Company elects to exercise the Special Call Option, then the
Company shall be obligated to purchase from each Purchaser (and each Purchaser
shall be obligated to sell to the Company) all of his or its Class A Shares
subject to such election (as set forth in the applicable Special Call Notice)
at a per share purchase price equal to the Call Price, payable by wire transfer
of immediately available funds to the account or accounts designated by the
Purchasers.  The closing of the purchase
and sale of the Class A Shares pursuant to this Section 9.01 shall take place
at the principal office of the Company, or at such other place as the Parties
may agree.

 

(e)           Disgorgement
of Proceeds.  If at any time
following the Company’s exercise of the Special Call Option and payment in full
of the entire Call Price owing in respect thereof, any Purchaser or its
Permitted Transferee (as defined in the Stockholders Agreement) is required (or
otherwise agrees in the context of a legal dispute) to return or disgorge all
or any portion of the proceeds thereof to the Company or any of its or its
Subsidiary’s creditors, in addition to such Purchaser or Permitted Transferee’s
rights under Article 8 and any other rights or remedies available by law
or otherwise, the Company shall immediately reissue to such Purchaser or
Permitted Transferee the number of Class A Shares previously held by such
Purchaser or Permitted Transferee as is proportional to the percentage that the
proceeds returned or disgorged represent of the total proceeds received by such
Purchaser (or Permitted Transferee) on exercise of the Special Call Option).

 

9.02        Priority
of Preferred Stock.  So long as any Senior Preferred Share
remains outstanding, without the prior approval of the holders of a majority of
the Senior Preferred Shares then outstanding, the Company shall not declare or
pay any dividends (other than dividends declared in connection with any stock
splits, stock dividends, share combinations, share exchanges, or other
recapitalizations in which such dividends are made in the form of Common Stock)
or other distributions of any kind on, nor shall the Company redeem, purchase
or acquire any shares of Junior Securities (other than repurchases of shares of
Common Stock from present or former employees of the Company and its Subsidiaries
pursuant to written

 

24

 

agreements in effect as of the
Original Issue Date of the Senior Preferred Shares) unless and until the Call
Price is paid in full or set aside for payment or the Senior Preferred Shares
are otherwise purchased by the Company.

 

9.03        Reservation
of Shares; Other Assurances.  The Company agrees that it shall at all
times reserve and keep available out of its authorized but unissued shares of
Preferred Stock, solely for the purpose of issuance pursuant to Section 8.03 or
9.01(e) above or pursuant to the Prior Purchase Agreements, such number of
shares of Preferred Stock that may be required to be issued hereunder or
thereunder.  All shares of Preferred
Stock which are so issuable shall, when issued, be duly and validly issued,
fully paid and nonassessable and free from all taxes, Liens (other than those
arising under the Stockholders Agreement or pursuant to applicable securities
laws) and charges other than Liens and charges on the assets of, or arising
from actions of, the holders of such shares. 
The Company agrees to take all such actions as may be necessary to
assure that all such shares of Preferred Stock may be so issued without
violation of any applicable law or governmental regulation or any requirements
of any domestic securities exchange upon which shares of Preferred Stock may be
listed (except for official notice of issuance which shall be immediately
delivered by the Company upon each such issuance).  The Company shall assist and cooperate with the Purchasers to the
extent that it is required to make any governmental filings or obtain any
governmental approval prior to or in connection with any issuance of Senior
Preferred Shares hereunder (including, without limitation, making any filings
required to be made by the Company).

 

ARTICLE
10

 

MISCELLANEOUS

 

10.01      Survival of Representations and
Warranties and Covenants.  All of the representations and warranties
made by the Company and RBCA in Article 3 hereof and all of the covenants and
agreements set forth in Article 7 hereof shall survive the execution and
delivery of this Agreement and any investigation made by or on behalf of any
Purchaser.

 

10.02      Notices.  All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier (with receipt confirmed), courier service or personal delivery:

 

25

 

	
  if to
  Whitney V, to:

  
	
   

  	
   

  
	
  Whitney V,
  L.P.

  
	
  177 Broad
  Street

  
	
  Stamford,
  Connecticut  06901

  
	
  Telecopier
  No.:

  	
  (203)
  973-1422

  
	
  Attention:

  	
  Michael R.
  Stone

  
	
   

  	
  Ransom A.
  Langford

  
	
   

  	
  Kevin Curley

  
	
   

  	
   

  
	
  with a copy
  (which shall not constitute notice to Whitney V), to:

  
	
   

  	
   

  
	
  Kirkland &
  Ellis

  
	
  153 East 53rd
  Street

  
	
  New York,
  New York  10022

  
	
  Telecopier
  No.:

  	
  (212)
  446-4900

  
	
  Attention:

  	
  Frederick
  Tanne, Esq.

  
	
   

  	
   

  
	
  if to any of
  Hartnett, the Company or RBCA, to:

  
	
   

  	
   

  
	
  Roller
  Bearing Holding Company, Inc.

  
	
  60 Round
  Hill Road

  	
   

  
	
  Fairfield,
  Connecticut  06430

  
	
  Telecopier
  No.:

  	
  (203)
  256-0775

  
	
  Attention:

  	
  Dr. Michael
  J. Hartnett, C.E.O.

  
	
   

  	
   

  
	
  with a copy
  (which shall not constitute notice to such Party), to:

  
	
   

  	
   

  
	
  McDermott,
  Will & Emery

  
	
  50
  Rockefeller Plaza

  
	
  New York,
  New York 10020

  
	
  Telecopier No.:

  	
  (212)
  547-5444

  
	
  Attention:

  	
  C. David
  Goldman, Esq.

  
	
   

  	
   

  
			

All such
notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial overnight courier service; if mailed, five (5) Business
Days after being deposited in the mail, postage prepaid; or if telecopied, when
receipt is acknowledged.

 

10.03      E-Documents.  The Company shall, promptly following the
Closing, cause its MWE to deliver via e-mail to Whitney and Kirkland &
Ellis, electronic versions of the documents prepared by the Company in
connection with the Transactions in either MicroSoft Word or PDF Format.  The Whitney copies shall be e-mailed to
bdimartino@whitney.com, with copies to msalvator@whitney.com.

 

10.04      Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of the parties
hereto.  Subject to applicable

 

26

 

securities laws, each Purchaser
may assign any of its rights under this Agreement to any Person, provided that
after the Closing, such rights may only be assigned to a Permitted Transferee
of such Purchaser.  The Company may not
assign any of its rights, or delegate any of its obligations, under this
Agreement without the prior written consent of the Purchasers, and any such
purported assignment by the Company without the written consent of the
Purchasers shall be void and of no effect. 
Except as provided in Article 8 and Article 9, no Person other
than the parties hereto and their successors and permitted assigns is intended
to be a beneficiary of this Agreement.

 

10.05      Amendment and Waiver.

 

(a)           No
failure or delay on the part of any of the Parties hereto in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.  The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to the Parties hereto at law, in equity or otherwise.

 

(b)           Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by any party from the terms of any provision of this Agreement, shall be
effective (i) only if it is made or given in writing and signed by all of the
parties hereto, and (ii) only in the specific instance and for the specific
purpose for which made or given.  No
amendment, supplement or modification of or to any provision of this Agreement,
or any waiver of any such provision or consent to any departure by any party
from the terms of any such provision may be made orally. Except where notice is
specifically required by this Agreement, no notice to or demand on the Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.

 

10.06      Signatures;
Counterparts.  Telefacsimile transmissions of any executed original document
and/or retransmission of any executed telefacsimile transmission shall be
deemed to be the same as the delivery of an executed original.  At the request of any party hereto, the
other parties hereto shall confirm telefacsimile transmissions by executing
duplicate original documents and delivering the same to the requesting Party or
Parties.  This Agreement may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

 

10.07      Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

10.08      GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED
ENTIRELY WITHIN SUCH STATE.

 

27

 

10.09      JURISDICTION, WAIVER OF JURY TRIAL, ETC.

 

(a)           EACH
PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT THE ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE CLASS A SHARES, OR
ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL
JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY
WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN
INCONVENIENT FORUM.  EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN
SECTION 10.02, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.

 

(b)           EACH
PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE CLASS A
SHARES, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS.  EACH OF
THE COMPANY AND ITS SUBSIDIARIES (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF WHITNEY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT WHITNEY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii)
ACKNOWLEDGES THAT EACH PURCHASER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE TRANSACTIONS BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.

 

10.10      Severability.  If any one or more of the provisions
contained in this Agreement, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other respect
and of the remaining provisions hereof shall not be in any way impaired, unless
the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions of this Agreement.  The parties hereto further agree to replace
such invalid, illegal or unenforceable provision of this Agreement with a
valid, legal and enforceable provision that shall achieve, to the extent
possible, the economic, business and other purposes of such invalid, illegal or
unenforceable provision.

 

10.11      Rules of
Construction.  Unless the context otherwise requires, “or”
is not exclusive, and references to sections or subsections refer to sections
or subsections of this Agreement.

 

10.12      Entire Agreement.  This Agreement, together with the exhibits
and schedules hereto, and the Amended Stockholders Agreement are intended by
the parties as a final

 

28

 

expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein.  This
Agreement, together with the exhibits and schedules hereto, and the Amended
Stockholders Agreement supersede all prior agreements and understandings
between the parties with respect to such subject matter.

 

10.13      Expenses.  Except as expressly provided herein, the parties
hereto shall pay their respective expenses (including, without limitation,
fees, charges and disbursements of counsel) incurred in connection with the
negotiation, execution and performance of this Agreement and the matters
related hereto.

 

10.14      Publicity.  Except as may be required by applicable law,
none of the parties hereto shall issue a publicity release or announcement or
otherwise make any public disclosure concerning this Agreement or the
transactions contemplated hereby, without prior approval by the other party
hereto.  If any announcement is required
by law to be made by any party hereto, prior to making such announcement such
party shall deliver a draft of such announcement to the other parties and shall
give the other parties an opportunity to comment thereon.  Notwithstanding the foregoing, Whitney and
its affiliates may list the Company’s name and logo, and describe the Company’s
business in their marketing materials and may post such information on their
website.

 

10.15      Further Assurances.  Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations, or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority
or any other Person) as may be reasonably required or desirable to carry out or
to perform the provisions of this Agreement, including, without limitation, any
post-closing assignment(s) by any Purchaser of a portion of the Securities to a
Person not currently a party hereto.

 

10.16      No Strict
Construction.  The Parties hereto have participated jointly in the negotiation
and drafting of this Agreement.  In the
event an ambiguity or question of intent or interpretation arises under any
provision of this Agreement, this Agreement shall be construed as if drafted
jointly by the parties thereto, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

29

 

IN WITNESS WHEREOF,
the parties hereto have caused this Preferred Stock Purchase Agreement to be
executed and delivered by their respective officers hereunto duly authorized as
of the date first above written.

 

	
   

  	
   

  	
  ROLLER
  BEARING HOLDING COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dr.
  Michael J. Hartnett

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dr. Michael
  J. Hartnett

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ROLLER
  BEARING COMPANY OF AMERICA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dr.
  Michael J. Hartnett

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dr. Michael
  J. Hartnett

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WHITNEY V,
  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Whitney Equity Partners V, LLC,

  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Duly
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Dr.
  Michael J. Hartnett

  	
   

  
	
   

  	
   

  	
  Dr. Michael
  J. Hartnett

  
											

 

30

 

SCHEDULE I

 

Investment Allocation

 

	
  PURCHASER

  	
   

  	
  CLASS A SHARES

  	
   

  	
  PURCHASE PRICE

  	
   

  	
  PRO RATA SHARE

  	
   

  
	
  Whitney V

  	
   

  	
  809.49

  	
   

  	
  $

  	
  2,428,470.00

  	
   

  	
  19.7

  	
  %

  
	
  Hartnett

  	
   

  	
  198.92

  	
   

  	
  $

  	
  596,760.00

  	
   

  	
  80.3

  	
  %

  
	
  Total

  	
   

  	
  1,008.41

  	
   

  	
  $

  	
  3,025,230.00

  	
   

  	
  100.0

  	
  %

  

 

31

 

EXHIBIT A

 

Restated Charter and
ByLaws

 

(See attached)

 

32

 

EXHIBIT B

 

Trustee Notice

 

(See attached)

 

33

 

EXHIBIT C

 

OPINION TO TRUSTEE

 

(See attached)

 

34

 

EXHIBIT D

 

OPINION TO PURCHASERS
REGARDING BOND MATTERS

 

(See attached)

 

35

 

EXHIBIT E

 

OPINION TO PURCHASERS
REGARDING OTHER CUSTOMARY MATTERS

 

(See attached)

 

36

 

EXHIBIT F

 

AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT

 

(See attached)

 

F-1

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