Exhibit 10.13


 


CONFIDENTIAL


 




 













LOAN AGREEMENT










 


between


 


SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY

and


 


ROLLER BEARING COMPANY OF AMERICA, INC.

Relating to


 










 


$3,000,000

Variable Rate Demand

Industrial Development Revenue Bonds

(Roller Bearing Company of America, Inc. Project)

Series 1994B










DATED AS OF SEPTEMBER 1, 1994










 




 





 





















 


TABLE OF CONTENTS


 


(This Table of Contents is
for convenience of reference only and is not intended to define, limit or
describe the scope or intent of any provisions of this Loan Agreement).


 


	
  ARTICLE I 

  	
  DEFINITIONS, CONSTRUCTION AND CERTAIN
  GENERAL PROVISIONS 

  	
   

  
	
  Section 1.1.

  	
  Definitions 

  	
   

  
	
  Section 1.2.

  	
  Rules of Interpretation 

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS 

  	
   

  
	
  Section 2.1.

  	
  Representations by the Issuer 

  	
   

  
	
  Section 2.2.

  	
  Representations and Warranties by the
  Borrower 

  	
   

  
	
  ARTICLE III 

  	
  THE LOAN; ISSUANCE OF THE BONDS

  	
   

  
	
  Section 3.1.

  	
  Amount and Source of the Loan 

  	
   

  
	
  Section 3.2.

  	
  Reserved 

  	
   

  
	
  Section 3.3.

  	
  Reserved 

  	
   

  
	
  Section 3.4.
  

  	
  Disbursements from the Project Fund
  and the Cost of Issuance Fund 

  	
   

  
	
  Section 3.5.

  	
  Investment of Fund Moneys 

  	
   

  
	
  Section 3.6.

  	
  Loan Payments 

  	
   

  
	
  Section 3.7.

  	
  Additional Payments 

  	
   

  
	
  Section 3.8.

  	
  Obligations Unconditional

  	
   

  
	
  Section 3.9.

  	
  Credit Facility

  	
   

  
	
  Section 3.10.

  	
  Alternate
  Credit Facility

  	
   

  
	
  Section 3.11.

  	
  Issuance
  of Bonds

  	
   

  
				



 


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  Section 3.12.
  

  	
  Borrower
  Required to Pay Costs in Event ProjectFund Insufficient  

  	
   

  
	
  Section 3.13.

  	
  Completion
  Date  

  	
   

  
	
  ARTICLE IV

  	
  OPERATION OF THE PLANT  

  	
   

  
	
  Section 4.1.

  	
  Operation of the Plant

  	
   

  
	
  Section 4.2.

  	
  Environmental Compliance

  	
   

  
	
  Section 4.3.

  	
  Payment of Project Costs

  	
   

  
	
  Section 4.4.

  	
  Deficiency of Project Fund

  	
   

  
	
  ARTICLE V

  	
  MAINTENANCE; TAXES; INSURANCE

  	
   

  
	
  Section 5.1.

  	
  Maintenance of Plant by Borrower

  	
   

  
	
  Section 5.2.

  	
  Sale or Lease of Plant; Assignment of
  Loan Agreement by Borrower

  	
   

  
	
  Section 5.3.

  	
  Taxes, Assessments and Other Charges

  	
   

  
	
  Section 5.4.

  	
  Use of Plant

  	
   

  
	
  Section 5.5.

  	
  Insurance Required

  	
   

  
	
  ARTICLE VI

  	
  PARTICULAR COVENANTS

  	
   

  
	
  Section 6.1.

  	
  Access to the Plant and Inspection;
  Operation of the Plant

  	
   

  
	
  Section 6.2.

  	
  Financial Statements

  	
   

  
	
  Section 6.3.

  	
  Indemnification

  	
   

  
	
  Section 6.4.

  	
  Further Assurances and Corrective
  Instruments

  	
   

  
	
  Section 6.5.

  	
  Litigation Notice

  	
   

  
	
  Section 6.6.

  	
  Annual Certificate

  	
   

  
	
  ARTICLE VII

  	
  ASSIGNMENT OF ISSUER’S RIGHTS UNDER
  LOAN AGREEMENT

  	
   

  
	
  Section 7.1.

  	
  Assignment by the Issuer

  	
   

  
	
  Section 7.2.

  	
  Restriction on Transfer of Issuer’s
  Rights

  	
   

  
				






 


iii





















 




	
  Section 7.3.

  	
  Credit Enhancer’s Remedial Rights

  	
   

  
	
  ARTICLE VIII
  

  	
  EVENTS OF
  DEFAULT AND REMEDIES

  	
   

  
	
  Section 8.1.

  	
  Events of Default Defined

  	
   

  
	
  Section 8.2.

  	
  Remedies on Default

  	
   

  
	
  Section 8.3.

  	
  No Remedy Exclusive

  	
   

  
	
  Section 8.4.

  	
  Agreement to Pay Attorneys’ Fees and
  Expenses

  	
   

  
	
  Section 8.5.

  	
  Issuer and Borrower to Give Notice of
  Default

  	
   

  
	
  Section 8.6.

  	
  Performance Of Borrower’s Obligations

  	
   

  
	
  Section 8.7.

  	
  Remedial Rights Assigned to the
  Trustee

  	
   

  
	
  Section 8.8.

  	
  Credit Enhancer to Direct Trustee

  	
   

  
	
  ARTICLE IX

  	
  PREPAYMENT AND ACCELERATION OF LOAN
  PAYMENTS

  	
   

  
	
  Section 9.1.

  	
  Prepayment at the Option of the
  Borrower

  	
   

  
	
  Section 9.2.

  	
  Optional Prepayment Upon Certain
  Events

  	
   

  
	
  Section 9.3.

  	
  Reserved

  	
   

  
	
  Section 9.4.

  	
  Mandatory Prepayment Upon Certain
  Defaults

  	
   

  
	
  Section 9.5.
  

  	
  Mandatory Prepayment From Amounts
  Remaining in Project Fund

  	
   

  
	
  Section 9.6.

  	
  Right to Prepay at Any Time

  	
   

  
	
  Section 9.7.

  	
  Notice of Prepayment

  	
   

  
	
  Section 9.8.

  	
  Precedence of this Article

  	
   

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
   

  
	
  Section 10.1.

  	
  Authorized
  Representatives

  	
   

  
	
  Section 10.2.

  	
  Term of
  Loan Agreement

  	
   

  
	
  Section 10.3.

  	
  Notices

  	
   

  
	
  Section 10.4.

  	
  Performance
  Date Not a Business Day

  	
   

  
				






 


iv





















 


	
  Section 10.5.

  	
  Binding
  Effect

  	
   

  
	
  Section 10.6.

  	
  Amendments,
  Changes and Modifications

  	
   

  
	
  Section 10.7.

  	
  Execution
  in Counterparts

  	
   

  
	
  Section 10.8.

  	
  No
  Pecuniary Liability

  	
   

  
	
  Section 10.9.
  

  	
  Extent of
  Covenants of the Issuer; No Personal or
  Pecuniary Liability

  	
   

  
	
  Section 10.10.
  

  	
  Net Loan

  	
   

  
	
  Section 10.11.
  

  	
  Security
  Interests

  	
   

  
	
  Section 10.12.
  

  	
  Complete
  Agreement

  	
   

  
	
  Section 10.13.
  

  	
  Severability

  	
   

  
	
  Section 10.14.
  

  	
  Governing
  Law

  	
   

  
	
  Section 10.15.
  

  	
  Not a
  Limitation

  	
   

  
	
  Section 10.16.
  

  	
  Consent
  to Jurisdiction; Service of Process

  	
   

  
	
  EXHIBIT A

  	
   

  	
   

  
	
  EXHIBIT B

  	
   

  	
   

  
	
  EXHIBIT C

  	
   

  	
   

  



 


v





















 


LOAN AGREEMENT


 


THIS
LOAN AGREEMENT, dated as of September 1, 1994 (this “Agreement” or Loan
Agreement), between the SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY, a
body corporate and politic and an agency of the State of South Carolina (the “Issuer”),
and ROLLER BEARING COMPANY OF AMERICA, INC., a Delaware corporation (the “Borrower”);


 


WITNESSETH:


 


WHEREAS,
the Issuer acting by and through its Board of Directors, is authorized and
empowered under and pursuant to the provisions of Title 41, Chapter 43, Code of
Laws of South Carolina 1976, as amended (the “Act”), to acquire and cause to be
acquired properties that are projects under the Act through which the
industrial, commercial, agricultural and recreational development of the State
of South Carolina (the “State”) will be promoted and trade developed by
inducing business enterprises to locate in and remain in the State and thus
provide maximum opportunities for the creation and retention of jobs and
improvement of the standard of living of the citizens of the State; and


 


WHEREAS,
the Issuer is further authorized by Section 41-43-110 of the Act to issue
revenue bonds payable by the Issuer solely from revenues and receipts from any
financing agreement between the Issuer and any business enterprise with respect
to such project and secured by a pledge of said revenues and receipts and by an
assignment of such financing agreement; and


 


WHEREAS,
pursuant to the Act, the Issuer is authorized to issue its Variable Rate Demand
Industrial Development Revenue Bonds (Roller Bearing Company of America, Inc.
Project) Series 1994B in the principal amount of $3,000,000 (the “Bonds”) for
the purpose of providing working capital (the “Project”) in connection with an
approximately 60,000 square foot expansion of an existing facility for the
manufacture of roller bearings in Darlington County, South Carolina which is
owned and operated by the Borrower; and


 


WHEREAS,
the proceeds from the sale of the Bonds will be loaned to the Borrower pursuant
to the provisions of this Loan Agreement to enable the Borrower to fund the
Project; and


 


WHEREAS,
the amount necessary to provide the working capital constituting the Project
will require the issuance, sale and delivery of the Bonds, as hereinafter
provided; and


 


WHEREAS,
to secure the payment of the principal of and interest on the Bonds and the purchase
price of Bonds tendered by the Owners thereof as provided in the Trust
Indenture of even date herewith (the “Indenture”) between the Issuer and Mark
Twain Bank, as Trustee (the “Trustee”), the Borrower has caused the Credit
Enhancer (as defined in the Indenture) to issue its Credit Facility (as defined
in the Indenture) to the Trustee; and


 


WHEREAS,
pursuant to the foregoing, the Issuer desires to loan the proceeds of the Bonds
to the Borrower and the Borrower desires to borrow the proceeds of the Bonds
from the Issuer, to be repaid by the Borrower and upon the terms and conditions
hereinafter set forth;


 


NOW,
THEREFORE, in consideration of the premises and the mutual representations,
covenants and agreements herein contained, the Issuer and the Borrower do
hereby represent, covenant and agree as follows: 


 





















 


ARTICLE I


 


DEFINITIONS, CONSTRUCTION AND CERTAIN GENERAL PROVISIONS


 


Section 1.1. Definitions. All words and terms defined in Section 101
of the Indenture shall have the same meaning in this Loan Agreement unless
otherwise defined herein. In addition to words and terms defined in the
Indenture or defined elsewhere in this Loan Agreement, the following words and
terms shall have the following meanings, unless some other meaning is plainly
intended:


 


“Additional
Payments” means the Additional Payments described in Section 3.7 hereof.


 


“Borrower
Documents” means this Loan Agreement and the Collateral Documents.


 


“Default”
means any event or condition which constitutes, or with the giving of any requisite
notice or upon the passage of any requisite time period or upon the occurrence
of both would constitute, an Event of Default under this Agreement or the
Indenture.


 


“Event
of Default” means any Event of Default as defined in Section 8.1 hereof.


 


“Loan
Payment Date” means an Interest Payment Date, Principal Payment Date or any
other date on which the principal of and interest on the Bonds is payable.


 


“Loan Payments” means the
Loan Payments described in Section 3.6 hereof.


 


“Loan
Term” means the period from the effective date of this Loan Agreement until the
expiration hereof pursuant to Section 10.2 of this Loan Agreement.


 


“Plant”
means the facility, including machinery and equipment, for manufacture of
roller bearings operated by the Borrower in Darlington County, South Carolina,
as expanded with the proceeds of the Series 1994A Bonds.


 


“Project”
means the working capital generally described in Exhibit A hereto, as provided
for in this Loan Agreement.


 


“Series
1994A Bonds” means the Issuer’s $7,700,000 Variable Rate Demand Industrial
Development Revenue Bonds (Roller Bearing Company of America, Inc. Project)
Series 1994A.


 


“Series
1994A Loan Agreement” means the Loan Agreement dated of even date herewith
between the Issuer and the Borrower, delivered with respect to the Series 1994A
Bonds, as amended, restated or supplemented.


 


“Unassigned
Issuer’s Rights” means the Issuer’s rights to reimbursement and payment of its
costs and expenses and rebatable arbitrage under Sections 3.7(b) and (d).8.4
and 8.6 hereof, its rights of access under Section 6.1 hereof, its rights
to indemnification under Sections 4.5 and 6.3 hereof, its rights to exemption
from liability under Sections 10.8 and 10.9 hereof, its rights to receive
notices, reports and other statements and its rights to consent to certain
matters.


 


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Section 1.2. Rules of Interpretation. (a) Words of the
masculine gender shall be deemed and construed to include correlative words of
the feminine and neuter genders.


 


(b)
Unless the context shall otherwise indicate words importing the singular number
shall include the plural and vice versa, and words importing person shall
include firms, partnerships, associations, joint stock companies, joint
ventures, trusts, unincorporated organizations, limited liability companies and
corporations, including governmental entities, as well as natural persons.


 


(c)
The words “herein”, “hereby”, “hereunder”, “hereof”, “hereto”, “hereinbefore”, “hereinafter”
and other equivalent words refer to this Loan Agreement and not solely to the
particular article, section, paragraph or subparagraph hereof in which such
word is used.


 


(d)
Reference herein to a particular article or a particular section shall
be construed to be a reference to the specified article or section hereof
unless the context or use clearly indicates another or different meaning or
intent. Reference herein to a schedule or an exhibit shall be construed to
be a reference to the specified schedule or exhibit hereto unless the
context or use clearly indicates another or different meaning or intent.


 


(e)
Wherever an item or items are listed after the word “including”, such listing
is not intended to be a listing that excludes items not listed.


 


(f)
The table of contents, captions and headings in this Loan Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Loan Agreement.


 


[End of Article I]


 


3





















 


ARTICLE II


 


REPRESENTATIONS


 


Section 2.1. Representations by the Issuer. The Issuer
makes the following representations as the basis for the undertakings on its
part herein contained:


 


(a)
 The Issuer is a body politic and corporate and an agency of the State.


 


(b)
 The Issuer has lawful power and authority under the Act, acting through
its Board of Directors, to enter into the transactions contemplated by this
Loan Agreement and to carry out its obligations hereunder. By proper action of
the Board of Directors, the Issuer has been duly authorized to execute and
deliver this Loan Agreement, acting by and through its duly authorized
officers.


 


(c)
 The issuance of the Bonds will further the public purposes of the Act.


 


(d)
 To finance the costs of the working capital constituting the Project, the
Issuer proposes to issue the Bonds in the aggregate principal amount of
$3,000,000. The Bonds will bear interest at the rates and be scheduled to
mature as set forth in Article II of the Indenture and will be subject to
purchase from the Owners thereof in accordance with the provisions of Article III
of the Indenture and redemption prior to maturity in accordance with the
provisions of Article IV of the Indenture. The Bonds are to be issued
under and secured by the Indenture, pursuant to which the payments, revenues
and receipts derived by the Issuer pursuant to this Loan Agreement, other than
Unassigned Issuer’s Rights, will be pledged and assigned to the Trustee as
security for payment of the principal of, premium, if any, and interest on the
Bonds.


 


(e)
 To the best of its knowledge, no member of the governing body of the
Issuer or any other officer of the Issuer has any significant or conflicting
interest, financial, employment or otherwise, in the Borrower, the Project or
in the transactions contemplated hereby.


 


Section 2.2. Representations and Warranties by the
Borrower. The Borrower represents and warrants as follows:


 


(a)
 The Borrower is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware, has the power and
authority to own its properties and carry on its business as now being
conducted, and is duly qualified to do such business, and is in good standing,
wherever such qualification is required, including the State.


 


(b)
 The Borrower has the power and authority to execute and deliver the
Borrower Documents, and to carry out the transactions contemplated hereby and
thereby, and has duly authorized the execution, delivery and performance of
each of the foregoing.


 


(c)
 Neither the execution nor delivery of the Borrower Documents, nor the
consummation of the transactions contemplated hereby or thereby, nor the
fulfillment of or compliance with the terms and conditions hereof or thereof,
conflicts with or results in a breach of or will constitute a default under any
of the terms, conditions or provisions or any legal restriction of any
agreement or instrument to which the Borrower is now a party or by which it is
bound, or constitutes a default under any of the


 


4





















 


foregoing or violates any
judgment, order, writ, injunction, decree, law, rule or regulation to which it
is subject.


 


(d)
 The Borrower is knowledgeable in the operation of manufacturing
facilities of the magnitude and nature of the Plant.


 


(e)
 The Borrower is not presently under any cease or desist order or other
orders of a similar nature, temporary or permanent, of any federal or state
authority which would have the effect of preventing or hindering performance of
its duties hereunder, nor are there any proceedings presently in progress or to
its knowledge contemplated which would, if successful, lead to the issuance of
any such order.


 


(f)
 To the best of its knowledge, the Borrower has made, and will during the
term of this Agreement make, all filings which it is obligated to make with,
and has obtained, and will during the term of this Agreement obtain, all
approvals and consents which it is obligated to obtain from all federal, state
and local regulatory agencies having jurisdiction to the extent, if any,
required by applicable laws and regulations to be made or to be obtained in
connection with the Project, the execution and delivery by the Borrower of the
Borrower Documents, the transaction contemplated thereunder, and the
performance by the Borrower of its obligations thereunder.


 


(g)
 To the best of the Borrower’s knowledge, except to the extent disclosed
to the Credit Enhancer, the operation and maintenance of the Plant does not
conflict with any zoning, building, safety, health or environmental quality or
other law, ordinance, order, rule or regulation applicable thereto.


 


(h)
 The Borrower will keep and perform faithfully all of its duties,
obligations, covenants and undertakings contained herein and in the Borrower
Documents.


 


(i)
 The Borrower will execute and deliver such additional instruments and
perform such additional acts as may be necessary, in the opinion of the Issuer,
to carry out the intent hereof and of the Borrower Documents or to perfect or
give further assurances of any of the rights granted or provided for herein or
in the Borrower Documents.


 


(j)
 The Borrower agrees that during the Loan Term it will maintain its
existence, will not dissolve (other than a technical dissolution under State
law so long as the Borrower is immediately reconstituted) or otherwise dispose
of all or substantially all of its assets; provided that the Borrower may,
without violating the agreement contained in this paragraph, merge or
consolidate with another legal entity or sell or otherwise transfer to another
legal entity all or substantially all of its assets as an entirety and
thereafter dissolve, provided (i) that such merger, consolidation or transfer
will not affect the excludability of the interest on the Bonds from gross
income for federal income tax purposes; (ii) that if the successor or
transferee legal entity is not the Borrower, then such legal entity shall be a
legal entity, organized and existing under the laws of one of the States of the
United States of America and shall be qualified to do business in the State;
(iii) such successor or transferee entity shall assume all of the obligations
of the Borrower under the Borrower Documents in which event the Borrower shall
be released from its obligations under the Borrower Documents; and (iv) the
Credit Enhancer consents thereto in writing.


 


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(k)
 The Borrower will advise the Issuer, the Credit Enhancer and the Trustee
promptly in writing of the occurrence of any Default hereunder or any event
which, with the passage of time or service of notice, or both, would constitute
an Event of Default hereunder, specifying the nature and period of existence of
such event and the actions being taken or proposed to be taken with respect
thereto.


 


(l)
 Any certificate signed by an Authorized Borrower Representative and
delivered pursuant to this Loan Agreement or the Indenture shall be deemed a
representation and warranty of the Borrower as to the statement made therein.


 


(m)
 Concurrently with the execution of this Loan Agreement, the Borrower will
cause to be delivered to the Trustee, on behalf of the Issuer, the Credit
Facility and the Credit Facility shall be in full force and effect and shall
secure the payment of the principal and purchase price of, and interest on, the
Bonds.


 


(n)
 The working capital constituting the Project will be used solely in
connection with the Borrower’s operation of the Plant or to pay costs of
issuance of the Bonds.


 


(o)
 There is not now pending or, to the knowledge of the Borrower,
threatened, any suit, action or proceeding against or affecting the Borrower by
or before any court, arbitrator, administrator, administrative agency or other
governmental authority which, if decided adversely to the Borrower, would
materially and adversely affect the validity of any of the transactions
contemplated by this Loan Agreement or the Indenture, or impair the ability of
the Borrower to perform its obligations under this Loan Agreement or the Indenture,
or as contemplated hereby or thereby, nor, to the knowledge of the Borrower, is
there any basis therefor.


 


(p)
 The Project is of the type authorized and permitted by the Act, and the
Project is substantially the same in all material respects to that described in
the notice of public hearing published in The Darlington News and Post on June 1,
1994.


 


(q)
 The Plant is located wholly within Darlington County, South Carolina.


 


(r)
 The Borrower will not take any action or omit to take any action or permit
any action which is within its control to be taken or omitted which would
impair the excludability from gross income for federal income taxation purposes
of interest on the Series 1994A Bonds.


 


[End of Article II]


 


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ARTICLE III


 


THE LOAN; ISSUANCE OF THE BONDS


 


Section 3.1. Amount and Source of the Loan. The Issuer
agrees to lend to the Borrower, upon the terms and conditions herein and in the
Indenture specified, the net proceeds received by the Issuer from the sale of
the Bonds (the “Loan”), and to cause such proceeds to be deposited in
accordance with the Indenture.


 


Section 3.2. [Reserved].


 


Section 3.3. [Reserved].


 


Section 3.4. Disbursements from the Project Fund and the
Cost of Issuance Fund.


 


(a)
The Issuer has, in the Indenture, authorized and directed the Trustee, provided
no Event of Default has occurred and is continuing, to make disbursements from
the Project Fund and the Cost of Issuance Fund, to:


 


(i) provide working capital for the Borrower in connection with the operation
of the Plant;


 


(ii) pay financing, legal, accounting, printing and engraving fees, charges
and expenses, and all other such fees, charges and expenses incurred in
connection with the authorization, sale, issuance and delivery of the Bonds and
the preparation and delivery of this Loan Agreement and related documents; and


 


(iii) pay the fees and expenses of the Trustee, Registrar, Tender Agent
and Paying Agent properly incurred in connection with the execution and
delivery of the Indenture and of the Credit Enhancer properly incurred in
connection with the issuance of the Credit Facility and the execution and
delivery of the Letter of Credit Agreement.


 


(b)
All moneys in the Project Fund (including moneys earned thereon by investment
thereof) remaining after the completion of funding of the Project and payment,
or provision for payment, in full of the costs provided in the preceding subsection of
this Section, then due and payable, shall as soon as practicable be paid into
the Revenue Fund to be used for the redemption of the Bonds, or a portion
thereof, at the earliest possible date.


 


(c)
All disbursements from the Project Fund for the items described in this Section shall
be made only upon the written order of an Authorized Borrower Representative
and the following conditions shall have been satisfied with respect to such
disbursement:


 


(A) There shall have been delivered to the Trustee and the Credit
Enhancer a certificate of an Authorized Borrower Representative in the form of
Exhibit B attached hereto certifying, with respect to such disbursement, to the
Credit Enhancer and the Trustee (1) the amount of working capital and/or cost
of credit enhancement to be disbursed, (2) that such amount will be expended by
the Borrower in connection with the operation of the Plant and (3) that none of
the items for which the disbursement is


 


7





















 


proposed
to be made formed the basis for any disbursement theretofore made from the
Project Fund;


 


(B) There shall be in existence no Event of Default or situation which,
upon the giving of notice or the passage of time or both would become an Event
of Default; and


 


(C) The Credit Enhancer shall have approved the requested disbursement
from the Project Fund.


 


(d)
Should the Borrower be unable to request final disbursement from the Project
Fund as described above prior to a date which is five (5) years from the Bond
Issuance Date, such funds remaining in the Project Fund shall be considered to
be moneys remaining in the Project Fund after completion of the Project and
shall be paid into the Revenue Fund and expended as described in Section 3.4(b)
unless the Borrower delivers to the Trustee an opinion of Bond Counsel that
such treatment is not necessary to retain the State tax-exempt status of the
Bonds.


 


(e)
All disbursements from the Cost of Issuance Fund for the items described above
shall be made only upon the written order of the Authorized Borrower
Representative in substantially the form attached hereto as Exhibit B.


 


Section 3.5. Investment of Fund Moneys. Any moneys held
as part of the Funds under the Indenture shall be invested or reinvested by the
Trustee as provided in the Indenture.


 


Section 3.6. Loan Payments. The Borrower shall pay the
following amounts to the Trustee, all as “Loan Payments” under this Loan
Agreement:


 


(a)
The Borrower covenants and agrees during the Loan Term to make Loan Payments to
the Trustee at its Principal Office, for the account of the Issuer, for deposit
in the Revenue Fund, in federal or other immediately available funds, during
normal business hours on or before 10:00 A.M., Trustee’s local time, on each
Loan Payment Date, the amount of such payment being as follows:


 


(i) the amount of the principal, if any, of the Bonds due and payable on
such Loan Payment Date, whether at stated maturity, by redemption prior to
maturity or acceleration or otherwise;


 


(ii) the amount of interest on the Bonds due and payable on such Loan
Payment Date;


 


(iii) the amount of redemption premium, if any, on the Bonds due and payable
on such Loan Payment Date; and


 


(iv) the purchase price of any Bonds required to be purchased on such
Loan Payment Date pursuant to Article III of the Indenture.


 


8





















 


(b)
The amounts received by the Trustee under the Credit Facility shall be credited
against the Loan Payment due on the applicable Loan Payment Date. Any Loan
Payment made by the Borrower and held by the Trustee in such event shall be
delivered to the Credit Enhancer in reimbursement of the amounts so received by
the Trustee under the Credit Facility, and any excess shall be returned to the
Borrower as an overpayment.


 


(c)
Except for such interest of the Borrower as may hereafter arise pursuant to Section 510
of the Indenture, the Borrower and the Issuer each acknowledge that neither the
Borrower nor the Issuer has any interest in the Revenue Fund or the Debt
Service Fund and any moneys deposited therein shall be in the custody of and
held by the Trustee in trust for the benefit of the Bondowners and the Credit
Enhancer.


 


Section 3.7. Additional Payments. The Borrower shall pay
the following amounts to the following persons, all as “Additional Payments”
under this Loan Agreement:


 


(a)
To the Trustee, when due, all reasonable fees and charges for its services
rendered under the Indenture, this Loan Agreement and the Borrower Documents,
and all reasonable expenses (including without limitation reasonable fees and
charges of the Paying Agent, the Bond Registrar, counsel, accountant, engineer
or other person) incurred in the performance of the duties of the Trustee under
the Indenture, this Loan Agreement and the other Borrower Documents, for which
the Trustee and other persons are entitled to repayment or reimbursement;


 


(b)
To the Issuer, upon demand, its regular administrative and issuance fees and
charges, if any, and all expenses (including without limitation attorney’s
fees) incurred by the Issuer in relation to the transactions contemplated by
this Loan Agreement and the Indenture, which are not otherwise to be paid by
the Borrower under this Loan Agreement or the Indenture;


 


(c)
To the appropriate Person, all taxes, assessments and charges required to be
paid pursuant to Section 5.3 hereof;


 


(d)
To the appropriate person, such payments as are required (i) as payment for or
reimbursement of any and all reasonable costs, expenses and liabilities
incurred by the Issuer, the Credit Enhancer or the Trustee or any of them in
satisfaction of any obligations of the Borrower hereunder and under the other
Borrower Documents that the Borrower does not perform, or incurred in the
defense of any action or proceeding with respect to the Project, this Loan
Agreement, the Indenture or the other Borrower Documents, or (ii) as reimbursement
for expenses paid, or as prepayment of expenses to be paid, by the Issuer or
the Trustee that are incurred as a result of a request by the Borrower or for
which the Borrower is liable under this Loan Agreement;


 


(e)
To the appropriate Person, any other amounts required to be paid by the
Borrower under this Loan Agreement; and


 


(f)
All Costs of Issuance and fees, charges and expenses, including agent and
counsel fees, incurred in connection with the issuance of the Bonds, as and
when the same become due.


 


9





















 


Any
past due Additional Payments shall continue as an obligation of the Borrower
until they are paid and shall bear interest (except as may be otherwise
provided in the Collateral Documents with respect to obligations owed to the
Credit Enhancer) at the base rate of interest announced from time to time by
the Trustee for variable rate commercial loans plus two percent (2%) during the
period such Additional Payments remain unpaid.


 


Section 3.8. Obligations Unconditional. The obligations
of the Borrower to make Loan Payments and Additional Payments on or before the
date the same become due, and to perform all of its other obligations,
covenants and agreements hereunder shall be absolute and unconditional, and the
Borrower shall make such payments and perform such obligations without
abatement, diminution or deduction regardless of any cause or circumstances
whatsoever including, without limitation, any defense, set-off, recoupment or
counterclaim which the Borrower may have or assert against the Issuer, the
Trustee or any other Person.


 


Section 3.9. Credit Facility. Concurrently with the
issuance of the Bonds, the Borrower shall cause the Credit Facility to be
delivered to the Trustee to induce the purchase of the Bonds by the original
purchasers thereof. The Borrower shall cause the Credit Facility or an
Alternate Credit Facility to be continuously maintained until all of the Bonds
have been fully paid or their payment provided for in accordance with Article XII
of the Indenture.


 


Section 3.10. Alternate Credit Facility. The Borrower may
(without penalty or premium) provide and the Trustee shall accept any Alternate
Credit Facility, provided that any Alternate Credit Facility shall meet the
requirements of Section 706 of the Indenture and an opinion of counsel
acceptable to the Trustee has been delivered to the Trustee to substantially
the same effect as the opinion of counsel to the Credit Enhancer delivered in
connection with the issuance of the initial Credit Facility and, in addition,
to the effect that the exemption of the Bonds (or any securities evidenced
thereby) from the registration requirements of the Securities Act of 1933, as
amended, shall not be impaired by the substitution of such Alternate Letter of
Credit or that the applicable registration or qualification requirements of
such Act have been satisfied.


 


Section 3.11. Issuance of Bonds. In order to provide funds
for the Project, the Issuer agrees that it will issue, sell and deliver the Bonds
to the original purchasers thereof. The proceeds of the sale of the Bonds shall
be paid over to the Trustee for the account of the Issuer in accordance with
the Indenture.


 


Section 3.12. Borrower Required to Pay Costs in Event
Project Fund Insufficient. In the event that money in the Project Fund is not
sufficient to pay all costs of providing the Project, the Borrower shall,
nonetheless, complete the Project and shall pay all costs of such completion in
full from its own funds. The Borrower shall not be entitled to any
reimbursement for such completion costs from the Issuer, the Credit Enhancer or
any Trustee, Registrar or Paying Agent, nor shall it be entitled to any
abatement, diminution or postponement of Loan Payments.


 


10





















 


Section 3.13. Completion Date. The Completion Date of the
Project shall be evidenced to the Issuer, the Credit Enhancer and the Trustee
by a certificate signed by an Authorized Borrower Representative substantially
in the form attached hereto as Exhibit C.


 


[End of Article III]


 


11





















 


ARTICLE IV


 


OPERATION OF THE PLANT


 


Section 4.1. Operation of the Plant. The Borrower
represents, warrants, covenants and agrees that it has obtained or shall obtain
all necessary or required permits, licenses, consents and approvals that are
material for the operation and maintenance of the Plant and shall comply in all
material respects with all lawful requirements of any governmental body
regarding the use or condition of the Plant, whether existing or later enacted,
foreseen or unforeseen or whether involving any change in governmental policy
or requiring structural or other changes to the Project and irrespective of the
cost of so complying.


 


Neither
the Issuer, the Trustee or the Credit Enhancer, nor their respective successors
or assigns are the agents or representatives of the Borrower, and the Borrower
is not the agent of the Issuer, the Trustee or the Credit Enhancer, and this
Loan Agreement shall not be construed to make any of the Issuer, the Trustee or
the Credit Enhancer liable to materialmen, contractors, subcontractors,
craftsmen, laborers or others for goods or services delivered by them in
connection with the expansion of the Plant, or for debts or claims accruing to
the aforesaid parties against the Borrower. This Loan Agreement shall not
create any contractual relation either expressed or implied between the Issuer,
the Trustee or the Credit Enhancer and any materialmen, contractors, subcontractors,
craftsmen, laborers or any other person supplying any work, labor or materials
in connection with the expansion of the Plant.


 


Section 4.2. Environmental Compliance. The Borrower will
comply in all material respects with the environmental provisions of the Credit
Documents, the provisions of which (including relevant definitions) are
incorporated herein by this reference and constitute a part of this Agreement.


 


Section 4.3. Payment of Project Costs. The proceeds from
the sale of the Bonds shall be paid by the Trustee from the Project Fund in
accordance with Section 3.4 of this Agreement to provide for the payment
of the Project costs.


 


Section 4.4. Deficiency of Project Fund. The Issuer makes
no warranty, either express or implied, that the amounts in the Project Fund
shall be sufficient to fully provide for the costs of the Project. The Borrower
shall not be entitled to any reimbursement for the payment of any such
deficiency by the Issuer, the Trustee, the Credit Enhancer or any Bondowner,
nor shall it be entitled to any diminution of any amounts otherwise payable
under this Loan Agreement.


 


[End of Article IV]


 


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ARTICLE V


 


MAINTENANCE; TAXES; INSURANCE


 


Section 5.1. Maintenance of Plant by Borrower. The
Borrower agrees that during the term of this Agreement it will keep and
maintain the Plant in good condition, repair and working order, ordinary wear
and tear excepted, at its own cost, and will make or cause to be made from time
to time all necessary repairs thereto (including external and structural
repairs) and renewals and replacements thereto.


 


Section 5.2. Sale or Lease of Plant; Assignment of Loan
Agreement by Borrower. Upon the written consent of the Credit Enhancer and the
delivery of an Opinion of Bond Counsel to the Trustee and the Credit Enhancer
that such action is permitted by the Borrower Documents and the Act, and shall
not adversely affect the exclusion from gross income for federal income tax
purposes of the interest on the Series 1994A Bonds, the Borrower may assign,
mortgage, pledge, sell, lease, grant a security interest in, or in any other
manner transfer, convey or dispose of the Plant or any interest therein or part
thereof or assign any of its right, title and interest in, to and under this
Loan Agreement in accordance with the Borrower Documents; provided that no such
assignment with respect to this Loan Agreement shall be made unless a
corresponding assignment is made with respect to the Series l994A Loan
Agreement.


 


Section 5.3. Taxes, Assessments and Other Charges. The
Borrower shall pay all taxes, assessments and charges of any kind whatsoever
that may at any time be lawfully assessed or levied against or with respect to
the Plant (including any tax upon or with respect to the income or profits of
the Issuer from the Plant that, if not paid, would become a charge on the
payments to be made under this Loan Agreement prior to or on a parity with the
charge thereon created by the Indenture and including ad valorem, sales and excise
taxes, assessments and charges upon the Borrower’s interest in the Plant), all
utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Plant and all assessments and charges lawfully made
by any governmental body for public improvements that may be secured by lien on
the Plant.


 


Section 5.4. Use of Plant. The Issuer will not take or
cause the Trustee to take any action (other than as provided herein or in the
Indenture) to interfere with the Borrower’s interest in the Plant or to
interfere with possession, custody, use and enjoyment of the Plant.


 


Section 5.5. Insurance Required. The Borrower shall cause
the Plant to be kept continuously insured against such risks as are customarily
insured against by companies conducting activities similar to those of the
Borrower in connection with the Plant, and shall pay as the same become due all
premiums in respect thereof, all as provided in the Credit Documents.


 


[End of Article V]


 


13





















 


ARTICLE VI


 


PARTICULAR COVENANTS


 


Section 6.1. Access to the Plant and Inspection;
Operation of the Plant. The duly authorized agents of the Issuer, the Credit
Enhancer and the Trustee shall have the right, at all reasonable times upon the
furnishing of reasonable notice under the circumstances, to enter upon the
Plant and to examine and inspect the Plant, subject to any secrecy regulation
or agreement or national security law or regulation of the government of the
United States of America. The Borrower will execute, acknowledge and deliver
all such further documents and do all such other acts and things as may be
necessary to grant to the Issuer, the Credit Enhancer and the Trustee such
right of entry. The duly authorized agents of the Issuer, the Credit Enhancer
and the Trustee shall also be permitted, at all reasonable times upon
reasonable notice under the circumstances, to examine the books and records of
the Borrower with respect to the Plant, the working capital provided for
herein, and the obligations of the Borrower hereunder.


 


Section 6.2. Financial Statements. The Borrower shall
furnish the Credit Enhancer and the Trustee with copies of its audited
financial statements for each of its fiscal years within 120 days after the end
of the preceding fiscal year accompanied by a certificate of the Authorized
Borrower Representative stating (i) that the information contained in such
statements is materially true and correct, and (ii) that, to the best of his
knowledge after reasonable investigation, no Default exists, and if there is
such a Default, specifying the nature and period of existence thereof and what
action, if any, the Borrower is taking or proposes to take with respect
thereto.


 


Section 6.3. Indemnification. (a) The Borrower releases
the Issuer and the Trustee from, agrees that the Issuer and the Trustee shall
not be liable for, and indemnifies the Issuer and the Trustee against, all
liabilities, losses, damages (including reasonable attorneys’ fees), causes of
action, suits, claims, costs and expenses, demands and judgments of any nature
imposed upon or asserted against the Issuer or the Trustee, on account of: (i)
any loss or damage to property or injury to or death of or loss by any Person
that may be occasioned by any cause whatsoever pertaining to the construction,
maintenance, operation and use of the Plant; (ii) any breach or default on the
part of the Borrower in the performance of any covenant or agreement of the
Borrower under this Loan Agreement, the Borrower Documents or any related
document, or arising from any act or failure to act by the Borrower, or any of
its agents, contractors, servants, employees or licensees; (iii) violation by
the Borrower or any Affiliate of any law, ordinance or regulation affecting the
ownership, occupancy or use of the Plant; (iv) the authorization, issuance and
sale of the Bonds, and the provision of any information furnished by the
Borrower in connection therewith concerning the Project or the Borrower or
arising from (1) any errors or omissions of any nature whatsoever such that the
Bonds, when delivered to the Bondowners, are not validly issued and binding
obligations of the Issuer, or (2) any fraud or misrepresentations or omissions
contained in the proceedings of the Issuer or the Trustee with respect to, or
as a result of, materials furnished in writing by the Borrower relating to the
issuance of the Bonds which, if known to the original purchaser of the Bonds,
would reasonably be a material factor in its decision to purchase the Bonds;
and (v) any claim or action or proceeding with respect to the matters set forth
in subsections (i), (ii), (iii) and (iv) above brought thereon; provided,
however, that the Borrower does not hereby release the Issuer or the Trustee
from, or agree that either of them shall not be liable for, or indemnify either
of them against any liabilities, losses, damages (including attorneys’ fees),
causes of action, suits, claims, costs and expenses, demands and judgments of
any nature imposed upon or asserted against either of them on account of, with
respect to the Issuer, its willful misconduct, or, with respect to the Trustee,
its negligence or willful misconduct.


 


14





















 


(b)
The Borrower agrees to indemnify the Trustee for and to hold it harmless
against all liabilities, claims, costs and expenses incurred without negligence
or willful misconduct on the part of the Trustee, on account of any action
taken or omitted to be taken by the Trustee in accordance with the terms of
this Loan Agreement, the Bonds or the Indenture or any action taken at the
request of or with the consent of the Borrower, including the costs and
expenses of the Trustee in defending itself against any such claim, action or
proceeding brought in connection with the exercise or performance of any of its
powers or duties under this Loan Agreement, the Bonds or the Indenture.


 


(c)
In case any action or proceeding is brought against the Issuer or the Trustee
in respect of which indemnity may be sought hereunder, the party seeking
indemnity promptly shall give notice of that action or proceeding to the
Borrower, and the Borrower upon receipt of that notice shall have the
obligation and the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not relieve the
Borrower from any of its obligations under this Section unless that
failure prejudices the defense of the action or proceeding by the Borrower. At
its own expense, an indemnified party may employ separate legal counsel and
participate in (but not control) the defense. The Borrower shall not be liable
for any settlement without its consent.


 


(d)
The indemnification set forth above is intended to and shall include the
indemnification of all affected officials, directors, officers, staff and
employees of the Issuer, and the Trustee, respectively. That indemnification is
intended to and shall be enforceable by the Issuer to the full extent permitted
by law.


 


Section 6.4. Further Assurances and Corrective Instruments.
Subject to the Indenture, the Issuer and the Borrower from time to time will
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, Supplemental Loan Agreements and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description
of the Project and for carrying out the intention or facilitating the
performance of this Loan Agreement.


 


Section 6.5. Litigation Notice. The Borrower shall give
the Trustee and the Credit Enhancer prompt notice of any action, suit or
proceeding by it or against it at law or in equity, or before any governmental
instrumentality or agency, or of any of the same which may be threatened,
which, if adversely determined, would materially impair the right of the
Borrower to carry on the business which is contemplated in connection with the
Project, or would materially and adversely affect its business, operations,
properties, assets or condition. Within five Business Days after the filing
against the Borrower, and prior to the filing by the Borrower, of a petition in
bankruptcy, the Borrower shall notify the Trustee and the Credit Enhancer in
writing as to such occurrence.


 


Section 6.6. Annual Certificate. The Borrower will
furnish to the Issuer, the Trustee and the Credit Enhancer, on or before September 1
of each year, a certificate, signed by an Authorized Borrower Representative,
stating that the Borrower has made a review of its activities with respect to
the Project during the preceding calendar year for the purpose of determining
whether or not the Borrower has complied with all of the terms, provisions and
conditions of the Borrower Documents and that the


 


15





















 


Borrower has, to the best of
its knowledge, kept, observed, performed and fulfilled each and every covenant,
provision and condition of the Borrower Documents on its part to be performed
and is not in default, in the performance or observance of any of the terms,
covenants, provisions or conditions hereof. If the Borrower shall be in default
such certificate shall specify all such defaults and the nature thereof.


 


[End of Article VI]


 


16





















 


ARTICLE VII


 


ASSIGNMENT OF ISSUER’S RIGHTS UNDER LOAN AGREEMENT


 


Section 7.1. Assignment by the Issuer. The Issuer, by
means of the Indenture and as security for the payment of the principal of,
purchase price of, and redemption premium, if any, and interest on the Bonds,
and the obligations payable to the Credit Enhancer under the Letter of Credit
Agreement, will assign, pledge and grant a security interest in certain of its
rights, title and interests in, to and under this Loan Agreement, including
Loan Payments and Additional Payments and other revenues, moneys and receipts
received by it pursuant to this Loan Agreement, to the Trustee (reserving its
Unassigned Issuer’s Rights).


 


Section 7.2. Restriction on Transfer of Issuer’s Rights.
The Issuer will not sell, assign, transfer or convey its interests in this Loan
Agreement except pursuant to the Indenture.


 


Section 7.3. Credit Enhancer’s Remedial Rights. The
Issuer and the Borrower hereby acknowledge and agree that should the Credit
Enhancer exercise certain of its remedial rights under the Credit Documents,
the Credit Enhancer (or an affiliate or designee thereof) may become successor
in interest to the Borrower hereunder. No such exercise of the Credit Enhancer’s
rights under the Credit Documents, or succession of the Credit Enhancer (or an
affiliate or designee thereof) to the interest of the Borrower hereunder, shall
require, as a condition precedent, either (i) the further consent of the
Issuer, the Trustee or the Bondowners, or (ii) the acceleration of the Bonds
(unless the Credit Enhancer elects such in its sole discretion).


 


[End of Article VII]


 


17





















 


ARTICLE VIII


 


EVENTS OF DEFAULT AND REMEDIES


 


Section 8.1. Events of Default Defined. The term “Event
of Default” shall mean any one or more of the following events:


 


(a)
 Failure by the Borrower to make timely payment of any Loan Payment or any
Additional Payment when due.


 


(b)
Failure by the Borrower to observe and perform any covenant, condition or
agreement on the part of the Borrower under this Loan Agreement or the
Indenture, other than as referred to in the preceding subparagraph (a) of this
Section, for a period of 60 days after written notice of such default has been
given to the Borrower and the Credit Enhancer by the Trustee during which time
such default is neither cured by the Borrower or the Credit Enhancer nor waived
in writing by the Credit Enhancer and the Trustee, provided that, if the
failure stated in the notice cannot be corrected within said 60-day period, the
Credit Enhancer and the Trustee may consent in writing to an extension of such
time prior to its expiration and the Credit Enhancer and the Trustee will not
unreasonably withhold their consent to such an extension if corrective action
is instituted by the Borrower or the Credit Enhancer within the 60-day period
and diligently pursued to completion and if such consent, in their judgment,
does not materially adversely affect the interests of the Bondowners.


 


(c)
 Any representation or warranty by the Borrower herein or in any
certificate or other instrument delivered under or pursuant to this Loan
Agreement or the Indenture or in connection with the financing of the Project
shall prove to have been false, incorrect, misleading or breached in any
material respect on the date when made, unless waived in writing by the Issuer,
the Credit Enhancer and the Trustee or cured by the Borrower or the Credit
Enhancer within 30 days after the discovery thereof and notice has been given
to the Borrower and the Credit Enhancer.


 


(d)
 The occurrence of an Act of Bankruptcy with respect to the Borrower.


 


(e)
 The occurrence of an Event of Default as defined in the Indenture.


 


(f)
 The occurrence of an Event of Default as defined in the Series 1994A Loan
Agreement.


 


Section 8.2. Remedies on Default. Subject to the provisions
of Section 8.8 hereof, whenever any Event of Default shall have occurred
and be continuing, the Trustee, as the assignee of the Issuer, may take any one
or more of the following remedial steps; provided that if the principal of all
Bonds then Outstanding and the interest accrued thereon shall have been
declared immediately due and payable pursuant to the provisions of Section 802
of the Indenture, all Loan Payments for the remainder of the Loan Term shall
become immediately due and payable without any further act or action on the
part of the Issuer or the Trustee and the Trustee may immediately proceed
(subject to the provisions of Section 8.8 hereof) to take any one or more
of the remedial steps set forth in subparagraph (b) of this Section:


 


18





















 


(a)
By written notice to the Borrower (with a copy to the Credit Enhancer) declare
all Loan Payments to be immediately due and payable, together with interest on
overdue payments of principal and redemption premium, if any, and, to the
extent permitted by law, interest, at the rate or rates of interest specified
in the respective Bonds, without presentment, demand or protest, all of which
are expressly waived.


 


(b)
Take whatever other action at law or in equity, including causing the
appointment of a receiver or receivers for the Borrower and/or its assets,
taking all actions necessary and appropriate to exercise or to cause the
exercise the rights and powers set forth herein or in the Indenture, as may
appear necessary or desirable to collect the amounts payable pursuant to this
Loan Agreement then due and thereafter to become due or to enforce the
performance and observance of any obligation, agreement or covenant of the
Borrower under this Loan Agreement or the Indenture.


 


In
the enforcement of the remedies provided in this Section, the Trustee may treat
all expenses of enforcement, including reasonable legal, accounting and
advertising fees and expenses, as Additional Payments then due and payable by
the Borrower.


 


Any
amount collected pursuant to action taken under this Section (other than
payments on the Credit Facility) shall be paid to the Trustee and applied,
first, to the payment of any costs, expenses and fees incurred by the Issuer or
the Trustee as a result of taking such action and, next, any balance shall be
used to satisfy any Loan Payments then due by payment into the Revenue Fund and
applied in accordance with the Indenture and, then, to satisfy any other
Additional Payments then due or to cure any other Event of Default.


 


Notwithstanding
the foregoing, the Trustee shall not be obligated to take any remedial action
described in (b) above that in its opinion will or might cause it to expend
time or money or otherwise incur liability, unless and until indemnity
satisfactory to it has been furnished to the Trustee at no cost or expense to
the Trustee.


 


The
provisions of this Section are subject to the limitation that the
annulment of a declaration that the Bonds are immediately due and payable shall
automatically constitute an annulment of any corresponding declaration made
pursuant to subparagraph (a) of this Section and a waiver and rescission
of the consequences of such declaration and of the Event of Default with
respect to which such declaration has been made, provided that no such waiver
or rescission shall extend to or affect any other or subsequent Default or
impair any right consequent thereon. In the event any covenant, condition or
agreement contained in this Loan Agreement shall be breached or any Event of
Default shall have occurred and such breach or Event of Default shall
thereafter be waived by the Trustee, such waiver shall be limited to such
particular breach or Event of Default.


 


Section 8.3. No Remedy Exclusive. Subject to the
provisions of Section 8.8 hereof, no remedy herein conferred or reserved
is intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Loan Agreement or now or hereafter existing at
law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice, other than such notice as may be herein expressly
required.


 


19





















 


Section 8.4. Agreement to Pay Attorneys’ Fees and
Expenses. Subject to the provisions of Section 3.7 hereof, in correction
with any Event of Default by the Borrower, if the Issuer or the Trustee employs
attorneys or incurs other expenses for the collection of amounts payable
hereunder or the enforcement of the performance or observance of any covenants
or agreements on the part of the Borrower herein contained, the Borrower agrees
that it will, on demand therefor, pay to the Issuer and the Trustee the
reasonable fees of such attorneys and such other reasonable expenses so
incurred by the Issuer and the Trustee.


 


Section 8.5. Issuer and Borrower to Give Notice of
Default. The Issuer, the Trustee and the Borrower shall each, at the expense of
the Borrower, promptly give to the Credit Enhancer and the other listed parties
written notice of any Default of which the Issuer, the Trustee or the Borrower,
as the case may be, shall have actual knowledge or written notice, but the
Issuer shall not be liable for failing to give such notice.


 


Section 8.6. Performance Of Borrower’s Obligations. If
the Borrower shall fail to keep or perform any of its obligations as provided
in this Loan Agreement in respect of (a) maintenance of insurance, (b) payments
of taxes, assessments and other charges, (c) repairs and maintenance of the
Plant, and (d) compliance with legal or insurance requirements, or in the
making of any other payment or performance of any other obligation, then the
Issuer, the Credit Enhancer or the Trustee, may (but shall not be obligated so
to do) upon the continuance of such failure on the Borrower’s part for 5 days
after notice of such failure is given to the Borrower and the other listed
parties by the Issuer, the Credit Enhancer or the Trustee, and without waiving
or releasing the Borrower from any obligation hereunder, as an additional but
not exclusive remedy, make any such payment or perform any such obligation, and
all sums so paid by the Issuer, the Credit Enhancer or the Trustee and all
necessary incidental costs and expenses incurred by the Issuer, the Credit
Enhancer or the Trustee in performing such obligations shall be deemed to be
Additional Payments or payments due under the Collateral Documents, as
applicable, and shall be paid to the Issuer, the Credit Enhancer or the Trustee
on demand.


 


Section 8.7. Remedial Rights Assigned to the Trustee.
Upon the execution and delivery of the Indenture, the Issuer will thereby have
assigned to the Trustee all rights and remedies conferred upon or reserved to
the Issuer by this Loan Agreement, reserving only the Unassigned Issuer’s
Rights. Subject to the provisions of Section 8.8 hereof, the Trustee shall
have the exclusive right to exercise such rights and remedies conferred upon or
reserved to the Issuer by this Loan Agreement in the same manner and to the
same extent, but under the limitations and conditions imposed thereby and
hereby. The Trustee, the Credit Enhancer and the Bondowners shall be deemed
third party creditor beneficiaries of all representations, warranties,
covenants and agreements contained herein.


 


Section 8.8. Credit Enhancer to Direct Trustee. Any
provision herein to the contrary notwithstanding, unless an Event of Default
described in subparagraph (a), (b), (c) or (e)(i) of Section 801 of the
Indenture, or an Event of Default described in subparagraph (g) of said Section 801
as the same relates to a default described in subparagraphs (a), (b), (c) or
(e)(i) of Section 801 of the Series 1994A Indenture, shall have occurred
and be continuing, the Issuer shall (subject to the requirements of Section 901(1)
of the Indenture) exercise the remedies provided for hereunder only if and as
directed in writing by the Credit Enhancer and shall not waive any Event of
Default without the prior written consent


 


20





















 


of the Credit Enhancer;
provided that such direction shall not be otherwise than in accordance with the
provisions of law and of the Indenture.


 


[End of Article VIII]


 


21





















 


ARTICLE IX


 


PREPAYMENT AND ACCELERATION OF LOAN PAYMENTS


 


Section 9.1. Prepayment at the Option of the Borrower.
Upon the exercise by the Borrower, with the prior written consent of the Credit
Enhancer, of its option to cause the Bonds or any portion thereof to be
redeemed pursuant to Section 401 of the Indenture, the Borrower shall
prepay Loan Payments in whole or in part at the times and at the prepayment
prices sufficient to redeem all or a corresponding portion of the Bonds then
Outstanding in accordance with said Section. At the written direction of the
Borrower such prepayments shall be applied to the redemption of the Bonds in
whole or in part in accordance with said Section.


 


Section 9.2. Optional Prepayment Upon Certain Events.
Upon the occurrence of any of the conditions or events set forth in Section 402(d)
of the Indenture, the Borrower shall have the option, with the prior written
consent of the Credit Enhancer, to prepay Loan Payments, in whole or in part at
any time, at the time and at the prepayment price sufficient to redeem all or a
corresponding portion of the Bonds then Outstanding in accordance with said
Section.


 


Section 9.3. [Reserved].


 


Section 9.4. Mandatory Prepayment Upon Certain Defaults.
Upon the occurrence of any event set forth in Section 402(c) of the
Indenture, the Borrower shall prepay Loan Payments in whole at the time and at
the prepayment price sufficient to redeem all of the Bonds then Outstanding in
accordance with said Section.


 


Section 9.5. Mandatory Prepayment From Amounts Remaining
in Project Fund. Redemption of Bonds with proceeds derived under Section 3.4(b)
hereof shall be deemed a prepayment of the Loan Payments in the same amount as
the amount of Bonds redeemed. The Borrower shall pay or cause to be paid to the
Trustee from Available Moneys, at the time of a transfer from the Project Fund
to the Revenue Fund, such amount as is necessary to cause the transferred
amount to equal an Authorized Denomination.


 


Section 9.6. Right to Prepay at Any Time. The Borrower
shall have the option at any time to prepay all of the Loan Payments,
Additional Payments and other amounts it is required to pay hereunder by paying
to the Trustee all such sums as are sufficient to satisfy and discharge the
Indenture and paying or making provision for the payment of all other sums
payable hereunder.


 


Section 9.7. Notice of Prepayment. To exercise an option
granted by Section 9.1, Section 9.2 or Section 9.6, the Borrower
shall give written notice to the Issuer, the Credit Enhancer and the Trustee
which shall specify therein the date upon which a prepayment of Loan Payments
will be made, which date shall be not less than 45 days from the date the
notice is received by the Trustee, and which shall contain the written consent
of the Credit Enhancer. In the Indenture, the Issuer has directed the Trustee
to forthwith take all steps (other than the payment of the money required to
redeem the Bonds) necessary under the applicable provisions of the Indenture to
effect any redemption of the then Outstanding Bonds, in whole, or in part,
pursuant to Section 402 of the Indenture.


 


22





















 


Section 9.8. Precedence of this Article. The rights,
options and obligations of the Borrower set forth in this Article may be
exercised or shall be fulfilled, as the case may be, whether or not a Default
exists hereunder, provided that such Default will not result in nonfulfillment
of any condition to the exercise of any such right or option and provided
further that no amounts payable pursuant to this Loan Agreement shall be
prepaid in part during the continuance of an Event of Default described in
subparagraph (a) of Section 8.1 hereof.


 


[End of Article IX]


 


23





















 


ARTICLE X


 


MISCELLANEOUS


 


Section 10.1. Authorized Representatives. Whenever under
this Loan Agreement the approval of the Issuer is required or the Issuer is
required or permitted to take some action, such approval shall be given or such
action shall he taken by an Authorized Issuer Representative, and the Borrower,
the Credit Enhancer and the Trustee shall be authorized to act on any such
approval or action. Any approval shall not he unreasonably withheld or delayed.


 


Whenever
under this Loan Agreement the approval of the Borrower is required or the
Borrower is required or permitted to take some action, such approval shall be
given or such action shall be taken by an Authorized Borrower Representative,
and the Issuer, the Credit Enhancer and the Trustee shall be authorized to act
on any such approval or action.


 


Whenever
under this Loan Agreement the approval of the Credit Enhancer is required or
the Credit Enhancer is required or permitted to take some action, such approval
shall be given or such action shall be taken by an authorized Credit Enhancer
representative, and the Issuer, the Borrower and the Trustee shall be
authorized to act on any such approval or action.


 


Section 10.2. Term of Loan Agreement. This Loan Agreement
shall be effective from and after its execution and delivery and shall continue
in full force and effect until the Bonds are deemed to be paid within the
meaning of Article XII of the Indenture and provision has been made for
paying all other sums payable by the Borrower to the Issuer, the Trustee, the
Credit Enhancer and the Paying Agent to the date of the retirement of the
Bonds. All agreements, covenants, representations and certifications by the
Borrower as to all matters affecting the status of the interest on the Bonds
and the indemnifications provided by Section 6.3 hereof shall survive the
termination of this Loan Agreement for 12 months unless a claim has been made
and then such indemnification shall continue with regard to that claim only.


 


Section 10.3. Notices. Except as otherwise provided
herein, it shall be sufficient service of any notice, request, complaint,
demand or other paper required by this Agreement to be given to or filed if the
same shall be duly mailed by first-class mail, postage pre-paid, certified or
registered mail, or sent by telegram, telecopy or telex or other similar
communication, confirmed in writing by first-class mail, postage prepaid,
certified or registered mail, or sent by telegram, telecopy or telex or other
similar communication, on the same day, addressed as specified in Section 1302
of the Indenture. All notices given by first-class mail, certified or
registered mail, postage prepaid, as aforesaid shall be deemed duly given as of
the third day after they are so mailed; all notices given by telegram, telecopy
or telex or other similar communication shall be deemed duly given as of the
date the same are transmitted by such means to the recipient thereof; provided,
however, that any notice deemed to be given on a date that is not a Business
Day in the jurisdiction in which such notice is delivered to the addressee
thereof, such notice shall not he deemed duly given until the next succeeding
Business Day; provided, further, that notices to the Trustee shall he deemed
given as of the date they are received by the Trustee. A duplicate copy of each
notice, certificate or other communication given hereunder by either the Issuer
or the Trustee to the other shall also be given to the Borrower, the Remarketing
Agent and the Credit Enhancer. In the event of notice to any party other than
the Issuer or the Trustee, a copy of the notice shall he provided to the
Borrower, the Remarketing Agent and the Credit Enhancer. In addition, the
Trustee shall send to the Credit Enhancer, the Borrower, the Tender Agent and
the Remarketing Agent a copy of each notice sent to the Bondowners. The Issuer,
the Trustee, the Tender Agent, the Borrower, the Credit Enhancer


 


24





















 


and the Remarketing Agent may
from time to time designate, by notice given under the terms of the Indenture
to the others of such parties, such other address to which subsequent notices,
certificates or other communications shall be sent.


 


Section 10.4. Performance Date Not a Business Day. If the
last day for performance of any act or the exercising of any right, as provided
in this Loan Agreement, shall not be a Business Day, such payment may be made
or act performed or right exercised on the next succeeding Business Day.


 


Section 10.5. Binding Effect. This Loan Agreement shall
inure to the benefit of and shall be binding upon the Issuer, the Borrower and
their respective successors and assigns, subject to the provisions contained in
Section 5.2 hereof. The Issuer and the Borrower acknowledge that the
Credit Enhancer is a third-party beneficiary of those provisions herein which
relate to the making of payments or giving of notice to or consents by or
following the directions of or the performance of other acts to benefit it and
all such provisions shall be enforceable by the Credit Enhancer.


 


Section 10.6. Amendments, Changes and Modifications.
Except as otherwise provided in this Loan Agreement or in the Indenture,
subsequent to the issuance of Bonds and prior to all of the Bonds being deemed
to be paid in accordance with Article XII of the Indenture and provision
being made for the payment of all sums payable under the Indenture in
accordance with Article XII thereof, this Loan Agreement may not be
effectively amended, changed, modified, altered or terminated without the prior
concurring written consent of the Trustee and the Credit Enhancer, given in
accordance with the Indenture.


 


Section 10.7. Execution in Counterparts. This Loan
Agreement may be executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.


 


Section 10.8. No Pecuniary Liability. No provision,
representation, covenant or agreement contained in this Loan Agreement or in
the Indenture, the Bonds, or any obligation herein or therein imposed upon the
Issuer, or the breach thereof, shall constitute or give rise to or impose upon
the Issuer a pecuniary liability (except to the extent of any loan repayments,
revenues and receipts derived by the Issuer pursuant to this Loan Agreement).
No provision hereof shall be construed to impose a charge against the general
credit of the Issuer or the State or the taxing powers of the State within the
meaning of any constitutional provision or statutory limitation, or any
personal or pecuniary liability upon any director, official or employee of the
Issuer.


 


Section 10.9. Extent of Covenants of the Issuer; No
Personal or Pecuniary Liability. All covenants, obligations and agreements of
the Issuer contained in this Loan Agreement and the Indenture shall be
effective to the extent authorized and permitted by applicable law. No such
covenant, obligation or agreement shall be deemed to be a covenant, obligation
or agreement of any present or future member, officer, agent or employee of the
Issuer in other than his official capacity, and no official executing the Bonds
shall be liable personally on the Bonds or be subject to any personal liability
or accountability by reason of the issuance thereof or by reason of the
covenants, obligations or agreements of the Issuer contained in this Loan
Agreement or in the Indenture. No provision, covenant or agreement contained in
this Loan Agreement, the Indenture or the Bonds, or any obligation herein or therein
imposed upon the Issuer, or the breach thereof, shall constitute or give rise
to or impose upon the Issuer a pecuniary liability or a charge.


 


25





















 


Section 10.10. Net Loan. The parties hereto agree (a) that
the payments of Loan Payments are designed to provide the Issuer and the
Trustee with moneys adequate in amount to pay all principal of, purchase price
of, and redemption premium, if any, and interest accruing on the Bonds as the
same become due and payable, (b) that to the extent that the payments of Loan
Payments are not sufficient to provide the Issuer and the Trustee with funds
sufficient for the purposes aforesaid, subject to the provisions of Section 3.8
hereof, the Borrower shall be obligated to pay, and it does hereby covenant and
agree to pay, upon demand therefor, as Additional Payments, such further
moneys, in cash, as may from time to time be required for such purposes, and
(c) that if after the principal of, and redemption premium, if any, and
interest on the Bonds and all costs incident to the payment of the Bonds have
been paid in full the Trustee or the Issuer holds unexpended funds received in
accordance with the terms hereof, such unexpended funds shall, after payment
therefrom of all sums then due and owing by the Borrower under the terms of
this Loan Agreement, be distributed in accordance with the Indenture.


 


Section 10.11. Security Interests. The Issuer and the
Borrower agree to enter into all instruments (including financing statements
and statements of continuation) necessary for perfection of and continuance of
the perfection of the security interests of the Issuer and the Trustee in the
Project. The Trustee shall file or cause to be filed all such instruments
required to be so filed and shall continue or cause to be continued the liens
of such instruments for so long as the Bonds shall be Outstanding.


 


Section 10.12. Complete Agreement. The Issuer and the
Borrower understand that oral agreements or commitments to loan money, extend credit
or to forbear from enforcing repayment of a debt including promises to extend
or renew such debt are not enforceable. To protect the Issuer and the Borrower
from misunderstanding or disappointment, any agreements the Issuer and the
Borrower reach covering such matters are contained in this Loan Agreement,
which is the complete and exclusive statement of the agreement between the
Issuer and the Borrower, except as the Issuer and the Borrower may later agree
in writing (subject to the provisions of Article XI of the Indenture) to
modify this Agreement.


 


Section 10.13. Severability. If any provision of this Loan
Agreement, or any covenant, stipulation, obligation, agreement, act or action,
or part thereof made, assumed, entered into or taken thereunder, or any
application of such provision, is for any reason held to be illegal or invalid,
such illegality or invalidity shall not affect any other provision of this Loan
Agreement or any other covenant, stipulation, obligation, agreement, act or
action, or part thereof, made, assumed, entered into, or taken, each of which
shall be construed and enforced as if such illegal or invalid portion were not
contained herein. Such illegality or invalidity of any application thereof
shall not affect any legal and valid application thereof, and each such
provision, covenant, stipulation, obligation, agreement, act or action, or part
thereof, shall be deemed to be effective, operative, made, entered into or
taken in the manner and to the full extent permitted by law.


 


26





















 


Section 10.14. Governing Law. This Loan Agreement shall be
governed by and construed in accordance with the laws of the State of South
Carolina.


 


Section 10.15. Not a Limitation. Nothing in this Loan
Agreement contained is intended to be (and nothing herein shall be construed to
be) a limitation on the obligations of the Borrower to the Credit Enhancer
under the Credit Documents.


 


Section 10.16. Consent to Jurisdiction; Service of Process.


 


(a)
 The Borrower hereby agrees and consents that any action or proceeding
arising out of or brought to enforce the provisions of this Loan Agreement or
any of the other Borrower Documents may be brought in any appropriate court in
the State or in any other court having jurisdiction over the subject matter,
all at the sole election of the Issuer or the Trustee, and by the execution of
this Loan Agreement, the Borrower irrevocably consents to the jurisdiction of
each such court.


 


(b)
 If for any reason the Borrower should become not qualified to do business
in the State, the Borrower hereby agrees to designate and appoint, without
power of revocation, an agent for service of process within the State, as the
agent for the Borrower upon whom may be served all process, pleadings, notice,
or other papers, which may be served upon the Borrower as a result of any of
the Borrower’s obligations hereunder.


 


(c)
 The Borrower covenants that throughout the period during which any of the
Bonds remain outstanding, if a new agent for service or process within the
State is designated pursuant to the terms of subsection (1,) of this
section, the Borrower will immediately file with the Issuer, the name and
address of such new agent and the date on which its appointment is to become
effective.


 


27





















 


IN
WITNESS WHEREOF, the Issuer and the Borrower have caused this Loan Agreement to
be executed in their respective names.


 


 


	
   

  	
  SOUTH CAROLINA
  JOBS-ECONOMIC

  DEVELOPMENT AUTHORITY

  
	
   

  	
   

  
	
   

  	
  By 

  	
   /s/ [Illegible]

  	
   

  
	
   

  	
   

  	
  Chairman, Board of
  Directors

  



 


[SEAL]


 


ATTEST:


 


	
  By 

  	
   /s/ [Illegible]

  	
   

  	
   

  
	
   

  	
  Executive Director

  	
   

  
	
   

  	
   

  
	
   

  	
  ROLLER BEARING COMPANY OF
  AMERICA,

  INC.

  
	
   

  	
   

  
	
   

  	
  By 

  	
   /s/ [Illegible]

  	
   

  
	
   

  	
   

  	
  Its CFO and TREASURER

  



 


[SEAL]


 


ATTEST:


 


	
  By 

  	
   /s/ [Illegible]

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
				



 


28





















 


EXHIBIT A


 


DESCRIPTION OF PROJECT


 


The
provision of working capital to be utilized in connection with an approximately
60,000 square foot expansion of an existing facility for the manufacture of
roller bearings in Darlington County, South Carolina.


 


A-1





















 


EXHIBIT B


 


	
  Request No.

  	
   

  	
   

  	
   

  	
  Date: 

  	
   

  	
   

  



 


WRITTEN REQUEST FOR DISBURSEMENT FROM

SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY










 


	
   

  	
   

  	
  FUND

  
	
  (ROLLER BEARING OF AMERICA, INC. PROJECT)

  
	
  Series 1994B

  



 


To:                              Mark Twain Bank


Attention:
Corporate Trust Department


 


as
Trustee under the Trust Indenture, dated as of September 1, 1994, between
the South Carolina Jobs-Economic Development Authority, and said Trustee


 


Pursuant
to Section 3.4 of the Loan Agreement, dated as of September 1, 1994
(the “Loan Agreement”), between the South Carolina Jobs-Economic Development
Authority and Roller Bearing Company of America, Inc. (the “Borrower”), the
Borrower hereby requests payment from the          
Fund in accordance with this request and said Section 3.4 and hereby
states and certifies as follows:


 


1.                                       The date and number of this request are as set
forth above. The amount of such request is $                    


 


2.                                       All terms in this request shall have and are
used with the meanings specified in the Loan Agreement.


 


3.                                       The conditions to disbursement set forth in Section 3.4(c)
of the Loan Agreement have been met and satisfied with respect to this request.


 


4.                                       With respect to
this request, the Borrower hereby certifies as to those items set forth in (2)
and (3) of Section 3.4(c)(A) of the Loan Agreement.


 


	
   

  	
  ROLLER BEARING COMPANY OF

  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Borrower
  Representative

  



 


Consented to this          
day of                ,
199      .


 


	
  HELLER FINANCIAL, INC.

  
	
   

  
	
  By

  	
   

  	
   

  
	
  Authorized Signatory

  



 


B-1





















 


EXHIBIT C


 


COMPLETION CERTIFICATE


 


	
  To:

  	
   

  	
  Mark Twain Bank, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  South Carolina
  Jobs-Economic Development Authority, Issuer and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Heller Financial Inc.,
  Credit Enhancer

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Authorized Borrower
  Representative

  
	
   

  	
   

  	
   

  
	
  Subject: 

  	
   

  	
  $3,000,000 South Carolina
  Jobs-Economic Development Authority Variable Rate Demand Industrial
  Development Revenue Bonds (Roller Bearing Company of America, Inc. Project)
  Series 1994B

  



 


 


The
undersigned hereby certifies in connection with the Project, financed with the
proceeds of the above-described Bonds issued by the South Carolina
Jobs-Economic Development Authority (the “Issuer”) pursuant to the Trust
Indenture dated as of September 1, 1994 (the “Indenture”) between the
Issuer and                                                             
(the “Trustee”), the proceeds of which have been loaned to Roller Bearing
Company of America, Inc. (the “Borrower”) pursuant to the Loan Agreement
between the Borrower and the Issuer dated as of September 1, 1994 (the “Loan
Agreement”) (words capitalized herein have the meaning ascribed to them in the
Loan Agreement):


 


1.
The funding of the Project was completed as of                               ,
19       (the “Completion Date”).


 


2.
The money in the Project Fund in excess of the total set forth in 1(a) above
represents the surplus proceeds of the Bonds and the Trustee under the
Indenture is hereby authorized and directed to deposit such money to the
Revenue Fund to be used to redeem the principal amount of outstanding Revenue
Bonds at the earliest possible time. Accompanying this Certificate (or
otherwise to be made available to the Trustee as follows: ) are Available
Moneys sufficient to cause the amount to be deposited to equal an Authorized
Denomination.


 


C-1





















 


This
certificate is given without prejudice to any rights against third parties
which exist at the date hereof or which may subsequently come into being.


 


 


	
   

  	
  ROLLER BEARING COMPANY OF

  AMERICA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Borrower
  Representative

  



 


Date:                               ,
19      


 


C-2