Exhibit 10.10


 


CONFIDENTIAL


 




 













LOAN
AGREEMENT










 


between


 


SOUTH
CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY


 


and


 


ROLLER
BEARING COMPANY OF AMERICA, INC.


 










 


Relating
to


 


$7,700,000


Variable
Rate Demand


Industrial
Development Revenue Bonds


(Roller
Bearing Company of America, Inc. Project)


Series 1994A


 










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 

  	
   

  
	
  Section 2.3.

  	
  General
  Tax Representations, Warranties and Covenants of Borrower 

  	
   

  
	
  Section 2.4.

  	
  Manufacturing
  Facilities 

  	
   

  
	
  Section 2.5.

  	
  Actions Under
  Section 144(a)(4) of the Code 

  	
   

  
	
  Section 2.6.

  	
  Tax Exemption

  	
   

  
	
  ARTICLE III

  	
  THE LOAN; ISSUANCE OF THE BONDS

  	
   

  
	
  Section 3.1.

  	
  Amount and Source of the Loan

  	
   

  
	
  Section 3.2.

  	
  Possession and Use of the Project

  	
   

  
	
  Section 3.3.

  	
  Termination of Prior Liens

  	
   

  
	
  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

  	
   

  
				



 


ii





















 


	
  Section 3.8.

  	
  Obligations Unconditional

  	
   

  
	
  Section 3.9.

  	
  Credit Facility

  	
   

  
	
  Section 3.10.

  	
  Alternate
  Credit Facility

  	
   

  
	
  Section 3.11.

  	
  Issuance
  of Bonds

  	
   

  
	
  Section 3.12.

  	
  Borrower
  Required to Pay Costs in Event Project Fund Insufficient

  	
   

  
	
  Section 3.13.

  	
  Completion
  Date

  	
   

  
	
  ARTICLE IV

  	
  OPERATION OF THE PROJECT

  	
   

  
	
  Section 4.1.

  	
  Operation of the Project

  	
   

  
	
  Section 4.2.

  	
  Environmental Compliance

  	
   

  
	
  Section 4.3.

  	
  Payment of Project Costs

  	
   

  
	
  Section 4.4.

  	
  Deficiency of Project Fund

  	
   

  
	
  ARTICLE V

  	
  MAINTENANCE;
  MODIFICATIONS; INSURANCE; LEASE OR ASSIGNMENT OF PROJECT; LOSS OR DAMAGE TO
  PROJECT

  	
   

  
	
  Section 5.1.

  	
  Maintenance
  of Project by Borrower

  	
   

  
	
  Section 5.2.

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

  	
   

  
	
  Section 5.3.

  	
  Taxes,
  Assessments and Other Charges

  	
   

  
	
  Section 5.4.

  	
  Use
  of Project

  	
   

  
	
  Section 5.5.

  	
  Insurance
  Required

  	
   

  
	
  Section 5.6.

  	
  Damage,
  Destruction, Condemnation or Loss of Title

  	
   

  
	
  Section 5.7.

  	
  Remodeling
  and Improvements 

  	
   

  
	
  Section 5.8.

  	
  Equipment

  	
   

  
				



 


iii





















 


	
  ARTICLE VI

  	
  PARTICULAR
  COVENANTS 

  	
   

  
	
  Section 6.1.

  	
  Access
  to the Project and Inspection; Operation of the Project

  	
   

  
	
  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

  	
   

  
	
  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

  	
   

  
							



 


iv





















 


 


	
  Section 9.3.

  	
  Mandatory
  Prepayment Upon Determination of Taxability

  	
   

  
	
  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

  	
   

  
	
  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

  	
   

  
				



 


v





















 


	
  EXHIBIT
  A

  	
   

  
	
  EXHIBIT
  B

  	
   

  
	
  EXHIBIT
  C

  	
   

  



 


vi





















 


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 41-43-100 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 1994A in the principal amount of $7,700,000 (the “Bonds”)
for the purpose of providing funds to construct or purchase certain buildings,
fixtures, machinery and equipment (the “Project”) to constitute 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 construct and purchase the
Project; and


 


WHEREAS, the amount necessary
to finance the costs of such construct and purchase 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:


 


2





















 


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, the Tax Agreement and the Collateral Documents.


 


“Completion Date” means the
date of completion of the Project and any additions or improvements to the
Project.


 


“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.


 


“Full Insurable Value” means
the actual replacement cost of the Project without deduction for physical
depreciation and exclusive of land, excavations, footings, foundations and
parking lots.


 


“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.


 


“Net Proceeds” means, when
used with respect to any insurance or condemnation award with respect to the
Project, the title insurance or condemnation award with respect to which that
term is used remaining after the payment of all expenses (including attorneys’
fees and any expenses of the Issuer or the Trustee) incurred in the collection
of such gross proceeds. As used in this definition the word “condemnation”
shall have the meaning given to it in Section 5.6 hereof.


 


“Permitted Encumbrances”
shall have the meaning assigned to such term in the Credit Agreement (as
defined in the Letter of Credit Agreement).


 


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


 


3





















 


“Series 1994B Bonds”
means the Issuer’s $3,000,000 original principal amount Variable Rate Demand
Industrial Development Revenue Bonds (Roller Bearing Company of America, Inc.
Project) Series 1994B.


 


“Series 1994B Loan
Agreement” means the Loan Agreement dated of even date herewith between the
Issuer and the Borrower, delivered with respect to the Series 1994B 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(c) and (e), 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.


 


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}


 


4





















 


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 constructing and purchasing the Project, the Issuer proposes to issue the
Bonds in the aggregate principal amount of $7,700,000. 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


 


5





















 


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 Project.


 


(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 Project 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.


 


6





















 


(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 Project is located
wholly within Darlington County, South Carolina.


 


(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.


 


Section 2.3. General Tax Representations, Warranties and
Covenants of Borrower. The Borrower further represents, warrants and covenants
as follows:


 


(a) No proceeds of the
Bonds will be used, directly or indirectly, for the acquisition of land (or an
interest therein) to be used for farming purposes and less than 25% of the
proceeds of the Bonds will be used (directly or indirectly) for the acquisition
of land (or an interest therein) within the meaning of Section 147(c) of
the Code.


 


(b) Ninety-five percent
(95%) or more of the expenditures for costs of the Project made from proceeds
of the Bonds are, for federal income tax purposes, for land or depreciable
property chargeable to the capital account of the Project or would be so
chargeable either with a proper election by the Borrower under the Code or but
for a proper election to deduct any such costs.


 


(c) Acquisition and
construction of the Project, and each of the components thereof, occurred
subsequent to April 28, 1994, and no obligation relating to the
acquisition and construction of the Project (to be financed with proceeds of
the sale of the Bonds) was paid or incurred prior to such date. The Project is
expected to be placed in service on or about August 1, 1997.


 


(d) 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.


 


(e) During the period
commencing 15 days before the date of sale of the Bonds, neither the Borrower
or any other “principal user” of the Project or any “related person” (or group
of “related


 


7





















 


persons” which includes the
Borrower) has guaranteed, arranged, participated in, assisted with, borrowed
the proceeds of, or leased facilities financed by, obligations issued under Section 144(a) of
the Code by any state or local governmental unit or any constituted authority
empowered to issue obligations by or on behalf of any state or local governmental
unit other than the Issuer (“principal user” and “related person” as those
terms are used in Section 144(a) of the Code).


 


(f) During the period
commencing on the date of sale of the Bonds and ending 15 days thereafter,
there will be no obligations issued under Section 144(a) of the Code
which are guaranteed by the Borrower or any other “principal user” of the
Project or any “related person” (or group of “related persons” which includes
the Borrower) or which are issued with the assistance or participation of, or
by arrangement with, the Borrower or any other “principal user” of the Project
or any “related person” (or group of “related persons” which includes the
Borrower) without the written opinion of Sinkler & Boyd, P.A., to the
effect that the issuance of such obligations will not adversely affect the
exclusion from gross income of the interest paid on the Bonds for purposes of
federal income taxation; other than the Borrower or any other “principal user”
of the Project or any “related person” (or group of “related persons” including
the Borrower), no person has (i) guaranteed, arranged, participated in,
assisted with the issuance of, or paid any portion of the cost of the issuance
of, any of the Bonds, and (ii) provided any property or any franchise,
trademark or trade name (within the meaning of Section 1253 of the Code)
which is to be used in connection with the Project (“principal user” and “related
person” as those terms are used in Section 144(a) of the Code).


 


(g) The Bonds are not
being issued as part of an issue the interest of which is excludable from gross
income for purposes of federal income taxation under any other provision of law
other than Section 144(a) of the Code.


 


(h) The issuance of the
Bonds is not part of an issuance of tax-exempt bonds which (1) will be
sold (A) at substantially the same time or (B) pursuant to the same
plan of financing, and (2) are reasonably expected to be paid from
substantially the same source of funds, determined without regard to guarantees
from unrelated parties.


 


(i) For each “test-period
beneficiary” (as defined in Section 144(a)(10)(D) of the Code) of the
Project, the sum of (i) the aggregate authorized face amount of the Bonds
allocated in accordance with Section 144(a)(10)(C) of the Code to
such beneficiary and (ii) the aggregate outstanding principal amount of
any other tax-exempt obligation described in Section 144(a)(10)(B)(ii) of
the Code, wherever and whenever issued, allocated to such beneficiary does not
and will not exceed $40,000,000.


 


(j) There are no other issues
of private activity bonds, as defined in Section 141 of the Code, the
proceeds of which have been or will be used with respect to the “facilities,”
as defined in Section 144(a)(4)(B) of the Code, located within the
jurisdiction of the Issuer, the “principal user” of which is the Borrower or a “related
person” thereto (“principal user” and “related person” being used in this
Agreement as those terms are used in Section 144(a) of the Code).


 


(k) The Borrower will assist
the Issuer in filing all appropriate returns, reports and attachments to income
tax returns as of now or hereafter required by the provisions of the Code,
including without limitation the Information Return for Private Activity Bond
Issues (Form 8038) required under the Code.


 


8





















 


(l) The weighted average
maturity of the Bonds, calculated in accordance with the requirements of Section 147(b) of
the Code, is not more than 23 years, which is less than one hundred twenty
percent (120%) of the remaining average reasonably expected economic life of
the Project, calculated in accordance with the requirements of Section 147(b) of
the Code.


 


(m) No proceeds of the Bonds
shall be invested in federally insured deposits or accounts except as part of a
bona fide debt service fund or a reasonably required reserve fund.


 


(n) The Borrower has not and
will not sell, transfer or otherwise dispose of the Project except as provided
in this Loan Agreement.


 


(o) During the term of this
Agreement, the operation and maintenance of the Project will not conflict in
any material respect with any zoning, building, safety, health or environmental
quality or other law, ordinance, rule, or regulation applicable thereto. To the
extent of any conflict, the Borrower will use its best efforts to bring the
zoning of the Project into compliance with the intended uses of the Project.


 


(p) The Borrower hereby
represents and warrants that (i) the representations and warranties of the
Borrower set forth in the Tax Agreement are true and correct as of the of
delivery of this Loan Agreement and (ii) the Borrower expects to comply
with the covenants and agreements set forth in the Tax Agreement.


 


Section 2.4. Manufacturing Facilities. The Borrower
represents, warrants and covenants that the Project will be operated as a “manufacturing
facility” within the definition of Section 144(a)(12)(C) of the Code,
which shall include facilities which are directly related and ancillary thereto
within the meaning of the Code (the “Related and Ancillary Facilities”),
provided that (i) such Related and Ancillary Facilities shall be located
on the same site as the manufacturing facility, and (ii) not more than 25%
of the net proceeds of the Bonds may be used to provide the Related and Ancillary
Facilities. In addition, no more than a de minimis amount (within the meaning
of the Code) of the functions to be performed at any office space comprising
the Project is not directly related to the day-to-day operations at the
manufacturing facility.


 


Section 2.5 Actions Under Section 144(a)(4) of
the Code. The Issuer is issuing the Bonds pursuant to an election made by it,
at the Borrower’s request, under Section 144(a)(4) of the Code. In
connection with that election, the Borrower represents and covenants that:


 


(a) The sum of (i) the
principal amount of the Bonds, (ii) the outstanding face amount of prior
issues, if any, described in Section 144(a)(2) of the Code and (iii) the
aggregate amount of capital expenditures with respect to “facilities” as defined
in Section 144(a)(4)(B) of the Code, other than those financed or to
be financed out of proceeds of the Bonds or any such prior issues or those
mentioned in Section 144(a)(4)(C) of the Code (“Capital Expenditures”),
made during the three-year period preceding the Issue Date, does not exceed
$10,000,000.


 


(b) During the
three-year period following the Issue Date, the Borrower does not intend to
make or cause or permit to be made any capital expenditures in an amount which
would cause the interest on the Bonds to be included in the gross income of the
Owners for federal income tax purposes.


 


9





















 


(c) It will maintain
records, listing by month, day, year and amount each capital expenditure made
since the Issue Date through and including the third anniversary of the date of
original delivery of the Bonds and upon any Determination of Taxability will
furnish those records to the Trustee.


 


(d) In the event, on
account of a lease, sublease, management contract or other agreement relating
to the Project, or any portion thereof, permitted by the terms hereof, any
person other than the Borrower becomes a “principal user” of the Project
(within the meaning of Section 144(a) of the Code), the Borrower
shall promptly advise the Trustee of the identity of such person and furnish to
the Trustee a copy of such lease, sublease, management contract or other
agreement. In connection with any such lease, sublease, management contract or
other agreement, the Borrower will require by covenant that any lessee,
sublessee, manager or user who is a “principal user” of the Project and any “related
person” (within the meaning of Section 144(a) of the Code) thereto
shall comply with the covenants set forth in subsections (b) and (c) of
this Section as if those covenants were made herein by such lessee,
sublessee, manager, user or “related person” thereto.


 


Section 2.6. Tax Exemption. The Borrower hereby
covenants, represents and agrees as follows:


 


(a) that it will not
direct the Trustee to make any investment or use of the proceeds of any of the
Bonds, which would cause any of the Bonds to be “arbitrage bonds” within the
meaning of Section 148 of the Code and the Tax Regulations thereunder as
the same may be applicable to the Bonds at the time of such action, investment
or use and that it shall take and cause the Issuer and Trustee to take all
actions required to comply with the provisions of Section 148 of the Code;


 


(b) that it will at all
times do and perform all acts and things necessary or desirable and within its
reasonable control in order to assure that interest paid on the Bonds shall,
for the purposes of federal income taxation, not be includable in the gross
income of the Bondowners, except in the event that the Bondowner is a “substantial
user” of the Project or a “related person” (such terms within the meaning of Section 147(a) of
the Code);


 


(c) that it shall not
take or omit to take, or permit to be taken on its behalf, any actions which,
if taken or omitted, would adversely affect the excludability from the gross
income of the Bondowners of interest paid on the Bonds for federal income tax
purposes, whether currently in effect or enacted subsequent to the date of
original delivery of the Bonds;


 


(d) in the event that,
in accordance with Section 148(f) of the Code, any rebate of earnings
or profits on investment of any amounts constituting gross proceeds of the
Bonds shall be required to be made to the United States of America in order to
preserve the tax-exempt status of interest on the Bonds, it shall make all
rebatable arbitrage payments or cause them to be made in installments at least
once every five years as required by Section 148(f)(3) of the Code
and the provisions of the Tax Agreement; it being understood that in no event
shall the Issuer or the Trustee have any responsibility or liability for the
payment of any rebatable arbitrage, except as specifically provided in the Tax
Agreement and the Indenture, and that all responsibility and liability therefor
shall be vested in the Borrower; and


 


10





















 


(e) to take such action
or actions as may be necessary in the opinion of Bond Counsel to preserve or
perfect the exclusion of interest on the Bond from gross income for federal
income tax purposes.


 


[End
of Article II]


 


11





















 


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. Possession and Use of the Project. The
Issuer acknowledges that as between the Issuer and the Borrower the Borrower
shall be the sole legal owner of the Project, and shall be entitled to sole and
exclusive possession of the Project.


 


Section 3.3. Termination of Prior Liens. Concurrently
with the execution of this Loan Agreement the Borrower shall make provisions
for termination of all liens and security interests incurred with respect to
the Project except for Permitted Encumbrances.


 


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 reimburse the Borrower or any person
designated by the Borrower for the following:


 


(i) Costs
incurred directly or indirectly for or in connection with  the acquisition, construction, improvement,
installation or equipping of the
Project including, but not limited to, those for preliminary planning and studies, architectural, legal, engineering
and supervisory services, labor,
services, materials, fixtures, and equipment;


 


(ii) Premiums
attributable to all insurance required to be taken out  with respect to the Project, the premium on
each surety bond, if any, required
with respect to work on the Project, and taxes, assessments and other charges in respect of the Project, that
may become due and payable;


 


(iii) Costs
incurred directly or indirectly in seeking to enforce  any remedy against any contractor,
subcontractor, materialman or other agent in respect of any default under any contract relating to theProject;


 


(iv) 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 as long as such disbursements do not exceed two percent (2%) of the proceeds of the Bonds pursuant to Section 147(g) of
the Code;


 


(v) Any
other incidental and necessary costs, expenses, fees and  charges relating to the acquisition,
construction, improvement, installation
or equipping of the Project; title charges, surveys, commitment fees, appraisal fees and recording
fees; and


 


12





















 


(vi) 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) Nothing contained
herein permits or shall be construed to permit the expenditure of any moneys in
the Project Fund or the Cost of Issuance Fund for, or in reimbursement of
payments made for, the acquisition of motor vehicles, costs of issuance of the
Bonds to the extent such costs of issuance exceed 2% of the net proceeds of the
Bonds allocable to the Project within the meaning of Section 147(g) of
the Code, raw materials, small tools, supplies, inventory or accounts
receivable, or for provision of working capital, and no such expenditure shall
be made from the Project Fund or the Cost of Issuance Fund.


 


(c) All moneys in the
Project Fund (including moneys earned thereon by investment thereof) remaining
after the completion of the acquisition, construction, installation, equipment
and improvement of the Project and payment, or provision for payment, in full
of the costs provided for in the preceding subsections of this Section, then
due and payable, shall as soon as practicable be paid into the Revenue Fund to
be used (i) for the redemption of the Bonds, or a portion thereof, at the
earliest possible date; provided that amounts approved by the Borrower shall be
retained by the Trustee in the Project Fund for payment of such costs not then
due and payable, or (ii) to acquire, construct, install, improve and equip
such additional real and personal property in connection with the Project as
are designated by an Authorized Borrower Representative, the acquisition,
construction, installation, improvement and equipping of which will be such as
is permitted under both the Act and the Code, or (iii) for a combination
of any or all of the foregoing as is provided in such direction.


 


(d) Disbursements from
the Project Fund for the items described in this Section shall be in the
amount of such items, but, for the purpose of determining the amount of any such
item which involves any contract providing for the retention of a portion of
the contract price, there shall initially be deducted from such item the amount
of any such retention, and, when such retention becomes due and payable, such
retention shall be added to the item. 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 specific items, amounts
and payees thereof, (2) that none
of the items for which the disbursement is proposed to be made formed the basis for any disbursement
theretofore made from the Project
Fund, (3) that each item for which the disbursement is proposed to be made is or was properly
chargeable as a capital expenditure
in connection with the Project, (4) that the Borrower has received from each payee appropriate
waivers of any mechanics or other
liens (or thereby provided indemnification in lieu thereof) and, upon the written request of the Trustee
or the Credit Enhancer, copies of
such waivers and evidence of any such indemnification will be included with the certificate, (5) that
the items requested qualify for
such disbursement under the provisions of subsections (i) through (iii) of Section 3.4(c),
(6) that all construction on the
Project thereto performed is substantially in accordance with any plans and specifications for such
construction and all applicable
laws, rules, codes and regulations 


 


13





















 


and (7) that payment of
such disbursement will not result in less  than substantially all (at least ninety-five percent (95%)) of thenet proceeds of the Bonds (taking into
account investment income with
respect thereto) being used to provide land or property subject to the allowance for depreciation under Section 167
of the Code, constituting the
Project;


 


(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. 


 


(e) The final
disbursement from the Project Fund for the items described in this Section shall
include all amounts theretofore withheld as retainages as hereinbefore set
forth in this Section. The Credit Enhancer shall have no obligation to cause
its approval to be given to the written order of an Authorized Borrower
Representative for such final disbursement until the conditions described in
subsections (A) and (B) of Section 3.4(d) shall have been
satisfied with respect to such final disbursement.


 


(f) Should the Borrower
be unable to request final disbursement from the Project Fund as described
above prior to a date which is three (3) 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(c) unless
the Borrower delivers to the Trustee an opinion of Bond Counsel that such
treatment is not necessary to retain the tax-exempt status of the Bonds.


 


(g) All disbursements
from the Cost of Issuance Fund for the items described above shall be made only
upon the written order of an 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. The Issuer and the Borrower each hereby
covenants that it shall cause that investment and reinvestment and the use of
the proceeds of the Bonds to be restricted in such manner and to such extent,
if any, as may be necessary, after taking into account reasonable expectations
at the time of delivery of and payment for the Bonds, so that the Bonds will
not constitute arbitrage bonds under Section 148 of the Code.


 


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; 


 


14





















 


(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.


 


(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 Trustee, upon
demand, an amount necessary to pay rebatable arbitrage in accordance with the
Tax Agreement and the Indenture.


 


(c) 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;


 


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


 


(e) 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;


 


15





















 


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


 


(g) 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.


 


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 construction and purchase of 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, or providing improvements
or additions to the Project as contemplated in connection with the Bonds, the
Borrower shall, nonetheless, complete such improvements or additions 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.


 


16





















 


Section 3.13. Completion Date. The Completion Date of the
Project and all additions or improvements to 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, stating:


 


(a) the date on which
the Project and the final additions or improvements to the Project were
substantially complete,


 


(b) that all other
facilities necessary in connection with such additions or improvements have
been acquired, constructed, improved, installed and equipped,


 


(c) that the Project and
any such additions and improvements have been completed in such a manner as to
conform in all material respects with all applicable zoning, planning,
building, environmental and other similar governmental regulations,


 


(d) that all costs of
the Project or any such additions or improvements then due and payable have
been paid, and


 


(e) the amounts which
the Trustee should retain in the Project Fund for the payment of costs not yet
due or the liability for which the Borrower is contesting or which otherwise
should be retained and the reasons such amounts should be retained.


 


An Authorized Borrower
Representative shall include with such certificate a statement specifically
describing all items of real property, personal property and fixtures acquired
and installed as part of the Project.


 


[End
of Article III]


 


17





















 


ARTICLE IV


 


OPERATION
OF THE PROJECT


 


Section 4.1. Operation of the Project. 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 Project and shall comply in
all material respects with all lawful requirements of any governmental body
regarding the use or condition of the Project, 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 Project,
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 Project.


 


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]


 


18


















 


ARTICLE V


 


MAINTENANCE;
MODIFICATIONS; INSURANCE;


LEASE
OR ASSIGNMENT OF PROJECT;


LOSS
OR DAMAGE TO PROJECT


 


Section 5.1. Maintenance of Project by Borrower. The
Borrower agrees that, subject to the provisions of Sections 5.7 and 5.8 hereof,
during the term of this Agreement it will keep and maintain the Project 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 Project; Assignment of Loan
Agreement by Borrower. Subject to Section 2.2(j) hereof, and 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 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
Project 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 1994B 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 Project (including any tax upon or with respect to the income or profits of
the Issuer from the Project 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
Project), all utility and other charges incurred in the operation, maintenance,
use, occupancy and upkeep of the Project and all assessments and charges
lawfully made by any governmental body for public improvements that may be
secured by lien on the Project.


 


Section 5.4. Use of Project. 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 Project or to
interfere with possession, custody, use and enjoyment of the Project.


 


Section 5.5. Insurance Required. The Borrower shall cause
the Project 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 Project, and shall pay as the same
become due all premiums in respect thereof, all as provided in the Credit
Documents.


 


Section 5.6. Damage, Destruction, Condemnation or Loss of
Title. For as long as Heller Financial, Inc. is the Credit Enhancer, all
Net Proceeds shall be applied in accordance with the terms and provisions of
the Credit Agreement and other Credit Documents; provided (i) in addition
to the


 


19





















 


requirements set forth in the
Credit Agreement and other Credit Documents, as a condition to the use of such
Net Proceeds for repair, reconstruction, restoration, replacement and
re-equipping of the Project, there shall be delivered to the Trustee and the
Credit Enhancer an Opinion of Bond Counsel that such action shall not adversely
affect the exclusion from gross income for federal income tax purposes of the
interest on the Bonds and, upon completion of such action, any remaining
balance not required for such repair, reconstruction, restoration, replacement
and re-equipping shall be deposited in the Revenue Fund and applied in
accordance with the provisions of the Indenture and (ii) in the event the
Net Proceeds are not used for such repair, reconstruction, restoration,
replacement and re-equipping, such Net Proceeds shall be used for redemption of
Bonds as set forth in Section 5.6(b) below.


 


The Borrower hereby agrees to
apply the Net Proceeds of any award, compensation, settlement, damages,
compromise, voluntary conveyance or insurance proceeds payable in connection
with the pending or threatened condemnation or taking, or sale under threat of
condemnation or taking, of the Project or a portion thereof for any public or
quasipublic use (hereinafter referred to as a “condemnation”) or in connection
with a deficiency or nonexistence of the Borrower’s title thereto or the lien
or priority of the documents securing the Borrower’s obligations under the
Letter of Credit Agreement to the Credit Enhancer (hereinafter referred to as a
“loss of title”). The Issuer and the Trustee shall cooperate with the Borrower
in the handling and conduct of any prospective or pending condemnation
proceedings with respect to the Project or any portion thereof.


 


The Borrower shall notify the
Issuer, the Credit Enhancer and the Trustee immediately in the case of damage
to or destruction of the Project or any portion thereof resulting from fire or
other casualty (hereinafter referred to as a “casualty loss”) or of a
condemnation or loss of title.


 


In the event of a casualty
loss, a condemnation or a loss of title for which the Net Proceeds do not
exceed $1,000,000, the Borrower shall, but only with the prior written consent
of the Credit Enhancer, which consent may not be unreasonably withheld,
forthwith repair, reconstruct, restore, replace and improve the Project to
substantially the same or an improved condition or utility value as existed
prior to such casualty loss or forthwith make such replacements of or repairs
or improvements to the Project or portions thereof made necessary by such
condemnation or loss of title. Such Net Proceeds shall be paid directly to the
Borrower and applied to the extent necessary to the payment of the costs of
such repair, reconstruction, restoration, replacement and improvement. Any
remaining balance not required for such purpose shall be paid to the Trustee
for deposit in the Revenue Fund to be used to redeem Bonds on the earliest date
for which notice of redemption can be given in accordance with Article IV
of the Indenture.


 


If such Net Proceeds exceed
$1,000,000, or if such Net Proceeds do not exceed such amount and the Credit
Enhancer does not consent in writing to the action described in the immediately
preceding paragraph, such Net Proceeds shall be paid to the Trustee for
disbursement as hereinafter described and the Borrower shall, with the prior
written consent of the Credit Enhancer, elect one of the following options by
written notice delivered to the Trustee, the Credit Enhancer and the Issuer
within 30 days after the determination of the amount of such Net Proceeds or 90
days after the occurrence of such casualty loss, condemnation or loss of title,
whichever occurs first:


 


20





















 


(a) Option A - Repairs
and Improvements. Upon delivery of an Opinion of Bond Counsel to the Trustee
and the Credit Enhancer that such action shall not adversely affect the
exclusion from gross income for federal income tax purposes of the interest on
the Bonds, the Borrower may elect to use such Net Proceeds to repair,
reconstruct, restore, replace and re-equip the Project and, in such event, such
Net Proceeds shall be deposited in a separate account to be established by the
Trustee and, so long as no Event of Default exists, shall be disbursed from
time to time by the Trustee upon the request of the Borrower in such manner as
may be agreed to by the Credit Enhancer and the Trustee. Upon the completion of
such use, any remaining balance not required for such repair, reconstruction,
restoration, replacement and re-equipping shall be deposited in the Revenue
Fund and applied in accordance with the provisions of the Indenture.


 


(b) Option B -
Redemption of Bonds. The Borrower may elect to have such Net Proceeds deposited
in the Revenue Fund; provided either (i) the Borrower elects to prepay all
Loan Payments pursuant to Section 9.2 hereof and cause all the Bonds to be
redeemed (without premium or penalty) in accordance with Section 402(d) of
the Indenture at the earliest practical date, or (ii) the Borrower elects
to prepay Loan Payments pursuant to Section 9.2 hereof and cause part of
the Bonds to be redeemed (without premium or penalty) pursuant to Section 402(d) of
the Indenture and the property suffering such casualty loss, condemnation or
loss of title was not essential to the use of the Project in a manner that will
result in any of the representations or warranties respecting the Project and
the use of the proceeds of the Bonds being false, untrue, misleading or
breached and provided further that an expert appraiser retained by the Borrower
and reasonably acceptable to the Trustee delivers to the Trustee its written
opinion, appraisal or certificate showing that the ratio of the fair market
value at a foreclosure sale of the Project immediately prior to the occurrence
or discovery of such casualty loss, condemnation or loss of title to the
principal amount of the Bonds then Outstanding is no greater than the ratio of
the then current market value at a foreclosure sale of the Project to the
principal amount of the Bonds to be Outstanding after the application of such
Net Proceeds and any other moneys deposited in the Revenue Fund by the Borrower
for the redemption of Bonds.


 


In the event such Net
Proceeds do not exceed $1,000,000 and the Credit Enhancer consents in writing
to the action described in the third paragraph of this Section or the
Borrower shall elect Option A, (i) the Borrower shall complete the repair,
reconstruction, restoration, replacement and re-equipping of the Project free
from all liens other than Permitted Encumbrances, whether or not such Net
Proceeds are sufficient to pay for the same; (ii) the Borrower shall not
be entitled to any reimbursement from the Issuer, the Trustee, the Credit
Enhancer or the Bondowners or any abatement or diminution of its obligations
hereunder by reason of any payments made by the Borrower for such purpose in
excess of the Net Proceeds; and (iii) all such repairs, reconstructions,
restorations, replacements and re-equipping shall be a part of the Project and
shall be subjected to the lien and security interest of the Credit Documents
and the Borrower shall take any actions which the Credit Enhancer reasonably
deems necessary or appropriate to so subject them to the Credit Documents.


 


Notwithstanding anything
herein to the contrary, if Heller Financial, Inc. is no longer the Credit
Enhancer, the Borrower shall have no obligation to repair, reconstruct,
restore, replace or re-equip the Project (unless such Net Proceeds are made
available to the Borrower for such purpose).


 


21





















 


Section 5.7. Remodeling and Improvements. The Borrower
may remodel the Project or make substitutions, additions, modifications or
improvements thereto from time to time as it, in its discretion, deems
desirable, provided that (i) any such remodeling, substitutions,
additions, modifications or improvements do not materially alter the character
of the Project as an enterprise permitted by the Act and (ii) the same
will not adversely affect the exclusion from gross income for federal taxation
purposes of interest on the Bonds, as provided in an Opinion of Bond Counsel
addressed to the Issuer, the Trustee and the Credit Enhancer. The cost of such
remodeling, substitutions, additions, modifications or improvements shall be
paid by the Borrower.


 


Section 5.8. Equipment. The Borrower may from time to
time substitute machinery and equipment for any part of the Project, provided
that (i) any such substitutions do not materially alter the character of
the Project as an enterprise permitted by the Act and (ii) the same will
not adversely affect the exclusion from gross income for federal taxation
purposes of interest on the Bonds, as provided in an Opinion of Bond Counsel
addressed to the Issuer, the Trustee and the Credit Enhancer. Any such
substituted machinery and equipment shall become a part of the Project and be
included under the terms of this Agreement.


 


Provided that the same will
not adversely affect the exclusion from gross income for federal taxation
purposes of interest on the Bonds, as provided in an Opinion of Bond Counsel
addressed to the Issuer, the Trustee and the Credit Enhancer, the Borrower may
also sell, scrap, trade-in or otherwise dispose of, any machinery or equipment
which is a part of the Project, without substitution therefor so long as the
removal of the machinery or equipment to be purchased or otherwise disposed of
will not materially alter the character of the Project as an enterprise
permitted by the Act.


 


[End
of Article V]


 


22





















 


ARTICLE VI


 


PARTICULAR
COVENANTS


 


Section 6.1. Access to the Project and Inspection;
Operation of the Project. 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
Project and to examine and inspect the Project, 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 Project 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 he occasioned by any cause whatsoever
pertaining to the construction, maintenance, operation and use of the Project; (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
Project; (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; (v) failure to pay rebatable
arbitrage pursuant to Section 3.7(b) hereof; and (vi) any claim
or action or proceeding with respect to the matters set forth in subsections
(i), (ii), (iii), (iv) and (v) 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


 


23





















 


(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.


 


(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


 


24





















 


complied with all of the
terms, provisions and conditions of the Borrower Documents and that the
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]


 


25





















 


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]


 


26





















 


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 1994B 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:


 


27





















 


(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


 


28





















 


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.


 


Section 8.4. Agreement to Pay Attorneys’ Fees and
Expenses. Subject to the provisions of Section 3.7 hereof, in connection
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 Project, (d) compliance with legal or insurance requirements, and (e) keeping
the Project free of all liens other than Permitted Encumbrances, 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


 


29





















 


same relates to a default
described in subparagraphs (a), (b), (c) or (e)(i) of Section 801
of the Series 1994B 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 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]


 


30





















 


ARTICLE IX


 


PREPAYMENT
AND ACCELERATION OF LOAN PAYMENTS


 


Section 9.l. 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. Mandatory Prepayment Upon Determination of
Taxability. Upon the occurrence of a Determination of Taxability, 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 Section 402(a) of
the Indenture. The Borrower will promptly notify the Issuer, the Credit
Enhancer and the Trustee in writing of the occurrence and existence of any
event or condition which could result in mandatory prepayment under this
Section.


 


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(c) 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


 


31





















 


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 inpart, pursuant to Section 402 of the
Indenture.


 


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]


 


32





















 


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 be 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 be 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 pre-paid,
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, shall not be deemed duly given until the next succeeding Business Day;
provided, further, that notices to the Trustee shall be 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 be provided to the Borrower,


 


33





















 


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 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


 


34





















 


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.


 


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.


 


35





















 


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 (b) 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.


 


36





















 


 


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/ Robert L. Mobley

  	
   

  
	
   

  	
   

  	
  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]

  	
   

  
							



 


37





















 


EXHIBIT A


 


DESCRIPTION
OF PROJECT


 


Buildings, fixtures,
machinery and equipment to constitute 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 1994A


 


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.


 


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


 


3.                                       The names of the persons, firms or
corporations to whom the payments requested hereby are due, the amounts to be
paid and the description of the obligation requested to be paid hereby are as
set forth on Attachment I hereto.


 


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


 


5.                                       With respect to this request, the Borrower
hereby certifies as to those items set forth in (2) through (7),
inclusive, of Section 3.4(d)(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

  	
   

  	
   

  



 





















 


ATTACHMENT
I


 


TO
WRITTEN REQUEST FOR DISBURSEMENT FROM


SOUTH
CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY


 










 


             FUND


(ROLLER
BEARING COMPANY OF AMERICA, INC. PROJECT)


Series 1994A


 


	
  REQUEST NO.             

  	
  DATED
                        
           , 19    .

  



 


 


SCHEDULE OF PAYMENTS
REQUESTED


 


	
  Payee

  	
   

  	
  Amount

  	
   

  	
  General classification

  and description of the

  obligation to be paid

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 





















 


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:                                                     $7,700,000 South Carolina Jobs-Economic
Development Authority Variable 


Rate Demand Industrial
Development Revenue Bonds Roller Bearing


Company of America, Inc.
Project) Series 1994A


 


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 acquisition,
improvement, construction, installation and equipping of the Project was
substantially completed as of                                   ,19   
the “Completion Date”).


 


2. All other facilities
necessary in connection with the Project have been acquired, constructed,
improved, installed and equipped.


 


3. The Project has been
completed in such manner as to conform with all applicable zoning, planning,
building, environmental, food handling and other similar governmental
regulations.


 


4. All costs of the Project
have been paid in full except for those not yet due and payable or being
contested, which are described below and for which money for payment thereof is
being held and should be retained in the Project Fund:


 


(a) Costs of the Project
not yet due and payable:


 


	
  Description

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


C-1





















 


(b) Payments being
contested:


 


	
  Description

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


5. The money in the Project
Fund in excess of the total set forth in 4(a) and (b) 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.


 


6. Attached hereto is a
statement of the Authorized Borrower Representative listing and specifically
describing all items of personal property and fixtures acquired and installed
as part of the Project.


 


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