LOAN AGREEMENT

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).

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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:

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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.

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“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}

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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

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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.

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

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

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

(n) The 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

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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.

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(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.

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(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

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(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]

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ARTICLE III

THE LOAN; ISSUANCE OF THE BONDS

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

Section 3.2 . 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

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(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

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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;

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

(iv) the pur