1
Exhibit 10.7
[CERTIFICATE]
UNITED STATES OF AMERICA
COMMONWEALTH OF KENTUCKY
NUMBER
R- COUNTY OF CARROLL, KENTUCKY $
VARIABLE RATE DEMAND
INDUSTRIAL BUILDING REVENUE BOND
INDUSTRIAL BUILDING REVENUE BOND
(Kentucky Ladder Company Project)
DATED MATURITY DATE ISSUE DATE CUSIP
- ----- ------------- ---------- -----
September 1, 2015 September 19, 1990 144836 AA 1
REGISTERED OWNER:
NON-NEGOTIABLE
PRINCIPAL AMOUNT:
The County of Carroll, Kentucky (the "Issuer"), a county and political
subdivision of the Commonwealth of Kentucky, for value received, hereby promises
to pay (but only out of the sources hereinafter mentioned) to the registered
owner specified above, or registered assigns, on the maturity date specified
above, unless this Bond shall have been called for redemption in whole or in
part and payment of the redemption price shall have been duly made or provided
for, upon surrender hereof, the principal amount specified above and to pay (but
only out of the sources hereinafter mentioned) interest thereon on each interest
Payment Date (as hereinafter defined) from the dated date hereof specified
above, until payment of said principal amount has been made or provided for,
at the rates determined as provided in this Bond, commencing on the first
Interest Payment Date after the dated date hereof specified above.
So long as this Bond bears interest at a variable Weekly Rate (as
hereinafter defined), this Bond shall be purchased on demand of the registered
owner hereof as hereinafter described.
The principal or redemption price of this Bond shall be paid upon
presentation and surrender hereof at the principal corporate trust office of
Del-Ichi Kangyo Trust Company of New York, as Tender Agent (in such capacity,
the "Tender Agent") or at the duly designated office of any duly appointed
alternate or successor tender agent. The interest on this Bond shall be
payable by check mailed to the registered owner of this Bond at such owner's
address as it appears on the Bond Register of the Issuer maintained by the
Tender Agent, or, at the request of any registered owner of at least $1,000,000
aggregate principal amount of Bonds, by wire transfer within the continental
United States to the bank account number of such owner appearing on the Bond
Register. The principal or redemption price of and interest on this Bond shall
be paid in any coin or currency of the United States of America which, at the
time of payment, is legal tender for the payment of public and private debts.
The interest payable as provided in this Bond on any Interest Payment Date,
and duly provided for, will be paid to the person in whose name ownership of
this Bond is registered at the close of business on the Regular Record Date for
such interest, which shall be the day two Business Days prior to the Interest
Payment Date; provided that if this Bond bears interest at a Fixed Rate (as
hereinafter defined), then the Regular Record Date shall be the 15th day of the
month immediately preceding the month in which the Interest Payment Date occurs.
Any such interest not so paid or duly provided for on such Interest Payment
Date, or within three Business Days thereafter, shall forthwith cease to be
payable to the person in whose name this Bond is registered on such Regular
Record Date, and shall be paid to the person in whose name this Bond is
registered at the close of business on a Special Record Date for the payment of
such defaulted interest to be fixed by the Trustee referred to below, notice of
which shall be given to such person not less than ten days prior to such Special
Record Date, or may be paid, at any time in any other lawful manner, all as more
fully provided in the Indenture (as defined on the reverse hereof). This Bond
shall bear interest on overdue principal at the rate borne by this Bond during
such time.
THIS BOND IS ISSUED UNDER THE PROVISIONS OF KENTUCKY REVISED STATUTES
103.200 THROUGH 103.286, INCLUSIVE, AND DOES NOT CONSTITUTE AN INDEBTEDNESS OF
THE ISSUER, THE COMMONWEALTH OF KENTUCKY, OR ANY POLITICAL SUBDIVISION THEREOF,
WITHIN THE MEANING OF THE CONSTITUTION OF THE COMMONWEALTH OF KENTUCKY.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET
FORTH ON THE REVERSE SIDE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF FULLY SET FORTH IN THE TEXT OF THIS BOND
WRITTEN ABOVE.
This Bond is not valid unless the Certificate of Authentication
endorsed hereon is duly executed by the Tender Agent.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in
its name by the manual or facsimile signature of its County Judge/Executive and
its official seal or a facsimile thereof to be affixed, imprinted, lithographed
or reproduced hereon and attested by the manual or facsimile signature of its
County Clerk.
FORM OF CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned
Indenture. Printed hereon is the complete text of the opinion of Cohen, Grigsby,
A Professional Corporation, of Pittsburgh, Pennsylvania, Bond Counsel, a signed
original of which is on file with the Trustee.
DAI-ICHI KANGYO TRUST COMPANY ATTEST: COUNTY OF CARROLL, KENTUCKY
OF NEW YORK, as Tender Agent
By: /s/ By: /s/ Harold "Shorty" Tomlinson
--------------------------- ------------------ -------------------------------
Authorized Signature Carrol County Clerk County Judge/Executive
[SEAL-COUNTY COURT - CARROLL COUNTY, KY]
2
This bond is one of a duly authorized series (the "Bonds") limited in aggregate
principal amount to $5,000,000 issued under and secured by a Trust Indenture
dated as of September 1, 1990 (the "Indenture") between the Issuer and Dai-Ichi
Kangyo Trust Company of New York, as Trustee (in such capacity, the "Trustee")
to accomplish the public purposes of Chapter 103 of the Kentucky Revised
Statutes, as amended (the "Act") by undertaking the financing of a project for
Kentucky Ladder Company (the "Company") involving the acquisition and
construction of a manufacturing facility consisting of 193,000 square foot
building to be located on a parcel of land in Carroll County, Kentucky (the
"Project Facilities") for use as a manufacturing facility in the manufacture,
processing and assembly of climbing ladder products and related products,
together with storage, warehousing and distribution facilities with respect
thereto. The Issuer has entered into a Lease Agreement dated as of September 1,
1990 with the Company (the "Financing Agreement") providing for the use of the
proceeds of the Bonds to finance the acquisition and construction of the Project
Facilities and providing for lease payments by the Company in amounts sufficient
to pay, when due, the principal of, premium, if any, on and interest on the
Bonds. As security for the Bonds, the Issuer has assigned to the Trustee under
and pursuant to the Indenture all of the Issuer's right, title and interest in
and to the Financing Agreement and all amounts payable thereunder (except for
payments with respect to certain fees and expenses, indemnification payments to
the Issuer and excess investment earnings).
The Bonds are issued under the provisions of Kentucky Revised Statutes 103.200
through 103.286 inclusive, and do not constitute an indebtedness of the Issuer,
the Commonwealth of Kentucky or any political subdivision thereof within the
meaning of the Constitution of the Commonwealth of Kentucky, and are limited
obligations of the Issuer payable solely from lease payments to be made by the
Company to the Trustee pursuant to the Financing Agreement and from any other
moneys pledged to or held by or on behalf of the Trustee or the Tender Agent
under the Indenture for such purpose, including, but not limited to, proceeds of
drawings on the Letter of Credit described below, and there shall be no other
recourse against the Issuer or any other property now or hereafter owned by it.
Except as otherwise specified in the Indenture, this Bond is entitled to the
benefits of the Indenture equally and natably both as to principal (and
redemption price) and interest with all other Bonds issued under the Indenture.
No additional Bonds may be issued under the Indenture. Reference is made to the
Indenture and the Financing Agreement for a description of the rights of the
Owners of the Bonds; the rights and obligations of the Issuer and the Company;
the rights, duties and obligations of the Trustee and the Tender Agent; and the
provisions relating to amendments and modifications thereof. The acceptance of
the terms and conditions of such documents and the Letter of Credit described
below (including amplifications and qualifications of the provisions thereof),
copies of which or copies of forms of which are on file at the principal
corporate trust office of the Trustee, is an explicit and material part of the
consideration of the Issuer's issuance hereof, and each owner hereof by
acceptance of this Bond accepts and assents to all such terms and conditions as
if fully set forth herein. The owner of this Bond shall have the right to
enforce the provisions of the Indenture, the Financing Agreement or the Letter
of Credit or the rights and remedies thereunder, except as provided in the
Indenture. Capitalized terms used in this Bond which are not defined herein but
which are defined in the Indenture shall have the respective meanings set forth
in the Indenture.
The Company has caused an irrevocable Letter of Credit to be issued by The
Dai-Ichi Kangyo Bank, Limited, New York Branch, a Japanese banking corporation,
to be delivered to the Tender Agent. Such irrevocable Letter of Credit or any
replacement letter of credit or similar credit facility delivered to the Tender
Agent in accordance with the terms of the Indenture is herein called the "Letter
of Credit." As used herein, the term "Bank" shall mean The Dai-Ichi Kangyo Bank,
Limited, New York Branch, as issuer of the Letter of Credit or the bank or
financial institution or insurance company issuing any replacement Letter of
Credit or similar credit facility. The Tender Agent shall be authorized under
the Letter of Credit, subject to the terms and conditions thereof, to draw up to
(a) an amount equal to the principal of the outstanding Bonds (i) to pay the
principal of the Bonds when due at maturity or upon redemption or acceleration
or (ii) to pay the portion of the purchase price of Bonds corresponding to the
principal of Bonds tendered for purchase pursuant to the Indenture to the extent
remarketing proceeds are not available for such purpose, plus (b) an amount
equal to 53 days' accrued interest on the outstanding Bonds (computed at the
maximum rate of 15% per annum) (i) to pay interest on the Bonds when due or (ii)
to pay the portion of the purchase price of Bonds tendered for purchase pursuant
to the Indenture corresponding to the accrued interest, if any, on such Bonds to
the extent remarketing proceeds are not available for such purpose. The Letter
of Credit expires on September 19, 1993, unless terminated earlier pursuant to
its terms or extended. Subject to the provisions of the Indenture, the Company
may, but is not required to, cause the Letter of Credit to be extended or
replaced with another Letter or Credit or similar credit facility having
substantially similar terms. The Bank is under no obligation to extend the
Letter of Credit. Unless the Letter of Credit is extended or replaced in
accordance with the terms of the Indenture, this Bond will become subject to
mandatory tender, as described below. After a mandatory purchase of Bonds in
anticipation of expiration of a Letter of Credit, the Company shall have the
right to provide other credit enhancement as security for the Bonds or no
credit enhancement thereon. The Letter of Credit is being issued pursuant to a
Reimbursement Agreement dated as of September 1, 1990 (the "Reimbursement
Agreement") between the Company and the Bank, under which the Company will be
obligated, among other things, to reimburse the Bank, with interest, for any
draws under the Letter of Credit.
INTEREST ON BONDS
GENERAL. The Bonds shall bear interest at an initial fixed rate based
on a 365-day year (as set forth in the Indenture) from the issue date hereof
until October 2, 1990, and thereafter at a Variable Weekly Rate, subject to
conversion to a Fixed Rate, as described herein. All computations of interest
at Variable Weekly Rates shall be based on a year of 365 or 366 days, as
appropriate; and all computations of interest at a Fixed Rate shall be based on
a 360-day year of twelve 30-day months. As used in this Bond, the term
"Interest Payment Date" means (i) on or prior to the Fixed Rate Conversion
Date, the first Business Day of each calendar month and (ii) after the Fixed
Rate Conversion Date, each March 1 and September 1. As used in this Bond, the
term "Fixed Rate Conversion Date" means the effective date of a conversion of
the interest rate on the Bonds from a Variable Weekly rate to a Fixed Rate.
Variable Weekly Rate. A Variable Weekly Rate shall be determined for
each Weekly Rate Period as described below. Weekly Rate Periods shall
commence on Wednesday of each week and end at the close of business on Tuesday
of the following week; except that in the case of conversion to a Fixed Rate,
the last Weekly Rate Period prior to such conversion shall end on the last day
immediately preceding the Fixed Rate Conversion Date. The Weekly Rate for each
Weekly Rate Period shall be effective from and including the commencement date
of such period and shall remain in effect through and including the last day
thereof. Each such Weekly Rate shall be determined by the Remarketing Agent
(described below) on the Tuesday, or, if such Tuesday is not a Business Day, on
the Business Day next preceding the commencement date of the Weekly Rate Period
to which it relates and provided by the Remarketing Agent to the Tender Agent
by the close of business on that same day. The Weekly Rate so to be determined
shall be the lowest rate of interest which, in the judgment of the Remarketing
Agent, would cause the Bonds to have a market value equal to the principal
amount thereof, plus accrued interest, taking into account Prevailing Market
Conditions as of the date of determination; provided that (i) if the
Remarketing Agent fails for any reason to determine or notify the Tender Agent
of the Weekly Rate for any Weekly Rate Period, the Weekly Rate shall be the
same as the Weekly Rate in effect for the immediately preceding Weekly Rate
Period, except that if such failure continues for more than one consecutive
Weekly Rate Period, the Weekly Rate shall be equal to 80% of the average of the
annual bond equivalent yield evaluations at par of 13-week United States
Treasury obligations at the most recent Treasury auction and (ii) in no event
shall the Weekly Rate for any Weekly Rate Period exceed 15% per annum. No
notice of Weekly Rates will be given to the registered owners of the Bonds;
however, such owners may obtain Weekly Rates from the Tender Agent or the
Remarketing Agent. All determinations of Weekly Rates pursuant to the Indenture
shall be conclusive and binding upon the Issuer, the Company, the Bank, the
Trustee, the Tender Agent and the registered owners of the Bonds to which such
rates are applicable. The Issuer, the Company, the Bank, the Trustee, the
Tender Agent and the Remarketing Agent shall not be liable to any registered
owner for failure to give any notice required with respect to Weekly Rates or
for the failure of any registered owner to receive any such notice.
FIXED RATE. The Indenture provides that the Company, with the provision
of a Favorable Opinion of nationally recognized bond counsel and upon
compliance with certain other conditions, has the right to convert the interest
rate on this Bond to a Fixed Rate to maturity. In the event of such conversion,
this Bond shall be subject to mandatory tender for purchase on the Fixed Rate
Conversion Date, unless the registered owner elects to retain this Bond. After
the Fixed Rate Conversion Date (i) the rate borne on the Bonds shall be a Fixed
Rate, (ii) the registered owner of this Bond shall have no right to tender this
Bond for purchase, and (iii) the original Letter of Credit shall be terminated.
In the event the Bonds are converted to a Fixed Rate, the Company may provide
for a Fixed Rate Letter of Credit or other credit enhancement.
OPTIONAL TENDER
While this Bond bears interest at the Variable Weekly Rate, the registered owner
of this Bond has the right to tender this Bond (or a portion hereof equal to a
whole multiple of $100,000 in principal amount for purchase, at a price equal to
the principal amount hereof (or of such portion) plus accrued interest, on any
Business Day upon written notice to the Tender Agent and the Remarketing Agent
on any Business Day at least seven (7) days prior to the Business Day on which
such purchase is to be made.
Each notice of tender shall (1) be delivered to the Tender Agent at
its principal corporate trust office and to the Remarketing Agent at its
principal office and be substantially in the form prescribed by the Indenture or
in other form satisfactory to the Tender Agent; (2) state (A) the principal
amount of this Bond to which the notice relates, (B) the serial number of this
Bond, (C) that the registered owner irrevocably demands purchase of this Bond
(or a specified portion hereof in an amount equal to a whole multiple of
$100,000), (D) the date on which this Bond (or such specified portion) is to be
purchased, and (E) payment instructions with respect to the purchase price; and
(3) automatically constitute (A) an irrevocable offer to sell this Bond (or such
specified portion) on the purchase date at a price equal to the principal amount
of this Bond (or such specified portion) plus any interest thereon accrued and
unpaid as of the purchase date, (B) an irrevocable authorization and instruction
to the Tender Agent to effect transfer of this Bond (or such portion specified
upon payment of such price to the Tender Agent on the purchase date (C) an
authorization and instruction to the Tender Agent to effect the exchange of
this Bond in whole or in part for other Bonds in an equal aggregate principal
amount so as to facilitate the sale of this Bond (or such specified portion),
and (D) an acknowledgement that such registered owner will have no further
rights with respect to this Bond (or such specified portion) upon payment of
the purchase price thereof to the Tender Agent on the purchase date, except for
the right of such registered owner to receive such purchase price upon
surrender of this Bond to the Tender Agent endorsed for transfer in blank and
with guaranty of signature satisfactory to the Tender Agent. The determination
of the Tender Agent as to whether a notice of tender has been properly
delivered pursuant to the foregoing shall be conclusive and binding upon the
registered owner.
All Bonds tendered for redemption must be delivered to the principal
corporate trust office of the Tender Agent at or before 11:00 a.m. on the
purchase date, and if such Bond is to be purchased prior to the next succeeding
interest payment date and after the Record Date in respect thereof (which is two
Business Days prior to such Interest Payment Date), a non-recourse due-bill for
interest due from the preceding Interest Payment Date to the next succeeding
Interest Payment Date. Any owner who fails to deliver such Bond for purchase on
or before the purchase date shall have no further rights thereunder except the
right to receive the purchase price thereof upon presentation and surrender of
such Bond (or portion thereof) to the Tender Agent property endorsed for
transfer in blank.
MANDATORY TENDER
While this Bond bears interest at a Variable Weekly Rate, this Bond is
subject to mandatory tender for purchase, at a price equal to the principal
amount hereof plus accrued interest (the "purchase price"), on (i) the Fixed
Rate Conversion Date in the event of a conversion of the interest rate on this
Bond to a Fixed Rate and (ii) on the Interest Payment Date immediately preceding
the expiration date of the Letter of Credit then in effect in the event such
Letter of Credit shall not have been extended or replaced in accordance with the
terms of the Indenture if the Fixed Rate Conversion Date coincides with the
Interest Payment Date immediately preceding the expiration date of the Letter of
Credit, it shall be a Fixed Rate Conversion Date for the purpose of mandatory
tender.
Any Bond which the registered owner has not elected to continue to own
after a mandatory tender date in accordance with the procedure and conditions
for such election described in the Indenture and which is not surrendered on the
mandatory tender date, but for which there has been irrevocably deposited with
the Tender Agent an amount sufficient to pay the purchase price thereof, shall
be deemed to have been tendered on the mandatory tender date and interest on
such Bond shall cease to accrue on the mandatory tender date. Thereafter, the
registered owner of such Bond shall not be entitled to any payment other than
the purchase price for such Bond upon surrender thereof to the Tender Agent
endorsed for transfer in blank and with guaranty of signature satisfactory to
the Tender Agent. Except for payment of such purchase price from moneys held by
the Tender Agent for such purpose, such Bond shall no longer be outstanding and
entitled to the benefits of the Indenture. On the mandatory tender date the
Tender Agent shall authenticate and deliver to the new purchasers thereof
substitute Bonds in lieu of such un-surrendered Bonds.
OPTIONAL REDEMPTION
So long as the rate of interest on the Bonds has not been converted to a
Fixed Rate, the Bonds are subject to redemption prior to maturity at the option
of the Issuer, upon the direction of the Company, on any Interest Payment Date
in whole or in part by lot, at a redemption price equal to 100% of the principal
amount thereof plus interest accrued to the redemption date.
After the rate of interest on the Bonds has been converted to a Fixed Rate,
the Bonds shall not be subject to optional redemption upon any Interest Payment
Date as provided in the immediately preceding paragraph, but shall be subject to
redemption prior to maturity at the option of the Issuer, upon the direction of
the Company. in whole or in part, at any time during the applicable redemption
periods and at the redemption prices set forth in the Indenture.
EXTRAORDINARY OPTIONAL REDEMPTION
The Bonds are subject to redemption prior to maturity at the option of the
Issuer, upon direction of the Company, in whole on any date, at a redemption
price equal to 100% of the principal amount thereof plus interest accrued to the
redemption date following the occurrence of any of the following events: (a) the
Project Facilities (or the manufacturing facilities of which they are a part)
shall have been damaged or destroyed to such extent that, in the Company's
judgment, (i) they cannot be reasonably restored when a period of six months to
substantially the same condition thereof immediately preceding such damage or
destruction, (ii) the normal operation of such facilities will thereby be
prevented for a period of six months or more, or (iii) the cost of restoration
of such facilities would exceed by $100,000 the net proceeds of insurance
carried thereon, plus amounts deductible under such insurance; or (b) title to,
or the temporary use of, the Project Facilities (or the manufacturing facilities
of which they are a part) or a part thereof shall have been taken under the
power of eminent domain by any governmental body or by any person, firm or
corporation acting under governmental authority for a bona fide sale in lieu of
such taking shall have occurred) to such an extent that, in the Company's
judgment, the normal operation of such facilities will thereby be prevented for
a period of six months or more; or (b) any Federal, state or local body
exercising governmental or judicial authority shall have taken any action which
results in unreasonable burdens or excessive liabilities, including without
limitation taxes not presently levied, with respect to the Project Facilities
(or the manufacturing facilities of which they are a part) or the ownership or
operation thereof, which in the company's judgment render such facilities or the
operation thereof impractical or uneconomic.
SPECIAL MANDATORY REDEMPTION
The Bonds are subject to mandatory redemption prior to maturity in whole
following the occurrence of a Determination of Taxability (as hereinafter
defined), such mandatory redemption to be made as soon as practicable after the
date on which the Trustee first receives written notice of the Determination of
Taxability, at a redemption price equal to 100% of the principal amount thereof,
plus accrued interest to the redemption date. As used herein and in the
Indenture, a "Determination of Taxability" shall mean one of the following
determinations, made in regard to Section 103 of the Internal Revenue Code of
1986 and the rules and regulations thereunder (including any amendments and
successor provisions thereto, the "Code"), to the effect that the interest
payable on the Bonds is includable in the gross income of the owners of the
Bonds (other than an owner who is a "substantial user" or "related person" as
such terms are used in the Code): (i) a final determination, decision or decree
by the Commissioner or any District Director of Internal Revenue, or by any
court of competent jurisdiction, which is not subject to further review, in a
proceeding in which the Company was afforded the opportunity to contest the
issues involving Federal income tax treatment of interest on the Bonds, either
directly or in the name of the owner of the Bonds, at the Company's expense, as
described in the Indenture, or (ii) a determination that the
$10,000,000 limitation set forth in Section 144(a)(4)(A) of the Code or the
$40,000,000 limitation set forth in Section 144(a)(10) of the Code has been
exceeded, which determination shall be deemed to have been made on the date
which the Company or any principal user of the Project Facilities files any tax
schedule, return or document with the Internal Revenue Service and the Trustee
which expressly discloses that either of such limits has been exceeded, or (iii)
an opinion of nationally recognized bond counsel furnished by the Company to the
Trustee.
EXTRAORDINARY MANDATORY REDEMPTION
If the rate of interest on the Bonds has been converted to a Fixed Rate and
in connection with such conversion a Fixed Rate Letter of Credit has been
delivered to the Tender Agent, then the Bonds are subject to mandatory
redemption, at a price equal to the principal amount thereof plus accrued
interest to the redemption date, on the Interest Payment Date immediately
preceding the expiration date of the Fixed Rate Letter of Credit then in effect
in the event such Fixed Rate Letter of Credit shall not have been extended or
replaced in accordance with the terms of the Indenture.
REDEMPTION NOTICE
Any notice of redemption shall be given not more than 60 and not less than
30 days prior to the redemption date, by mailing a copy of the redemption notice
by first class mail, postage prepaid, to the registered owner of each Bond to be
redeemed in whole or in part at the address shown on the Bond Register. Notice
of optional redemption may be conditioned upon the deposit of moneys in the Bond
Fund established under the Indenture before the date fixed for redemption and
such notice shall be of no effect and the redemption shall be deemed cancelled
unless such moneys are so deposited. All Bonds or portions thereof so called for
redemption will cease to bear interest on the specified redemption date provided
funds for their redemption will cease to bear interest on the specified
redemption date provided funds for their redemption are on deposit at the
principal place of payment at that time.
DEFAULT ACCELERATION
If an Event of Default as defined in the Indenture occurs, the principal of
all Bonds issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture.
DENOMINATIONS, TRANSFER, OWNERSHIP
Subject to the provisions of the Indenture, the Bonds are issuable as
registered Bonds in the denomination of $100,000 or any whole multiple thereof,
except that if the interest rate borne by the Bonds is converted to a Fixed
Rate, replacement Bonds shall be in the denomination of $5,000 or any whole
multiple thereof. Subject to the limitations provided in the Indenture and upon
payment of any tax or governmental charge, Bonds may be exchanged for a like
aggregate principal amount of Bonds of authorized denominations.
This Bond is transferable by the registered owner hereof or his duly
authorized attorney at the principal corporate trust office of Dai-Ichi Kangyo
Trust Company of New York, as Tender Agent, or at the duly designated office of
any duly appointed alternate or successor bond registrar, upon surrender of this
Bond, accompanied by a duly executed instrument of transfer in form and with
guaranty of signature satisfactory to the Tender Agent, subject to such
reasonable regulations as the Issuer, the Trustee or the Tender Agent may
prescribe, and upon payment of any tax or other governmental charge incident to
such transfer. Upon any such transfer a new Bond or Bonds in the same aggregate
principal amount will be issued to the transferee. Except as provided in the
Indenture, the person in whose name this Bond is registered on the Bond Register
shall be deemed the owner hereof for all purposes, and the Issuer, the Trustee,
the Tender Agent and the Remarketing Agent shall not be affected by any notice
to the contrary.
THIS BOND IS A LIMITED OBLIGATION OF THE ISSUER AND IS PAYABLE SOLELY FROM
THE SOURCES REFERRED TO HEREIN. NEITHER THE GENERAL CREDIT NOR THE TAXING POWER
OF THE COUNTY OF CARROLL, THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL
SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THIS BOND, AND THIS BOND SHALL
NOT BE OR BE DEEMED AN OBLIGATION OF THE COUNTY OF CARROLL, THE COMMONWEALTH OF
KENTUCKY OR ANY POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF THE
CONSTITUTION OF THE COMMONWEALTH OF KENTUCKY.
The liability of the undersigned shall be limited to the proceeds resulting
from the lease of the Project Facilities and the payments, revenues, rents and
receipts receivable by the Issuer therefrom.
No covenant or agreement contained in this Bond shall be deemed to be the
covenant or agreement of any member, officer, attorney, agent or employee of the
Issuer in an individual capacity. No recourse shall be had for the payment of
the principal, the interest thereon, or the premium, if any, payable upon the
redemption of this Bond or any claim based thereon against any officer, member,
agent, attorney or employee of the Issuer past or future, or its successors or
assigns, as such, either directly or through the issuer or any such successor
whether by virtue of any constitutional provision, statute or rule of law, or
by the enforcement of any assessment or penalty, or otherwise, all of such
liability of such members, officers, agents, attorneys or employees being hereby
released as a condition of and and as a consideration for the execution and
delivery of this Bond.
All acts, conditions and things required by the laws of the Commonwealth of
Kentucky and by the Indenture to exist, to have happened and to have been
performed prior to or in connection with the issuance of this Bond do exist,
have happened, and have been performed.
FORM OF ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
the within Bond, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with the
right of survivorship and
not as tenants in common
under Uniform Gift to Minors
UNIFORM GIFT MIN ACT - Custodian Act
------------------------- ------------------------ ------------------------
(Cust) (Minor) (State)
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers
unto _________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________, attorney to transfer the said
Bond on the Bond Register, with full power of substitution in the premises.
Assignor's Signature: Social Security Number or
Date: Employer Identification
Signature guaranteed: Number of Transferee:
------------ ----------------------
NOTE: The assignor's signature to this
Assignment must correspond with the name
as it appears on the face of the within
Bond in every particular without
alteration or any change whatsoever.
To the Purchasers of the Below Referenced Bonds
Re: $5,000,000 County of Carroll, Kentucky Variable
Rate Demand Industrial Building Revenue Bonds
(Kentucky Ladder Company Project)
------------------------------------------------
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance by the County
of Carroll, Kentucky (the "Issuer") of $5,000,000 aggregate principal amount of
its Variable Rate Demand Industrial Building Revenue Bonds (Kentucky Ladder
Company Project) (the "Bonds"). The Bonds are being issued to finance a project
(the "Project") for Kentucky Ladder Company (the "Company") consisting of the
acquisition and construction of a manufacturing facility. The Project has been
undertaken by the Issuer to accomplish the public purposes of Chapter 103 of the
Kentucky Revised Statutes, as amended (the "Act").
The Bonds are being issued under and are secured by a Trust Indenture (the
"Indenture") dated as of September 1, 1990 between the Issuer and Dai-Ichi
Kangyo Trust Company of New York as Trustee (the "Trustee"). Under the terms of
a Lease Agreement dated as of September 1, 1990 (the "Financing Agreement")
between the Issuer and the Company, the Company has agreed to make lease
payments to be used to pay when due the principal of, and premium, if any, and
interest on the Bonds, and such payments and other revenues under the Financing
Agreement (collectively, the "Revenues") and the rights of the Issuer under the
Financing Agreement (except rights to payments with respect to certain fees and
expenses, indemnification, and excess investment earnings) are pledged and
assigned by the Issuer as security for the Bonds. As additional security for the
Bonds, the Company has caused the Bonds to be secured by an irrevocable letter
of credit (the "Letter of Credit") issued by The Dai-Ichi Kangyo Bank, Limited,
New York Branch (the "Bank"). The Letter of Credit has a stated expiration date
of September 19, 1993, but may be terminated earlier or extended pursuant to its
terms.
In our capacity as Bond Counsel, we have examined such documents, records
of the Issuer and other instruments as we deemed necessary to enable us to
express the opinions set forth below, including the Act, the Code (as
hereinafter defined) and original counterparts or certified copies of the
Indenture, the Financing Agreement, the Letter of Credit, the Reimbursement
Agreement and the application to the Kentucky Private Activity Bond Allocation
Committee and the approval of that application. With respect to matters
pertaining to the Company, including the due authorization, execution and
delivery of the Financing Agreement and the Company's power to enter into and
perform its obligations thereunder, we have relied on the opinion of Eric J.
Werner, Esq., Corporate Counsel for the Company, a copy of which opinion has
been filed with the Trustee. With respect to the validity of the Letter of
Credit, we have relied on the opinion of Winthrop, Stimson, Putnam & Roberts,
counsel for the Bank, a copy of which opinion has been filed by the Trustee.
With respect to matters of Kentucky law, we have relied on the opinion of
Stites & Harbinson, local bond counsel, a copy of which opinion has been filed
with the Trustee.
In addition, we have assumed (i) the genuineness of the signatures, and the
authority, of persons signing all documents in connection with which this
opinion is rendered, (ii) the authenticity of all documents submitted to us as
originals, (iii) the conformity to authentic original documents of all documents
submitted to us as copies and the authenticity of the originals of said copies,
and (iv) in the case of documents submitted to us as forms or drafts, that such
documents have been duly executed and delivered on behalf of the parties thereto
in the form examined by us and are in full force and effect on the date hereof.
Based on the foregoing, it is our opinion that, under existing law and as
of the date hereof:
1. The Issuer is duly created and validly existing as a county and
political subdivision of the Commonwealth of Kentucky, organized and existing
under the laws of the Commonwealth of Kentucky, with full power and authority to
undertake the Project, to execute, deliver and perform the Financing Agreement
and the Indenture and to issue and sell the Bonds.
2. The Financing Agreement and the indenture have been duly authorized,
executed and delivered by the Issuer and constitute the legal, valid and binding
obligations of the Issuer in accordance with their respective terms. The
Agreement creates a valid lien on the Revenues and on the rights of the Issuer
under the Financing Agreement (except rights to payments with respect to certain
fees and expenses, indemnification and excess investment earnings).
3. All right, title and interest of the Issuer in and to the Financing
Agreement (except for payments with respect to certain fees and expenses.
Indemnification and excess investment earnings) have been validly assigned to
the Trustee.
4. The issuance and sale of the Bonds have been duly authorized by the
Issuer; the Bonds have been duly executed and delivered by the Issuer and the
authenticated by the Tender Agent; and the Bonds are legal, valid and binding
limited obligations of the Issuer in accordance with their terms and are
entitled to the benefit and security of the Indenture.
5. The interest to be paid on the Bonds will be excludable from gross
income for federal income tax purposes, except for any period during which a
Bond is held by a "substantial user" of the facilities financed by the Bonds or
a "related person" within the meaning of Section 147(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and except that the Company or another
person, by taking action after the date hereof that causes the $10,000,000
limitation set forth in Section 144(a)(4)(A) of the Code or the $40,000,000
limit set forth in Section 144(a)(10) of the Code to be exceeded, may cause
interest on the Bonds to become included in gross income (retroactive to the
date of their issuance, in the case of $40,000,000 limitation) for federal
income tax purposes. It should be noted, however, that interest on the Bonds is
an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations. In addition to the foregoing
exceptions, the opinion set forth in the first sentence of this paragraph is
subject to the condition that the Issuer and the Company comply with all
requirements of the Code that must be satisfied subsequent to the issuance of
the Bonds in order that interest thereon be, or continue to be, excluded from
gross income for federal income tax purposes. The Issuer and the Company have
covenanted to comply with each such requirement. Failure to comply with certain
of such requirements may cause the inclusion of interest on the Bonds in gross
income for federal income tax purposes to be retroactive to the date of issuance
of the Bonds. We express no opinion regarding other federal tax consequences
arising with respect to the Bonds.
6. Interest to be paid on the Bonds is exempt from taxation by the
Commonwealth of Kentucky and the Bonds are exempt from ad valorem taxation
(except inheritance taxes) by the Commonwealth of Kentucky and all of its
political subdivisions.
It is to be understood that the rights of the holders of the Bonds and the
enforceability of the Bonds and the Financing Agreement may be subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable and that their enforcement may also be subject to
the exercise of judicial discretion in appropriate cases.
Ownership of the Bonds may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, financial
institutions, property and casualty insurance companies, individual recipients
of Social Security or Railroad Retirement benefits and taxpayers who may be
deemed to have incurred or continued indebtedness to purchase or carry the
Bonds. We express no opinion as to such collateral income tax consequences.
We express no opinion herein with respect to the adequacy or accuracy of
any placement memorandum or other information pertaining to the offering for
sale of the Bonds.
We call your attention to the fact that the Bonds are limited obligations
of the Issuer payable only out of payments to be made by the Company pursuant to
the Financing Agreement, drawings under the Letter of Credit and certain other
moneys available therefor, and that the Bonds do not pledge the credit or taxing
power of the County of Carroll, the Commonwealth of Kentucky or any political
subdivision thereof.
Also, we do not render any opinion with respect to title to the Project
facilities or the priority of any liens of any document.
Very truly yours,
COHEN & GRIGSBY
A Profesional Corporation