<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For Quarter Ended July 2, 1994 Commission file number 0-7469
- - ------------------------------ ------------------------------
TJ INTERNATIONAL, INC.
---------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 82-0250992
- - ----------------------------- -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
380 E. ParkCenter Boulevard
BOISE, IDAHO 83706
- - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (208) 345-8500
--------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding 12 months
(or for each shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
July 29, 1994. 16,876,705 shares of $1 par value common stock.
----------------------------------------------------------------
EXHIBIT INDEX ON PAGE 16
<PAGE>
TJ INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. In the opinion of management, all
adjustments necessary to present fairly the results for the periods presented
have been included therein. The adjustments made were of a normal, recurring
nature. Certain information and footnote disclosure normally included in
financial statements have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate
to make the information presented not misleading. It is recommended that
these condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest annual
report on Form 10-K.
The results of operations for the periods presented are not necessarily
indicative of the results that might be expected for the fiscal year.
<PAGE>
TJ INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
JULY 2, JANUARY 1, JULY 3,
1994 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents............................................ $ 50,849 $ 66,319 $ 239
Marketable securities................................................ 9,139 7,004 --
Receivables, less allowances of $752,000, $663,000 and $680,000...... 47,226 45,709 35,206
Inventories.......................................................... 68,015 53,081 56,602
Other................................................................ 11,322 10,715 8,506
----------- ------------ ------------
186,551 182,828 100,553
Property
Property and equipment............................................... 416,774 361,952 343,844
Less -- accumulated depreciation..................................... (131,078) (120,762) (109,384)
----------- ------------ ------------
285,696 241,190 234,460
Goodwill............................................................... 23,140 23,660 24,180
Unexpended bond funds.................................................. 42,630 -- --
Other assets........................................................... 10,938 6,649 7,461
----------- ------------ ------------
$ 548,955 $ 454,327 $ 366,654
----------- ------------ ------------
----------- ------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable........................................................ $ 1,278 $ 4,007 $ 40,672
Current portion of long-term debt.................................... 1,701 1,891 1,316
Accounts payable..................................................... 32,688 23,686 19,021
Accrued liabilities.................................................. 24,078 27,555 18,602
----------- ------------ ------------
59,745 57,139 79,611
Long-term debt, excluding current portion............................... 88,571 30,877 32,310
Deferred income taxes.................................................. 7,361 8,429 3,034
Other long-term liabilities............................................ 13,449 14,982 13,139
Minority interest in Partnership....................................... 137,428 108,159 105,511
Stockholders' equity
ESOP Convertible Preferred Stock, $1.00 par value, authorized
10,000,000 shares, issued 1,254,735, 1,259,308 and 630,992.......... 14,835 14,859 14,907
Guaranteed ESOP benefit.............................................. (11,460) (12,390) (13,321)
Common stock, $1.00 par value, authorized 200,000,000 shares, issued
16,872,055, 16,738,069 and 7,896,085................................ 16,872 16,738 7,896
Paid-in capital...................................................... 137,124 135,727 44,235
Retained earnings.................................................... 88,106 82,139 99,357
Cumulative translation adjustments................................... (3,076) (2,332) (1,184)
Treasury stock, 1,287,439 shares, at cost............................ -- -- (18,841)
----------- ------------ ------------
242,401 234,741 133,049
----------- ------------ ------------
$ 548,955 $ 454,327 $ 366,654
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS
EXCEPT PER SHARE FIGURES)
FOR THE FISCAL FOR THE TWO
QUARTER ENDED FISCAL QUARTERS ENDED
------------------------ ------------------------
JULY 2, JULY 3, JULY 2, JULY 3,
1994 1993 1994 1993
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales......................................................... $ 163,484 $ 139,639 $ 298,532 $ 253,750
----------- ----------- ----------- -----------
Costs and expenses
Cost of sales............................................... 122,763 106,335 222,091 201,485
Selling expenses............................................ 15,117 15,008 30,730 29,470
Administrative expenses..................................... 7,937 8,451 16,135 15,562
----------- ----------- ----------- -----------
145,817 129,794 268,956 246,517
----------- ----------- ----------- -----------
Income from operations........................................ 17,667 9,845 29,576 7,233
Investment income, net........................................ 383 1 924 16
Interest expense.............................................. 0 (980) 0 (1,623)
Minority interest in Partnership.............................. (8,950) (2,882) (16,910) (1,787)
----------- ----------- ----------- -----------
Income before income taxes.................................... 9,100 5,984 13,590 3,839
Income taxes.................................................. 3,378 1,722 5,309 150
----------- ----------- ----------- -----------
Net income.................................................... 5,722 4,262 8,281 3,689
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income per common share
Primary..................................................... $0.32 $0.30 $0.45 $0.24
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Fully Diluted............................................... $0.30 $0.27 $0.43 $0.22
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Dividends declared per common share........................... $0.0550 $0.0525 $0.1100 $0.1050
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of common shares outstanding during
the periods
Primary..................................................... 17,341 13,610
----------- -----------
----------- -----------
Fully Diluted............................................... 18,599 14,916
----------- -----------
----------- -----------
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWO FISCAL QUARTER ENDED
JULY 2, 1994 AND JULY 3, 1993
(UNAUDITED)
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
JULY 2, JULY 3,
1994 1993
------------ ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income....................................................................... $ 8,281 $ 3,689
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization.................................................. 13,765 11,375
Minority interest in partnership............................................... 16,910 1,787
Other, net..................................................................... 57 99
Change in working capital items:
Receivables.................................................................... (1,517) (10,724)
Inventories.................................................................... (14,934) (12,365)
Other current assets........................................................... (1,075) (1,551)
Accounts payable and accrued liabilities....................................... 4,827 3,529
Other, net....................................................................... (2,622) 1,317
------------ ----------
Net cash used in operating activities............................................ $ 23,692 $ (2,844)
------------ ----------
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures............................................................. $ (61,913) $ (14,769)
Marketable securities............................................................ (2,135) --
Increase in unexpended bond funds................................................ (42,630) --
Other, net....................................................................... (161) 554
------------ ----------
Net cash used in investing activities............................................ $ (106,839) $ (14,215)
------------ ----------
------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid on common stock.............................................. $ (1,844) $ (1,375)
Minority partner capital contributions........................................... 20,433 2,327
Minority partner tax distributions............................................... (5,437) (381)
Proceeds from issuance of long-term debt......................................... 58,500 --
Net (repayments) borrowings under lines of credit................................ (2,729) 17,052
Principal payments of long-term debt............................................. (702) (674)
Other, net....................................................................... (544) 139
------------ ----------
Net cash provided by financing activities........................................ $ 67,677 $ 17,088
------------ ----------
------------ ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS
Net increase (decrease) in cash and cash equivalents............................. $ (15,470) $ 29
Cash and cash equivalents at beginning of year................................... 66,319 210
------------ ----------
Cash and cash equivalents at end of period....................................... $ 50,849 $ 239
------------ ----------
------------ ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid (received) during the period for:
Interest, net of amounts capitalized........................................... $ 1,206 $ 1,537
Income taxes (refunds), net.................................................... $ 5,300 $ (1,436)
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
INVENTORIES
Inventories consisted of the following:
<TABLE>
<CAPTION>
(amounts in thousands)
July 2, Jan. 1, July 3,
1994 1994 1993
------ ----- ------
<S> <C> <C> <C>
Finished goods $32,364 $23,831 $24,170
Raw materials and
work-in-progress 39,869 33,243 35,720
------- ------- -------
72,233 57,074 59,890
Reduction to LIFO cost (4,218) (3,993) (3,288)
------- ------- -------
$68,015 $53,081 $56,602
------- ------- -------
------- ------- -------
</TABLE>
The determination of inventory under the LIFO method can be made only at the
end of each fiscal year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations must necessarily be based on the
Company's estimates of expected year-end inventory levels and costs. Since
these estimates are subject to many forces beyond the Company's control,
interim results could possibly be affected by the final year-end LIFO
inventory valuation.
RECLASSIFICATIONS
Certain reclassifications have been made, none of which affected net income,
to conform prior years information to the current year's presentation.
NET INCOME PER COMMON SHARE
Primary net income per common share is based on net income adjusted for
preferred stock dividends and related tax benefits divided by the weighted
average number of common shares outstanding after giving effect to stock
options as common stock equivalents and to the 1993 two-for-one stock split.
Fully diluted net income per common share assumes conversion of the ESOP
convertible preferred stock into common stock at the beginning of the year.
<PAGE>
Primary net income and fully diluted net income were calculated as follows:
<TABLE>
<CAPTION>
For the fiscal For the two fiscal
quarter ended quarters ended
------------------- -------------------
July 2, July 3, July 2, July 3,
1994 1993 1994 1993
------- -------- -------- --------
<S> <C> <C> <C> <C>
PRIMARY NET INCOME
Net income as reported $ 5,722 $ 4,262 $ 8,281 $ 3,689
Preferred stock dividends,
net of related tax benefits (233) (223) (466) (446)
------- ------- ------- -------
Primary net income $ 5,489 $ 4,039 $ 7,815 $ 3,243
------- ------- ------- -------
------- ------- ------- -------
FULLY DILUTED NET INCOME
Net income as reported $ 5,722 $ 4,262 $ 8,281 $ 3,689
Additional ESOP contribution
payable upon assumed
conversion of ESOP
preferred stock, net of
related tax benefits (181) (178) (361) (346)
------- ------- ------- -------
Fully diluted net income $ 5,541 $ 4,084 $ 7,920 $ 3,343
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<PAGE>
TJ INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL QUARTER ENDED JULY 2, 1994
OPERATING RESULTS
The following comments discuss material variations in the results of
operations for the comparative periods presented in the condensed consolidated
statements of income.
SALES
The Company's sales by quarter during the current year and for the preceding
four years are as follows:
<TABLE>
<CAPTION>
SALES BY QUARTER
-----------------
(AMOUNTS IN THOUSANDS)
----------------------
Quarter 1994 1993 1992 1991 1990
- - ------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
First $135,048 $114,111 $ 75,561 $ 45,330 $ 74,370
Second 163,484 139,639 111,024 79,679 98,185
========
Third 152,729 113,512 84,838 89,930
Fourth 144,725 100,383 73,363 64,987
-------- -------- -------- --------
$551,204 $400,480 $283,210 $327,472
======== ======== ======== ========
</TABLE>
GENERAL
The company's operations are strongly influenced by the cyclicality and
seasonality of residential housing construction. This industry experiences
fluctuations resulting from a number of factors, including the general
economy, consumer confidence, credit availability, and interest rates. The
seasonality of this industry, which is particularly pronounced in the colder
climates of Canada and the northern United States, has an especially
significant impact on the company's window operations as they are
predominantly located in northern climates. As a result of this seasonal
pattern, the company's sales have historically tended to be lowest in the
first and fourth quarters and highest in the second and third quarters of each
year.
The company's engineered lumber products are gaining increased market
acceptance as high-quality substitutes for large-dimension structural lumber.
The consistent quality, superior strength, lighter weight, and ease of
installation of engineered lumber products are causing an increasing number of
builders and other wood users to choose engineered lumber over traditional
solid-sawn lumber. The Company believes this trend should continue through
the 1990's.
No other company possesses the range of engineered lumber products, the levels
of service and technical support, nor the second generation technologies of
<PAGE>
TimberStrand-R- laminated strand lumber (LSL) or Parallam-R- parallel strand
lumber (PSL). However, a number of companies, including several large forest
products companies, now produce look-alike wood I-joist products and laminated
veneer lumber (LVL) products and have announced capacity expansions. These
look-alike products are manufactured using processes similar to the company's
oldest generation technologies. The Company believes its system of
manufacturing plants and multiple technologies position it as the low-cost
producer of engineered lumber. While competition helps expand the market for
engineered wood products, including those manufactured by the Company, it may
also make the existing markets more price competitive. It is likely these
trends of increased competition in engineered lumber products will continue
for the foreseeable future.
The Company's window and door products compete in the market place by striving
to provide reliable product quality and high levels of personal service
through locally tailored distribution channels. Competition comes from
numerous businesses ranging from small local concerns, to large nationally
prominent businesses. In the wood window and door portion of the industry,
three companies are especially significant, Andersen Corporation, Rolscreen
Company and Marvin Windows. Each of these companies has greater brand
awareness than the Company's window products.
SECOND QUARTER OF 1994 COMPARED WITH THE SECOND QUARTER OF 1993
Sales for the second quarter increased by $23.8 million or 17% from the same
period last year. Income from operations increased 79% to $17.7 million,
compared to $9.8 million for last year's second quarter. The bulk of the
improvement in operating results can be attributed to growth in market
penetration and margin expansion for engineered lumber products.
Prices for wide dimension lumber trended in an extremely atypical pattern,
decreasing in price levels from the first to second quarter. In response to
this decline, the Company offered buying incentives and price reductions from
the first quarter 1994 levels. The market remained soft through the second
quarter as customers worked down their inventories accumulated during the
first quarter. However, broadened product offerings, intensified marketing
efforts and the increasing acceptance of the Company's environmentally
sensitive, high-quality engineered lumber combined to boost the Company's
market penetration.
The improvement in sales was broad-based, encompassing all residential product
lines and all major geographical market areas except for Eastern Canada.
Engineered lumber products sales increased 21% to $128.9 million. Window
product sales increased 15% to $34.7 million. For comparison purposes, 1993
window sales exclude $2.6 million of cutstock sales to third parties in 1993
from the Redding facility which was sold in the first quarter of 1994. The
TimberStrand-R- LSL product experienced significant improvements in market
acceptance, compared to the sales levels during the second quarter of 1993.
Several new products were introduced into test markets at the end of the
second quarter of 1994.
Gross operating margins as a percent of sales were 24.9% compared to 23.9% for
the second quarter of 1993.
<PAGE>
Selling expenses increased slightly in absolute dollar terms, but decreased
from 10.7% to 9.2% as a percent of sales. The decrease was primarily a result
of the leverage in the existing sales and distribution network which has the
capacity to handle significant volume increases with the current in-place
infrastructure combined with a reduction in window product selling expenses.
Administrative expenses decreased in absolute dollar terms and as a percentage
of sales. The decreased dollar amount is reflective primarily of the timing
of expenditures.
The change in the minority interest in Partnership from $2.9 million during
the second quarter of 1993 to $8.9 million for the second quarter of 1994
reflects the dynamics of three events. First, the contractual agreement is to
allocate 49% of the Partnership's net income to MacMillan Bloedel in 1994
compared to a 33% allocation in 1993. The second factor affecting minority
interest is the improvement in the TimberStrand-R- LSL operations. In the
second quarter of 1993, 70% of the operations loss was allocated to MB. In
the second quarter of 1994, the TimberStrand-R- operations were profitable at
the manufacturing level despite a fire in the plant during the middle of June.
Finally, the improved profitability of engineered lumber products increased
the amount allocated to MB.
FIRST TWO QUARTERS OF 1994 COMPARED WITH THE FIRST TWO QUARTERS OF 1993
Sales for the first two quarters of 1994 increased by $44.8 million or 18%
from the same period last year. Income from operations increased to $29.6
million from $7.2 million last year.
Engineered lumber product sales increased by 23% while window product sales
decreased by 3% from the comparable period last year.
Gross operating margins as a percent of sales were 25.6% compared to 20.6% for
the first half of 1993. Window products continued lack of profitability in
the first half of 1994 has been disappointing. Losses were incurred due to
the severity of the 1994 winter and resulting lack of activity in
construction, combined with a very competitive pricing environment in Eastern
Canada.
Both selling and administrative expenses increased in absolute dollar terms
but decreased as a percent of sales. These six-month comparisons paralleled
the second quarter comparisons discussed earlier.
Order files are higher at the end of June 1994, than they were at the end of
June 1993. Customers continue to order on a "just-in-time" basis as they
attempt to avoid the build-up of inventory due to a perception of uncertainty
in the housing market. However, as wholesalers and dealers find their
inventory depleted, rates of order intake were steadily improving at quarter
end.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
JULY 2, 1994, COMPARED TO JANUARY 1, 1994
Working capital increased $1.1 million during the six months ended July 2,
1994. Cash was used to fund capital expenditures and dividend payments.
Inventories were higher because of the increased level of operations at the
end of the second quarter and planned effort to build inventory to have
adequate product available during the summer building season.
JULY 2, 1994, COMPARED TO JULY 3, 1993
Working capital increased by $105.9 million to $126.8 million at July 2, 1994,
from $20.9 million at July 3, 1993. This increase was primarily the result of
the company's sale of 3,500,000 common shares in November 1993. Cash provided
by operating activities was $23.7 million the first six months of 1994.
Capital expenditures were $61.9 million and related primarily to the
construction of additional engineered lumber capacity.
The company's Board of Directors has approved a capacity expansion program
which includes construction of a plant near Hazard, Kentucky, that will
manufacture TimberStrand-TM- laminated strand lumber products. Construction
commenced in the fall of 1993 with an expected cost of just over $100 million.
In addition, the company's Board of Directors has approved construction of a
plant that will manufacture both Microllam-R- laminated veneer lumber and
Parallam-R- parallel strand lumber near Buchanan, West Virginia, at an expected
cost of $85 million. Construction commenced in the second quarter of 1994.
The Company is evaluating potential sites for a third TimberStrand-R- laminated
strand lumber plant, or an additional combination LVL and PSL plant, but has
not determined whether or when to proceed with that plant.
During the second quarter of 1994, the company issued $43.5 million of
industrial revenue bonds to finance construction of the Hazard, Kentucky
TimberStrand-R- LSL plant. The bonds are due in a single maturity in 2024 with
interest payable semi-annually at 7%. Proceeds from this bond issue are
recorded as unexpended bond funds.
MacMillan Bloedel's Board of Directors has authorized a $49 million capital
contribution to the Partnership in light of the capacity expansion program.
The Company expects the contribution to be made as the Partnership experiences
negative cash flow resulting from expenditures for capital expansion over the
next six to nine months. Cash contributions received through July 2, 1994
totaled $20.4 million. However, there is no provision in the Partnership
Agreement, or in any other agreement requiring the partners to contribute
funds.
The Company believes that cash generated from operations, borrowings under a
$75 million Revolving Credit Facility, net proceeds from the stock offering,
proceeds from the Kentucky industrial revenue bonds, and the $49 million
contribution authorized by MacMillan Bloedel will be sufficient to meet the
company's working capital needs and capital expansion program approved by the
Board of Directors. The Company also believes that additional or expanded
lines of credit or appropriate long-term capital can be obtained to fund
capital requirements as they arise, or to fund an acquisition.
<PAGE>
A substantial majority of the company's assets is held, and revenues
generated, by the Partnership. Distributions of cash by the Partnership to
the Company require the unanimous consent of the members of the Partnership's
Management Board, which includes members of both the Company and MacMillan
Bloedel. Accordingly, there can be no assurance that distributions by the
Partnership will be approved for the payment of dividends to fund the
Company's other operations, or for other purposes.
Microllam-TM- is a trademark of Trus Joist MacMillan a Limited Partnership,
Boise, Idaho.
Parallam-TM- and TimberStrand-R- are registered trademarks of Trus Joist
MacMillan a Limited Partnership, Boise, Idaho.
<PAGE>
TJ INTERNATIONAL, INC.
PART II
OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Company's May 25, 1994 annual meeting of stockholders, the
following matters were voted upon and approved by the stockholders
as indicated:
<TABLE>
<CAPTION>
Votes Cast
--------------------------
Against or
Description For Withheld Abstentions
------------------------------------------ ------------ ---------- ------------
<S> <C> <C> <C>
1) To elect as directors the following
individuals:
For terms expiring at the 1997
annual meeting
-------------------------------
J.L. Scott 13,745,870.6 66,770.0 231,220.0
Harold E. Thomas 13,632,716.6 65,094.0 231,220.0
J. Robert Tullis 13,738,112.6 70,685.0 231,220.0
William J. White 13,607,756.6 88,093.0 231,220.0
2) To approve amendment of the Company's
Certificate of Incorporation to
increase the number of authorized
shares of Common Stock from
40,000,000 to 200,000,000 shares and
Preferred Stock from 2,000,000 to
10,000,000 shares. 9,151,817.6 2,373,165.0 368,123.0
3) To ratify the appointment of Arthur
Andersen & Co. as the Company's
independent accountants for the year
ended December 31, 1994 13,844,049.6 36,898.0 77,126.0
</TABLE>
Item 5. OTHER INFORMATION
SOLID WASTE DISPOSAL REVENUE BOND FINANCING - On June 29, 1994, the
Company announced that it had completed, in conjunction with the
County of Perry, Kentucky, an offering of $43.5 million of Solid
Waste Disposal Revenue Bonds (TJ International Project) Series
1994. The proceeds of the tax-exempt Bonds are being loaned to the
Company to finance a portion of the construction of the Company's
East Kentucky TimberStrand-R- LSL Plant, located near Hazard,
Kentucky. Construction of the facility commenced in the fall of
1993 with initial production expected in 1995.
The Bonds are dated as of June 1, 1994, and have a 30-year
maturity, bearing interest at 7 percent. The Bonds represent a
general, unsecured obligation of the Company. Payment of principal
and
<PAGE>
interest on the Bonds has been unconditionally guaranteed by
Trus Joist MacMillan a Limited Partnership.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Filed as an exhibit to this report is the following:
1.) A copy of the Certificate of Amendment of Certificate of
Incorporation, dated July 29, 1994, to increase the number
of authorized shares of Common Stock and Preferred Stock,
which is a subject in Item 4 of this report.
2.) A copy of the Loan Agreement, Trust Indenture and
Guaranty pertaining to the Solid Waste Disposal Revenue
Bonds issued to help finance construction of a
TimberStrand-R- LSL plant near Hazard, Kentucky, which
is the subject in Item 5 of this report.
(b) No reports on Form 8-K were filed during the quarter ended
July 2, 1994.
<PAGE>
TJ INTERNATIONAL INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TJ INTERNATIONAL, INC.
/s/ Valerie A. Heusinkveld
--------------------------
Valerie A. Heusinkveld
Vice President, Finance & Chief
Financial Officer
Date: August 16, 1994
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS TO FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the fiscal quarter ended July 2, 1994 Commission File Number 0-7469
TJ INTERNATIONAL, INC.
EXHIBIT INDEX
Document Page
- - -------- -----
A.) TJ International, Inc. Amended Certificate of Incorporation. Document 2
B.) Loan Agreement, Trust Indenture and Guaranty pertaining
to Hazard, Kentucky, plant. Document 3
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TJ INTERNATIONAL, INC.
TJ INTERNATIONAL, INC., a corporation organized and
existing under and by virtue of the General Corporation Law of
the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors
of the Corporation on December 17, 1992, resolutions were duly
adopted setting forth a proposed amendment to the Certificate of
Incorporation, declaring said amendment to be advisable and
directing that the amendment proposed be considered at the next
Annual Meeting of the Stockholders. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that Article Fifth of the Company's
Certificate of Incorporation be amended and restated in its
entirety to read as follows:
FIFTH: (a) Except as otherwise provided in
this Certificate of Incorporation or the bylaws of the
corporation relating to the rights of the holders of
any series of Preferred Stock, voting separately by
class or series, to elect additional directors under
specified circumstances, the number of directors of the
corporation shall be as fixed from time to time by or
pursuant to the bylaws of this corporation. The
directors, other than those who may be elected by the
holders of any series of Preferred Stock, voting
separately by class or series, shall be classified,
with respect to the time for which they severally hold
office, into three classes, Class I, Class II and Class
III, which shall be as nearly equal in number as
possible, and shall be adjusted from time to time in
the manner specified in the bylaws of the corporation
to maintain such proportionality. Each initial
director in Class I shall hold office for a term
expiring at the 1994 annual meeting of stockholders,
each initial director in Class II shall hold office
initially for a term expiring at the 1995 annual
meeting of stockholders, and each initial director in
Class III shall hold office for a term expiring at the
1996 annual meeting of stockholders. Notwithstanding
the foregoing provisions of this Article Fifth, each
director shall serve until his or her successor is duly
elected and qualified or until his or her earlier
death, resignation or removal. At each annual meeting
of stockholders following the 1993 annual meeting, the
successors to the class
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<PAGE>
of directors whose term expires at that meeting shall
be elected to hold office for a term expiring at
the annual meeting of stockholders held in the third
year following the year of their election and until
their successors have been duly elected and qualified
or until their earlier death, resignation or removal.
(b) Except as otherwise provided in this
Certificate of Incorporation or bylaws of the
corporation relating to the rights of the holders of
any series of Preferred Stock, voting separately by
class or series, to elect directors under specified
circumstances, any director or directors may be removed
from office at any time, but only for cause and only by
the affirmative vote, at any regular meeting or special
meeting of the stockholders, of not less than sixty-six
and two-thirds percent (66-2/3%) of the total number of
votes of the then outstanding shares of capital stock
of the corporation entitled to vote generally in the
election of directors, voting together as a single
class, but only if notice of such proposal is contained
in the notice of such meeting. Any vacancy in the
Board of Directors resulting from any such removal
shall be filled by vote of a majority of the directors
then in office, although less than a quorum, and any
directors so chosen shall hold office until their
successors shall have been elected and qualified or
until their earlier death, resignation or removal.
(c) Notwithstanding any other provisions of this
Certificate of Incorporation or the bylaws of the
corporation, the affirmative vote, at any regular
meeting or special meeting of the stockholders, of not
less than sixty-six and two-thirds percent (66-2/3%) of
the total number of votes of the then outstanding
shares of capital stock of the corporation entitled to
vote generally in the election of directors, voting
together as a single class, shall be required to amend
or repeal, or to adopt any provision inconsistent with
the purpose or intent of, this Article Fifth. Notice
of any such proposed amendment or repeal shall be
contained in the notice of the meeting at which it is
to be considered.
(d) In the event of any increase or decrease in
the authorized number of directors, the newly created
or eliminated directorships resulting from such
increase or decrease shall be appointed by the Board of
Directors among the three classes of directors so as to
maintain such classes as nearly equal as possible. No
decrease in the number of directors constituting the
Board of Directors shall shorten the term of any
incumbent director.
(e) Notwithstanding the foregoing, whenever the
holders of any one or more class or series of Preferred
Stock issued by the corporation shall have the right,
voting separately by class or series, to elect
directors at an annual or special meeting of the
stockholders, the election, term of office, filling of
vacancies and other features of such directorships
shall be governed by the terms of this Certificate of
Incorporation applicable thereto, and such directors so
elected shall not be divided into classes pursuant to
this Article Fifth unless expressly provided by such
terms.
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(f) In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly,
authorized to adopt, repeal, alter,
amend or rescind the bylaws of the
corporation. In addition, the bylaws of
the corporation may be adopted,
repealed, altered, amended, or rescinded
by the affirmative vote of sixty-six and
two-thirds percent (66-2/3%) of the
outstanding capital stock of the
corporation entitled to vote thereon.
SECOND: That thereafter, pursuant to such resolution
of the Board of Directors of the Corporation, the proposed
amendment was considered at the Annual Meeting of Stockholders of
the Corporation duly called and held on May 26, 1993, upon notice
in accordance with Section 222 of the General Corporation Law of
the State of Delaware, at which meeting a majority of the
outstanding shares of Common Stock and Preferred Stock of the
Corporation were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
FOURTH: That said amendment shall be effective on May
26, 1993.
IN WITNESS WHEREOF, TJ International, Inc. has caused
this certificate to be duly executed in duplicate by Valerie A.
Heusinkveld, its Vice President, Finance, and by Richard B. Drury, its
Corporate Secretary, this 29th day of July, 1994.
BY: /s/ Valerie Heusinkveld
-----------------------
ATTEST: /s/ Richard B. Drury
Richard B. Drury
Corporate Secretary
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<PAGE>
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
LOAN AGREEMENT
Between
COUNTY OF PERRY, KENTUCKY
and
TJ INTERNATIONAL, INC.
_______________________________
Dated as of June 1, 1994
- - ------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------
Relating to the Issuance of
County of Perry, Kentucky
Solid Waste Disposal Revenue Bonds
(TJ International Project)
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
I. Background, Representations and Findings. . . . 1
Section 1.1 Background. . . . . . . . . . . . . . 1
Section 1.2 Company Representations . . . . . . . 1
Section 1.3 Issuer Findings and Representation . . 2
Section 1.4. Use of Proceeds; Other Matters
with Respect to Project,
Bonds and Tax Exemption . . . . . . . 2
II. Construction of Project .. . . . . . . . . . . 5
Section 2.1 Project . . . . . . . . . . . . . . . 5
Section 2.2 Specification of Project
Additions and Changes. . . . . . . . . 5
Section 2.3 Award of Construction Contracts. . . . 5
Section 2.4 Administration of Construction
Contracts. . . . . . . . . . . . . . . 5
Section 2.5 Notices and Permits . . . . . . . . . 5
Section 2.6 Additions and Changes to the
Project. . . . . . . . . . . . . . . . 6
III. Financing the Project. . . . . .. . . . . . . 6
Section 3.1 Issuance of Bonds . . . . . . . . . . 6
Section 3.2 Construction Fund . . . . . . . . . . 6
Section 3.3 Bonds Not to Become Arbitrage Bonds. . 7
Section 3.4 Completion of Project . . . . . . . . 7
Section 3.5 Deletion of Project Facilities . . . . 8
IV. Loan and Repayment.. . . . . . . . . . . . . . 8
Section 4.1 Amount and Source of Loan . . . . . . 8
Section 4.2 Repayment of Loan . . . . . . . . . . 8
Section 4.3 Company Notes . . . . . . . . . . . . 8
Section 4.4 Acceleration of Payment to
Redeem Bonds. . . . . . . . . . . . . 9
Section 4.5 No Defense or Set-Off . . . . . . . . 9
Section 4.6 Assignment of Issuer's Rights . . . 10
V. Covenants of the Company. . . . . . . . . . . 10
Section 5.1 Operation and Maintenance of
Project. . . . .. . . . . . . . . . . 10
Section 5.2 Maintenance of Corporate
Existence . . . . . . . . . . . . . . 10
Section 5.3 Payment of Trustee's
Compensation and Expenses. . . . . . .11
Section 5.4 Payment of Issuer's Expenses. . . . . 11
Section 5.5 Indemnity Against Claims. . . . . . . 11
Section 5.6 Disclaimer; Limitation of
Liability of the Issuer. . . . . . . .11
Section 5.7 Insurance.. . . . . . . . . . . . . . 12
Section 5.8 Damage; Destruction and
Eminent Domain. . . . . . . . . . . . 12
Section 5.9 Financial Statements. . . . . . . . . 12
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Section 5.10 Investment of Funds.. . . . . . . . . 12
Section 5.11 Limitation on Liens.. . . . . . . . . 12
Section 5.12 Limitation on Sale and
Leaseback Transactions. . . . . . . . 13
Section 5.13 Limitation on Restricted
Payments.. . . . . . . . . . . . . . .14
VI. Events of Default and Remedies.. . . . . .. . 17
Section 6.1 Events of Default . . . . . . . . . . 17
Section 6.2 Payment on Default; Suit
Therefor . . . . . . . . . . . . . . 19
Section 6.3 Cumulative Rights . . . . . . . . . . 20
VII. Miscellaneous. . . . . . . . . . . . . . . . . . 20
Section 7.1 Notices . . . . . . . . . . . . . . . 20
Section 7.2 Assignments . . . . . . . . . . . . . 21
Section 7.3 Illegal. etc. Provisions
Disregarded. . . . . . . . . . . . . 21
Section 7.4 Applicable Law. . . . . . . . . . . . 21
Section 7.5 Amendments. . . . . . . . . . . . . . 21
Section 7.6 Amounts Remaining in Bond Fund
or Construction Fund. . . . . . . . . 21
Section 7.7 Term of Agreement . . . . . . . . . . 21
Section 7.8 Payments Due on Saturdays,
Sundays and Holidays . . . . . . . . .22
</TABLE>
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<PAGE>
LOAN AGREEMENT, dated as of June 1, 1994 (the "Agreement") between
the COUNTY OF PERRY, KENTUCKY, a county and political subdivision of the
Commonwealth of Kentucky (the "Issuer") and TJ INTERNATIONAL, INC., a Delaware
corporation (the "Company").
I. Background, Representations and Findings.
Section 1.1 BACKGROUND. The Issuer is a county and political
subdivision of the Commonwealth of Kentucky and is authorized under KRS
103.200 et. seq., as amended (hereinafter called the "Act"), to enter into
loan agreements with corporations and other entities with respect to one or
more "industrial buildings" as defined in the Act, upon such terms and
conditions as the Issuer deems advisable in accordance with the provisions of
the Act in order to promote the economic development of the Commonwealth of
Kentucky (the "Commonwealth"), relieve conditions of unemployment, to
encourage the increase of industry in the Commonwealth and to aid in the
retention of existing industry through the control of pollution, and the
Issuer having found in its Ordinance enacted on May 17, 1994, that the
issuance of bonds on behalf of the Company will accomplish those purposes.
The Company has asked the Issuer to undertake the financing of the
costs of a project (the "Project") consisting of sewage and solid waste
disposal components of a production facility for the manufacturer of
engineered lumber for the construction of wood joists and related products,
more particularly described in Schedule A attached hereto to be operated by
Trus Joist MacMillan a Limited Partnership, a Delaware limited partnership, as
beneficial owner of the Project and guarantor (the "Guarantor") of the Bonds,
as hereinafter defined. The Company is the managing general partner of the
Guarantor. The Issuer intends to loan the proceeds of the Bonds to the
Company pursuant to the terms hereof to be repaid in installments equal to
payments of debt service on such Bonds together with redemption premiums, if
any. The Company will, in turn, lend the money to the Guarantor as evidenced
by a promissory note.
The Issuer and the Company intend that components of the Project
will constitute sewage facilities or "solid waste disposal facilities" for the
purposes of the Internal Revenue Code of 1986, as amended (the "Code").
Section 1.2 COMPANY REPRESENTATIONS. The Company represents that:
(a) It is a corporation duly organized and existing in
good standing under Delaware law, qualified to do business in the
Commonwealth, with full power and legal right to enter into this
Agreement and the related Note and to perform its obligations hereunder.
The making and performance of this Agreement on the Company's part have
been duly authorized by all necessary corporate action and will not
violate or conflict with the Company's Certificate of Incorporation,
bylaws or any agreement, indenture or other instrument by which the
Company or its properties are bound.
(b) The Company intends to cause the Guarantor to operate
a portion of the Project as a sewage and solid waste disposal facility.
(c) The proceeds of the Series 1994 Bonds (as defined in
the Indenture) will not exceed the Costs of the Project (as defined in
the Indenture referred to in Section 3.1 hereof).
(d) The Company has acquired or will cause the Guarantor
to acquire all permits, licenses and has or will satisfy other
requirements necessary for the acquisition, construction, installation
and operation of the Project.
Section 1.3 ISSUER FINDINGS AND REPRESENTATION. The Issuer hereby
confirms its findings and represents that:
(a) The Issuer is a county and political subdivision of
the Commonwealth, and is authorized pursuant to the Act to enter into
the transactions contemplated by this Agreement and to carry out its
obligations hereunder.
<PAGE>
(b) The Issuer has the necessary power under the Act, and
has duly taken all action on its part required, to authorize, execute
and deliver this Agreement and to undertake the Project. The execution
and performance of this Agreement by the Issuer will not violate or
conflict with any instrument by which the Issuer or any of its
properties is bound.
(c) The Project constitutes an "industrial building" under
the Act, and the undertaking of the financing for the Project by the
Issuer will promote the public purposes of the Act in order to promote
the economic development of the Commonwealth, relieve conditions of
unemployment, to encourage the increase of industry in the Commonwealth
and to aid in the retention of existing industry through the control of
pollution.
(d) The Issuer has received with respect to the Project,
allocations from the Kentucky Private Activity Bond Allocation Committee
in the aggregate amount of $45,000,000 dated March 24, 1994, as extended
on May 25, 1994, for tax-exempt private activity bonds pursuant to
Section 146 of the Code.
Section 1.4. USE OF PROCEEDS; OTHER MATTERS WITH RESPECT TO
PROJECT, BONDS AND TAX EXEMPTION. (a) Neither the Issuer nor the Company
shall cause any proceeds of the Bonds (as defined below) to be expended except
pursuant to the Indenture. The Company shall not permit the Guarantor to (1)
requisition or otherwise allow any payment out of proceeds of the Bonds (i) if
such payment is to be used for the acquisition of any property (or an interest
therein) unless the first use of such property is pursuant to such
acquisition, provided that this clause (i) shall not apply to any building
(and the equipment purchased as a part thereof, if any) if the "rehabilitation
expenditures", as defined in Section 147(d) of the Code, with respect to the
building equal or exceed 15% of the portion of the cost of acquiring the
building (including such equipment) financed with the proceeds of the Bonds,
(ii) if as a result of such payment, 25% or more of the proceeds of the Bonds
would be considered as having been used directly or indirectly for the
acquisition of land (or an interest therein); (iii) if, as a result of such
payment, less than 95% of the net proceeds of the Bonds, expended at the time
of such requisition would be considered as having been used for costs of the
acquisition, construction, reconstruction or improvement of "sewage
facilities" or "solid waste disposal facilities" within the meaning of
Section 142(a) of the Code, or (iv) if such payment is used to pay issuance
costs (including counsel fees and placement fees) in excess of an amount equal
to 2% of the proceeds of the Bonds; (2) take or omit, or permit to be taken or
omitted, any other action with respect to the use of such proceeds the taking
or omission of which would result in the loss of exclusion of interest on the
Bonds from gross income for purposes of Federal income taxation; or (3) take
or omit, or permit to be taken or omitted, any other action the taking or
omission of which would cause the loss of such exclusion. Without limiting
the generality of the foregoing, the Company shall not permit (i) any of the
proceeds of the Bonds to be used for the acquisition of land (or an interest
therein) to be used for farming purposes, or (ii) any of the proceeds of the
Bonds to be used to provide any airplane, skybox or other private luxury box,
any health club facility, any facility primarily used for gambling, any store
the principal business of which is the sale of alcoholic beverages for
consumption off premises.
(b) The Company hereby represents that neither "construction"
nor "acquisition" of the Project "commenced" prior to August 17, 1993, within
the meaning of Section 142 of the Code. No person, firm or corporation who
was a "substantial user" of the Project (within the meaning of Section 147(a)
of the Code) before the date of issuance of the Bonds and who was or will be a
"substantial user" of the Project following its being placed in service, has
received or will receive directly or indirectly, any proceeds from the
issuance and sale of the Bonds in payment for its interest in the Project. No
portion of the Project was placed in service prior to the date hereof.
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<PAGE>
(c) The Company hereby represents that the "average reasonably
expected economic life" of the components comprising the Project, determined
pursuant to Section 147(b) of the Code, is not less than the amount set forth
in the certificates or letters of representation of the Company and the
Guarantor delivered at the time of the issuance of the Bonds (the "Closing").
The weighted average maturity of the Bonds does not exceed 120% of the
"average reasonably expected economic life" of the components comprising the
Project, determined pursuant to Section 147(b) of the Code, as set forth in
the certificates or letters of representation of the Company delivered at the
Closing. The Company agrees that it will not make nor permit the Guarantor to
make any changes in the Project which would, at the time made, cause the
"average reasonably expected economic life" of the components of the Project,
determined pursuant to Section 147(b) of the Code, to be less than the
"average reasonably expected estimated economic life" of the components set
forth in the certificates or letters of representation of the Company and the
Guarantor delivered at the Closing, unless the Company and the Guarantor shall
file with the Issuer and the Trustee an opinion of recognized bond counsel
that such change to the Project will not impair the exclusion of interest on
the Bonds from gross income for purposes of Federal income taxation.
(d) The Company hereby represents that the information contained
in the certificates of the Company and the Guarantor with respect to the
compliance with the requirements of Section 103 and 142 and Sections 146
through 149 of the Code, including the information in Form 8038 (excluding the
issue number and the employer identification number of the Issuer) filed by
the Issuer with respect to the Bonds and the Project, is true and correct in
all material respects.
(e) The Company shall not nor permit the Guarantor to (1) take
or omit to take any action, or approve the Trustee's making any investment or
use of any proceeds of the Bonds or any other moneys within their respective
control (including without limitation the proceeds of any insurance or any
condemnation award with respect to the Project) or the taking or omission of
any other action, which would cause any Bonds to be "arbitrage bonds" within
the meaning of Section 148 of the Code, or (2) approve the use of any proceeds
from the sale of the Bonds otherwise than in accordance with the Issuer's
"non-arbitrage" certificate given at the Closing barring any unforeseen
circumstances, in which event, the Company shall use such proceeds with due
diligence and shall otherwise comply with the "non-arbitrage" certificate.
Without limiting the generality of the foregoing, the Company shall at its
sole expense take or cause the Gaurantor to take all action required under
Section 148 of the Code and Treasury Regulations thereunder to prevent
inclusion of interest in gross income for purposes of Federal income taxation,
including but not limited to (i) paying on behalf of the Issuer the "rebatable
arbitrage" to the United States in accordance with Sections 1.148-1 through
1.148-9 of such Treasury Regulations, (ii) determining the "rebatable
arbitrage" as of June 1, 1999 and each fifth anniversary of such date and as
of the payment of the Bonds on behalf of the Issuer pursuant to Sections
1.148-1 through 1.148-9 of such Treasury Regulations and determining the
income attributable to such rebatable arbitrage as of the payment (whether by
reason of maturity, redemption or otherwise) of the Bonds, and (iii) complying
with any similar requirements contained in any final Treasury Regulations
adopted in place of Sections 1.148-1 through 1.148-9 of such Treasury
Regulations and all other requirements of any such final Treasury Regulations.
(f) The Company shall not permit the Project to be used or
occupied, other than as a member of the general public, by the United States
or an agency or instrumentality thereof, including any entity with statutory
authority to borrow from the United States (in any case within the meaning of
Section 149(b) of the Code) unless the Company shall deliver to the Trustee
and the Issuer an opinion of recognized bond counsel in form and substance
satisfactory to the Trustee to the effect that such use will not impair the
exclusion of interest on the Bonds from Federal income taxation.
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<PAGE>
(g) During the period commencing on the date of the issuance of
the Bonds and ending 15 days thereafter, there shall be issued no "private
activity bonds", as defined in Section 141 of the Code, which are guaranteed
or otherwise secured by payments to be made by the Company, the Guarantor or
any "related person" (or group of "related persons") unless the Company shall
deliver to the Trustee and the Issuer an opinion of recognized bond counsel in
form and substance satisfactory to the Trustee to the effect that the issuance
of such "private activity bonds" will not impair the exclusion of interest on
the Bonds from Federal income taxation. Except for the Company, the Guarantor
or any "related person" (or group of "related persons"), no person has (1)
guaranteed, arranged, participated in, assisted with or paid any portion of
the cost of the issuance of, the Bonds, or (2) 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.
II. Construction of Project.
Section 2.1 PROJECT. As between the Issuer and the Company, the
Company or the Guarantor will be entitled to physical possession and control
of the Project at all times and will be liable at all times for all risk, loss
and damages with respect to or in any manner relating to such Project. At
present, title to the Project is in the name of the Issuer with the Guarantor
being the beneficial owner pursuant to the provisions of a certain Lease
Financing Agreement dated as of December 15, 1993, by and between the Issuer
and the Guarantor.
Section 2.2 SPECIFICATION OF PROJECT ADDITIONS AND CHANGES.
Pursuant to the Act, the Issuer hereby authorizes the Company or the Guarantor
to provide for the construction, acquisition and installation of the Project,
as generally described in Schedule A hereto, by any legal means available to
the Company or the Guarantor and in the manner determined by the Company or
the Guarantor. Subject to the provisions of the Act, the Company or the
Guarantor may make additions to, deletions from and changes in the Project
from time to time and will supplement the information contained in Schedule A
by filing with the Issuer and the Trustee, hereinafter mentioned, such
supplemental information as is necessary to reflect the same so that the
Issuer and such Trustee will be able to ascertain the nature and cost of the
facilities covered by this Agreement; provided that if any changes are
substantial in relation to any series of Bonds issued for the Project, the
Company or the Guarantor will obtain an opinion of nationally recognized bond
counsel that such changes will not impair the tax exempt status of interest on
the Bonds.
Section 2.3 AWARD OF CONSTRUCTION CONTRACTS. The Company has
awarded or will cause the Guarantor to award contracts and issue purchase
orders covering the acquisition, construction and installation of the Project.
Certain portions of the work may be awarded to or completed by the Company's
or Guarantor's own personnel. The contracts so awarded, the purchase orders
issued and the work orders for the work to be done by the Company or Guarantor
personnel are hereinafter called the "Construction Contracts."
Section 2.4 ADMINISTRATION OF CONSTRUCTION CONTRACTS. The Company
will have full responsibility for preparing, administering, amending and
enforcing the Construction Contracts and litigating or settling claims
thereunder, and will be entitled to all warranties, guaranties and indemnities
provided under the Construction Contracts and by law.
Section 2.5 NOTICES AND PERMITS. The Company shall give or cause
to be given all notices and comply or cause compliance with all laws,
ordinances, municipal rules and regulations and requirements of public
authorities applying to or affecting the conduct of the construction of the
Project and the Company will defend or cause the Guarantor to defend and save
the Issuer, its officers,
4
<PAGE>
agents and employees, past, present and future, and
the Trustee, its officers, agents and employees, past, present and future
harmless from all fines, losses, costs, damages or other expenses or
liabilities due to the Company's or Guarantor's failure to comply therewith.
All permits and licenses necessary for the prosecution of the construction of
the Project shall be procured by the Company or the Guarantor.
Section 2.6 ADDITIONS AND CHANGES TO THE PROJECT. The Company may
or cause the Guarantor to further improve the Project with additional
facilities (the "Additional Facilities") beyond such acquisition, construction
and equipment as can be financed out of the proceeds of the initial series of
Bonds referred to below. In such event and if no Event of Default has
occurred and is continuing, the Company may request the Issuer to, and the
Issuer may at its election, proceed under the provisions of the Act to issue
additional Bonds under the Indenture in order to finance such Additional
Facilities. If Additional Facilities are to be financed by the Issuer, the
Company shall obtain the Issuer's approval prior to the commencement of
acquisition, construction and installation, and the Company shall amend
Schedule A to this Agreement to include the Additional Facilities as a part of
the Project. With regard to Additional Facilities to be financed pursuant to
the terms of this Section 2.6, the Company shall increase its obligations
hereunder in amounts necessary to provide for the payment of the principal of
and interest on any such additional Bonds, as provided in Article IV hereof.
III. Financing the Project.
Section 3.1 ISSUANCE OF BONDS. In order to finance the project,
the Issuer, upon request of the Company, will issue and sell its Solid Waste
Disposal Revenue Bonds (TJ International Project) (the "Bonds") in an
aggregate principal amount of $45,000,000, or such greater amount as shall be
approved by the Issuer. The proceeds of the Bonds shall be loaned to the
Company in accordance with Section 4.1 hereof. The Bonds will be issued under
a Trust Indenture (the "Indenture") between the Issuer and a corporate trustee
(the "Trustee"); will be payable solely from the Revenues of the Issuer as
such term is defined in the Indenture; and may be sold in one or more series
at such times, in such amounts and for such prices as may be approved by the
Company.
Section 3.2 CONSTRUCTION FUND. The net proceeds of the Bonds will
be deposited in the Construction Fund established under the Indenture for
payment of Project Costs as defined and permitted under the Indenture, except
that accrued interest will be deposited in the Bond Fund established under the
Indenture for payment of interest on the Bonds. The Trustee will be directed
to make payments from the Construction Fund upon receipt of a requisition from
the Company or the Guarantor, signed by any Senior Vice President, Treasurer,
or Assistant Treasurer or any other person designated by any of such officers
of the Company or by the managing general partner of the Guarantor, stating:
(a) the Costs (as defined in the Indenture) to which the
payment relates, and with respect to work and material, stating that
such have been incorporated into the Project substantially in accordance
with the plans and specifications therefor;
(b) the payee, which may be the Company or the Guarantor
in the case of work done by the Company or the Guarantor personnel and
in the case of reimbursement for payments previously made by the Company
for the Issuer's account (other than payments made by way of set-off of
mutual claims between the Company and the payee), which payee may be the
Trustee in the case of a requisition for payment of interest on the
Bonds during acquisition, construction and installation of the Project
and which payee may be the United States of America in respect of any
amount required to be paid pursuant to Section 148(f) of the Code;
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<PAGE>
(c) the amount of the payments to be made; and
(d) that the payment is due, is a proper charge against
the Construction Fund and has not been the basis for any previous
withdrawal from the Construction Fund or any other funds representing
proceeds of Bonds issued by the Issuer on the Company's behalf.
The Company shall have the right to enforce payments from the Construction
Fund upon compliance with the procedures set forth in this Section 3.2;
provided, however, that during the continuance of an Event of Default under
the Indenture (as such term is defined therein), the Construction Fund shall
be held for the benefit of owners of the Bonds in accordance with the
provisions of the Indenture.
Section 3.3 BONDS NOT TO BECOME ARBITRAGE BONDS. As provided in
Article VI of the Indenture, the Trustee will invest moneys held by the
Trustee as directed by the Company. The Issuer and the Company hereby
covenant for the benefit of the owners of the Bonds that, notwithstanding any
other provision of this Agreement or any other instrument, they will neither
make nor instruct the Trustee to make any investment or other use of the
Construction Fund or other proceeds of the Bonds which would cause the Bonds
to be arbitrage bonds under Section 148 of the Code and the regulations
thereunder, and that they will comply with the requirements of such Section
and regulations throughout the term of the Bonds.
Section 3.4 COMPLETION OF PROJECT. When the Company or the
Guarantor certifies to the Trustee and the Issuer that the Project is
complete, any amounts remaining in the Construction Fund will be applied by
the Trustee in accordance with Section 4.03 of the Indenture. Such
application shall constitute payment of principal or interest payments on the
Notes described in Section 4.3 hereof otherwise due from the Company to the
Trustee. If for any reason the amount in the Construction Fund proves
insufficient to pay all Costs of the Project, the Company will pay the
remainder of such Costs.
Section 3.5 DELETION OF PROJECT FACILITIES. Prior to completion
thereof the Company (a) may or cause the Guarantor to delete or make
modifications to any unit or portion of the Project, provided that the Company
or the Guarantor shall have received an opinion of nationally recognized bond
counsel to the effect that such deletion will not affect the tax-exempt status
of interest on the Bonds issued to finance the Project; and (b) shall delete or
make modifications to any unit or portion of the Project if such deletion is
necessary to maintain the tax exempt status of interest on the Bonds. After
deletion the Company shall restore to the Construction Fund the full amount of
such payment theretofore made on account of the deleted unit.
IV. Loan and Repayment.
Section 4.1 AMOUNT AND SOURCE OF LOAN. Concurrently with the
delivery of any series of Bonds, the Issuer will, upon the terms and conditions
of this Agreement, lend to the Company, by deposit of the proceeds thereof with
the Trustee in the Construction Fund established under the Indenture, an amount
equal to the aggregate principal amount of such series of Bonds for application
(as provided in Article III hereof) against the Costs of the Project. The Bonds
may be sold by the Issuer at a discount from their principal amount, and in such
event, the amount of such discount shall be deemed to have been loaned to the
Company and applied to the Costs of the Project. The accrued interest received
by the Issuer upon the sale of any series of Bonds shall be deposited into the
Bond Fund under the Indenture and shall be applied to the first interest due
on such Bonds, with a corresponding credit on the amounts otherwise due under
the Notes mentioned in Section 4.3 below.
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Section 4.2 REPAYMENT OF LOAN. The Company agrees to repay the loan
made by the Issuer in installments which, as to amount, shall correspond to the
payments of principal or sinking fund (if any) on the Bonds and premium (if any)
and interest at the rate or rates, and at the times, payable on the Bonds,
whether at maturity, upon redemption or acceleration, or otherwise, in
accordance with the terms of the Indenture; provided that such amount shall be
reduced to the extent that other moneys on deposit with the Trustee are
available for such purpose, and a credit in respect thereof has been granted
pursuant to the Indenture. All such repayments of the loan will be made in
funds which will be available to the Trustee no later than the corresponding
principal or interest payment date of the Bonds. To evidence its obligation to
pay such amounts, the Company will deliver the Notes specified under
Section 4.3 below.
Section 4.3 COMPANY NOTES. Concurrently with the delivery by the
Trustee to the purchaser or purchasers thereof against payment therefor of any
series of Bonds, the Company will execute and deliver a non-negotiable Note in
substantially the form of the Series 1994 Solid Waste Disposal Note attached
hereto as Schedule B, with such variations in principal amount, interest rate,
dates and prepayment provisions as may be appropriate, such notes being
hereinafter referred to as the "Notes". Each Note will:
(a) be payable to the order of the Trustee;
(b) be in a principal amount equal to the aggregate principal
amount of the Bonds issued concurrently therewith (the "related Bonds");
(c) provide for payments of interest equal to the payments
of interest on the related Bonds, except to the extent provision may be
made for the payment of capitalized or accrued interest;
(d) require payments of principal, or principal plus a
premium, if any, equal to the maturities and/or sinking fund payments,
redemption price, if any, on the related Bonds;
(e) contain provisions in respect of the prepayment of
principal and premium, if any, identical with the redemption provisions
of the related Bonds; and
(f) require all payments on the Note to be made on or
prior to the due date for the corresponding payment to be made on the
related Bonds.
Section 4.4 ACCELERATION OF PAYMENT TO REDEEM BONDS. The
Issuer will redeem any or all series of its Bonds or portions thereof upon the
occurrence of an event which gives rise to any mandatory redemption specified
therein and in accordance with the provisions of the Indenture. Whenever any
series of Bonds is subject to optional redemption, the Issuer will, but only
upon request of the Company, redeem the same in accordance with such request.
In either event, unless such redemption is effected in connection with a
refunding, the Company will pay an amount equal to the applicable redemption
price as a prepayment of the Note corresponding to such series of Bonds or
portions thereof, together with interest accrued to the date of redemption.
In the case of a redemption pursuant to the provisions described under the
caption EXTRAORDINARY OPTIONAL REDEMPTION IN WHOLE in the form of the Series
1994 Bond set forth in the Indenture, the Company's request shall be made, if
at all, within six months following the occurrence of the event giving rise to
such redemption.
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In the event that the Company consults with the Trustee pursuant
to Section 7.01(c) of the Indenture concerning a proceeding which could lead
to a Determination of Taxability, as defined in the Indenture, and special
mandatory redemption of Bonds as contemplated by such Section has been
instituted against a holder of a Bond, the Company shall promptly notify the
Trustee and the Issuer within 20 days whether or not it intends to contest
such proceeding. In the event that the Company chooses to so contest, it will
use its best efforts to obtain a prompt and final determination or decision in
such proceeding or litigation and will keep the Trustee and the Issuer
informed of the progress of any such proceeding or litigation.
Section 4.5 NO DEFENSE OR SET-OFF. The obligations of the Company
to make payments on the Notes and to perform and observe the other agreements
on its part contained herein shall be absolute and unconditional without
defense or setoff by reason of any default by the suppliers under the
Construction Contracts or by the Issuer under this Agreement or under any
other agreement between the Company and the Issuer or for any other reason,
including without limitation, failure to complete the Project, loss or
impairment of the Construction Fund, any acts or circumstances that may
constitute failure of consideration, destruction of or damage to the Project,
impossibility of performance, commercial frustration of purpose, or failure of
the Issuer to perform and observe any agreement, whether express or implied,
or any duty, liability or obligation arising out of or connected with this
Agreement, it being the intention of the parties that the payments required
hereunder will be paid in full when due without any delay or diminution
whatsoever.
Section 4.6 ASSIGNMENT OF ISSUER'S RIGHTS. As the source of
payment for its Bonds, the Issuer will assign to the Trustee all the Issuer's
rights under this Agreement (except rights of the Issuer to receive payments
and indemnification under Sections 5.4 and 5.5 hereof ). The Company consents
to such assignment and agrees to make payments on the Notes and interest
thereon directly to the Trustee without defense or setoff by reason of any
dispute between the Company and the Trustee, the Issuer or the holders of the
Bonds.
V. Covenants of the Company.
5.1 OPERATION AND MAINTENANCE OF PROJECT. So long as any Bonds
are outstanding as determined under the Indenture, the Company, at its
expense, will maintain and operate the Project or cause the Guarantor to
maintain and operate the Project during its useful life or until it is
replaced with facilities of at least equal effectiveness in disposing of solid
waste, or as otherwise required to meet the public purposes of the Act and the
provisions of the Code, but this covenant shall not require the Company or the
Guarantor to occupy or operate the Project or any portion of any other
property after it is no longer economical and feasible, in the Company's or
Guarantor's judgment, to do so and shall not prevent the Company from selling
all or any portion of any property or from merging or consolidating with
another Person, as hereinafter defined, subject to maintenance of the
corporate existence of the Company in accordance with the covenant set forth
in Section 5.2 hereof. This covenant is personal to the Company and its
successors or subsidiaries and will not be binding upon purchasers of any
portions of the Company's properties. Notwithstanding the foregoing, the
Company may make changes in or modifications of the Project necessary or
desirable to maintain or improve operating performance, subject to the
limitations set forth in Sections 2.2, 2.6 and 3.5 hereof.
5.2 MAINTENANCE OF CORPORATE EXISTENCE. So long as the Bonds
are outstanding as determined under the Indenture, the Company will maintain
its corporate existence and remain qualified to do business in the
Commonwealth, except that it may dissolve or otherwise dispose of all or
substantially all of its assets and may consolidate with or merge into another
Person or permit one or more Persons to consolidate or merge into it, if the
surviving, resulting or transferee
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Person, if other than the Company, assumes in writing all of the
obligations of the Company hereunder and under the Notes and is organized
under the laws of a State of the United States of America and
is duly qualified to do business in the Commonwealth and has a net worth of at
least 90% of that of the Company prior to the merger; provided that
immediately thereafter the Company or its successor will not be in default
under the Agreement or the Notes.
5.3 PAYMENT OF TRUSTEE'S COMPENSATION AND EXPENSES. The Company
will pay the Trustee's compensation and expenses under the Indenture,
including all costs of redeeming Bonds thereunder and the compensation to any
co-paying agent appointed in respect of the Bonds, and will indemnify the
Trustee against any claims arising out of the exercise and performance of its
powers and duties under the Indenture in good faith and without negligence.
5.4 PAYMENT OF ISSUER'S EXPENSES. Except to the extent payment
is provided from the Construction Fund, the Company will pay the Issuer's
expenses, including legal and accounting fees incurred by the Issuer in
connection with the issuance of the Bonds and the performance by the Issuer of
any and all of its functions and duties under this Agreement or the Indenture,
including, but not limited to, all duties which may be required of the Issuer
by the Trustee and the holders of the Bonds.
5.5 INDEMNITY AGAINST CLAIMS. The Company will indemnify the
Issuer and the Trustee, and the officers, agents and employees of each, past,
present and future, against claims arising out of the Construction Contracts,
the construction of the Project, or the Issuer's undertaking of the financing
of the Project other than claims arising from willful misconduct in the case
of the Issuer, and from willful misconduct or negligence in the case of the
Trustee. If any such claim is asserted, the Issuer or the Trustee, as the
case may be, will give prompt notice to the Company and the Company will
assume the defense thereof, with full power to litigate, compromise or settle
the same in its sole discretion. If the Issuer or the Trustee, as the case
may be, so elects, either may participate in the defense of such claims, may
be represented by counsel of its own choice and at its own expense and may
demand that the Company indemnify it against any loss, cost, damages or
expenses on account of any such litigation, compromise or settlement
undertaken solely by the Company.
5.6 DISCLAIMER; LIMITATION OF LIABILITY OF THE ISSUER. The
Issuer makes no representation or warranty, either express or implied, as to
the actual or designed capacity of the Project, as to the suitability of the
Project for the purposes specified in this Agreement, as to the condition of
the Project, or that the Project will be suitable for the Company's purposes
or needs. In the event of any default by the Issuer hereunder, the liability
of the Issuer to the Company shall be enforceable only out of its interest
under this Agreement and there shall be no other recourse by the Company
against the Issuer, its officers, agents and employees, past, present or
future, or any of the property now or hereafter owned by it or them. No
obligation of the Issuer hereunder or under the Bonds shall be deemed to
constitute or give rise to a pecuniary liability of the Issuer or a charge
against the general credit or taxing power of the Issuer, the Commonwealth or
of any political subdivision thereof.
5.7 INSURANCE; PAYMENT OF TAXES AND CHARGES. The Company, at
its expense, shall procure and maintain, or cause to be procured and
maintained, continuously during the term of this Agreement, insurance policies
with respect to the Project against such risks (including all liability for
injury to persons or property arising from the operation of the Project) and
in such amounts as are customary for a prudent owner of properties comparable
to the Project. Further, the Company shall cause the Guarantor to duly pay
and discharge, or cause to be paid and discharged, all taxes, assessments and
other governmental charges, or required payments in lieu thereof, lawfully
imposed upon the Project or upon the rights, revenues, income, receipts, and
other moneys, securities and funds derived from operation of the Project
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(including all rights, moneys and other property transferred, assigned and
pledged under the Indenture), except those taxes, assessments, charges or
claims which the Company or the Guarantor shall in good faith contest by
proper legal proceedings if the Company or the Guarantor shall in all such
cases set aside on its books reserves deemed adequate with respect thereto.
5.8 DAMAGE; DESTRUCTION AND EMINENT DOMAIN. Damage to,
destruction of or condemnation (or sale under threat of condemnation) of all
or a portion of the Project shall not terminate the Agreement, or cause any
abatement of or reduction in the payments to be made by the Company or
otherwise affect the respective obligations of the Issuer or the Company,
except as set forth in this Agreement.
5.9 FINANCIAL STATEMENTS. So long as any Bonds are outstanding
as determined under the Indenture, the Company will have its financial
statements audited annually by independent public accountants and shall
furnish to the Trustee a copy of such audited financial statements within 90
days after the end of each fiscal year of the Company. The Trustee may
distribute such financial statements to the holders of the Bonds upon request
and the Company shall furnish to the Trustee sufficient copies of such
statements to enable the Trustee to make distribution to the holders of the
Bonds. Such financial statements shall be prepared in accordance with
generally accepted accounting principles.
In addition, the Company will file, in a sufficient amount, its
Quarterly Reports on Form 10-Q with the Trustee which the Trustee may also
distribute to the holders of the Bonds upon request.
At the time of delivery of annual financial statements to the
Trustee, the Company will provide to the Trustee a certificate to the effect
that it is in compliance with its covenants hereunder, or if not in such
compliance, full detail with respect thereto.
5.10 INVESTMENT OF FUNDS. The Company agrees to pay to the
Trustee upon ten days prior written notice any loss sustained in the
investment of any funds authorized under Section 6.01 of the Indenture.
5.11 LIMITATION ON LIENS. The Company will not, and will not
permit any Subsidiary (as hereinafter defined) to, issue, assume or guarantee
any Debt (as hereinafter defined) if such Debt is secured by a Lien (as
hereinafter defined) upon any Principal Property (as hereinafter defined) or
on any shares of stock or indebtedness of any Restricted Subsidiary (as
hereinafter defined) (whether such Principal Property, shares of stock or
indebtedness is now owned or hereafter acquired) without in any case
effectively providing that, or causing such Restricted Subsidiary to make
effective provision so that, the Note (together with, if the Company shall so
determine, any other indebtedness of or guaranteed by the Company or such
Restricted Subsidiary that is not subordinate to the Note then existing or
thereafter created) shall be secured equally and ratably with such Debt,
except that the foregoing restrictions shall not apply to (i) Liens on
property, shares of stock or indebtedness of or guaranteed by any corporation
existing at the time such corporation becomes a Restricted Subsidiary; (ii)
Liens on property existing at the time of acquisition thereof, or to secure
the payment of all or any part of the purchase price of such property, or to
secure Debt incurred or guaranteed for the purpose of financing all or any
part of the purchase price of such property or improvements, substantial
repairing or construction (including any improvements on any existing
property) thereon provided, however, that the commitment of the creditor to
extend the credit secured by any such Lien shall have been obtained not later
than 120 days after the later of (a) the completion of the acquisition,
substantial repair, improvement or construction of such property or (b) the
placing in operation of such property or of such property as so substantially
repaired, improved or constructed; provided, further, that (a) the principal
amount of any Debt secured by such Lien does not exceed 100% of the cost of
such acquisition, substantial
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repair, improvement or construction and (b) such Lien does not extend to or
cover any other property other than such item of property and any improvements
on such item; (iii) Liens securing Debt owing by any Restricted Subsidiary to
the Company or another Restricted Subsidiary; (iv) Liens on property of a
Person existing at the time such Person is merged into or consolidated with
the Company or a Restricted Subsidiary or at the time of a purchase, lease or
other acquisition of the properties of a Person as an entirety or substantially
as an entirety by the Company or a Restricted Subsidiary; (v) Liens on property
of the Company or a Restricted Subsidiary in favor of the United States of
America or any State thereof, or any department, agency, instrumentality or
political subdivision thereof, or in favor of any other country, or any
political subdivision thereof, to secure any payments pursuant to any contract
or statute or to secure any indebtedness incurred or guaranteed for the purpose
of financing all or any part of the purchase price or the cost of construction
of the property subject to such Liens (including, but not limited to, Liens
incurred in connection with pollution control, industrial revenue bond or
similar financings); (vi) Liens existing on the date of issuance of the Series
1994 Bonds; and (vii) Liens to secure Debt incurred to extend, renew, refinance
or refund (or successive extension, renewals, refinancings or refundings), in
whole or in part, Debt secured by any Lien referred to in the foregoing clauses
(i) to (vi) inclusive so long as such Liens do not extend to any other property
and the principal amount of the Debt so secured is not increased.
Notwithstanding the above, the Company and one or more Subsidiaries may issue,
assume or guarantee secured Debt which would otherwise be subject to the
foregoing restrictions, provided that after giving effect thereto the aggregate
amount of such Debt then outstanding (not including secured Debt permitted under
the foregoing exceptions) at such time does not exceed 10% of the Consolidated
Net Tangible Assets (as hereinafter defined) of the Company and its consolidated
Subsidiaries as of the end of the latest fiscal year.
5.12 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Neither the
Company nor any Restricted Subsidiary may enter into any sale and leaseback
transaction (the term of which exceeds three years) with any lender or
investor (not including the Company or any Restricted Subsidiary) involving
any real property constituting all or part of any Principal Property, unless
either (i) Debt secured by a Lien on the Principal Property or part thereof to
be leased in an amount equal to the Attributable Debt (as hereinafter defined)
with respect to such sale and leaseback transaction could be created under the
limitation on secured liens referred to in Section 5.11 hereof without equally
and ratably securing the Note as contemplated by that limitation or (ii) the
Company or such Restricted Subsidiary applies or causes to be applied, in the
case of a sale or transfer for cash, an amount equal to the net proceeds
thereof (but not in excess of the net book value of such Principal Property at
the date of such sale) and, in the case of a sale otherwise than for cash, an
amount equal to the fair value (as determined by the Board of Directors of the
Company and evidenced by a Board Resolution (as hereinafter defined)) of the
Principal Property so leased to the retirement, within 120 days after the
effective date of such sale and leaseback transaction, of Debt of the Company
or a Restricted Subsidiary (other than Debt that is subordinate in right of
payment to the Note or which is owing to the Company or a Restricted
Subsidiary).
5.13 LIMITATION ON RESTRICTED PAYMENTS. The Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, make
any Restricted Payment (as hereinafter defined) if, at the time of such
Restricted Payment, or after giving effect thereto, (i) an Event of Default or
declared default thereunder shall have occurred and be continuing or (ii) the
aggregate amount expended for all Restricted Payments, including such
Restricted Payment (the amount of any Restricted Payment, if other than cash,
to be the fair market value thereof at the date of payment as determined in
good faith by the Board of Directors of the Company), subsequent to July 2,
1994 shall exceed the sum of (a) $15,000,000 plus (b) 75% of the aggregate
Consolidated Net Income (as hereinafter defined) (or if such aggregate
Consolidated Net Income is a loss, minus 100% of such loss) of the Company
earned subsequent to July 2, 1994 and on or prior to the last day of the
fiscal quarter ending immediately prior to the date of such Restricted Payment
plus (c) 100% of the aggregate net proceeds, including the fair value of
property other than cash (determined in good faith by the Board
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of Directors of the Company and evidenced by a Board Resolution), from the
issuance of Capital Stock (as hereinafter defined) (other than Disqualified
Stock (as hereinafter defined)) of the Company and options, warrants or other
rights to acquire Capital Stock (other than Disqualified Stock) of the Company.
For the purposes of this section, Restricted Payment means (i) any declaration
or payment of any dividend or other distribution in respect of any Capital Stock
of the Company, including pursuant to a merger or consolidation of the Company
but excluding any dividends or distributions payable solely in shares of
Capital Stock (other than Disqualified Stock) of the Company or in options,
warrants or other rights to acquire Capital Stock (other than Disqualified
Stock) of the Company, (ii) the redemption, repurchase, retirement or other
acquisition of any Capital Stock of the Company or any Related Person of the
Company or any options, warrants or rights to purchase or acquire shares of
Capital Stock of the Company or any Related Person (as hereinafter defined) of
the Company or (iii) any purchase, redemption, defeasance, or other
acquisition or retirement prior to scheduled maturity of any installment of
any Debt that is subordinate to the Note.
The foregoing provision shall not be violated by reason of (i) the
payment of any dividend on Capital Stock within 60 days after the declaration
thereof if, on the date such dividend was declared, such payment would have
complied with the foregoing provision, (ii) the redemption, repurchase,
retirement or other acquisition of Capital Stock of the Company or the
purchase, defeasance, acquisition or retirement of Debt of the Company which
is subordinate to the Note out of the net proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of Capital Stock
(other than Disqualified Stock) of the Company; provided that the amount of
such net proceeds applied to such redemption, repurchase, retirement,
acquisition, purchase or defeasance shall be excluded from the calculation of
the amount available for Restricted Payments pursuant to the immediately
preceding paragraph, (iii) the acquisition by the Company of its Capital Stock
(or, in the case of clause (C) below, warrants, rights or options to purchase
or acquire shares of its Capital Stock) (A) to eliminate fractional shares,
(B) from any shareholder who, by reason of dissent from any corporate action,
is entitled under applicable law to be paid the fair market value of his
shares or (C) from an employee who has purchased or otherwise acquired such
shares, warrants, rights or options from the Company or a Subsidiary of the
Company under an agreement permitting or obligating the Company or a
Subsidiary of the Company to repurchase such shares, warrants, rights or
options, but in no event for a price greater than the higher of the fair
market value thereof or the price at which they were sold by the Company or
such Subsidiary, provided that the aggregate amount paid by the Company
subsequent to the issuance of the Series 1994 Bonds pursuant to subclauses
(A), (B), and (C) shall not exceed $5,000,000, or (iv) the redemption,
repurchase, retirement or other acquisition by the Company of Founder's Stock
(as hereinafter defined). The declaration of each dividend paid in accordance
with clause (i) above shall be counted for purposes of computing the aggregate
amount expended for all Restricted Payments pursuant to the preceding
paragraph, but any payment pursuant to clause (ii), (iii) or (iv) above shall
not be so counted.
"Attributable Debt" as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation (as
hereinafter defined), and at any date as of which the amount thereof is to be
determined, means the total net amount of rent required to be paid by such
Person under such lease during the initial term thereof as determined in
accordance with generally accepted accounting principles, discounted from the
last date of such initial term to the date of determination at a rate per
annum equal to the discount rate which would be applicable to a Capital Lease
Obligation with like term in accordance with generally accepted accounting
principles. The net amount of rent required to be paid under any such lease
for any such period shall be the aggregate amount of rent payable by the
lessee with respect to such period after excluding amounts required to be paid
on account of insurance, taxes, assessments, utility, operating and labor
costs and similar charges. In the case of any lease which is terminable by
the lessee upon the payment of a penalty, such net amount shall also include
the amount of such penalty, but no rent shall be considered as required to be
paid under such lease subsequent to the first date upon which it may be so
terminated. "Attributable Debt"
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means, as to a Capital Lease Obligation under which any Person is at the time
liable and at any date as of which the amount thereof is to be determined, the
capitalized amount thereof that would appear as a liability on the face of a
balance sheet of such Person as of such date in accordance with generally
accepted accounting principles.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification.
"Capital Lease Obligation" of any Person means the obligation to
pay rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability
on the face of a balance sheet of such Person in accordance with generally
accepted accounting principles.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock of such Person.
"Consolidated Net Income" is the consolidated net income of the
Company and its subsidiaries for the period in question, determined in
accordance with generally accepted accounting principles.
"Consolidated Net Tangible Assets" is the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (i) all current liabilities and (ii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
like intangibles of the Company and its Consolidated Subsidiaries (as
hereinafter defined), all as set forth on the most recent balance sheet of the
Company and its Consolidated Subsidiaries prepared in accordance with
generally accepted accounting principles.
"Consolidated Subsidiaries" of any Person means all other Persons
that would be accounted for as consolidated Persons in such Person's financial
statements in accordance with generally accepted accounting principles.
"Debt" is indebtedness for money borrowed.
"Disqualified Stock" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part, on or prior to the final stated maturity of the Note.
"Founder's Stock" means any and all shares of common stock of the
Company owned or thereafter acquired by Harold E. Thomas, Phyllis E. Thomas,
Arthur L. Troutner or Katherine Troutner. The amount of Founder's Stock
outstanding as of the date hereof is approximately 2 million shares. The
quoted sales prices (closing) of the Company's common stock during 1993 ranged
from a low of $11-7/16 to a high of $32-3/4.
"Lien" is any mortgage, pledge, lien or other encumbrance.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
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"Principal Property" is any manufacturing plant or facility
located within the United States of America (other than its territories and
possessions) and owned by the Company or any Subsidiary, unless, in the
opinion of the Board of Directors and set forth in a Board Resolution, such
plant or facility is not of material importance to the business conducted by
the Company and its Subsidiaries taken as a whole.
"Related Person" of any Person means any other Person directly or
indirectly owning (a) 25% or more of the outstanding Common Stock of such
Person (or, in the case of a Person that is not a corporation, 25% or more of
the equity interest in such Person) or (b) 25% or more of the combined voting
power of the Voting Stock of such Person.
"Restricted Subsidiary" is a Subsidiary which owns or leases any
Principal Property.
"Subsidiary" is a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
Section 5.14 CREDIT RATING OF OUTSTANDING BONDS. Upon an
assignment by a nationally recognized ratings service of an investment grade
credit rating to any bonds, notes, or other forms of indebtedness of the
Company, the Company, at its own expense, also shall apply for an investment
grade credit rating of the outstanding Bonds from a nationally recognized
ratings service.
VI. Events of Default and Remedies.
Section 6.1 EVENTS OF DEFAULT. Each of the following events is
hereby defined as, and is declared to be and to constitute, an "Event of
Default":
(a) failure by the Company to make any payment on the
Notes as required to be made pursuant to Section 4.2 or 4.4 hereof when
the same is due; or
(b) failure by the Company to observe and perform any other
covenant, condition or agreement on its part to be observed or performed
under this Agreement or the Notes for a period of 60 days after written
notice, specifying such failure and requesting that it be remedied, given
to the Company and the Guarantor by the Trustee; provided, that if such
failure is of such nature that it can be corrected (as agreed to by the
Trustee), but not within such period, the same shall not constitute an
Event of Default so long as the Company institutes prompt corrective
action and is diligently pursuing same; or
(c) if the Company or the Guarantor
(1) admits in writing its inability to pay its debts
generally as they become due, or
(2) files a petition to be adjudicated a voluntary
bankrupt in bankruptcy or a similar petition under any insolvency
act, or
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(3) makes a general assignment for the benefit of
its creditors, or
(4) consents to the appointment of a receiver of
itself or of the whole or any substantial part of its property; or
(d) if the Company or the Guarantor files a petition or
answer seeking reorganization or arrangement of the Company or the
Guarantor under the federal bankruptcy laws or any other applicable law
or statute; or
(e) if the Company or the Guarantor, on a petition in
bankruptcy filed against it, is adjudicated a bankrupt or if a court of
competent jurisdiction shall enter an order or decree appointing,
without the consent of the Company or the Guarantor, a receiver or
trustee of the Company or the Guarantor or of the whole or substantially
all of its property, or approving a petition filed against it seeking
reorganization or arrangement of the Company or the Guarantor under the
federal bankruptcy laws or any other applicable law or statute, and such
adjudication, order or decree shall not be vacated or set aside or
stayed within 90 days from the date of the entry thereof; or
(f) an event of default under any other financing
agreement or note evidencing a debt obligation of the Company in an
aggregate principal amount of $10,000,000 which results in an
acceleration of the payment of such debt; or
(g) if an event of default under the provisions of the
Guaranty, as defined in the Indenture, occurs, or;
(h) if for any reason the Bonds shall be declared due and
payable by acceleration in accordance with Section 9.02 of the
Indenture;
then and in each and every such case and during the continuance thereof, the
Issuer or the Trustee, by notice in writing to the Company and to the
Guarantor, may declare all sums which the Company is obligated to pay
hereunder and under the Notes to be due and payable immediately, and upon any
such declaration the same shall become and be immediately due and payable,
anything in this Agreement or the Notes to the contrary notwithstanding.
In case such declaration shall have been annulled in accordance
with Section 9.02 of the Indenture, or in case the Issuer or the Trustee shall
have proceeded to enforce any right under this Agreement and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Issuer or the Trustee, then and in every such case
the Company, the Issuer and the Trustee shall be restored to their respective
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Issuer and the Trustee shall continue as though no such
proceeding had been taken, but subject to the limitations of any such adverse
determination.
Section 6.2 PAYMENT ON DEFAULT; SUIT THEREFOR. The Company
covenants that, in case default shall be made in the payment of any amount due
under this Agreement or under the Notes as and when the same shall become due
and payable, whether at maturity or by declaration of acceleration or
otherwise, then, upon demand of the Issuer or the Trustee, the Company will
pay to the Trustee the whole amount of the Notes that then shall have become
due and payable with interest at the rates provided in the Bonds; and, in
addition thereto, such further amount as shall be sufficient
15
<PAGE>
to cover the reasonable costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorney and counsel, and
any expenses or liabilities incurred by the Issuer other than through its gross
negligence, bad faith or willful misconduct or the Trustee other than through
its negligence, bad faith or willful misconduct.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceeding to judgment or
final decree, and may enforce any such judgment or final decree against the
Company and collect in the manner provided by law out of the property of the
Company the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company under the federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been
appointed for the property of the Company or the Guarantor or in the case of
any other similar judicial proceedings relative to the Company or the
Guarantor, or to the creditors or property of the Company or the Guarantor,
the Issuer or the Trustee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of the Notes and interest owing and unpaid in respect thereof
and, in case of any judicial proceedings, to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have
the claims of the Issuer or the Trustee allowed in such judicial proceedings
relative to the Company or the Guarantor, its creditors, or its property, and
to collect and receive any moneys or other property payable or deliverable on
any such claims, and to distribute the same after the deduction of its charges
and expenses; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Trustee, and
to pay to the Trustee any amount due it for compensation and expenses,
including counsel fees incurred by it up to the date of such distribution.
Section 6.3 CUMULATIVE RIGHTS. No remedy conferred upon or
reserved to the Issuer or the Trustee by this Agreement or the Notes 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 Agreement or the Notes or now or hereafter
existing at law or in equity or by statute provided there is no duplication of
recovery. No waiver by the Issuer or the Trustee of any breach by the Company
of any of its obligations, agreements or covenants hereunder or under the
Notes shall be a waiver of any subsequent breach, and no delay or omission to
exercise any right or power shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
VII. Miscellaneous.
Section 7.1 NOTICES. Notice hereunder shall be given in writing,
either by registered mail, return receipt requested, to be deemed effective
upon receipt, or by telegram, confirmed in writing, addressed as follows:
The Issuer - County of Perry, Kentucky
Courthouse, 481 Main Street
Hazard, Kentucky 41701
Attention: County Judge/Executive
16
<PAGE>
The Company - TJ International, Inc.
380 E. Park center Blvd., Suite 300
Boise, Idaho 83708
Attention: Corporate Secretary
The Guarantor - Trus Joist MacMillan a Limited Partnership
200 east Mallard
Boise, Idaho 83706
Attention: General Partner
The Trustee - West One Bank, Idaho
101 South Capitol Boulevard
Boise, Idaho 83702
Attention: Corporate Trust
or such other address as may be filed in writing with the parties to this
Agreement and with the Trustee.
Section 7.2 ASSIGNMENTS. This Agreement may be assigned by the
Company without the consent of the Issuer and the Trustee provided that under
such assignment, the Company shall remain primarily liable for any of its
obligations under the Agreement and the Notes and such assignment shall not
effect the compliance of the Project with the public purposes of the Act.
Notwithstanding the foregoing, no merger or consolidation permitted under
Section 5.2 hereof shall be deemed to be an assignment for purposes of this
Section 7.2.
Section 7.3 ILLEGAL. ETC. PROVISIONS DISREGARDED. In case any
provision of this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, this Agreement shall be construed as if such
provision had never been contained herein.
Section 7.4 APPLICABLE LAW. This Agreement has been delivered in
the Commonwealth and shall be deemed to be governed by, and interpreted under,
the laws of the Commonwealth.
Section 7.5 AMENDMENTS. This Agreement may not be amended except
by an instrument in writing signed by the parties and, if such amendment
occurs after the issuance of any of the Bonds, consented to by the Trustee for
the holders of Bonds, in accordance with Section 12.03 of the Indenture.
Section 7.6 AMOUNTS REMAINING IN BOND FUND OR CONSTRUCTION FUND.
It is agreed by the parties that any amounts remaining in the Bond Fund or the
Construction Fund established under the Indenture upon expiration or sooner
termination of the Agreement term, as provided in this Agreement, after
payment in full of the Bonds (or provision for payment thereof having been
made in accordance with the provisions of the Indenture), of the fees, charges
and expenses of the Trustee and the Issuer, shall belong to and be paid to the
Company by the Trustee as overpayment of the amounts due under the Notes, in
accordance with Section 13.01 of the Indenture.
17
<PAGE>
Section 7.7 TERM OF AGREEMENT. This Agreement shall become
effective upon its delivery and shall continue in effect until all Bonds have
been paid or provision for such payment has been made in accordance with the
Indenture.
Section 7.8 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In
any case where the date of maturity of interest on or principal of any Note or
the date fixed for prepayment of any Note or the date fixed for the giving of
any notice hereunder shall be a Saturday or Sunday or a legal holiday or a day
on which banking institutions in the city of payment are authorized by law to
close, then payment of interest, premium, if any, or principal or the giving
of notice need not be made on such date but may be made on the next succeeding
business day with the same force and effect as if made on the date of maturity
or the date fixed for redemption or prepayment or the giving of notice, and no
interest in such payment shall accrue for the period after such date.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto, in consideration of the
mutual covenants set forth herein and intending to be legally bound, have
caused this Agreement to be executed and delivered as of the date first
written above.
COUNTY OF PERRY, KENTUCKY
Attest: /s/ Betty Turner By: /s/ Sherman Neace
---------------- -----------------
Fiscal Court Clerk County Judge/Executive
TJ INTERNATIONAL, INC.
Attest: /s/ Richard B. Drury By: /s/ Valerie Heusinkveld
-------------------- -----------------------
Name: Name:
-------------------- ------------------------
Title: CORPORATE SECRETARY Title: VICE PRESIDENT, FINANCE
& CHIEF FINANCIAL OFFICER
19
<PAGE>
SCHEDULE A
THE PROJECT
The Project consists of certain equipment, structures and related
systems and facilities which shall comprise the sewage and solid waste
disposal components of a laminated strand lumber production facility in the
County of Perry, Kentucky, including the sewage and solid waste processing
components of the log processing facility, the strander area, the billet
processing area, the waste wood disposal system and the sanitary waste
facility of the laminated strand lumber production facility.
<TABLE>
ESTIMATED PROJECT COST
<S> <C>
Qualifying Project Facility Costs . . . . . . . . . . . .$39,896,846
Net Interest During Construction. . . . . . . . . . . . . 1,715,620
Insubstantial Portion Costs . . . . . . . . . . . . . . . 1,017,534
Costs of Issuance - Bonds . . . . . . . . . . . . . . . . 870,000
Total Use of Proceeds -----------
-----------
$43,500,000
</TABLE>
A-1
<PAGE>
SCHEDULE B
TJ INTERNATIONAL, INC.
SOLID WASTE DISPOSAL NOTE
(County of Perry, Kentucky)
Series 1994
TJ INTERNATIONAL, INC. (the "Company"), a Delaware corporation,
for value received, promises to pay to the order of West One Bank, Idaho,
Boise, Idaho (the "Trustee"), as trustee under the Trust Indenture dated as of
June 1, 1994 (the "Indenture") between the County of Perry, Kentucky (the
"Issuer") and the Trustee, the principal sum of $43,500,000 on June 1, 2024,
with interest on the outstanding balance, payable on June 1 and December 1 of
each year commencing December 1, 1994, at the rate of 7.00% per annum
(computed on the basis of a 360-day year consisting of twelve (12) 30-day
months), until payment of such principal has been made or provided for.
This Note is subject to prepayment at the option of the Company
upon at least 30 days prior written notice to the Trustee, in whole, or in
part in multiples of $100,000, on any date or after June 1, 2004, any such
prepayment to be made at the applicable prepayment price shown below as a
percentage of the principal amount thereof, plus interest accrued to the date
of prepayment:
<TABLE>
<CAPTION>
PREPAYMENT PERIOD PREPAYMENT PRICE
- - ----------------- ----------------
<S> <C>
June 1, 2004 through May 31, 2005 102%
June 1, 2005 through May 31, 2006 101
June 1, 2006 and thereafter 100
</TABLE>
This Note is subject to prepayment in whole on any date, at a
prepayment price equal to 100% of the unpaid principal amount, plus interest
accrued to the prepayment date, if one or more of the following events shall
have occurred:
(a) the damage or destruction of all or substantially all
of the Project (as hereinafter defined) or the plant at which such
Project is located to such extent that, in the reasonable opinion of the
Company, the repair and restoration thereof would not be economical; or
(b) the condemnation (or sale under threat of
condemnation) of all or substantially all of the Project or such plant
or the taking by condemnation of any part, use or control of the Project
or such plant as to render it unsatisfactory to the Company for its
intended use; or
(c) in the Company's reasonable opinion, unreasonable
burdens or excessive liabilities shall have been imposed upon the
Company with respect to the Project or the operation thereof, including,
but without being limited to, federal, state or other ad valorem,
property, income or other taxes, not being imposed on the date of the
Agreement other than ad valorem taxes presently levied upon privately
owned property used for the same general purpose as the Project; or
B-1
<PAGE>
(d) by reason of unforeseen change in use of the Project
as a "solid waste disposal facility" within the meaning of Section
142(a)(6) of the Internal Revenue Code of 1986 the interest payable by
the Company under the Agreement (as hereinafter defined) is no longer
deductible by the Company for Federal income tax purposes.
The Company's right to prepay this Note as a result of unforeseen
change in use of the Project will survive defeasance of the Series 1994 Bonds,
as hereinafter defined.
If the Trustee notifies the Company that an event has occurred
which makes the Issuer's Solid Waste Disposal Revenue Bonds (TJ International
Project), Series 1994 (the "Series 1994 Bonds") subject to redemption pursuant
to the provisions described under the caption SPECIAL MANDATORY REDEMPTION in
the form of the Series 1994 Bond, the Company shall, on or before the proposed
redemption date for the Series 1994 Bonds, pay to the Trustee the whole or
appropriate portion of the unpaid principal amount of this Note with interest
accrued to the proposed redemption date. The whole or appropriate portion of
the unpaid principal of this Note, with interest accrued to the date of
payment, shall be paid by the Company to the Trustee on the date specified in
a notice from the Trustee. Defeasance of the Series 1994 Bonds shall release
the Company of its obligation with regard to Special Mandatory Redemption.
This Note is subject to mandatory prepayment by the Company prior
to its scheduled payment, in whole at a prepayment price of 100% of the
principal amount thereof, on the earliest practicable date selected by the
Trustee pursuant to the Indenture upon the occurrence of a dissolution of Trus
Joist MacMillan a Limited Partnership ("Trus Joist MacMillan") as permitted
under the terms of the limited partnership agreement between the Company, as
general partner, and MacMillan Bloedel of America Inc., as limited partner of
Trus Joist MacMillan, except for such dissolution, consolidation or merger as
otherwise permitted by the terms of the Agreement (as hereinafter defined).
Upon receipt of notice of optional prepayment and at the time of
giving notice of a mandatory prepayment, the Trustee shall take all action
necessary under the Indenture to redeem Bonds in an amount corresponding to
that specified in the notice.
If, for any reason, the amounts specified above are not sufficient
to make corresponding payments of principal or redemption price of, and
interest on, all of the Issuer's Series 1994 Bonds, when such payments are
due, the Company shall pay as additional amounts due hereunder, the amounts
required from time to time to make up any such deficiency. Whenever payment
or provision therefor has been made in respect of the principal or redemption
price of, and interest on all such Series 1994 Bonds in accordance with the
Indenture, this Note shall be deemed paid in full and shall be canceled and
returned to the Company.
All payments of principal, prepayment premium, if any, and
interest shall be made to the Trustee at its principal corporate trust office
in Boise, Idaho, in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and
private debts. All payments shall be in the full amount required hereunder
unless the Trustee notifies the Company that it is entitled to a credit under
the Agreement or the Indenture.
This Note is issued pursuant to a certain Loan Agreement (the
"Agreement") dated as of June 1, 1994 between the Issuer and the Company
relating to the financing of a solid waste disposal facility (the "Project").
Additional similar Notes may be issued as provided in the Agreement. The
obligations of the Company to make the payments required hereunder shall be
absolute and unconditional without defense or set-off by reason of any default
by the suppliers under
B-2
<PAGE>
the Construction Contracts defined in the Agreement or by the Issuer under the
Agreement or under any other agreement between the Company and the Issuer or
for any other reason, including without limitation, failure to complete the
Project, loss or impairment of the Construction Fund, any acts or
circumstances that may constitute failure of consideration, destruction of
or damage to the Project, commercial frustration of purpose, or failure of
the Issuer to perform and observe any agreement, whether express or
implied, or any duty, liability or obligation arising out of or connected with
the Agreement, it being the intention of the Company and the Issuer that the
payments hereunder will be paid in full when due without any delay or
diminution whatsoever.
In case one or more of the Events of Default specified in
Section 6.1 of the Agreement shall have occurred and be continuing, then and
in each and every such case, the Trustee, by notice in writing to the Company,
may declare the unpaid balance of this Note to be due and payable immediately,
if concurrently with or prior to such notice the unpaid principal amount of
the Series 1994 Bonds has been declared to be due and payable, and upon any
such declaration the same shall become and shall be immediately due and
payable, anything in this Note or in the Agreement to the contrary
notwithstanding.
In case the Trustee shall have proceeded to enforce its rights
under this Note or the Agreement and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Trustee, then and in every such case the Company and the
Trustee shall be restored to their respective positions and rights hereunder,
and all rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceeding had been taken.
In case the Company shall fail forthwith to pay all amounts due
hereunder and under the Agreement upon such demand, the Trustee shall be
entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company and collect, in the manner
provided by law out of the property of the Company, the moneys adjudged or
decreed to be payable.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed and delivered.
Dated: June 1, 1994 TJ INTERNATIONAL, INC.
By: __________________________
Vice President
B-3
<PAGE>
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
COUNTY OF PERRY, KENTUCKY
to
WEST ONE BANK, IDAHO,
as Trustee
TRUST INDENTURE
Dated as of June 1, 1994
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
Solid Waste Disposal Revenue Bonds
(TJ International Project)
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
<S> <C>
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
FORM OF SERIES 1994 BOND. . . . . . . . . . . . . . . . . . . . . . . . . 2
FORM OF TRUSTEE'S CERTIFICATION OF AUTHENTICATION . . . . . . . . . . . . 8
FORM OF ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
HABENDUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE I. - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE II. - THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 2.01. Amounts and Terms - Series 1994 Bonds
and Other Series . . . . . . . . . . . . . . . . . 14
Section 2.02. Interest Accrual . . . . . . . . . . . . . . . . . 15
Section 2.03. Registered Bonds Required; Bond Registrar
and Bond Register. . . . . . . . . . . . . . . . . 15
Section 2.04. Registration, Transfer and Exchange. . . . . . . . 16
Section 2.05. Execution. . . . . . . . . . . . . . . . . . . . . 16
Section 2.06. Authentication . . . . . . . . . . . . . . . . . . 17
Section 2.07. Payment of Principal and Interest; Interest
Rights Preserved . . . . . . . . . . . . . . . . . 17
Section 2.08. Persons Deemed Owners. . . . . . . . . . . . . . . 17
Section 2.09. Mutilated, Destroyed, Lost or Stolen Bonds . . . . 18
Section 2.10. Temporary Bonds. . . . . . . . . . . . . . . . . . 18
Section 2.11. Cancellation and Destruction of Surrendered Bonds. 19
Section 2.12. Book-Entry Only System . . . . . . . . . . . . . . 19
ARTICLE III. - ISSUE OF BONDS . . . . . . . . . . . . . . . . . . . . . .20
Section 3.01. Issue of Series 1994 Bonds . . . . . . . . . . . . 20
Section 3.02. Issue of Additional Bonds. . . . . . . . . . . . . 20
Section 3.03. Disposition of Proceeds of Bonds . . . . . . . . . 22
ARTICLE IV. - PROJECT CONSTRUCTION. . . . . . . . . . . . . . . . . . . .23
Section 4.01. Establishment of Construction Fund . . . . . . . . 23
Section 4.02. Payments from Construction Fund. . . . . . . . . . 23
Section 4.03. Procedure Upon Completion of Project . . . . . . . 24
-i-
<PAGE>
ARTICLE V. - REVENUES AND APPLICATION THEREOF . . . . . . . . . . . . . .24
Section 5.01. Revenues to Be Paid Over to Trustee. . . . . . . . 24
Section 5.02. Bond Fund. . . . . . . . . . . . . . . . . . . . . 25
Section 5.03. Sinking Funds. . . . . . . . . . . . . . . . . . . 25
Section 5.04. Revenues to Be Held for All Bondholders;
Certain Exceptions . . . . . . . . . . . . . . . . 25
ARTICLE VI. - INVESTMENT OF FUNDS . . . . . . . . . . . . . . . . . . . .26
Section 6.01. Investment of Funds. . . . . . . . . . . . . . . . 26
ARTICLE VII. - REDEMPTION OF BONDS. . . . . . . . . . . . . . . . . . . .27
Section 7.01. Bonds Subject to Redemption; Selection
of Bonds to be Called for Redemption . . . . . . . 27
Section 7.02. Notice of Redemption . . . . . . . . . . . . . . . 27
Section 7.03. Payment of Redemption Price. . . . . . . . . . . . 28
Section 7.04. Bonds Redeemed in Part . . . . . . . . . . . . . . 28
Section 7.05. Bond Redemption Fund for Refunding Issues. . . . . 29
ARTICLE VIII. - COVENANTS OF THE ISSUER . . . . . . . . . . . . . . . . .29
Section 8.01. Power and Authority of the Issuer. . . . . . . . . 29
Section 8.02. Payment of Principal of and Premium, if any,
and Interest on the Bonds; Appointment of
Paying Agent . . . . . . . . . . . . . . . . . . . 29
Section 8.03. Corporate Existence; Compliance with Laws. . . . . 30
Section 8.04. Enforcement of Agreement; Prohibition Against
Amendments; Notice of Default. . . . . . . . . . . 30
Section 8.05. Further Assurances . . . . . . . . . . . . . . . . 30
Section 8.06. Bonds Not to Become Arbitrage Bonds. . . . . . . . 30
Section 8.07. Perfection of Security Interest. . . . . . . . . . 30
ARTICLE IX. - EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . .31
Section 9.01. Events of Default Defined. . . . . . . . . . . . . 31
Section 9.02. Acceleration and Annulment Thereof . . . . . . . . 31
Section 9.03. Other Remedies . . . . . . . . . . . . . . . . . . 32
Section 9.04. Legal Proceedings by Trustee . . . . . . . . . . . 32
Section 9.05. Discontinuance of Proceedings by Trustee . . . . . 32
Section 9.06. Bondholders May Direct Proceedings . . . . . . . . 32
Section 9.07. Limitations on Actions by Bondholders. . . . . . . 32
Section 9.08. Trustee May Enforce Rights
Without Possession of Bonds. . . . . . . . . . . . 33
-ii-
<PAGE>
Section 9.09. Delays and Omissions Not to Impair Rights. . . . . 33
Section 9.10. Application of Moneys in Event of Default. . . . . 33
Section 9.11. Trustee and Bondholders Entitled to All
Remedies Under Act; Remedies Not Exclusive . . . . 34
Section 9.12. Trustee's Right to Receiver. . . . . . . . . . . . 34
ARTICLE X. - THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . .34
Section 10.01. Acceptance of Trust . . . . . . . . . . . . . . . 34
Section 10.02. No Responsibility for Recitals, etc . . . . . . . 34
Section 10.03. Trustee May Act Through Agents; Answerable
Only for Willful Misconduct or Negligence . . . . 35
Section 10.04. Compensation and Indemnity. . . . . . . . . . . . 35
Section 10.05. Notice of Default; Right to Investigate . . . . . 35
Section 10.06. Obligation to Act on Defaults . . . . . . . . . . 35
Section 10.07. Reliance on Requisition, Counsel, etc . . . . . . 36
Section 10.08. Trustee May Own Bonds . . . . . . . . . . . . . . 36
Section 10.09. Construction of Ambiguous Provisions. . . . . . . 36
Section 10.10. Resignation of Trustee. . . . . . . . . . . . . . 36
Section 10.11. Removal of Trustee. . . . . . . . . . . . . . . . 36
Section 10.12. Appointment of Successor Trustee. . . . . . . . . 36
Section 10.13. Qualification of Successor. . . . . . . . . . . . 37
Section 10.14. Instruments of Succession . . . . . . . . . . . . 37
Section 10.15. Merger of Trustee . . . . . . . . . . . . . . . . 37
Section 10.16. Appointment of Co-Trustee . . . . . . . . . . . . 37
ARTICLE XI. - ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP OF
BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 11.01. Acts of Bondholders; Evidence of Ownership. . . . 38
ARTICLE XII. - AMENDMENTS AND SUPPLEMENTS . . . . . . . . . . . . . . . .38
Section 12.01. Amendments and Supplements Without
Bondholders' Consent . . . . . . . . . . . . . . . 38
Section 12.02. Amendments With Bondholders' Consent. . . . . . . 39
Section 12.03. Amendment of Agreement. . . . . . . . . . . . . . 39
Section 12.04. Trustee Authorized to Join in Amendments
and Supplements; Reliance on Counsel . . . . . . . 39
ARTICLE XIII. - DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . .40
Section 13.01. Defeasance. . . . . . . . . . . . . . . . . . . . 40
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<PAGE>
ARTICLE XIV. - MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . .41
Section 14.01. No Personal Recourse. . . . . . . . . . . . . . . 41
Section 14.02. Deposit of Funds for Payment of Bonds . . . . . . 41
Section 14.03. No Rights Conferred on Others . . . . . . . . . . 41
Section 14.04. Illegal, etc. Provisions Disregarded. . . . . . . 42
Section 14.05. Substitute Notice . . . . . . . . . . . . . . . . 42
Section 14.06. Notices to Trustee and Issuer . . . . . . . . . . 42
Section 14.07. Successors and Assigns. . . . . . . . . . . . . . 42
Section 14.08. Headings for Convenience Only . . . . . . . . . . 42
Section 14.09. Counterparts. . . . . . . . . . . . . . . . . . . 42
Section 14.10. Credits on Notes. . . . . . . . . . . . . . . . . 42
Section 14.11. Payments Due On Saturdays, Sundays and
Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 14.12. Applicable Law. . . . . . . . . . . . . . . . . . 43
Section 14.13. Limited Liability of Issuer . . . . . . . . . . . 43
EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
EXHIBIT A - DTC Letter of Representations
</TABLE>
-iv-
<PAGE>
TRUST INDENTURE dated as of June 1, 1994, between the COUNTY OF
PERRY, KENTUCKY (the "Issuer"), a county and political subdivision of the
Commonwealth of Kentucky (the "Commonwealth") and WEST ONE BANK, IDAHO, as
Trustee (the "Trustee"), a state chartered banking corporation, having its
principal corporate trust office in Boise, Idaho.
BACKGROUND:
A. In furtherance of the statutory purposes of KRS 103.200 et.
seq., as amended (the "Act"), the Issuer has entered into a Loan Agreement
dated as of June 1, 1994 (the "Agreement") with TJ International, Inc. (the
"Company") providing for the financing by the Issuer of a project (the
"Project") consisting of the construction of the sewage and solid waste
disposal components of a production facility for the manufacturer of
engineered lumber for the construction of wood joists and related products,
more particularly described in Schedule A of the Agreement and located in
Perry County, Kentucky to be operated by Trus Joist MacMillan a Limited
Partnership, a Delaware limited partnership, as beneficial owner of the
Project and guarantor (the "Guarantor") of the 1994 Series Bonds, as
hereinafter defined. The Company is the managing general partner of the
Guarantor. The Issuer and the Company intend that the components of the
Project will constitute sewage facilities or solid waste disposal facilities
for the purposes of the Internal Revenue Code of 1986, as amended. The Issuer
has found that the financing of the Project will promote the economic
development of the Commonwealth of Kentucky, relieve conditions of
unemployment, encourage the increase of industry in the Commonwealth and aid
in the retention of existing industry through the control of pollution, and
the Issuer having found in its Bond Ordinance, as hereinafter defined, enacted
on May 17, 1994, that the issuance of bonds on behalf of the Company will
accomplish those purposes.
B. The Agreement provides that to finance the Project, the
Issuer will issue and sell its Solid Waste Disposal Revenue Bonds (TJ
International Project), and will loan the proceeds thereof to the Company to
be repaid in an amount equal to the principal of such Bonds, plus interest and
applicable premium thereon, over the life of such Bonds, payable in
installments equal to payments of the debt service on such Bonds together with
redemption premiums, if any.
C. To provide the funds needed for the acquisition and
construction of the Project, the Issuer has duly authorized the issuance and
sale of Solid Waste Disposal Revenue Bonds (TJ International Project), Series
1994 in the aggregate principal amount of $43,500,000 (the "Series 1994
Bonds").
D. The execution and delivery of this Trust Indenture (the
"Indenture") have been in all respects duly and validly authorized by the Bond
Ordinance duly enacted by the Fiscal Court of the Issuer, a duly certified
copy of which has been delivered to the Trustee.
E. The Series 1994 Bonds are to be in substantially the
following form:
<PAGE>
[FORM OF SERIES 1994 BOND]
No. AR-
$
[TEXT OF FACE]
UNITED STATES OF AMERICA
COMMONWEALTH OF KENTUCKY
COUNTY OF PERRY, KENTUCKY
SOLID WASTE DISPOSAL REVENUE BONDS
(TJ International Project)
Series 1994
<TABLE>
<CAPTION>
INTEREST RATE MATURITY DATE ORIGINAL DATE CUSIP
------------- ------------- ------------- -----
<S> <C> <C> <C>
___% _____________ June 1, 1994 _____
</TABLE>
[NAME OF REGISTERED OWNER]
----------------------------------
Principal Sum: DOLLARS
- - ---------------------------------------------------------------------------
The COUNTY OF PERRY, 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 hereof, or registered assigns, on the Maturity Date
specified above unless this Bond shall have been duly called for previous
redemption in whole or in part, upon surrender hereof, the principal sum as
specified above and to pay to the registered owner hereof (but only out of the
sources hereinafter mentioned) interest thereon at the Interest Rate per annum
(computed on the basis of a 360-day year containing twelve (12) 30-day months)
shown above until payment of said principal sum has been made or provided for,
on each June 1 and December 1 commencing on the first such interest payment
date after the date hereof, and, to the extent permitted by law, to pay
interest on overdue interest at the same rate per annum. The interest so
payable, and punctually paid or duly provided for, on any interest payment
date will, as provided in the Indenture referred to below, be paid to the
person in whose name this Bond is registered at the close of business on the
Regular Record Date for such interest, which shall be the fifteenth day
(whether or not a business day) of the calendar month next preceding such
interest payment date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered owner on
such Regular Record Date, and may 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, notice whereof
shall be given to Bondholders not less than 10 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 said Indenture. Principal, premium, if any, and
interest shall be paid at the principal corporate trust
-2-
<PAGE>
office of West One Bank, Idaho, Boise, Idaho, or at the duly designated office
of any duly appointed alternate or successor paying agent, 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, provided that interest
may be paid by check or draft drawn upon any such paying agent and mailed to the
person entitled thereto at his address as it appears on the Bond registry books
of the Issuer maintained by the Trustee.
This Bond is one of a duly authorized series (the "Series 1994
Bonds") limited in aggregate principal amount to $43,500,000 executed under a
Trust Indenture dated as of June 1, 1994 (the "Indenture") between the Issuer
and West One Bank, Idaho, as Trustee (the "Trustee"), to accomplish the public
purposes of Chapter 103.200 et. seq., as amended, of the Kentucky Revised
Statutes (the "Act") by aiding in the financing of a project consisting of the
acquisition and construction of sewage and solid waste disposal components of
a production facility for the manufacture of engineered lumber used in the
construction of wood joists and related products located in Perry County,
Kentucky (the "Project") to be operated by Trus Joist MacMillan a Limited
Partnership as beneficial owner of the Project and guarantor (the "Guarantor")
of the Series 1994 Bonds as hereinafter described. The Project is being
financed pursuant to the provisions of a certain Loan Agreement dated as of
June 1, 1994 (the "Agreement") between the Issuer and TJ International, Inc.,
a Delaware corporation (the "Company"). The Company is the managing general
partner of the Guarantor.
AS REQUIRED BY THE ACT, THIS BOND SHALL NOT BE A GENERAL
OBLIGATION OF THE ISSUER AND SHALL BE PAYABLE SOLELY FROM THE REVENUES DERIVED
FROM THE PROJECT, AND NEITHER THE BONDS, THE INTEREST OR PREMIUM, IF ANY,
THEREON, NOR COSTS INCIDENT THERETO SHALL CONSTITUTE NOR GIVE RISE TO A
PECUNIARY LIABILITY OF THE ISSUER OR A CHARGE AGAINST THE GENERAL CREDIT OR
TAXING POWERS OF THE ISSUER, THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL
SUBDIVISION THEREOF. THIS BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE
ISSUER WITHIN ANY CONSTITUTIONAL OR STATUTORY LIMITATION.
If the Issuer deposits or causes to be deposited with the Trustee
funds sufficient to pay the principal of any Bonds becoming due at maturity,
by call for redemption, or otherwise, together with the premium, if any, and
interest accrued to the due date, interest on such Bonds will cease to accrue
on the due date, and thereafter the owners will be restricted to the funds so
deposited as provided in the Indenture.
The owner of this Bond shall have no right to enforce the
provisions of the Indenture or to institute action to enforce the covenants
therein, or to take any action with respect to any event of default under the
Indenture, except as provided in the Indenture. 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.
No recourse shall be had for the payment of the principal of, or
premium, if any, or interest on, this Bond, or for any claim based hereon or
on the Indenture, against any director, officer, agent or employee, past,
present or future, of the Issuer or of any successor body, as such, either
directly or through the Issuer or any such successor body, under any
constitutional provision, statute or rule of law, or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise.
This Bond is not valid unless the Trustee's Certificate of
Authentication endorsed hereon is duly executed.
-3-
<PAGE>
The Series 1994 Bonds are payable solely from payments to be made
by the Company on one or more unsecured Solid Waste Disposal Notes (the
"Notes") required to be issued pursuant to the Agreement and from any other
moneys held by the Trustee under the Indenture for such purpose, and there
shall be no other recourse against the Issuer or any other property now or
hereafter owned by it. Under the Agreement, no mortgage lien or security
interest in the Project has been or will be created in favor of the Trustee or
owners of the Series 1994 Bonds. The Issuer has assigned to the Trustee all
rights of the Issuer under the Agreement and the Notes except the Issuer's
rights to payment of expenses and indemnification. The payment of the
principal of and premium, if any, and interest on the Series 1994 Bonds has
been guaranteed by the Guarantor pursuant to a Guaranty dated as of June 1,
1994 (the "Guaranty") delivered by the Guarantor to the Trustee. Except as
otherwise specified in the Indenture, this Bond is entitled to the benefits of
the Indenture equally and ratably as to principal, premium, if any, and
interest with all other Bonds issued and to be issued under the Indenture, to
which reference is made for a description of the security pledged for payment
of the Bonds; the rights of the owners of the Bonds; the rights and
obligations of the Issuer; the rights, duties and obligations of the Trustee;
the provisions relating to amendments to and modifications of the Indenture;
and the terms and conditions upon which additional Bonds may be issued
thereunder. Such additional Bonds may be issued by the Issuer to finance
additional facilities under the Agreement and to refund all or any part of the
Series 1994 Bonds or the Bonds of another series. The owner of this Bond
shall have no right to enforce the provisions of the Indenture, the Notes or
the Agreement or institute action to enforce the covenants thereof or rights
or remedies thereunder except as provided in the Indenture.
OPTIONAL REDEMPTION IN WHOLE OR IN PART. The Series 1994 Bonds
are subject to redemption prior to maturity by the Issuer at the request of
the Company, in whole or in part, on any date on or after June 1, 2004, from
the Bond Fund established under the Indenture and from moneys otherwise
available for such purpose, and if in part by lot. Such redemptions are to be
made at the applicable redemption price shown below as a percentage of the
principal amount thereof, plus interest accrued to the redemption date:
<TABLE>
<CAPTION>
OPTIONAL
REDEMPTION PERIOD REDEMPTION PRICE
----------------- -----------------
<S> <C>
June 1, 2004 through May 31, 2005 102%
June 1, 2005 through May 31, 2006 101
June 1, 2006 and thereafter 100
</TABLE>
EXTRAORDINARY OPTIONAL REDEMPTION IN WHOLE. The Series 1994 Bonds
are subject to redemption in whole on any date, upon the exercise by the
Company of its option to prepay its Solid Waste Disposal Note, Series 1994, in
the principal amount of $43,500,000 (the "Series 1994 Note"), at a redemption
price equal to 100% of the principal amount thereof, plus interest accrued to
the redemption date, if one or more of the following events shall have
occurred:
(a) the damage or destruction of all or substantially all
of the Project or the plant at which the Project is located to such
extent that, in the reasonable opinion of the Company, the repair and
restoration thereof would not be economical; or
(b) the condemnation (or sale under threat of
condemnation) of all or substantially all of the Project or such plant
or the taking by condemnation of any part, use or control of the Project
or such plant as to render it unsatisfactory to the Company for its
intended use; or
-4-
<PAGE>
(c) in the Company's reasonable opinion, unreasonable
burdens or excessive liabilities shall have been imposed upon the
Company with respect to the Project or the operation thereof, including,
but without being limited to, federal, state or other ad valorem,
property, income or other taxes, not being imposed on the date of the
Agreement other than ad valorem taxes presently levied upon privately
owned property used for the same general purpose as the Project; or
(d) by reason of unforeseen change in use of the Project
as a "solid waste disposal facility" within the meaning of Section
142(a)(6) of the Code the interest payable by the Company under the
Agreement is no longer deductible by the Company for Federal income tax
purposes.
The Company's right to cause extraordinary optional redemption of
the Series 1994 Bonds as a result of unforeseen changes in the use of the
Project will survive defeasance of such Bonds.
SPECIAL MANDATORY REDEMPTION. The Series 1994 Bonds are subject
to mandatory redemption by the Issuer prior to their scheduled maturity, in
whole, on the earliest practicable date selected by the Trustee pursuant to
the Indenture but in no event later than the latter of 180 days following the
occurrence of, or 60 days following the receipt by the Trustee of notice of
the occurrence of, a Determination of Taxability. In the event of any such
mandatory redemption, the Series 1994 Bonds outstanding at the time of the
Determination of Taxability (except those for which notice of redemption shall
have been given prior to the Determination of Taxability) shall be redeemed at
a redemption price of 100% of the principal amount thereof, plus accrued
interest thereon to the date fixed for redemption. As used herein, a
"Determination of Taxability" shall mean one of the following determinations,
made in regard to Section 103 of the Internal Revenue Code, as then in effect,
to the effect that by reason of any action or inaction by the Company or any
violation by the Company of any of its covenants in the Agreement or any
misrepresentation by the Company in any certificate furnished in connection
with the issuance, sale or delivery of the Series 1994 Bonds, the interest
payable on the Series 1994 Bonds is includable in the gross income of the
owners of such Bonds (other than an owner who is a "substantial user" of the
Project or "related person" as such terms are used in Section 147(a) of the
Internal Revenue Code of 1986, as amended): (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 Series 1994 Bonds, either directly or in the name of the
Bondholder, at the Company's expense, or (ii) an opinion of nationally
recognized bond counsel furnished by the Company to the Trustee.
If the Trustee receives notice from any source that a
Determination of Taxability has occurred, the Trustee shall forthwith consult
with the Issuer and the Company and thereafter proceed to enforce payments
under the Agreement and the Notes in respect of the necessary redemption price
and to redeem the Series 1994 Bonds at the earliest practicable date. In
making any determination in respect of the occurrence of a Determination of
Taxability or a redemption relating thereto, the Trustee may rely on an
opinion of counsel.
EXTRAORDINARY MANDATORY REDEMPTION. The Series 1994 Bonds are
subject to extraordinary mandatory redemption by the Issuer prior to their
scheduled maturity, in whole, on the earliest practicable date selected by the
Trustee pursuant to the terms hereof upon the occurrence of a dissolution of
the Guarantor as permitted under the terms of the limited partnership
agreement between the Company, as general partner, and MacMillan Bloedel of
America Inc., as limited partner of the Guarantor, except for such
dissolution, consolidation or merger as otherwise permitted by the terms of
the Agreement. In the event of any such extraordinary mandatory redemption,
the Bonds then outstanding shall be redeemed
-5-
<PAGE>
at a redemption price of 100% of the principal amount thereof, plus accrued
interest thereon to the date fixed for redemption.
Any redemption under the preceding paragraphs shall be made as
provided in the Indenture upon not more than 60 days' nor less than 30 days'
notice to the Bondholder. Notice of the call for any such redemption,
identifying the Bonds to be redeemed, will be given by mailing copies of such
notice to the registered owners of Bonds to be redeemed at their addresses as
they appear on the registry books maintained by the Trustee. Notice of
optional redemption may be conditioned upon the deposit of moneys with the
Trustee before the date fixed for redemption and such notice shall be of no
effect unless such moneys are so deposited. All Bonds so called for redemption
will cease to bear interest on the specified redemption date provided funds
for their redemption price and any accrued interest payable on the redemption
date are on deposit at the principal place of payment at that time.
Any moneys deposited and held by the Trustee for the benefit of
claimants, if any, for five years after the date payment thereof becomes due
shall be repaid to the Company, and thereupon and thereafter no claimant shall
have any rights to or in respect of such moneys.
This Bond is transferable by the registered owner hereof or his
duly authorized attorney at the principal corporate trust office of the
Trustee, upon surrender of this Bond, accompanied by a duly executed
instrument of transfer in form and with guaranty of signature satisfactory to
the Trustee, subject to such reasonable regulations as the Issuer or the
Trustee may prescribe, and upon payment of any taxes or other governmental
charges incident to such transfer. Upon any such transfer a new registered
Bond of the same maturity and in the same aggregate principal amount will be
issued to the transferee. The person in whose name this Bond is registered
shall be deemed the owner hereof for all purposes, and the Issuer and the
Trustee shall not be affected by any notice to the contrary.
In any case where the date of maturity of interest on or principal
of the Bonds or the date fixed for redemption of any Bonds shall be a Saturday
or Sunday or a legal holiday or a day on which banking institutions in the
city of payment are authorized by law to close, then payment of interest or
principal or redemption price need not be made on such date but may be made on
the next succeeding business day with the same force and effect as if made on
the date of maturity or the date fixed for redemption.
The law pursuant to which this Bond is issued requires that the
following statement appear on the face hereof:
Neither this Bond nor the interest hereon shall be
taxed by the Commonwealth of Kentucky or any county or
municipality thereof.
-6-
<PAGE>
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 corporate seal or a facsimile thereof to be affixed, imprinted,
lithographed or reproduced hereon and attested to by the manual or facsimile
signature of its Fiscal Court Clerk.
COUNTY OF PERRY, KENTUCKY
[SEAL]
By:___________________________
County Judge/Executive
-7-
<PAGE>
Attest:________________________
Fiscal Court Clerk
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Date of Authentication ________________
This Bond is one of the Bonds, of the Series designated herein,
described in the within-mentioned Indenture. A signed copy of the opinion of
bond counsel, Brown, Todd & Heyburn, dated the date of original issuance of
such Bonds, is on file with the undersigned.
WEST ONE BANK, IDAHO, Trustee
By ______________________________________
Authorized Representative or Agent
ABBREVIATIONS
The following abbreviations, when used in the Inscription on the
face of this 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 right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - Custodian
....................
(Cust) (Minor)
under Uniform Gifts to Minors
Act.........................
(State)
Additional abbreviations may also be used though not in the above list.
-8-
<PAGE>
[FORM OF ASSIGNMENT]
For value received, the undersigned hereby sells, assigns and
transfers unto _______________________ the within Bond of the County of Perry,
Kentucky 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.
Dated: ____________________
_________________________
Signature Guaranteed:
________________________
NOTICE: The Assignor's signature to this assignment must
correspond with the name as it appears upon the face of the within Bond in
every particular without alteration or any change whatever.
[END OF BOND FORM]
F. To evidence its obligation to repay the loan, the Company
has delivered to the Trustee its Solid Waste Disposal Note, Series 1994, in
the principal amount of $43,500,000 (the "Series 1994 Note").
G. The execution and delivery of the Series 1994 Bonds and of
this Indenture have been validly authorized by a Bond Ordinance duly enacted
by the Fiscal Court of the Issuer and all things necessary to make the Series
1994 Bonds, when executed by the Issuer and authenticated by the Trustee,
valid and binding legal obligations of the Issuer and to make this Indenture a
valid and binding agreement have been done.
H. The Guarantor has delivered to the Trustee its Guaranty
dated as of June 1, 1994 (the "Guaranty") in respect of the payment of
principal of, premium, if any, and interest on the Series 1994 Bonds.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to provide for the
payment of principal of all Bonds, as hereinafter defined, issued and
outstanding under this Indenture, together with premium, if any, and interest
thereon, the rights of the Bondholders and the performance of the covenants
contained in said Bonds and herein, the Issuer has caused the Company to
deliver the Series 1994 Note to the Trustee and does hereby sell, assign,
transfer, set over and pledge unto, and grant a security interest to, West One
Bank, Idaho, Trustee, its successors in trust and its assigns forever, all of
the right, title and interest of the Issuer in, to and under the Series 1994
Note and any other Notes, as hereinafter defined, the Revenues hereinafter
defined and the Agreement and all moneys payable thereunder to the extent that
the funds relate to Bonds issued under this Indenture (except the Issuer's
rights under Sections 5.4 and 5.5 of the Agreement).
TO HAVE AND TO HOLD in trust, nevertheless, for the equal and
ratable benefit and security of all present and future owners of the Bonds
issued and to be issued under this Indenture, without preference, priority or
-9-
<PAGE>
distinction as to lien or otherwise (except as herein expressly provided), of
any one Bond over any other Bond upon the terms and subject to the conditions
hereinafter set forth.
ARTICLE I.
DEFINITIONS
In this Indenture and any indenture supplemental hereto (except as
otherwise expressly provided or unless the context otherwise requires) the
singular includes the plural, the masculine includes the feminine, and the
following terms shall have the meanings specified in the foregoing caption and
recitals:
Act Issuer
Agreement Project
Company Series 1994 Bonds
Guarantor Series 1994 Note
Guaranty
In addition, the following terms shall have the meanings specified
in this Article, unless the context otherwise requires:
"Authorized Newspaper" means THE BOND BUYER, or its successor, and
if THE BOND BUYER or its successor is no longer in business, then in a
newspaper of general circulation in the Borough of Manhattan, City and County
of New York.
"Bond" or "Bonds" means any bond or bonds authenticated and
delivered under this Indenture; "Series 1994 Bonds" means the Solid Waste
Disposal Revenue Bonds (TJ International Project), Series 1994.
"Bondholder" or "holder of Bonds" or "owner of Bonds" means the
registered owner of any Bond.
"Bond Fund" means the fund so designated which is established
pursuant to Section 5.02 hereof.
"Bond Ordinance" means a copy of one or more ordinances certified
by the Fiscal Court Clerk of the Issuer, under its seal, to have been duly
enacted by the Fiscal Court of the Issuer and to be in effect on the date of
such certification.
"Bond Register" and "Bond Registrar," in respect of a particular
Series of Bonds, have the respective meanings specified in Section 2.03.
"Code" means the Internal Revenue Code of 1986, or its successor
provisions as amended at the time in question.
"Construction Fund" means the fund so designated which is
established pursuant to Section 4.01 hereof.
-10-
<PAGE>
"Cost" or "Costs" means any cost in respect of the Project
permitted under the Act. Without limiting the generality of the foregoing,
such costs may include: (i) amounts payable to contractors and suppliers
(including fees for designing the Project where the designs are provided by
the contractor or supplier); (ii) costs of labor, services, materials,
supplies and equipment furnished by the Company (including shipping costs);
(iii) architectural, engineering, legal and other professional fees; and (iv)
costs of financing, including bond discount and interest on the Bonds (or
costs relating to the Project properly capitalized under Section 263A of the
Code) during acquisition and construction to the extent permitted by the Act
and the Code.
"Counsel" means an attorney at law or law firm, who may be counsel
for the Issuer or the Company, satisfactory to the Trustee.
"Determination of Taxability" shall have the meaning described in
the form of Series 1994 Bond contained herein.
"Event of Default" means any of the events described in Section
9.01 hereof.
"Indenture" means this Indenture as amended or supplemented at the
time in question.
"Interest Payment Date," in respect of a particular series of
Bonds, means the stated maturity date of an installment of interest on the
Bonds of such Series.
"Note" or "Notes" means the Series 1994 Note and any other note
similar to the Series 1994 Note delivered by the Company to the Trustee
pursuant to Section 4.3 of the Agreement concurrently with the issuance of any
additional Bonds hereunder.
"Outstanding" in connection with Bonds (or a series of Bonds)
means, as of the time in question, all Bonds (or all Bonds of such series)
authenticated and delivered under the Indenture, except:
A. Bonds theretofore canceled or required to be canceled
under Section 2.11 hereof;
B. Bonds for the payment or redemption of which the
necessary amount shall have been or shall concurrently be deposited with
the Trustee or for which provision for the payment of which shall have
been made in accordance with Section 13.01 hereof; provided that, if
such Bonds are being redeemed prior to maturity, the required notice of
redemption shall have been given or provisions satisfactory to the
Trustee shall have been made therefor;
C. Bonds in substitution for which other Bonds have been
authenticated and delivered pursuant to Article II hereof; and
D. For purposes of any consent or other action to be
taken by the owners of a majority or a specified percentage of Bonds
hereunder or under the Agreement, Bonds held by or for the account of
the Issuer, the Company or any person controlling, controlled by or
under common control with any of them.
"Paying Agent" means, in respect of a particular series of Bonds,
the person or persons authorized by the Issuer to pay the principal of,
premium, if any, or interest on, such Bonds on behalf of the Issuer.
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<PAGE>
"Regular Record Date" means, in respect of a particular series of
Bonds, the fifteenth day (whether or not a business day) of the calendar month
next preceding each Interest Payment
Date.
"Responsible Officers" of the Trustee or any separate trustee or
co-trustee hereunder shall mean the Chairman of the Board of Directors, the
President, every Vice President, every Assistant Vice President, the Cashier,
every Assistant Cashier, the Secretary, every Assistant Secretary, every Trust
Officer and every officer and assistant officer of such Trustee, other than
those specifically above mentioned, to whom any corporate trust matter is
referred because of his knowledge of, and familiarity with, a particular
subject.
"Revenues" means (i) all amounts payable by the Company in respect
of the Series 1994 Note and any other Notes which may be delivered to the
Trustee, and other moneys paid to the Trustee under the Agreement, (ii) any
proceeds of Bonds originally deposited with the Trustee for the payment of
accrued or capitalized interest on the Bonds or moneys remaining in the
Construction Fund following certification of completion of the Project, and
(iii) investment income in respect of any moneys held by the Trustee.
"Securities Depository" means, initially, The Depository Trust
Company, New York, New York, and thereafter any successors and assigns.
"Special Record Date" means, in respect of a particular series of
Bonds, such date as may be fixed for the payment of defaulted interest in
accordance with Section 2.07.
"Trustee" means West One Bank, Idaho, and its successor for the
time being in the trust hereunder and any Co-Trustee appointed in accordance
with Section 10.16 of this Indenture.
The words "hereof," "herein," "hereto," "hereby" and "hereunder"
(except in the form of Bond) refer to the entire Indenture.
Every "request," "order," "demand," "application," "appointment,"
"notice," "statement," "certificate," "consent" or similar action hereunder by
the Issuer shall, unless the form thereof is specifically provided, be in
writing signed by the County Judge/Executive of the Issuer and the Secretary
of the Issuer.
ARTICLE II.
THE BONDS
Section 2.01. AMOUNTS AND TERMS - SERIES 1994 BONDS AND OTHER
SERIES. Except as provided in Section 2.09 hereof, the Series 1994 Bonds
shall be limited to $43,500,000 in aggregate principal amount, and shall
contain substantially the terms recited in the form of Series 1994 Bond above.
Other series of Bonds ranking as to source of payment equally and ratably with
the Series 1994 Bonds may be issued pursuant to Section 3.02 hereof in such
aggregate principal amounts and may contain such terms and be in such form,
not contrary to the Agreement, the Act or the Indenture, as may be determined
by the Issuer and expressed in such Bonds. All Bonds shall provide that
principal, premium, if any, and interest in respect thereof shall be payable
only out of the Revenues. The Series 1994 Bonds shall not be general
obligations of the Issuer and shall be payable solely from the Revenues, and
neither the Bonds, the interest
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or premium, if any, thereon, nor costs incident thereto shall constitute nor
give rise to a pecuniary liability of the Issuer or a charge against the
general credit or taxing power of the Issuer, the Commonwealth or any political
subdivisions thereof. The Issuer may cause a copy of the text of the opinion of
recognized bond counsel to be printed on any of its Bonds, and, upon request of
the Issuer and deposit with the Trustee of an executed counterpart of such
opinion, the Trustee shall certify to the correctness of the copy appearing on
the Bonds by manual or facsimile signature. The Series 1994 Bonds shall be
issued only as fully registered Bonds without coupons, in the denomination of
$100,000 or any integral multiple thereof. Pursuant to the recommendations
promulgated by the Committee on Uniform Security Identification Procedures,
"CUSIP" numbers may be printed on the Bonds. The Bonds may bear such other
endorsement or legend not unsatisfactory to the Trustee as may be required to
conform to usage or law with respect thereto.
The Series 1994 Bonds shall mature on June 1, 2024 and shall bear
interest at the rate of 7.00% per annum (computed on the basis of a 360-day
year containing twelve (12) 30-day months), payable June 1 and December 1 of
each year until maturity, commencing December 1, 1994.
Section 2.02. INTEREST ACCRUAL. The Bonds of a series shall be
dated June 1, 1994 and shall bear interest from the Interest Payment Date in
respect of that series to which interest has been paid next preceding the date
of authentication, unless the date of authentication (i) is an Interest
Payment Date to which interest has been paid, in which event Bonds shall be
dated and bear interest from the date of authentication, or (ii) is prior to
the first Interest Payment Date for the Bonds of such series, in which event
such Bonds shall bear interest from the original date of such series as shown
on the form of the Bond or as otherwise provided in the supplemental indenture
or Bond Ordinance establishing such series.
Section 2.03. REGISTERED BONDS REQUIRED; BOND REGISTRAR AND BOND
REGISTER. All Bonds shall be issued in fully registered form. The Bonds of a
series shall be registered upon original issuance and upon subsequent transfer
or exchange as provided in this Indenture. Any supplemental indenture or
certified Bond Ordinance may contain such additional provisions regarding the
registration, transfer and exchange of Bonds of a series as are not
inconsistent with this Indenture.
The Issuer shall designate, in respect of each series of Bonds, a
person to act as "Bond Registrar" for such series, provided that the Bond
Registrar appointed for any series of Bonds shall be either the Trustee or a
person which would meet the requirements for qualification as a Trustee
imposed by Section 10.13 hereof. The Issuer hereby appoints the Trustee its
Bond Registrar in respect of the Bonds. Any other person undertaking to act
as Bond Registrar in respect of a series of bonds shall first execute a
written agreement, in form satisfactory to the Trustee, to perform the duties
of a Bond Registrar under this Indenture, which agreement shall be filed with
the Trustee.
The Bond Registrar in respect of each series of Bonds shall act as
registrar and transfer agent for such series. The Issuer shall cause to be
kept at an office of the Bond Registrar for a series of Bonds a register
(herein sometimes referred to as the "Bond Register") in which, subject to
such reasonable regulations as it or the Bond Registrar may prescribe, the
Issuer shall provide for the registration of the Bonds of such series and for
the registration of transfers of such Bonds. The Issuer shall cause the Bond
Registrar to designate, by a written notification to the Trustee, a specific
office location (which may be changed from time to time, upon similar
notification) at which the Bond Register is kept. The principal corporate
trust office of the Trustee shall be deemed to be such office in respect of
any series of Bonds for which the Trustee is acting as Bond Registrar.
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Each Bond Registrar shall, in any case where it is not also the
Trustee, forthwith following each Regular Record Date in respect of the
related series of Bonds and at any other time as reasonably requested by the
Trustee, certify and furnish to the Trustee, and to any Paying Agent for such
series as the Trustee shall specify, the names, addresses, and holdings of
Bondholders and any other relevant information reflected in the Bond Register,
and the Trustee and any such Paying Agent shall for all purposes be fully
entitled to rely upon the information so furnished to it and shall have no
liability or responsibility in connection with the preparation thereof.
Section 2.04. REGISTRATION, TRANSFER AND EXCHANGE. As provided
in Section 2.03 hereof, the Issuer shall cause a Bond Register for each series
of Bonds to be kept at the designated office of the Bond Registrar for such
series. Upon surrender for transfer of any Bond at such office, the Issuer
shall execute and the Trustee shall authenticate and deliver in the name of
the transferee or transferees, one or more new fully registered Bonds of the
same series of authorized denomination for the aggregate principal amount
which the registered owner is entitled to receive.
At the option of the owner, Bonds of any series may be exchanged
for other Bonds of such series of any authorized denomination, of a like
aggregate principal amount, upon surrender of the Bonds to be exchanged at any
such office or agency. Whenever any Bonds are so surrendered for exchange,
the Issuer shall execute, and the Trustee shall authenticate and deliver, the
Bonds which the Bondholder making the exchange is entitled to receive.
All Bonds presented for transfer or exchange, redemption or
payment (if so required by the Issuer, the Bond Registrar or the Trustee),
shall be accompanied by a written instrument or instruments of transfer or
authorization for exchange, in form and with guaranty of signature
satisfactory to the Trustee, duly executed by the owner or by his attorney
duly authorized in writing.
No service charge shall be made for any exchange or transfer of
Bonds, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto.
Neither the Issuer nor any Bond Registrar on behalf of the Issuer
shall be required (i) to issue, transfer or exchange any Bond during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of Bonds selected for redemption under Section 7.02 and
ending at the close of business on the day of such mailing, or (ii) to
transfer or exchange any Bond so selected for redemption in whole or in part.
New Bonds delivered upon any transfer or exchange shall be valid
obligations of the Issuer, evidencing the same debt as the Bonds surrendered,
shall be secured by this Indenture and entitled to all of the security and
benefits hereof to the same extent as the Bonds surrendered.
Section 2.05. EXECUTION. The Bonds shall be executed by the
manual or facsimile signature of the County Judge/Executive of the Issuer, and
the corporate seal of the Issuer or a facsimile thereof shall be affixed,
imprinted, lithographed or reproduced thereon and shall be attested by the
manual or facsimile signature of the Fiscal Court Clerk of the Issuer.
Bonds executed as above provided may be issued and shall, upon
written request of the Issuer, be authenticated by the Trustee,
notwithstanding that any officer of the Issuer signing such Bonds or whose
facsimile signature appears thereon shall have ceased to hold office at the
time of issuance or authentication or shall not have held office at the date
of the Bond.
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Section 2.06. AUTHENTICATION. No Bond shall be valid for any
purpose until the certificate of authentication shall have been duly executed
by the Trustee, and such authentication shall be conclusive proof that such
Bond has been duly authenticated and delivered under this Indenture and that
the owner thereof is entitled to the benefit of the trust hereby created.
Section 2.07. PAYMENT OF PRINCIPAL AND INTEREST; INTEREST RIGHTS
PRESERVED. The principal and redemption price of any Bond shall be payable,
upon surrender of such Bond, at such offices or agencies of the Issuer as are
provided for herein or in any certified Bond Ordinance or supplemental
indenture. Interest on any Bond on each Interest Payment Date in respect
thereof shall be payable at such of those offices or agencies as is similarly
provided for.
Interest on any Bond which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Bond is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Bond which is payable, but is not punctually
paid or provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered owner on the
relevant Regular Record Date by virtue of having been such owner, and such
Defaulted Interest shall be paid, pursuant to Section 9.10 hereof, to the
registered owner in whose name the Bond is registered at the close of business
on a Special Record Date to be fixed by the Trustee, such date to be not more
than 15 nor less than 10 days prior to the date of proposed payment. The
Trustee shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first class postage
prepaid, to each Bondholder, at his address as it appears in the Bond
Register, not less than 10 days prior to such Special Record Date and may, in
its discretion, cause a similar notice to be published once in a newspaper in
each place where Bonds of the relevant series are payable, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date.
Subject to the foregoing provisions of this Section 2.07, each
Bond delivered under this Indenture upon transfer of or exchange for or in
lieu of any other Bond shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Bond.
Section 2.08. PERSONS DEEMED OWNERS. The Issuer, the Trustee,
any Paying Agent and the Bond Registrar may deem and treat the person in whose
name any Bond is registered as the absolute owner thereof (whether or not such
Bond shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by anyone other than the Issuer, the Trustee, the Paying
Agent or the Bond Registrar) for the purpose of receiving payment of or on
account of the principal of (and premium, if any, on), and (subject to
Section 2.07 hereof) interest on, such Bond, and for all other purposes, and
neither the Issuer, the Trustee, the Paying Agent nor the Bond Registrar shall
be affected by any notice to the contrary. All such payments so made to any
such registered owner, or upon his order, shall be valid and, to the extent of
the sum or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Bond.
Section 2.09. MUTILATED, DESTROYED, LOST OR STOLEN BONDS. If any
Bond shall become mutilated, the Issuer shall execute, and the Trustee shall
thereupon authenticate and deliver, a new Bond of like tenor and denomination
in exchange and substitution for the Bond so mutilated, but only upon
surrender to the Trustee of such mutilated Bond for cancellation, subject to
the Issuer, the Trustee and the Company being furnished such reasonable
indemnity as any of them may require therefor. If any Bond shall be reported
lost, stolen or destroyed, evidence as to the ownership and the loss, theft or
destruction thereof shall be submitted to the Trustee; and if such evidence
shall be satisfactory to it and
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such indemnity satisfactory to the Trustee and the Company shall be given,
the Issuer shall execute, and thereupon the Trustee shall authenticate and
deliver, a new Bond of like tenor and denomination as the original Bond, but
carrying such additional marking as will enable the Trustee to identify such
Bond as a replacement Bond. The cost of providing any substitute Bond under
the provisions of this Section shall be borne by the bondholder for whose
benefit such substitute Bond is provided. If any such mutilated, lost, stolen
or destroyed Bond shall have matured or be about to mature, the Trustee shall
pay to the owner the principal amount of such Bond upon the maturity thereof
and the compliance with the aforesaid conditions by such owner, without
the issuance of a substitute Bond therefor.
Every substituted Bond issued pursuant to this Section 2.09 shall
constitute an additional contractual obligation of the Issuer, whether or not
the Bond alleged to have been destroyed, lost or stolen shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Bonds duly issued
hereunder.
All Bonds shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds, and shall preclude any
and all other rights or remedies, notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or investment or other securities without
their surrender.
Section 2.10. TEMPORARY BONDS. Pending preparation of definitive
Bonds of any series, or by agreement with the purchasers of all Bonds of any
series, the Issuer may issue and, upon its request, the Trustee shall
authenticate in lieu of definitive Bonds one or more temporary printed or
typewritten Bonds in denominations of $5,000 or integral multiples thereof of
substantially the tenor recited above. Upon request of the Issuer, the
Trustee shall authenticate definitive Bonds in exchange for and upon surrender
of an equal principal amount of temporary Bonds. Until so exchanged,
temporary Bonds shall have the same rights, remedies and security hereunder as
definitive Bonds.
Section 2.11. CANCELLATION AND DESTRUCTION OF SURRENDERED BONDS.
Bonds surrendered for payment, redemption, transfer or exchange, and Bonds
purchased from any moneys held by the Trustee hereunder or surrendered to the
Trustee by the Company, shall be canceled and destroyed by the Trustee. The
Trustee shall deliver to the Issuer and the Company a certificate of
destruction identifying all Bonds so destroyed.
Section 2.12. BOOK-ENTRY ONLY SYSTEM. Upon issuance of the
Series 1994 Bonds, one fully-registered Series 1994 Bond will be registered in
the name of Cede & Co., as nominee for the Securities Depository, in the
aggregate principal amount of each maturity of the Series 1994 Bonds. So long
as Cede & Co. is the registered owner of the Series 1994 Bonds, as nominee of
the Securities Depository, references herein to the Holders of the Series 1994
Bonds or registered owner of the Series 1994 Bonds shall mean Cede & Co. and
shall not mean the beneficial owners of the Series 1994 Bonds.
The Letter of Representations in substantially the form attached
hereto as Exhibit A, with such changes, omissions, insertions and revisions as
the County Judge/Executive of the Issuer may approve at any time, is hereby
authorized by the Issuer and the County Judge/Executive of the Issuer shall
execute and deliver such Letter of Representations. The approval of the
County Judge/Executive of the Issuer of any changes, omissions, insertions and
revisions to the Letter of Representations shall be conclusively established
by the execution of the Letter of Representations by said County
Judge/Executive.
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Transfers of ownership interest in the Series 1994 Bonds will be
accomplished by book entries made by the Securities Depository, and, in turn
by the participants in the Securities Depository (the "Participants") who act
on behalf of the indirect Participants in the Securities Depository (the
"Indirect Participants") and the beneficial owners of the Series 1994 Bonds.
For each transfer and exchange of beneficial ownership in the Series 1994
Bonds, the beneficial owner may be charged a sum sufficient to cover any tax,
fee or other governmental charge that may be imposed in relation thereto.
The Trustee and the Issuer shall recognize the Securities
Depository or its nominee, Cede & Co., as the owner of the Series 1994 Bonds
for all purposes, including notices and voting. Conveyance of notices and
other communications by the Securities Depository to Participants and by such
Participants to Indirect Participants, and by Participants and Indirect
Participants to beneficial owners of the Series 1994 Bonds will be governed by
arrangements among Securities Depository, the Participants and the Indirect
Participants, subject to any statutory and regulatory requirements as may be
in effect from time to time.
NEITHER THE ISSUER NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR
OBLIGATIONS TO THE PARTICIPANTS OR INDIRECT PARTICIPANTS OR THE BENEFICIAL
OWNERS OF THE SERIES 1994 BONDS WITH RESPECT TO (i) THE ACCURACY OF ANY
RECORDS MAINTAINED BY SECURITIES DEPOSITORY OR ANY SUCH PARTICIPANT OR
INDIRECT PARTICIPANT; (ii) THE PAYMENT BY SECURITIES DEPOSITORY OR ANY SUCH
PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER
IN RESPECT OF THE PRINCIPAL AMOUNT OR PREPAYMENT PRICE OF OR INTEREST ON THE
SERIES 1994 BONDS; (iii) THE DELIVERY TO SECURITIES DEPOSITORY OR ANY SUCH
PARTICIPANT OR ANY INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER
THAT IS REQUIRED OR PERMITTED TO BE GIVEN TO HOLDERS OF THE SERIES 1994 BONDS
UNDER THE TERMS OF THIS BOND INDENTURE; (iv) THE SELECTION OF THE BENEFICIAL
OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES
1994 BONDS; OR (v) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY SECURITIES
DEPOSITORY AS HOLDER OF THE SERIES 1994 BONDS.
The Securities Depository may determine to discontinue providing
its service with respect to the Series 1994 Bonds at any time by giving notice
to the Trustee and discharging its responsibilities with respect thereto under
the applicable law. In such event, or in the event the Company desires to use
a similar book-entry system with another securities depository, there may be a
successor securities depository (all references to Securities Depository
include any such successor). The Company may also determine to discontinue
participation in the system of book-entry transfer through Securities
Depository at any time by giving reasonable notice to the Securities
Depository. If the book-entry system is terminated, Series 1994 Bond
certificates will be delivered to the beneficial owners as provided herein.
The beneficial owners of the Series 1994 Bonds, upon registration of
certificates held in the beneficial owners' names, will become the registered
owners of one of the Series 1994 Bonds.
ARTICLE III.
ISSUE OF BONDS
Section 3.01. ISSUE OF SERIES 1994 BONDS. The Issuer may issue
the Series 1994 Bonds following the execution of this Indenture; and the
Trustee shall, at the Issuer's request, authenticate such Bonds and deliver
them as specified in the request.
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Section 3.02. ISSUE OF ADDITIONAL BONDS. At the request of the
Company, the Issuer may, but is not required to, issue additional Bonds of
series other than the Series 1994 Bonds from time to time hereunder for any of
the following purposes:
A. To provide additional funds to finance completion of the
Project, including any additional facilities to be financed under the
Agreement.
B. To pay the Cost of refunding through redemption or payment
at maturity of all or part of the Outstanding Bonds of any series to the
extent permitted by the terms thereof.
In any such event the Trustee shall, at the request of the Issuer,
authenticate the additional Bonds and deliver them as specified in the
request, but only upon receipt of:
(1) A certified Bond Ordinance and an indenture
supplemental hereto,
(a) establishing the series to be issued and
providing the terms of the Bonds thereof,
(b) authorizing the execution and delivery of the
Bonds to be issued,
(c) stating the purpose of the issue,
(d) if the purpose is refunding, authorizing the
payment or redemption of the Bonds to be refunded, and
(e) setting forth any other matters relating to the
issuance of the additional Bonds or the purpose for which they are to be
issued;
(2) A certificate of the Issuer
(a) stating that no Event of Default hereunder has
occurred and is continuing, and
(b) if the purpose is refunding, stating (i) that
notice of redemption of the Bonds to be redeemed has been duly given or
that provision has been made therefor and (ii) that the proceeds of the
issue plus any other amounts stated to be available for the purpose will
be sufficient to pay the principal of and premium, if any, on such Bonds
at maturity or on a specified redemption date plus interest accrued to
such date or dates together with all other costs and expenses related to
the refunding;
(3) An executed counterpart of any amendment or supplement
to the Agreement not previously delivered;
(4) An additional Note issued in accordance with Section
4.3 of the Agreement;
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(5) An additional guaranty from the Guarantor relating to
the additional Bonds, such guaranty to contain substantially the same
terms and conditions as the Guaranty delivered in respect of the Series
1994 Bonds;
(6) The proceeds of the additional Bonds;
(7) An opinion of recognized bond counsel to the effect
that
(a) the purpose of the issue is one for which
Bonds may be issued under this Section,
(b) all conditions prescribed herein as
precedent to the issuance have been fulfilled,
(c) the additional Bonds have been validly
authorized and executed and, when authenticated and delivered
pursuant to the request of the Issuer, will be valid obligations
of the Issuer entitled to the benefit of the trust created by this
Indenture as amended from time to time,
(d) all consents, approvals or certificates of
any governmental authorities required to be obtained by the Issuer
in connection with the issuance and related transactions have been
obtained, and
(e) the issuance of the additional Bonds will
not adversely affect the exclusion of the interest on the
Outstanding Bonds from gross income for federal income tax
purposes as enacted and construed on the date of the opinion,
except as to any Bond held by a "substantial user" of the Project
or by a "related person" as such terms are used in Section 147(a)
the Code; and
(8) An opinion of counsel to the Company that the
Agreement, including any amendment thereto, has been duly authorized,
executed and delivered and is a valid and binding obligation of the
Company, that the additional Note and Guaranty required under (4) and
(5) above has been duly authorized, executed and delivered by and is a
valid and binding obligation of the Company and the Guarantor,
respectively.
Section 3.03. DISPOSITION OF PROCEEDS OF BONDS. From the net
proceeds of the Series 1994 Bonds there shall first be set aside with the
Trustee as Revenues in the Bond Fund an amount representing the accrued
interest received on the sale of the Series 1994 Bonds. Thereafter, the
Trustee shall forthwith deposit the balance of the net proceeds of the Series
1994 Bonds in the Construction Fund. The disposition of the proceeds of any
series of additional Bonds issued pursuant to Section 3.02 hereof shall be as
provided in the certified Bond Ordinance or supplemental indenture
establishing such series.
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ARTICLE IV.
PROJECT CONSTRUCTION
Section 4.01. ESTABLISHMENT OF CONSTRUCTION FUND. The Trustee
shall establish a Construction Fund for the payment of the Costs of the
Project. The Construction Fund shall consist of the amounts deposited therein
pursuant to this Indenture and any other amounts the Company or the Issuer may
deposit therein. The amounts in the Construction Fund, until applied as
hereinafter provided, shall be held for the security of all Bonds Outstanding
hereunder.
The Trustee shall maintain a record of the income on investments
and interest earned on deposit of amounts held in the Construction Fund and on
proceeds of Series 1994 Bonds in respect of accrued or capitalized interest
held by the Trustee as Revenues. Such income or interest may be expended at
any time or from time to time to pay Costs of the Project in the same manner
as the proceeds of Bonds deposited in the Construction Fund are expended, and
for no other purpose.
Section 4.02. PAYMENTS FROM CONSTRUCTION FUND. The Trustee shall
make payments from the Construction Fund upon receipt of a requisition from
the Company or the Guarantor, signed by its President, any Vice-President,
Treasurer or Assistant Treasurer or any other person designated in writing by
any of such officers of the Company or by the managing general partner of the
Guarantor, stating:
(a) The Costs to which the payment relates, and with
respect to work and material, stating that such have been incorporated
into the Project substantially in accordance with the plans and
specifications therefor;
(b) The payee, which payee may be the Company or the
Guarantor in the case of work done by Company or Guarantor personnel and
in the case of reimbursement for payments previously made by the Company
(other than payments made by way of set-off of mutual claims between the
Company and the payee), which payee may be the Trustee in the case of a
requisition for payment of interest on the Bonds during acquisition and
construction of the Project;
(c) The amount of the payments to be made;
(d) That the payment is due, is a proper charge against
the Construction Fund and has not been the subject of any previous
withdrawal therefrom or any other funds representing proceeds of Bonds
issued by the Issuer on the Company's behalf.
Each requisition will be accompanied by a statement in reasonable
detail listing the Costs of the Project to be paid to any contractors,
materialmen or suppliers or the Costs incurred or advanced by the Company for
which it is to be reimbursed. The Trustee shall retain copies or records of
each requisition for the Issuer and shall not destroy such records without the
prior consent of the Issuer, which consent will not be unreasonably withheld.
The establishment of the Construction Fund shall be for the
benefit of the Company, and, except during the continuance of an Event of
Default hereunder, the Company may enforce payments therefrom upon compliance
with the procedures set forth in this Section 4.02.
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Section 4.03. PROCEDURE UPON COMPLETION OF PROJECT. Upon the
completion of the Project, as evidenced by a certificate of the Company or the
Guarantor delivered to the Trustee and the Issuer, any amounts remaining in
the Construction Fund (including the earnings from investments thereof) shall
be applied by the Trustee, at the direction of the Company, (a) to the
purchase of Bonds of any series at such price and upon such terms and
conditions as the Company may direct, or (b) to the redemption of Bonds of any
series, on the first redemption date occurring after such completion, at the
applicable optional or mandatory redemption price provided, however, that no
exercise of any option to redeem shall be required if such exercise would
involve the payment of a premium or penalty, or (c) provided that the Trustee
shall have received an opinion of nationally recognized bond counsel that such
deposit shall not cause interest on the Bonds to be includable in gross income
under the Code, such amounts may be transferred to the Bond Fund for payment
of maturing principal or interest on any of the Bonds. Unless there shall be
delivered to the Trustee a similar opinion of nationally recognized bond
counsel, amounts held for application under this Section 4.03 shall not, after
the completion of the Project, be invested at a yield in excess of the yield
on the Bonds from which such amounts were derived. Notwithstanding the
foregoing, as to any balance remaining in the Construction Fund, the Trustee
may retain or pay to the United States of America any amount which is required
to be paid by the Issuer or the Trustee directly to the United States pursuant
to Section 148(f) of the Code, as directed by the Company. Any Bonds
purchased or redeemed by the Trustee in accordance with this Section 4.03
shall be canceled, and the Company will receive a credit corresponding to such
Bonds, and to any deposit in the Bond Fund as contemplated by this Section
4.03, against its obligation to make payments under the Notes and under the
Agreement.
ARTICLE V.
REVENUES AND APPLICATION THEREOF
Section 5.01. REVENUES TO BE PAID OVER TO TRUSTEE. The Issuer has
directed the Revenues to be paid directly to the Trustee. If, notwithstanding
these arrangements, the Issuer receives any payments pursuant to the Notes or
the Agreement (other than payments owed to the Issuer under Sections 5.4, 5.5
and 5.7 thereof), the Issuer shall immediately pay over the same to the
Trustee to be held as Revenues and deposited into the Bond Fund.
Section 5.02. BOND FUND. There is hereby established with the
Trustee a Bond Fund, which the Trustee shall make available to the Issuer's
Paying Agent or agents to pay the principal of Bonds as they mature or the
redemption price thereof as it becomes payable, upon surrender thereof, the
premium, if any, on the Bonds as it becomes payable, and the interest on Bonds
as it becomes payable. The Trustee may establish separate accounts within the
Bond Fund for separate series of Bonds. When Bonds are redeemed or purchased,
the amount, if any, in the Bond Fund representing interest thereon shall be
applied to the payment of accrued interest in connection with such redemption
or purchase. Whenever the amount in the Bond Fund is sufficient to redeem all
of the Outstanding Bonds and to pay interest accrued to the redemption date,
the Issuer will, upon request of the Company, cause the Trustee to redeem all
such Bonds on the applicable redemption date specified by the Company. Any
amounts remaining in the Bond Fund after payment in full of the principal of,
premium, if any, and interest on the Bonds (or provision for payment thereof)
and the fees, charges and expenses of the Issuer, the Trustee and any paying
agents, shall be paid to the Company.
Section 5.03. SINKING FUNDS. There shall be no sinking fund
requirement for the Series 1994 Bonds. The Trustee shall establish such other
sinking funds for any series of additional Bonds as may be directed in the
certified Bond Ordinance or supplemental indenture establishing such series.
The Trustee shall use the sinking fund for each series to purchase or redeem
Bonds of such series. The Company may deliver Bonds purchased by it as a
credit against the next
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ensuing and future sinking fund payments in the order in which they become due;
provided that such Bonds so delivered by the Company shall be of the
same series and maturity in respect of which the sinking fund payment is
to be made and shall be delivered no less than 45 days before the
sinking fund redemption date. Bonds so delivered shall be credited at the
sinking fund redemption price set forth in the form of Bonds. If at any time
all the Bonds of any series shall have been purchased, redeemed or paid, the
Trustee shall make no further transfers to the sinking fund for such series
and shall treat any balance then in such fund as Revenues in the Bond Fund
with a corresponding credit against the Company's obligation to make payments
under the Notes and the Agreement.
If any series of Bonds is to be paid or redeemed in full, any
balance in any sinking fund for such series may, at the option of the Issuer,
to be exercised at the request of the Company, be applied in whole or in part
to the payment or redemption of such series or transferred to the Bond Fund.
Section 5.04. REVENUES TO BE HELD FOR ALL BONDHOLDERS; CERTAIN
EXCEPTIONS. Revenues and investments thereof shall, until applied as provided
in this Indenture, be held by the Trustee for the benefit of the Owners of all
Outstanding Bonds, except that any portion of the Revenues in the Bond Fund or
any sinking fund representing principal of, premium, if any, and interest on
any matured Bonds, or any Bonds previously called for redemption in accordance
with Article VII of this Indenture, shall be held for the benefit of the
owners of such Bonds only.
ARTICLE VI.
INVESTMENT OF FUNDS
Section 6.01. INVESTMENT OF FUNDS. Any moneys held as part of
the Construction Fund or the Bond Fund shall, to the extent permitted by law,
at the oral request, promptly confirmed in writing, of the Company be invested
and reinvested by the Trustee in the following: (i) obligations issued or
guaranteed by the United States of America; (ii) obligations issued or
guaranteed by any person controlled or supervised by and acting as an
instrumentality of the United States of America pursuant to authority granted
by the Congress of the United States; (iii) obligations issued or guaranteed
by any state of the United States or the District of Columbia, or any
political subdivision thereof, rated within one of the two highest rating
categories by any nationally recognized rating service; (iv) commercial or
finance company paper receiving the highest rating of any nationally
recognized rating service; (v) bankers' acceptances drawn on and accepted by
commercial banks having combined capital and surplus of not less than
$50,000,000 and whose long term certificates of deposit have a rating of A or
better by Standard & Poor's Corporation and/or Moody's Investors Service,
Inc.; (vi) repurchase agreements with member banks of the Federal Reserve
System and primary dealers limited to U.S. Government Securities fully secured
by obligations of the type specified in (i) and (ii) above with a market value
which equals or exceeds the principal and interest due under the agreement;
(vii) certificates of deposit issued by commercial banks having combined
capital and surplus of not less than $50,000,000; and (viii) internal money
market fund vehicles managed by the Trustee or its affiliates or externally
managed money market funds approved by the Trustee as long as the money market
funds are invested in one or more of the securities specified in this Section
(a) for which the principal or dividends are either fully supported by a
letter of credit issued by a bank whose long term debt is rated at least AA or
the equivalent thereof by Standard & Poor's Corporation and Aa or the
equivalent thereof by Moody's Investors Service, Inc., or (b) which are stand
alone issues rated A1 or the equivalent thereof by Standard & Poor's
Corporation or P1 or the equivalent thereof by Moody's Investors Service, Inc.
The Trustee, in purchasing securities of the type described in clauses (i) and
(ii) in the preceding sentence, may make any such purchase subject to
agreement with the seller for repurchase by the seller at a later date, and in
such connection may accept the seller's agreement for the payment of interest
in lieu of the right to
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receive the interest payable by the issuer of the security purchased,
provided that title to the security so purchased by the Trustee shall vest
in the Trustee, that the Trustee shall have actual or constructive possession
of such security, and that the current market value of such security
(or of cash or additional securities of the type described in said
clauses pledged with the Trustee as collateral for the purpose) is at all
times at least equal to the total amount thereafter to become payable by the
seller under said agreement.
The Trustee is directed to sell and reduce to cash funds a
sufficient amount of such investments whenever the cash balance in the
Construction Fund or the Bond Fund is insufficient to pay amounts properly
payable therefrom.
The Trustee may make any and all investments permitted under this
Section through its own bond or investment department or affiliate.
The interest and income received upon such investments of the
Construction Fund or the Bond Fund, and any profit or loss resulting from the
sale of any investment shall be added or charged to such fund. The Company
has agreed in Section 5.10 of the Agreement to restore to the appropriate fund
all amounts necessary to cover all losses resulting from any investments
authorized hereunder. In the case of all other Revenues representing moneys
held in the Bond Fund, such interest or income received or paid shall be held
in the Bond Fund with a corresponding credit against the Company's obligation
to make payments under the Notes and the Agreement.
ARTICLE VII.
REDEMPTION OF BONDS
Section 7.01. BONDS SUBJECT TO REDEMPTION; SELECTION OF BONDS TO
BE CALLED FOR REDEMPTION.
(a) OPTIONAL REDEMPTION IN WHOLE OR IN PART. The Series 1994
Bonds are subject to redemption prior to maturity by the Issuer at the request
of the Company, in whole or in part, on any date on or after June 1, 2004,
from the Bond Fund established by Section 5.02 herein and from moneys
otherwise available for such purpose, and if in part by lot. Such redemptions
are to be made at the applicable redemption price shown below as a percentage
of the principal amount thereof, plus interest accrued to the redemption date:
<TABLE>
<CAPTION>
OPTIONAL
REDEMPTION PERIOD REDEMPTION PRICE
----------------- ----------------
<S> <C>
June 1, 2004 through May 31, 2005 102%
June 1, 2005 through May 31, 2006 101
June 1, 2006 and thereafter 100
</TABLE>
(b) EXTRAORDINARY OPTIONAL REDEMPTION IN WHOLE. The Series 1994
Bonds are subject to redemption in whole on any date, upon the exercise by the
Company of its option to prepay its Series 1994 Note at a redemption price
equal to 100% of the principal amount thereof, plus interest accrued to the
redemption date, if one or more of the following events shall have occurred:
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(i) the damage or destruction of all or substantially all
of the Project or the plant at which the Project is located to such
extent that, in the reasonable opinion of the Company, the repair and
restoration thereof would not be economical; or
(ii) the condemnation (or sale under threat of
condemnation) of all or substantially all of the Project or such plant
or the taking by condemnation of any part, use or control of the Project
or such plant as to render it unsatisfactory to the Company for its
intended use; or
(iii) in the Company's reasonable opinion, unreasonable
burdens or excessive liabilities shall have been imposed upon the
Company with respect to the Project or the operation thereof, including,
but without being limited to, federal, state or other ad valorem,
property, income or other taxes, not being imposed on the date of the
Agreement other than ad valorem taxes presently levied upon privately
owned property used for the same general purpose as the Project; or
(iv) by reason of unforeseen change in use of the Project
as a "solid waste disposal facility" within the meaning of Section
142(a)(6) of the Code the interest payable by the Company under the
Agreement is no longer deductible by the Company for Federal income tax
purposes.
The Company's right to cause extraordinary optional redemption of
the Series 1994 Bonds as a result of unforeseen changes in the use of the
Project will survive defeasance of such Bonds.
(c) SPECIAL MANDATORY REDEMPTION. The Series 1994 Bonds are
subject to mandatory redemption by the Issuer prior to their scheduled
maturity, in whole, on the earliest practicable date selected by the Trustee
pursuant to the terms herein but in no event later than the latter of 180 days
following the occurrence of, or 60 days following the receipt by the Trustee
of notice of the occurrence of, a Determination of Taxability. In the event
of any such mandatory redemption, the Series 1994 Bonds outstanding at the
time of the Determination of Taxability (except those for which notice of
redemption shall have been given prior to the Determination of Taxability)
shall be redeemed at a redemption price of 100% of the principal amount
thereof, plus accrued interest thereon to the date fixed for redemption. As
used herein, a "Determination of Taxability" shall mean one of the following
determinations, made in regard to Section 103 of the Internal Revenue Code, as
then in effect, to the effect that by reason of any action or inaction by the
Company or any violation by the Company of any of its covenants in the
Agreement or any misrepresentation by the Company in any certificate furnished
in connection with the issuance, sale or delivery of the Series 1994 Bonds,
the interest payable on the Series 1994 Bonds is includable in the gross
income of the owners of such Bonds (other than an owner who is a "substantial
user" of the Project or "related person" as such terms are used in Section
147(a) of the Internal Revenue Code of 1986, as amended): (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 Series 1994 Bonds, either directly or in the name of the
Bondholder, at the Company's expense, or (ii) an opinion of nationally
recognized bond counsel furnished by the Company to the Trustee.
If the Trustee receives notice from any source that a
Determination of Taxability has occurred, the Trustee shall forthwith consult
with the Issuer and the Company and thereafter proceed to enforce payments
under the Agreement and the Notes in respect of the necessary redemption price
and to redeem the Series 1994 Bonds at the earliest practicable date. In no
event shall the Trustee proceed with redemption of Bonds if the Company has
notified the Trustee in writing that it will contest such Determination of
Taxability and that it is actively pursuing such course. In
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making any determination in respect of the occurrence of a Determination of
Taxability or a redemption relating thereto, the Trustee may rely on an
opinion of counsel.
(d) EXTRAORDINARY MANDATORY REDEMPTION. The Series 1994 Bonds
are subject to extraordinary mandatory redemption by the Issuer prior to their
scheduled maturity, in whole, on the earliest practicable date selected by the
Trustee pursuant to the terms hereof upon the occurrence of a dissolution of
the Guarantor as permitted under the terms of the limited partnership
agreement between the Company, as general partner, and MacMillan Bloedel of
America Inc., as limited partner of the Guarantor, except for such
dissolution, consolidation or merger as otherwise permitted by the terms of
the Agreement. In the event of any such extraordinary mandatory redemption,
the Bonds then outstanding shall be redeemed at a redemption price of 100% of
the principal amount thereof, plus accrued interest thereon to the date fixed
for redemption.
Unless otherwise provided in respect of a series of Bonds, if less
than all the Bonds of a series or of a maturity are to be redeemed, the
particular Bonds of such series or maturity to be called for redemption shall
be selected by lot by the Trustee in any manner deemed fair and reasonable by
the Trustee. The Issuer shall direct the Trustee to call Bonds for optional
redemption when and only when it shall have been notified in writing by the
Company to do so and the Company has itself notified the Trustee of a
corresponding prepayment under the Notes or the Note corresponding to the
series of Bonds to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Bonds shall relate, in
the case of any Bond redeemed or to be redeemed only in part, to the portion
of the principal of such Bond which has been or is to be redeemed.
Section 7.02. NOTICE OF REDEMPTION. When required to redeem
Bonds under any provision of this Indenture, the Trustee shall cause notice of
the redemption to be given by first-class mail, postage prepaid, mailed to all
registered owners of Bonds to be redeemed at their registered address not more
than 60 days nor less than 30 days prior to the redemption date. In addition,
the Trustee shall send a copy of such notice by registered or certified mail
or overnight delivery service, return receipt requested, postage prepaid, to
not less than three registered securities depositories (such depositories now
being Depository Trust Company of New York, New York, Midwest Securities Trust
Company of Chicago, Illinois, Pacific Depository Trust Company of San
Francisco, California and Philadelphia Depository Trust Company of
Philadelphia, Pennsylvania) and not less than three nationally recognized
information services that disseminate redemption information (such as
Financial Information, Inc.'s Financial Daily Called Bond Service, Kenny
Information Service's called Bond Service and Moody's Record), sent at least
two Business Days in advance of the mailing of notice to Bondholders or the
publication date. In addition the Trustee shall at all reasonable times make
available to any interested party complete information as to Bonds which have
been redeemed or called for redemption. Any such notice shall be given in the
name of the Issuer, shall identify the Bonds to be redeemed (and, in the case
of partial redemption of any Bonds, the respective principal amounts thereof
to be redeemed), the "CUSIP" number applicable to the Bonds to be redeemed,
shall state the date of the notice of redemption, shall specify the redemption
date and the redemption price shall state that on the redemption date the
Bonds called for redemption will be payable at the principal corporate trust
office of the Trustee that from that date interest will cease to accrue.
Failure to mail any notice or defect in the mailed notice or in the mailing
thereof in respect of any Bond shall not affect the validity of the redemption
of any other Bond.
The Trustee shall use "CUSIP" numbers on notices of redemption as
a convenience to Bondholders provided that any such notice shall state that no
representation is made as to the correctness of such numbers either as
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printed on the Bonds or as contained in any notice of redemption and that
reliance may be placed only on the identification numbers containing the prefix
established under the Indenture.
If at the time of mailing of notice of an optional redemption
there shall not have been deposited with the Trustee moneys sufficient to
redeem all the Bonds called for redemption, such notice may state that it is
conditional, that is, subject to the deposit of the redemption moneys with the
Trustee not later than the opening of business on the redemption date, and
such notice shall be of no effect unless such moneys are so deposited.
Section 7.03. PAYMENT OF REDEMPTION PRICE. If (a) unconditional
notice of redemption has been duly published or duly waived by the owners of
all Bonds called for redemption or (b) conditional notice of redemption has
been so given or waived and the redemption moneys have been duly deposited
with the Trustee, then in either case the Bonds called for redemption shall be
payable on the redemption date at the applicable redemption price. Payment of
the principal of, premium, if any, and accrued interest on the Bonds called
for redemption shall be made by the Trustee to or upon the order of the owners
of the Bonds called for redemption upon surrender of such Bonds. The
principal and premium, if any, in respect of Bonds, the expenses of giving
notice and any other expenses of redemption (except accrued interest), shall
be paid out of the Fund from which redemption is to be made or from other
moneys which the Issuer makes available for such purpose. Accrued interest
shall be paid out of the Bond Fund.
Section 7.04. BONDS REDEEMED IN PART. Any Bond which is to be
redeemed only in part shall be surrendered at a place stated for the surrender
of Bonds called for redemption in the notice provided for in Section 7.02
(with due endorsement by, or a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the owner thereof or his
attorney duly authorized in writing) and the Issuer shall execute and the
Trustee shall authenticate and deliver to the owner of such Bond without
service charge, a new Bond or Bonds, of any authorized denomination as
requested by such owner in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Bond so surrendered.
Section 7.05. BOND REDEMPTION FUND FOR REFUNDING ISSUES.
Whenever the Issuer issues Bonds hereunder for refunding purposes, the Issuer
may, by the Ordinance or supplemental indenture authorizing the Bonds, direct
the Trustee to establish a separate bond redemption fund and to deposit
therein the proceeds of the refunding Bonds. The Ordinance or supplemental
indenture shall specify the investment and application of amounts so deposited
including, without limitation, the transfer thereof to any other fiscal agent
or trustee of the Issuer and the time and conditions for such transfer.
ARTICLE VIII.
COVENANTS OF THE ISSUER
Section 8.01. POWER AND AUTHORITY OF THE ISSUER. The Issuer is a
county and political subdivision of the Commonwealth, with full power and
authority to issue the Bonds, and to execute, deliver and perform its
obligations under the Agreement and this Indenture. The Issuer has the
necessary power under the Act, and has duly taken all action on its part
required to execute, deliver this Indenture and the Agreement and to undertake
the financing of the Project through the issuance of its Bonds. The
execution, delivery and performance of this Indenture and the Agreement by the
Issuer will not violate or conflict with any instrument by which the Issuer or
its properties are bound.
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Section 8.02. PAYMENT OF PRINCIPAL OF AND PREMIUM, IF ANY, AND
INTEREST ON THE BONDS; APPOINTMENT OF PAYING AGENT. The Issuer shall promptly
pay or cause to be paid the principal of, and the premium, if any, and
interest on, every Bond issued hereunder according to the terms thereof, but
shall be required to make such payment only out of Revenues. The Issuer shall
appoint one or more Paying Agents for such purpose, each such agent to be a
national banking association, a state chartered bank, a bank and trust company
or a trust company. The Issuer hereby appoints the Trustee, to act as sole
Paying Agent, and designates the principal corporate trust office of the
Trustee as the place of payment, such appointment and designation to remain in
effect until notice of change is filed with the Trustee.
Section 8.03. CORPORATE EXISTENCE; COMPLIANCE WITH LAWS. The
Issuer shall maintain its existence; shall use its best efforts to maintain
and renew all its rights, powers, privileges and franchises; and shall comply
with all valid and applicable laws, acts, rules, regulations, permits, orders,
requirements and directions of any legislative, executive, administrative or
judicial body.
Section 8.04. ENFORCEMENT OF AGREEMENT; PROHIBITION AGAINST
AMENDMENTS; NOTICE OF DEFAULT. The Issuer shall cooperate with the Trustee to
enforce the payment of all amounts payable under the Notes and the Agreement
and the Trustee shall require the Company to perform its obligations
thereunder. So long as no Event of Default hereunder shall have occurred and
be continuing, the Issuer may exercise all its rights under the Agreement as
amended or supplemented from time to time, except that it shall not amend the
Notes or the Agreement without the consent of the Trustee pursuant to Section
12.03 hereof. Prior to making any amendment or supplement, the Issuer shall
file with the Trustee (i) a copy of the proposed amendment or supplement and
(ii) an opinion of nationally recognized bond counsel to the effect that such
amendment or supplement will not have an adverse effect on the exemption of
interest on the Outstanding Bonds from federal income tax and, unless the
Trustee shall have otherwise given its consent to such amendment or
supplement, to the further effect that such amendment or supplement will not
otherwise adversely affect the interests of the Bondholders. The Issuer shall
give prompt notice to the Trustee of any default known to the Issuer under the
Notes or the Agreement or any amendment or supplement thereto.
Section 8.05. FURTHER ASSURANCES. Except to the extent otherwise
provided in this Indenture, the Issuer shall not enter into any contract or
take any action by which the rights of the Trustee or the Bondholders may be
impaired and shall, from time to time, execute and deliver such further
instruments and take such further action as may be required to carry out the
purposes of this Indenture.
Section 8.06. BONDS NOT TO BECOME ARBITRAGE BONDS. The Issuer
covenants, with the owners of the Bonds that, notwithstanding any other
provision of this Indenture or any other instrument, it will make no
investment or other use of the proceeds of the Bonds which would cause the
Bonds to be arbitrage Bonds under Section 148 of the Code, and the regulations
thereunder, and it further covenants that it will comply with the requirements
of such Section and regulations. The foregoing covenants shall extend
throughout the term of the Bonds, to all funds created under this Indenture
and all moneys on deposit to the credit of any such fund, and to any other
amounts which are Bond proceeds for purposes of Section 148 of the Code, and
the regulations thereunder.
Section 8.07. PERFECTION OF SECURITY INTEREST. Notwithstanding
any other provision herein, the Trustee shall be, and is, hereby directed not
to take any action, other than taking possession of the Note, which would
result in the perfection of a security interest in the Agreement or the
payments thereunder or the assignment of either thereof pursuant to the laws
of the Commonwealth or any other jurisdiction.
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ARTICLE IX.
EVENTS OF DEFAULT AND REMEDIES
Section 9.01. EVENTS OF DEFAULT DEFINED. Each of the following
shall be an "Event of Default" hereunder:
A. If payment of the principal of, or any premium on, any
Bond is not made when it becomes due and payable at maturity or upon
call for redemption; or
B. If the required payment is not made into any sinking
fund established pursuant to this Indenture when the same is due and
payable; or
C. If payment of any installment of interest on any Bond
is not made when the same is due and payable ; or
D. If an "Event of Default" as defined in the Agreement
occurs.
Section 9.02. ACCELERATION AND ANNULMENT THEREOF. If any Event
of Default occurs, the Trustee may in its discretion, and upon request of the
owners of a majority in aggregate principal amount of the Bonds then
Outstanding, shall, by notice in writing to the Issuer and the Company,
declare the principal of all Bonds then Outstanding to be immediately due and
payable; and upon such declaration the said principal, together with premium,
if any, and interest accrued thereon, shall become due and payable immediately
at the place of payment provided therein, anything in the Indenture or in said
Bonds to the contrary notwithstanding. Upon any declaration of acceleration
hereunder, the Trustee shall immediately exercise such rights as it may have
under the Notes, the Agreement and the Guaranty to declare all payments
thereunder to be immediately due and payable.
If, after the principal of said Bonds has been so declared to be
due and payable, all arrears of interest upon the Bonds (and interest on
overdue installments of interest at the rate borne by the Bonds) are paid or
caused to be paid by the Issuer, and the Issuer also performs or causes to be
performed all other things in respect to which it may have been in default
hereunder and pays or causes to be paid the reasonable charges of the Trustee,
the Bondholders and any trustee appointed under the Act, including reasonable
attorney's fees, then, and in every such case, the owners of a majority in
aggregate principal amount of the Bonds then Outstanding, by notice to the
Issuer and to the Trustee, may annul such declaration and its consequences and
such annulment shall be binding upon the Trustee and upon all owners of Bonds
issued hereunder; but no such annulment shall extend to or affect any
subsequent default or impair any right or remedy consequent thereon.
Section 9.03. OTHER REMEDIES. If any Event of Default occurs and
is continuing, the Trustee, before or after declaring the principal of the
Bonds immediately due and payable, may enforce each and every right granted to
the Issuer or the Trustee under the Notes, the Agreement and the Guaranty or
any supplements or amendments thereto. In exercising such rights and the
rights given the Trustee under this Article IX, the Trustee shall take such
action, as in the judgment of the Trustee, applying the standards described in
Section 10.06 hereof, would best serve the interests of the Bondholders.
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Section 9.04. LEGAL PROCEEDINGS BY TRUSTEE. If any Event of
Default has occurred and is continuing, the Trustee in its discretion may, and
upon the written request of the owners of 25% in principal amount of the Bonds
then Outstanding and receipt of indemnity to its satisfaction, shall, in its
own name, or in combination with the Issuer:
A. By mandamus, or other suit, action or proceeding at
law or in equity, enforce all rights of the Bondholders, including the
right to require collection of the amounts payable under the Notes and
the Agreement and to require the carrying out of any other provisions of
this Indenture for the benefit of the Bondholders;
B. Bring suit upon the Bonds, the Notes and the Guaranty;
and
C. By action or suit in equity enjoin any acts or things
which may be unlawful or in violation of the rights of the Bondholders.
Section 9.05. DISCONTINUANCE OF PROCEEDINGS BY TRUSTEE. If any
proceeding taken by the Trustee on account of any Event of Default is
discontinued or is determined adversely to the Trustee, the Issuer, the
Trustee and the Bondholders shall be restored to their former positions and
rights hereunder as though, no such proceeding had been taken, but subject to
the limitations of any such adverse determination.
Section 9.06. BONDHOLDERS MAY DIRECT PROCEEDINGS. The owners of
a majority in principal amount of the Bonds Outstanding hereunder shall have
the right to direct the method and place of conducting all remedial
proceedings by the Trustee hereunder, provided that such direction shall not
be otherwise than in accordance with law or the provisions of this Indenture,
and that the Trustee shall not be required to comply with any such direction
which it deems to be unlawful or unjustly prejudicial to Bondholders not party
to such direction.
Section 9.07. LIMITATIONS ON ACTIONS BY BONDHOLDERS. No
Bondholders shall have any right to pursue any remedy hereunder or under the
Notes, the Agreement or the Guaranty unless:
(a) the Trustee shall have been given written notice
of an Event of Default,
(b) the owners of at least 25% in principal amount
of the Bonds Outstanding respecting which there has been an Event
of Default shall have requested the Trustee, in writing, to
exercise the powers hereinabove granted or to pursue such remedy
in its or their name or names,
(c) the Trustee shall have been offered indemnity
satisfactory to it against costs, expenses and liabilities, and
(d) the Trustee shall have failed to comply with
such request within a reasonable time;
provided, however, that nothing herein shall preclude the owner of any Bond
with respect to which an Event of Default under Section 9.01 A, B or C has
occurred and is continuing from bringing an action at law to enforce the right
of payment on such Bond.
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Section 9.08. TRUSTEE MAY ENFORCE RIGHTS WITHOUT POSSESSION OF
BONDS. All rights under the Indenture and the Bonds may be enforced by the
Trustee without the possession of any Bonds or the production thereof at the
trial or other proceedings relative thereto, and any proceedings instituted by
the Trustee shall be brought in its name for the ratable benefit of the owners
of the Bonds.
Section 9.09. DELAYS AND OMISSIONS NOT TO IMPAIR RIGHTS. No
delay or omission in respect of exercising any right or power accruing upon
any Event of Default shall impair such right or power or be a waiver of such
Event of Default and every remedy given by this Article may be exercised from
time to time and as often as may be deemed expedient.
Section 9.10. APPLICATION OF MONEYS IN EVENT OF DEFAULT. Any
moneys received by the Trustee under this Article IX shall be applied:
First: to the payment of the expenses of the Trustee
including reasonable Counsel fees, any disbursements of the
Trustee with interest thereon and its reasonable compensation and
all other amounts owed to the Trustee under this Indenture or the
Agreement;
Second: to the payment of principal of, premium, if any, and
interest then owing on the Bonds, including any interest on
overdue interest, and in case such moneys shall be insufficient to
pay the same in full, then to the payment of principal of,
premium, if any, and interest ratably, without preference or
priority of one over another or of any installment of interest
over any other installment of interest; and
Third: to the payment of expenses of the Issuer, including
reasonable counsel fees, actually incurred in connection with the
Project and remaining unpaid.
The surplus, if any, shall be paid to the Company or the person
lawfully entitled to receive the same as a court of competent jurisdiction may
direct.
Section 9.11. TRUSTEE AND BONDHOLDERS ENTITLED TO ALL REMEDIES
UNDER ACT; REMEDIES NOT EXCLUSIVE. It is the purpose of this Article to
provide to the Trustee and the Bondholders all rights and remedies as may be
lawfully granted under the provisions of the Act; but should any remedy herein
granted be held unlawful, the Trustee and the Bondholders shall nevertheless
be entitled to every remedy permitted by the Act. It is further intended
that, insofar as lawfully possible, the provisions of this Article shall apply
to and be binding upon any trustee or receiver appointed under the Act.
No remedy herein conferred is intended to be exclusive of any
other remedy or remedies, and each remedy is in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute.
Section 9.12. TRUSTEE'S RIGHT TO RECEIVER. The Trustee shall be
entitled as a matter of right to the appointment of a receiver; and the
Trustee, the Bondholders and any receiver so appointed shall have such rights
and powers and be subject to such limitations and restrictions as may be
contained in or permitted by the Act.
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ARTICLE X.
THE TRUSTEE
Section 10.01. ACCEPTANCE OF TRUST. The Trustee accepts and
agrees to execute the trusts hereby created, but only upon the additional
terms set forth in this Article, to all of which the parties hereto and the
Bondholders are bound.
Section 10.02. NO RESPONSIBILITY FOR RECITALS, ETC. The
recitals, statements and representations in the Indenture or in the Bonds,
save only the Trustee's Certificate upon the Bonds, have been made by the
Issuer or the Company and not by the Trustee; and the Trustee shall be under
no responsibility for the correctness thereof.
The Trustee shall not be responsible for the validity of this
Indenture or for the validity, priority, recording or rerecording, filing or
re-filing of any financing statements, amendments thereto or continuation
statements, except as otherwise provided in Section 8.07 hereof, or for
insuring the Project or collecting any insurance moneys, or for the validity
of the execution by the Issuer of this Indenture or of any supplements thereto
or instruments of further assurance, or for the sufficiency of the security
for the Bonds issued hereunder or intended to be secured hereby, or for the
value or title of the Project or as to the maintenance of the security hereof;
except that in the event the Trustee enters into possession of a part or all
of the Project pursuant to any provision of this Indenture it shall use due
diligence in preserving such property.
Section 10.03. TRUSTEE MAY ACT THROUGH AGENTS; ANSWERABLE ONLY
FOR WILLFUL MISCONDUCT OR NEGLIGENCE. The Trustee may exercise any powers
hereunder and perform any duties required of it through attorneys, agents,
officers or employees, and shall be entitled to advice of Counsel concerning
all questions hereunder. The Trustee shall not be answerable for the exercise
of any discretion or power under this Indenture nor for anything whatever in
connection with the trust hereunder, except only its own willful misconduct or
negligence or that of its agents, officers and employees.
Section 10.04. COMPENSATION AND INDEMNITY. The Issuer shall
cause the Company to pay the Trustee reasonable compensation for its services
hereunder, and also all its reasonable expenses and disbursements. The
Company has agreed under Section 5.5 of the Agreement to indemnify the Trustee
against any claims arising out of the exercise and performance of its powers
and duties hereunder in good faith and without negligence.
Section 10.05. NOTICE OF DEFAULT; RIGHT TO INVESTIGATE. The
Trustee shall, within 30 days after the occurrence thereof, give written
notice by first class mail to owners of Bonds of all defaults known to the
Trustee and send a copy of such notice to the Issuer and the Company, unless
such defaults have been remedied (the term "defaults" for purposes of this
Section and Section 10.06 hereof being defined to include the events specified
in clauses A through D of Section 9.01 hereof, not including any notice or
periods of grace provided for therein). The Trustee shall not be deemed to
have notice of any default under Clause D of Section 9.01 hereof (other than a
default under Section 6.1(a) of the Agreement) unless it has actual knowledge
thereof or has been notified in writing of such default by the owners of at
least 25% in principal amount of the Bonds then outstanding. The Trustee may,
however, at any time require of the Issuer or the Company full information as
to the performance of any covenant hereunder or under the Agreement; and, if
information satisfactory to it is not forthcoming, the Trustee may make or
cause to be made an investigation into the affairs of the Issuer or the
Company related to this Indenture and the properties covered hereby.
Notwithstanding the foregoing provisions of this Section 10.05, the Trustee
shall be protected in withholding notice of any default if and so
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long as the Board of Directors, the executive committee or a trust committee of
Directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Bondholders.
Section 10.06. OBLIGATION TO ACT ON DEFAULTS. If any Event of
Default shall have occurred and be continuing, the Trustee, as directed by the
owners of a majority of the outstanding Bonds, shall exercise such of the
rights and remedies vested in it by this Indenture and shall use the same
degree of care in their exercise as a prudent man would exercise or use in the
circumstances in the conduct of his own affairs; provided, that if in the
opinion of the Trustee such action may tend to involve expense or liability,
it shall not be obligated to take such action unless it is furnished with
indemnity reasonably satisfactory to it.
Section 10.07. RELIANCE ON REQUISITION, COUNSEL, ETC. The Trustee
may act on any requisition, resolution, notice, telegram, request, consent,
waiver, certificate, statement, affidavit, voucher, bond, or other paper or
document which it in good faith believes to be genuine and to have been passed
or signed by the proper persons or to have been prepared and furnished
pursuant to any of the provisions of the Indenture; and the Trustee shall be
under no duty to make any investigation as to any statement contained in any
such instrument, but may accept the same as conclusive evidence of the
accuracy of such statement.
The Trustee will be entitled to rely upon opinions of Counsel and
will not be responsible for any loss or damage resulting from reliance in good
faith thereon, except for its own negligence or willful misconduct.
Section 10.08. TRUSTEE MAY OWN BONDS. The Trustee may in good
faith buy, sell, own and hold any of the Bonds and may join in any action
which any Bondholders may be entitled to take with like effect as if the
Trustee were not a party to the Indenture. The Trustee may also engage in or
be interested in any financial or other transaction with the Issuer, the
Company or the Guarantor, provided that if the Trustee determines that any
such relation is in conflict with its duties under this Indenture, it shall
eliminate the conflict or resign as Trustee.
Section 10.09. CONSTRUCTION OF AMBIGUOUS PROVISIONS. The Trustee
may construe any ambiguous or inconsistent provisions of this Indenture, and
any such construction by the Trustee shall be binding upon the Bondholders.
In construing any such provision, the Trustee will be entitled to rely upon
opinions of Counsel and will not be responsible for any loss or damage
resulting from reliance in good faith thereon except for its own negligence or
willful misconduct.
Section 10.10. RESIGNATION OF TRUSTEE. The Trustee may resign
and be discharged of the trusts created by this Indenture by written
resignation filed with the County Judge/Executive of the Issuer not less than
60 days before the date when it is to take effect, with copies of such notice
to the Company. Such resignation shall take effect only upon the appointment
of a successor trustee.
Section 10.11. REMOVAL OF TRUSTEE. Any Trustee hereunder may be
removed at any time by an instrument appointing a successor to the Trustee so
removed, executed by the owners of a majority of the Bonds then Outstanding
and filed with the Trustee and the Issuer.
Section 10.12. APPOINTMENT OF SUCCESSOR TRUSTEE. If the Trustee
or any successor trustee resigns or is removed (other than pursuant to Section
10.11 hereof) or dissolved, or if its property or business is taken under the
control of any state or federal court or administrative body, a vacancy shall
forthwith exist in the office of the Trustee, and the Issuer at the direction
of the Company shall appoint a successor and shall publish notice of such
appointment once
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in each of three consecutive weeks in an Authorized Newspaper. If the
Issuer fails to make such appointment within 60 days after the date
notice of resignation is filed, the owners of a majority of the Bonds
then Outstanding may do so.
Section 10.13. QUALIFICATION OF SUCCESSOR. A successor trustee
shall be a national bank with trust powers, a state chartered bank, or a bank
and trust company or a trust company organized under the laws of one of the
states of the United States of America, in each case having capital and
surplus of at least $50,000,000, if there be one able and willing to accept
the trust on reasonable and customary terms.
Section 10.14. INSTRUMENTS OF SUCCESSION. Any successor trustee
shall execute, acknowledge and deliver to the Issuer an instrument accepting
such appointment hereunder; and thereupon such successor trustee, without any
further act, deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, trusts, duties and obligations of its
predecessor in the trust hereunder, with like effect as if originally named
Trustee herein. The Trustee ceasing to act hereunder shall pay over to the
successor trustee all moneys held by it hereunder; and, upon request of the
successor trustee, the Trustee ceasing to act and the Issuer shall execute and
deliver an instrument transferring to the successor trustee all the estates,
properties, rights, powers and trusts hereunder of the Trustee ceasing to act.
The Company shall be provided with a copy of each instrument mentioned herein.
Section 10.15. MERGER OF TRUSTEE. Any corporation into which any
Trustee hereunder may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which any Trustee
hereunder shall be a party, shall be the successor trustee under this
Indenture, without the execution or filing of any paper or any further act on
the part of the parties hereto, anything herein to the contrary
notwithstanding.
Section 10.16. APPOINTMENT OF CO-TRUSTEE. It is the purpose of
this Indenture that there shall be no violation of any law of any jurisdiction
(including particularly the laws of the Commonwealth) denying or restricting
the right of banking corporations or associations to transact business as
Trustee in such jurisdiction. It is recognized that in case of litigation
under this Indenture, the Notes, the Agreement or the Guaranty, and in
particular in case of the enforcement of any such document in default, or in
case the Trustee deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the powers, rights or remedies herein
granted to the Trustee or hold title to the properties, in trust, as herein
granted, or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that the Trustee appoint an
additional individual or institution as a separate or Co-Trustee. The
following provisions of this Section are adopted to these ends.
The Trustee may appoint an additional individual or institution as
a separate or Co-Trustee, in which event such and every remedy, power, right,
claim, demand, cause of action, indemnity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest
in such separate or Co-Trustee but only to the extent necessary to enable such
separate or Co-Trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate or
Co-Trustee shall run to and be enforceable by either of them.
Should any deed, conveyance or instrument in writing from the
Issuer be required by the separate or Co-Trustee so appointed by the Trustee
for more fully and certainly vesting in and confirming to him or it such
properties, rights, powers, trusts, duties and obligations, any and all such
deeds, conveyances and instruments in writing shall, on request, be executed,
acknowledged and delivered by the Issuer. In case any separate or Co-Trustee,
or a successor to either, shall die, become incapable of acting, resign or be
removed, all the estates, properties, rights, powers, trusts, duties
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and obligations of such separate or Co-Trustee, so far as permitted by law,
shall vest in and be exercisable by the Trustee until the appointment of a new
Trustee or successor to such separate or Co-Trustee.
ARTICLE XI.
ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP OF BONDS
Section 11.01. ACTS OF BONDHOLDERS; EVIDENCE OF OWNERSHIP. Any
action to be taken by Bondholders may be evidenced by one or more concurrent
written instruments of similar tenor signed or executed by such Bondholders in
person or by agent appointed in writing. The fact and date of the execution
by any person of any such instrument may be proved by acknowledgment before a
notary public or other officer empowered to take acknowledgments of deeds or
by an affidavit of a witness to such execution. Where such execution is by an
officer of a corporation or a member of a partnership, on behalf of such
corporation or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient. The ownership of Bonds shall be proved by the Bond
Register. Any action by the owner of any Bond shall bind all future owners of
the same Bond in respect of anything done or suffered by the Issuer or the
Trustee in pursuance thereof.
ARTICLE XII.
AMENDMENTS AND SUPPLEMENTS
Section 12.01. AMENDMENTS AND SUPPLEMENTS WITHOUT BONDHOLDERS'
CONSENT. This Indenture may be amended or supplemented at any time and from
time to time, without notice to or the consent of the Bondholders by a
supplemental indenture authorized by a certified Bond Ordinance filed with the
Trustee, and consented to by the Company, for one or more of the following
purposes:
A. set forth any or all of the matters in connection with
the issuance of additional Bonds required by Section 3.02 hereof;
B. to add additional covenants of the Issuer or to
surrender any right or power herein conferred upon the Issuer;
C. to cure any ambiguity or to cure, correct or
supplement any defective provision of this Indenture in such manner as
shall not be inconsistent with this Indenture and shall not impair the
security hereof or materially adversely affect the Bondholders;
D. to issue the Bonds of any series in coupon form or in
form acceptable to any securities depository, subject in each case to
the receipt by the Trustee of an opinion of nationally recognized bond
counsel to the effect that any such changes will not adversely affect
the exemption of interest on the Bonds from federal income tax; and
E. to provide additional security for the Bonds.
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Section 12.02. AMENDMENTS WITH BONDHOLDERS' CONSENT. This
Indenture may be amended from time to time with the prior written consent of
the Company, except with respect to (1) the principal, premium, if any, or
interest payable upon any Bond, (2) the dates of maturity or redemption
provisions of any Bonds, and (3) this Article XII, by a supplemental indenture
approved by the owners of at least a majority in principal amount of the Bonds
then Outstanding; provided, that no amendment shall be made which adversely
affects one or more but less than all the Outstanding Bonds without the
consent of the owners of at least a majority in principal amount of the
Outstanding Bonds so affected. This Indenture may be amended with respect to
the matters enumerated in clauses (1) to (3) of the preceding sentence only
with the unanimous consent of all owners of Bonds then Outstanding and the
Company.
Section 12.03. AMENDMENT OF AGREEMENT. If the Issuer or the
Company proposes to amend the Agreement or the Notes, the Trustee may consent
thereto; provided, that if such proposal would amend the Agreement or the
Notes in such a way as would materially adversely affect the interests of the
Bondholders, the Trustee shall notify Bondholders of the proposed amendment
and by consent thereto with the consent of the owners of at least a majority
in principal amount of the Bonds then Outstanding; provided, that no amendment
shall be consented to by the Trustee which would (1) decrease the amounts
payable under the Agreement or the Notes, (2) change the date of payment or
prepayment provisions under the Agreement or the Notes, or (3) change any
provisions with respect to amendment; and further provided, that no amendment
shall be consented to which so affects the rights of some but less than all
the Outstanding Bonds of any one series without the consent of the owners of
at least a majority in principal amount of the Outstanding Bonds so affected.
Section 12.04. TRUSTEE AUTHORIZED TO JOIN IN AMENDMENTS AND
SUPPLEMENTS; RELIANCE ON COUNSEL. The Trustee is authorized to join with the
Issuer in the execution and delivery of any supplemental indenture or
amendment permitted by this Article XII and in so doing shall be fully
protected by an opinion of Counsel that such supplemental indenture or
amendment is so permitted and has been duly authorized by the Issuer and that
all things necessary to make it a valid and binding agreement have been done.
ARTICLE XIII.
DEFEASANCE
Section 13.01. DEFEASANCE. When the principal of, premium, if
any, and interest on, all Bonds issued hereunder, and all other amounts due
under this Indenture or the Agreement have been paid, or provision has been
made for payment of the same, together with all other sums payable hereunder
by the Issuer, the Trustee's right, title and interest in the Agreement and
the Notes and the moneys payable thereunder shall thereupon cease and the
Trustee, on demand of the Issuer, shall release this Indenture in respect
thereto and shall execute such documents to evidence such release as may be
reasonably required by the Issuer and shall turn over to the Company or its
assigns all balances then held by it hereunder not required for the payment of
the Bonds and such other sums. If such payment or provision therefor has been
made with respect to all the Bonds of any one series, the interest of the
Trustee in the Agreement and the related Notes shall cease in respect of such
series, and the Trustee shall take similar action for the release of this
Indenture. Such defeasance will release the Company of any obligations it may
have under the Agreement with respect to any special mandatory redemption of
the Series 1994 Bonds pursuant to Section 7.01 hereof.
Without limiting the generality of the foregoing, provision for
the payment of Bonds shall be deemed to have been made (a) upon the delivery
to the Trustee of (i) cash in an amount sufficient to make all payments
specified
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above, or (ii) non-callable direct obligations of the United States
of America, maturing on or before the date or dates when the payments
specified above shall become due, the principal amount of which and the
interest thereon, when due, is or will be, in the aggregate, sufficient
without reinvestment to make all such payments, or (iii) any combination of
cash and such obligations; and (b) when any Bonds to be redeemed prior to
maturity shall have been duly called for redemption or irrevocable
instructions to call such Bonds for redemption shall have been given to the
Trustee. The Trustee shall also receive evidence satisfactory to it that the
cash and government obligations delivered will be sufficient to provide for
the payment of the Bonds as aforesaid. Neither the obligations nor moneys
deposited with the Trustee pursuant to this Section shall be withdrawn or used
for any purpose other than, and shall be segregated and held in trust for, the
payment of the principal, and premium, if any, and interest, on the Bonds. In
the event that such moneys or obligations are to be applied to the payment of
principal, premium, if any, or interest on any Bonds more than 60 days
following the deposit thereof with the Trustee, the Trustee shall promptly
cause a notice stating that such moneys or obligations have been deposited and
identifying the Bonds for the payments of which such moneys or obligations are
being held to be given by first-class mail, postage prepaid, mailed to all
registered owners of such Bonds. In addition, the Trustee shall send a copy
of such notice by registered or certified mail or overnight delivery service,
return receipt requested, postage prepaid, to each registered securities
depository and nationally recognized information service that disseminates
information with respect to defeasance of bonds, sent at least two business
days in advance of the mailing of notice to Bondholders.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
Section 14.01. NO PERSONAL RECOURSE. No recourse shall be had
for any claim based on the Indenture or the Bonds, including but not limited
to the payment of the principal of, or premium, if any, or interest on, the
Bonds, against any director, officer, agent or employee, past, present or
future, of the Issuer or of any successor body, as such, either directly or
through the Issuer or any such successor body, under any constitutional
provision, statute or rule of law or by the enforcement of any assessment or
penalty or by any legal or equitable proceeding or otherwise.
Section 14.02. DEPOSIT OF FUNDS FOR PAYMENT OF BONDS. If there
are on deposit with the Trustee funds (including proceeds of government
obligations as provided in Section 13.01) sufficient to pay the principal of
any Bonds becoming due, either at maturity or by call for redemption or
otherwise, together with the premium, if any, and all interest accruing
thereon to the due date, all interest on such Bonds shall cease to accrue on
the due date and all liability of the Issuer with respect to such Bonds shall
likewise cease, except as hereinafter provided. Thereafter the owners of such
Bonds shall be restricted exclusively to the funds so deposited for any claim
of whatsoever nature with respect to such Bonds and the Trustee shall hold
such funds in trust for such owners. In accordance with Section 5.4 of the
Agreement except to the extent payment is provided from the Construction Fund,
the Company will pay the Issuer's expenses.
Moneys (including proceeds of government obligations as provided
in Section 13.01) so deposited with the Trustee which remain unclaimed five
years after the date payment thereof becomes due shall, if the Issuer is not
at the time, to the knowledge of the Trustee, in default with respect to any
covenant in the Indenture or the Bonds, be paid to the Company upon receipt by
the Trustee of indemnity satisfactory to it, and the owners of the Bonds for
which the deposit was made shall thereafter be limited to a claim against the
Company; provided, however, that the Trustee, before making payment to the
Company, may cause a notice to be published once in an Authorized Newspaper,
stating that the moneys remaining unclaimed will be returned to the Company
after a specified date.
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Section 14.03. NO RIGHTS CONFERRED ON OTHERS. Nothing herein
contained shall confer any right upon any person other than the parties
hereto, the owners of the Bonds and the Company.
Section 14.04. ILLEGAL, ETC. PROVISIONS DISREGARDED. In case any
provision in this Indenture or the Bonds shall for any reason be held invalid,
illegal or unenforceable in any respect, this Indenture shall be construed as
if such provision had never been contained herein.
Section 14.05. SUBSTITUTE NOTICE. If for any reason it shall be
impossible to make publication of any notice required hereby in an Authorized
Newspaper, then such publication in lieu thereof as shall be made with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
Section 14.06. NOTICES TO TRUSTEE AND ISSUER. Any notice to or
demand upon the Trustee may be served, presented or made at its principal
corporate trust office at 101 South Capitol Boulevard, Boise, Idaho 83702,
Attention: Corporate Trust Department. Any notice to or demand upon the
Issuer shall be deemed to have been sufficiently given or served by the
Trustee for all purposes by being sent by registered United States mail to
County of Perry, Kentucky, Courthouse, 481 Main Street, Hazard, Kentucky
41701, Attn: County Judge/Executive, or such other address as may be filed in
writing by the Issuer with the Trustee. A copy of any notice to or demand
upon either the Issuer or the Trustee shall also be mailed to the Company and
the Guarantor at the address provided in Section 7.1 of the Agreement.
Section 14.07. SUCCESSORS AND ASSIGNS. All the covenants,
promises and agreements in this Indenture contained by or on behalf of the
Issuer, or by or on behalf of the Trustee, shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed or not.
Section 14.08. HEADINGS FOR CONVENIENCE ONLY. The description
headings in this Indenture are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 14.09. COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original; but such counterparts shall together constitute but one and
the same instrument.
Section 14.10. CREDITS ON NOTES. In addition to any credit,
payment or satisfaction expressly provided for under the provisions of this
Indenture in respect of the Notes, the Trustee shall make credits against
amounts otherwise payable in respect of the related Notes in an amount
corresponding to (a) the principal amount of any Bond surrendered to the
Trustee by the Company or the Issuer, or purchased by the Trustee, for
cancellation and (b) the amount of money held by the Trustee and available and
designated for the payment of principal of, premium, if any, and/or interest
on, the Bonds, regardless of the source of payment to the Trustee of such
moneys. The Trustee shall promptly notify the Company when such credits
arise.
Section 14.11. PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS.
In any case where the date of maturity of interest on or principal of the
Bonds or the date fixed for redemption of any Bonds or the date fixed for the
giving of any notice hereunder shall be a Saturday or Sunday or a legal
holiday or a day on which banking institutions in the city of payment are
authorized by law to close, then payment of interest, premium, if any, or
principal or the giving of notice need not be made on such date but may be
made on the next succeeding business day with the same force and
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effect as if made on the date of maturity or the date fixed for redemption or
the giving of notice, and no interest on such payment shall accrue for the
period after such date.
Section 14.12. APPLICABLE LAW. This Indenture shall be governed
by and construed in accordance with the laws of the Commonwealth.
Section 14.13. LIMITED LIABILITY OF ISSUER. Anything in this
Indenture to the contrary notwithstanding, the performance by the Issuer of
all duties and obligations imposed upon it hereby, the exercise by it of all
powers granted to it hereunder, the carrying out of all covenants, agreements,
and promises made by it hereunder, and the liability of the Issuer for all
warranties and other covenants hereunder, shall be limited solely to the
revenues and receipts derived from the Agreement and the Notes, and the Issuer
shall not be required to effectuate any of its duties, obligations, powers or
covenants hereunder except to the extent of such revenues and receipts.
IN WITNESS WHEREOF, intending to be legally bound, the COUNTY OF
PERRY, KENTUCKY has caused this Indenture to be executed by its County
Judge/Executive and its Fiscal Court Clerk; WEST ONE BANK, IDAHO, as Trustee,
has caused this Indenture to be executed by its duly authorized officers, all
as of the day and year first above written.
COUNTY OF PERRY, KENTUCKY
Attest: /s/ Betty Turner By: /s/ Sherman Neace
---------------- -----------------
Fiscal Court Clerk County Judge/Executive
WEST ONE BANK, IDAHO, Trustee
Attest: /s/ William H. Way By: /s/ Carol E. Smith
------------------- ------------------
Authorized Officer Authorized Officer
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EXHIBIT A
Letter of Representations
TO BE COMPLETED BY ISSUER AND AGENT, IF ANY
County of Perry, Kentucky
--------------------------
Name of Issuer
West One Bank, Idaho
-----------------------
Name of Agent, if any
_________
(Date)
The Depository Trust Company
55 Water Street
New York, NY 10041
Attention: General Counsel's Office
Re: $43,500,000 Solid Waste Disposal
Revenue Bonds (TJ International
Project), Series 1994
-------------------------------
Gentlemen:
The purpose of this letter is to set out certain matters relating
to the above-referenced Bonds (the "Bonds"). West One Bank, Idaho (the
"Agent") is acting as Trustee, Paying Agent, Fiscal Agent, or other Agent of
the Issuer with respect to the Bonds. The Bonds will be issued pursuant to a
Trust Indenture, Bond Ordinance, or other such document authorizing the
issuance of the Bonds dated as of May 17, 1994 (the "Document(s)"). Goldman,
Sachs & Co., Inc. (the "Underwriter") is distributing the Bonds through The
Depository Trust Company ("DTC").
To induce DTC to accept the Bonds as eligible for deposit at DTC
and act in accordance with its Rules with respect to the Bonds, the Issuer and
the Agent, if any, make the following representations to DTC:
<PAGE>
1. Subsequent to Closing on the Bonds on __________, 1994,
there shall be deposited with DTC one Bond certificate in registered form
registered in the name of DTC's nominee, Cede & Co., for each stated maturity
of the Bonds in the face amounts set forth on Schedule A hereto, the total of
which represents 100% of the principal amount of such Bonds. If, however, the
aggregate principal amount of any maturity exceeds $150,000,000, one
certificate will be issued with respect to each $150,000,000 of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each $150,000,000 Bond certificate shall bear the
following legend:
2. "Unless this certificate is presented by an authorized
representative of The Depository Trust Company to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein."
3. In the event of any solicitation of consents from and voting
by holders of the Bonds, the Issuer or Agent, shall publish a record date for
such purposes and give DTC notice of such record date not less than 15
calendar days in advance of such record date to the extent possible.
4. In the event of a redemption or any other similar
transaction resulting in retirement of all Bonds outstanding or a redemption
in aggregate principal amount of Bonds outstanding ("full or partial
redemption") or an advance refunding of all or part of the Bonds outstanding,
the Issuer or Agent, shall give DTC notice of such event not less than 30
days' nor more than 60 days prior to the redemption date or, in the case of an
advance refunding, the date the proceeds are deposited in escrow.
5. In the event of a partial redemption or an advance refunding
of part of the Bonds outstanding, the Issuer or Agent shall send DTC a notice
specifying: 1) the amount of the redemption or refunding; 2) in the case of a
refunding, the maturity date(s) established under the refunding; and 3) the
date such notice is to be mailed to Bondholders or published (the "Publication
Date"). Such notice shall be sent to DTC by a secure means (e.g., legible
facsimile transmission, registered or certified mail, overnight express
delivery) in a timely manner designed to assure that such notice is in DTC's
possession no later than the close of business on the business day before the
Publication Date. The Issuer or Agent will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
for multiple CUSIP numbers which includes a manifest or list of each CUSIP
submitted in that transmission. (The Issuer or Agent sending such notice
shall have a method to verify subsequently the use of such means and
timeliness of the notice.) The Publication Date shall be not less than 30
days nor more than 60 days prior to the Redemption Date or, in the case of an
advance refunding, the date the proceeds are deposited in escrow.
6. In the event of an invitation to tender the Bonds, notice to
Bondholders by the Issuer or Agent, specifying the terms of the tender and the
date such notice is to be mailed to Bondholders or published ("the Publication
Date") shall present to DTC by a secure means (e.g., legible facsimile
transmission, registered or certified mail, overnight express delivery) in a
timely manner designed to assure that such notice is in DTC's possession no
later than the close of business on the business day before the Publication
Date. (The Issuer or Agent sending such notice shall have a method to verify
subsequently the use of such means and timeliness of the notice.)
All notices and payment advices sent to DTC shall contain the
CUSIP number of the Bonds.
<PAGE>
Notices to DTC by facsimile transmission shall be sent to DTC's
Case Notification Department at (516) 227-4164 or (516) 226-4190. The Agent
shall confirm DTC's receipt of such facsimile transmission by telephoning the
Call Notification Department at (516) 227-4070. Notices to DTC by mail or any
other means shall be sent to:
The Depository Trust Company
Call Notification Department
Muni Reorganization Manager
711 Stewart Avenue
Garden City, NY 11530
8. Interest payments shall be received by Cede & Co., as
nominee of DTC, or its registered assigns in next-day funds on each payment
date (or the equivalent in accordance with existing arrangements between the
Issuer or Agent and DTC). Such payments shall be made payable to the order of
Cede & Co.
9. Payments of principal shall be received by Cede & Co., as
nominee of DTC, or its registered assigns in next-day funds on each payment
date. Principal payments shall be made payable to the order of Cede & Co.,
and shall be addressed as follows:
The Depository Trust Company
Muni Redemption Department
55 Water Street 50th Floor
New York, NY 10041
Attention: Collection Supervisor
10. DTC may direct the Issuer or Agent to use any other
telephone number for facsimile transmission, address, or department of DTC as
the number, address or department to which payments of interest or principal
or notices may be sent.
11. In the event of a redemption, acceleration or any other
similar transaction (e.g., tenders made and accepted in response to the
Issuer's or Agent's invitation) necessitating a reduction in aggregate
principal amount of Bonds outstanding or an advance refunding of part of the
Bonds outstanding, DTC, in its discretion, (a) may request the Issuer or agent
to issue and authenticate a new Bond certificate or (b) shall make an
appropriate notation on the Bond certificate indicating the date and amounts
of such reduction in principal, except in the case of final maturity, in which
case the certificate must be presented to the Issuer or Agent prior to
payment.
12. In the event the Issuer determines pursuant to the
Document(s) that beneficial owners of the Bonds shall be able to obtain
certificated Bonds, the Issuer or Agent shall notify DTC of the availability
of Bond certificates and shall issue, transfer and exchange Bond certificates
in appropriate amounts as required by DTC and others.
13. DTC may determine to discontinue providing its service as
securities depository with respect to the Bonds at any time by giving
reasonable notice to the Issuer or Agent (at which time DTC will confirm with
the Issuer or Agent the aggregate principal amount of the Bonds outstanding)
and discharging its responsibilities with respect thereto under applicable
law. Under such circumstances, whenever DTC requests the Issuer and the Agent
to do so, the Agent and the Issuer will cooperate with DTC in taking
appropriate action to make available one or more separate certificates
evidencing the Bonds to any DTC Participant having Bonds credited to its DTC
account.
<PAGE>
14. Nothing herein shall be deemed to require the Agent to
advance funds on behalf of the Issuer.
Notes:
a. If there is no organization Very truly yours,
acting as Agent for the Issuer,
and all obligations in this _______________________________
Letter of Representations are to (as Agent)
be assumed solely by the Issuer,
references to such Agent may _______________________________
be inked out. (Authorized Officer's Signature)
b. Neither DTC nor (Cede & Co.)
provides consents with respect ________________________________
to any security. Under its usual (Title)
procedures, DTC mails an Omnibus
Proxy to the Issuer as soon as
possible after the record date. ________________________________
The Omnibus Proxy assigns Cede & (as Issuer)
Co.'s voting rights to those
Participants having the security
credited to their accounts on ________________________________
the record date (identified in (Authorized Officers Signature)
a listing attached to the Omnibus
Proxy). The requirement to
advise DTC of the record date
for the solicitation of consents ________________________________
is set forth in paragraph 2 of (Title)
the letter.
c. Under Rules of the Municipal
Securities Rulemaking Board relating
to "good Delivery", a municipal
securities dealer must be able to
determine the date that a notice of
partial call or of an advance
refunding of part of an issue is
published (the "Publication Date").
The establishment of such a Publication
Date is addressed in paragraph 4 of
the letter.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
<PAGE>
By:______________________________________
(Authorized Officer's signature)
cc:Underwriter
Underwriter's Counsel
<PAGE>
SCHEDULE A
(Describe Issue)
PRINCIPAL AMOUNT MATURITY DATE INTEREST RATE
- - ---------------- ------------- -------------
<PAGE>
GUARANTY
GUARANTY made as of June 1, 1994 by Trus Joist MacMillan a Limited
Partnership, a Delaware limited partnership (the "Guarantor"), delivered to
West One Bank, Idaho (the "Trustee"), as Trustee under the Trust Indenture
dated as of June 1, 1994 (the "Indenture") between the Trustee and the County
of Perry, Kentucky (the "Issuer").
BACKGROUND
The Issuer proposes to issue its Solid Waste Disposal Revenue
Bonds (TJ International Project) Series 1994 in an aggregate principal amount
of $43,500,000 (the "Bonds") under the Indenture. The proceeds of the Bonds
will be used to finance the cost of a project (the "Project") consisting of
solid waste disposal components of a production facility for the manufacturer
of engineered lumber for the construction of wood joists and related products,
pursuant to a loan agreement dated as of June 1, 1994 (the "Agreement")
between the Issuer and TJ International, Inc., the managing general partner of
the Guarantor. The Project will be operated by the Guarantor as beneficial
owner. The sale of the Bonds will finance the Project contemplated by the
Agreement, and the Guarantor is willing to enter into this Guaranty in order
to enhance the marketability of the Bonds and thereby achieve interest cost
and other savings to the Guarantor and as an inducement to the purchase of the
Bonds by all who may at any time become holders thereof.
GUARANTY
SECTION 1.01. In consideration of the foregoing and in order to
enhance the marketability of the Bonds and thereby achieve interest cost and
other savings to the Guarantor and as an inducement to the purchase of the
Bonds by all who may at any time become holders thereof, Guarantor hereby
<PAGE>
unconditionally guarantees (a) the full and prompt payment of the principal or
applicable redemption price of the Bonds when and as the same shall become
due, whether at the stated maturity thereof, by acceleration, call for
redemption or otherwise, and (b) the full and prompt payment of any interest
on any Bonds when and as the same shall become due. All payments by Guarantor
shall be paid in lawful money of the United States of America. Each and every
default in payment of the principal or applicable redemption price of, or
interest on, any Bond shall give rise to a separate cause of action hereunder,
and separate suits may be brought hereunder as each cause of action arises,
subject, however, to the limitation that a holder of Bonds shall have the
right to pursue any remedy hereunder only to the extent such holder then has
the right to pursue an individual remedy under the provisions of the
Indenture. Guarantor agrees further to pay in each case all expenses and
charges (including court costs and reasonable attorneys' fees) paid or
incurred by the Trustee in realizing upon any of the payments hereby
guaranteed or in enforcing this Guaranty; and in each and every case
irrespective of the Bonds or the Indenture or any of the terms thereof.
SECTION 1.02. The obligations of Guarantor under this Guaranty
shall be binding upon the Guarantor and its successors and assigns, shall be
absolute and unconditional and shall remain in full force and effect until the
entire principal or applicable redemption price of, and interest on, the Bonds
shall have been paid or provided for, and such obligations shall not be
affected, modified or impaired upon the happening from time to time of any
event, including without limitation any of the following:
(a) the compromise, settlement, release or termination of
any or all of the obligations, covenants or agreements of the Issuer
under the Indenture;
(b) the assignment of all or any part of the interest of
the Issuer in the Project or any failure of title with respect to the
Company's or Guarantor's interest in the Project;
<PAGE>
(c) the waiver of the payment, performance or observance
by the Issuer or Guarantor of any of the obligations, covenants or
agreements or either of them contained in the Indenture or this
Guaranty;
(d) the extension of the time for payment of any principal
or applicable redemption price of, or interest on, any Bond under this
Guaranty or of the time for performance of any other obligations,
covenants or agreements under or arising out of the Indenture or this
Guaranty or the extension or the renewal of either thereof;
(e) the modification or amendment (whether material or
otherwise) or any obligation, covenant or agreement set forth in the
Indenture;
(f) the taking or the omission of any of the actions
referred to in the Indenture and any actions under this Guaranty;
(g) any failure, omission, delay or lack on the part of
the Issuer or the Trustee to enforce, assert or exercise any right,
power or remedy conferred on the Issuer or the Trustee to enforce,
assert or exercise any right, power or remedy conferred on the Issuer or
the Trustee in this Guaranty or the Indenture, or any other acts or acts
on the part of the Issuer, the Trustee or any of the holders from time
to time of the Bonds;
(h) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other
similar proceedings affecting, the Company or Guarantor or the Issuer or
any of the assets of any of them, or any allegation or contest of the
validity of this Guaranty in any such proceeding;
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(i) to the extent permitted by law, the release or
discharge of Guarantor from the performance or observance of any
obligation, covenants or agreement contained in this Guaranty by
operation of law; or
(j) the default or failure of Guarantor fully to perform
any of its obligations set forth in this Guaranty.
SECTION 1.03. No set-off, counterclaim, reduction or diminution
of an obligation, or any defense of any kind or nature which Guarantor has or
may come to have against the Issuer, the Trustee or any Bondholder (as defined
in the Indenture) shall be available hereunder to Guarantor; provided that
nothing contained herein shall prohibit Guarantor from asserting any claim
against either the Issuer, the Trustee or any Bondholder in a separate
proceeding, which proceeding shall in no way delay the prompt performance by
Guarantor of its obligations hereunder.
SECTION 1.04. In the event of a default (a) in the payment of
principal or applicable redemption price of any Bond when and as the same
shall become due, whether at the stated maturity thereof, by acceleration,
call for redemption or otherwise, or (b) in the payment of any interest on any
Bond when and as the same shall become due, and regardless of the reason for
any such default, Guarantor shall, on demand by the Trustee, pay the full
amount in default to the Trustee for the benefit of the Bondholders. The
Trustee, in its sole discretion, shall have the right to proceed first and
directly against Guarantor under this Guaranty without proceeding against or
exhausting any other remedies which it may have and without resorting to any
other security held by the Issuer or the Trustee. The Guarantor agrees to pay
all costs, expenses and fees, including all reasonable attorneys' fees, which
may be incurred by the Trustee in enforcing this Guaranty following any
default on the part of Guarantor hereunder, whether the same shall be enforced
by suit or otherwise.
SECTION 1.05. This Guaranty is given by Guarantor for the benefit
of the Trustee and the holders from time to time of the Bonds. The
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<PAGE>
Trustee shall be entitled to enforce performance and observance of this
Guaranty for and on behalf of such holders, in accordance with the
provisions of Article IX of the Indenture.
SECTION 1.06. Anything contained in this Guaranty to the contrary
notwithstanding, except as provided herein with respect to expenses incurred
in connection with the enforcement hereof, the obligations of the Guarantor
hereunder shall be satisfied in full and discharged upon the payment by the
Guarantor to the Trustee of any amount equal to the aggregate principal of,
premium, if any, and interest on the Bonds less all amounts theretofore
deposited with the Trustee, whether under the Indenture or otherwise, for the
payment thereof.
SECTION 1.07. Anything contained in this Guaranty to the contrary
notwithstanding, except as provided herein, the obligations of the Guarantor
under this Guaranty are solely that of the Guarantor and neither the
Guarantor's general partner nor its limited partner shall have any obligation
for the payment of any sums due under this Guaranty and there shall be no
recourse against the partners of the Guarantor individually, or any assets of
such partners which are not assets of the Guarantor.
MISCELLANEOUS
SECTION 2.01. Guarantor hereby represents that it is a limited
partnership duly organized and existing in good standing under the laws of the
State of Delaware, duly qualified to conduct business in the Commonwealth of
Kentucky, with full power to execute, deliver and perform its obligations
under this Guaranty; that Guarantor has duly authorized this Guaranty and no
approval or other action by any governmental authority is required in
connection therewith; and that neither the making nor the performance of this
Guaranty will conflict with or violate the Guarantor's Limited Partnership
Agreement or any indenture, agreement or other
5
<PAGE>
instrument to which the Guarantor is a party or by which it or any of
its properties may be found.
SECTION 2.02. Guarantor hereby represents that it has the power
and authority (partnership and other) to own its properties and conduct its
business, and has been duly qualified as a foreign limited partnership for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business,
so as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; Guarantor owns no capital stock or other equity interest in any
corporation, association, trust or other equity.
SECTION 2.03. Guarantor hereby represents that it has good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by it, in each case free and clear of all
liens, encumbrances and defects such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed
to be made of such property by the Guarantor and any real property and
buildings held under lease by the Guarantor are held under valid, subsisting
and enforceable leases with such exceptions as would not have a material
adverse effect on the financial position, partnership capital or results of
operations of the Guarantor and do not interfere with the use made and
proposed to be made of such property and buildings by the Guarantor in a
manner that would have a material adverse effect on the financial position,
partnership capital or results of operations of the Guarantor.
SECTION 2.04. The Guarantor hereby represents that there are no
legal or governmental proceedings pending to which the Guarantor is a party or
of which any of its property is the subject which, if determined adversely to
the Guarantor would, taken as a whole, have a material adverse effect on the
financial position, partnership capital or results of operations of the
Guarantor; and, to the best of the Guarantor's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.
6
<PAGE>
SECTION 2.05. The Guarantor has duly authorized the execution and
delivery of this Guaranty and the undertaking of its obligations hereunder,
and this Guaranty when executed and delivered, will constitute, a valid,
binding and enforceable obligation of the Guarantor, except to the extent that
enforceability may be limited by bankruptcy, insolvency, moratorium or
reorganization laws or equitable principles.
SECTION 2.06. The execution and delivery of and performance by
the Guarantor of its obligations under this Guaranty will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing agreement
or instrument or other material agreement or instrument to which the Guarantor
is a party or by which the Guarantor is bound or to which any of its property
or assets of the Guarantor is subject, nor will such action result in any
violation of the provisions of its Limited Partnership Agreement or any
statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Guarantor or any of its properties.
SECTION 2.07. The representations of TJ International, Inc.
contained within Section 1.2 (c) and Section 1.4 (a) through (g) of the
Agreement are hereby incorporated by reference into this Guaranty as if such
representations were originally made by the Guarantor. For these purposes,
the Guarantor represents that the representations referenced above are also
the representations of the Guarantor.
SECTION 2.08. So long as any Bonds are outstanding as determined
under the Indenture, the Guarantor, at its expense, will maintain and operate
the Project during its useful life or until it is replaced with facilities of
at least equal effectiveness in disposing of solid waste, or as otherwise
required to meet the public purposes of the Act (as defined in the Indenture)
and the provisions of the Code (as defined in the Indenture), but this
covenant shall not require the Guarantor to occupy or operate the Project or
any portion of any other property after it is no longer economical and
7
<PAGE>
feasible, in the Guarantor's judgment, to do so and shall not prevent the
Guarantor from selling all or any portion of any property or from merging or
consolidating with another Person subject to the maintenance of the corporate
existence of the Guarantor in accordance with the covenant contained in
Section 2.09 hereof. This covenant is personal to the Guarantor and its
successors or subsidiaries and will not be binding upon purchasers of any
portions of the Guarantor's properties. Notwithstanding the foregoing, the
Guarantor may make changes in or modifications of the Project necessary or
desirable to maintain or improve operating performance, subject to the
limitations set forth in Sections 2.2, 2.6 and 3.5 of the Agreement.
SECTION 2.09. So long as the Bonds are outstanding as determined
under the Indenture, the Guarantor will maintain its existence as a
partnership and its qualification to do business in the Commonwealth of
Kentucky, except that it may transfer all or substantially all of its assets
to another Person (as hereinafter defined) and thereafter dissolve or may
consolidate with or merge into another Person or permit one or more Persons to
consolidate or merge into it, if the surviving, resulting or transferee
Person, if other than the Guarantor, assumes in writing all of the obligations
of the Guarantor hereunder and is organized under the laws of a State of the
United States of America and is duly qualified to do business in the
Commonwealth of Kentucky and has a net worth of at least 90% of that of the
Guarantor prior to the transfer or merger; provided that immediately
thereafter the Guarantor or its successor will not be in default under this
Guaranty.
SECTION 2.10. So long as any Bonds are outstanding as determined
under the Indenture, the Guarantor will have its financial statements audited
annually by independent public accountants and to the extent such financial
statements are not separately presented with the financial statements of TJ
International, Inc., shall furnish to the Trustee a copy of such audited
financial statements within 90 days after the end of each fiscal year of the
Guarantor. The Trustee may distribute such financial statements to the
holders of the Bonds upon request and the Guarantor shall furnish to the
Trustee sufficient copies of such statements to enable the Trustee to make
8
<PAGE>
distribution to the holders of the Bonds. Such financial statements shall be
prepared in accordance with generally accepted accounting principles.
In addition, the Guarantor will file, in a sufficient
amount, its unaudited quarterly income statement and balance sheet with the
Trustee which the Trustee may also distribute to the holders of the Bonds upon
request.
SECTION 2.11. The Guarantor will not, and will not permit any
Subsidiary (as hereinafter defined) to, issue, assume or guarantee any Debt
(as hereinafter defined) if such Debt is secured by a Lien (as hereinafter
defined) upon any Principal Property (as hereinafter defined) or on any shares
of stock or indebtedness of any Restricted Subsidiary (as hereinafter defined)
(whether such Principal Property, shares of stock or indebtedness is now owned
or hereafter acquired) without in any case effectively providing that, or
causing such Restricted Subsidiary to make effective provision so that, the
obligations of the Guarantor under this Guaranty (together with, if the
Guarantor shall so determine, any other indebtedness of or guaranteed by the
Guarantor or such Restricted Subsidiary that is not subordinate to this
Guaranty then existing or thereafter created) shall be secured equally and
ratably with such Debt, except that the foregoing restrictions shall not apply
to (i) Liens on property, shares of stock or indebtedness of or guaranteed by
any corporation existing at the time such corporation becomes a Restricted
Subsidiary; (ii) Liens on property existing at the time of acquisition
thereof, or to secure the payment of all or any part of the purchase price of
such property, or to secure Debt incurred or guaranteed for the purpose of
financing all or any part of the purchase price of such property or
improvements, substantial repairing or construction (including any
improvements on any existing property) thereon provided, however, that the
commitment of the creditor to extend the credit secured by any such Lien shall
have been obtained not later than 120 days after the later of (a) the
completion of the acquisition, substantial repair, improvement or construction
of such property or (b) the placing in operation of such property or of such
property as so substantially repaired, improved or constructed; provided,
further, that (a) the principal amount of any Debt secured by such Lien does
9
<PAGE>
not exceed 100% of the cost of such acquisition, substantial repair,
improvement or construction and (b) such Lien does not extend to or cover any
other property other than such item of property and any improvements on such
item; (iii) Liens securing Debt owing by any Restricted Subsidiary to the
Guarantor or another Restricted Subsidiary; (iv) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Guarantor or a Restricted Subsidiary or at the time of a purchase, lease or
other acquisition of the properties of a Person as an entirety or
substantially as an entirety by the Guarantor or a Restricted Subsidiary; (v)
Liens on property of the Guarantor or a Restricted Subsidiary in favor of the
United States of America or any State thereof, or any department, agency,
instrumentality or political subdivision thereof, or in favor of any other
country, or any political subdivision thereof, to secure any payments pursuant
to any contract or statute or to secure any indebtedness incurred or
guaranteed for the purpose of financing all or any part of the purchase price
or the cost of construction of the property subject to such Liens (including,
but not limited to, Liens incurred in connection with private activity bond or
industrial revenue bond or similar financings); (vi) Liens existing on the
date of issuance of the Bonds; and (vii) Liens to secure Debt incurred to
extend, renew, refinance or refund (or successive extension, renewals,
refinancings or refundings), in whole or in part, Debt secured by any Lien
referred to in the foregoing clauses (i) to (vi) inclusive so long as such
Liens do not extend to any other property and the principal amount of the Debt
so secured is not increased. Notwithstanding the above, the Guarantor and one
or more Subsidiaries may issue, assume or guarantee secured Debt which would
otherwise be subject to the foregoing restrictions, provided that after giving
effect thereto the aggregate amount of such Debt then outstanding (not
including secured Debt permitted under the foregoing exceptions) at such time
does not exceed 10% of the Consolidated Net Tangible Assets (as hereinafter
defined) of the Guarantor and its consolidated Subsidiaries as of the end of
the latest fiscal year.
SECTION 2.12. Neither the Guarantor nor any Restricted Subsidiary
may enter into any sale and leaseback transaction (the term of which exceeds
three years) with any lender or investor (not including the
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<PAGE>
Guarantor or any Restricted Subsidiary) involving any real property constituting
all or part of any Principal Property, unless either (i) Debt secured by a
Lien on the Principal Property or part thereof to be leased in an amount equal
to the Attributable Debt (as hereinafter defined) with respect to such sale and
leaseback transaction could be created under the limitation on secured liens
referred to in Section 2.11 hereof without equally and ratably securing the
obligations of the Guarantor under this Guaranty as contemplated by that
limitation or (ii) the Guarantor or such Restricted Subsidiary applies or
causes to be applied, in the case of a sale or transfer for cash, an amount
equal to the net proceeds thereof (but not in excess of the net book value of
such Principal Property at the date of such sale) and, in the case of a sale
otherwise than for cash, an amount equal to the fair value (as determined by
the general partner of the Guarantor and evidenced by a Board Resolution (as
hereinafter defined)) of the Principal Property so leased to the retirement,
within 120 days after the effective date of such sale and leaseback
transaction, of Debt of the Guarantor or a Restricted Subsidiary (other than
Debt that is subordinate in right of payment to this Guaranty or which is
owing to this Guarantor or a Restricted Subsidiary).
SECTION 2.13. The Guarantor shall at all times that the Bonds are
outstanding as determined under the Indenture maintain partners equity not
less than $180,000,000 determined in accordance with generally accepted
accounting principles.
"Attributable Debt" as to any particular lease under which any
Person is at the time liable other than a Capital Lease Obligation (as
hereinafter defined), and at any date as of which the amount thereof is to be
determined, means the total net amount of rent required to be paid by such
Person under such lease during the initial term thereof as determined in
accordance with generally accepted accounting principles, discounted from the
last date of such initial term to the date of determination at a rate per
annum equal to the discount rate which would be applicable to a Capital Lease
Obligation with like term in accordance with generally accepted accounting
principles. The net amount of rent required to be paid under any such lease
for any such period shall be the aggregate amount of rent payable
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by the lessee with respect to such period after excluding amounts required to be
paid on account of insurance, taxes, assessments, utility, operating and labor
costs and similar charges. In the case of any lease which is terminable by
the lessee upon the payment of a penalty, such net amount shall also include
the amount of such penalty, but no rent shall be considered as required to be
paid under such lease subsequent to the first date upon which it may be so
terminated. "Attributable Debt" means, as to a Capital Lease Obligation under
which any Person is at the time liable and at any date as of which the amount
thereof is to be determined, the capitalized amount thereof that would appear
as a liability on the face of a balance sheet of such Person as of such date
in accordance with generally accepted accounting principles.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the general partner of the Guarantor to
have been duly adopted by its board of directors and to be in full force and
effect on the date of such certification.
"Capital Lease Obligation" of any Person means the obligation to
pay rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability
on the face of a balance sheet of such Person in accordance with generally
accepted accounting principles.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock of such Person.
"Consolidated Net Income" is the consolidated net income of the
Guarantor and its subsidiaries for the period in question, determined in
accordance with generally accepted accounting principles.
"Consolidated Net Tangible Assets" is the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (i) all current liabilities and (ii) all goodwill, trade
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names, trademarks, patents, unamortized debt discount and expense and other
like intangibles of the Guarantor and its Consolidated Subsidiaries (as
hereinafter defined), all as set forth on the most recent balance sheet of the
Guarantor and its Consolidated Subsidiaries prepared in accordance with
generally accepted accounting principles.
"Consolidated Subsidiaries" of any Person means all other Persons
that would be accounted for as consolidated Persons in such Person's financial
statements in accordance with generally accepted accounting principles.
"Debt" is indebtedness for money borrowed.
"Lien" is any mortgage, pledge, lien or other encumbrance.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Principal Property" is any manufacturing plant or facility
located within the United States of America (other than its territories and
possessions) and owned by the Guarantor or any Subsidiary, unless, in the
opinion of the board of directors of the general partner of the Guarantor and
set forth in a Board Resolution, such plant or facility is not of material
importance to the business conducted by the Guarantor and its Subsidiaries
taken as a whole.
"Restricted Subsidiary" is a Subsidiary which owns or leases any
Principal Property.
"Subsidiary" is a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the Guarantor or by
one or more other Subsidiaries, or by the Guarantor and one or more other
Subsidiaries.
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"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
SECTION 2.14. No remedy herein conferred upon or reserved to
Trustee 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 the Guaranty or now or hereafter existing at
law or equity. No delay or omission to exercise any right or power accruing
upon any default, omission or failure or performance hereunder shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the Trustee to exercise any remedy
reserved to it in this Guaranty, it shall not be necessary to give any notice
to Guarantor prior to the demand for payment. In the event any provision
contained in this Guaranty should be breached by Guarantor and thereafter duly
waived by Trustee, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other branch hereunder. No
waiver, amendment, release or modification of this Guaranty shall be
established by conduct, custom or course of dealing.
SECTION 2.15. The Guarantor irrevocably (a) agrees that any suit,
action or other legal proceeding arising out of this Guaranty may be brought
in the courts of record of the Commonwealth of Kentucky or the courts of the
United States located in the Commonwealth of Kentucky; (b) consents to the
jurisdiction of each such court in any such suit, action or proceeding; and
(c) waives any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such courts. For such time as any of the
Bonds shall be unpaid in whole or in part, the Guarantor irrevocably
designates the CT Corporation, Inc., as its agent to accept and acknowledge in
its behalf service of any and all process solely in connection with any such
suit, action or proceeding brought in any such court and agrees and consents
that any such service or process upon such agent and written notice of such
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service to the Guarantor to the attention of its President by registered mail
shall be taken and held to be valid personal service upon the Guarantor
whether or not the Guarantor shall then be doing, or at any time shall have
done, business within the Commonwealth of Kentucky and that any such service
of process shall be of the same force and validity as if service were made
upon it according to the laws governing the validity and requirements of such
service in such state, and waives all claim of error by reason of any such
service.
SECTION 2.16. The invalidity or unenforceability of any one or
more provisions in this Guaranty shall not affect the validity or
enforceability of the remaining portions of this Guaranty, or any part
thereof.
SECTION 2.17. This Guaranty shall be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky.
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<PAGE>
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
executed and delivered to the Trustee for the benefit of Bondholders in its
name and behalf by its duly authorized general partner as of the date first
above written.
TRUS JOIST MACMILLAN
ATTEST: a LIMITED PARTNERSHIP
By: TJ INTERNATIONAL, INC.
By: /s/ Jody B. Olson Its General Partner
-----------------
/s/ Thomas H. Denig
-------------------
ACCEPTED this 29th day of
June, 1994 by West One Bank, TITLE: Senior Vice President,
Idaho, as Trustee Structural Operations
By: /s/ Carol E. Smith
-----------------------
Authorized Officer
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