LOAN AGREEMENT
Dated as of May 1, 1998
Between
MISSISSIPPI BUSINESS FINANCE CORPORATION
("Issuer")
and
DOLLAR TREE DISTRIBUTION, INC.
("Borrower")
Taxable Variable Rate Demand Revenue Bonds
(Dollar Tree Distribution, Inc. Project)
Series 1998
CERTAIN RIGHTS OF THE ISSUER UNDER THIS AGREEMENT HAVE BEEN ASSIGNED TO, AND ARE
SUBJECT TO A SECURITY INTEREST IN FAVOR OF, AMSOUTH BANK, AS TRUSTEE UNDER A
TRUST INDENTURE OF EVEN DATE HEREWITH BETWEEN THE ISSUER AND THE TRUSTEE, AS
AMENDED OR SUPPLEMENTED FROM TIME TO TIME.
TABLE OF CONTENTS
Page
PARTIES.......................................................................1
RECITALS......................................................................1
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions...................................................1
Section 1.2. Rules of Construction.........................................6
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Issuer.................................7
Section 2.2. Representations, Warranties and Covenants by the Borrower.....8
ARTICLE III
ACQUISITION OF THE PROJECT
Section 3.1. Acquisition of the Project...................................10
Section 3.2. Borrower to Obtain Approvals Required for the Project
and the Plant..............................................10
Section 3.3. Plans and Specifications.....................................10
ARTICLE IV
ISSUANCE OF THE BONDS; PROJECT FUND
Section 4.1. Agreement to Issue the Bonds.................................10
Section 4.2. Disbursement from the Project Fund...........................11
Section 4.3. Closeout of the Project Fund.................................11
Section 4.4. Disposition of the Balance in the Project Fund...............11
Section 4.5. Borrower Required to Pay in Event Project Fund Insufficient..11
Section 4.6. No Third Party Beneficiary...................................11
ARTICLE V
LOAN BY THE ISSUER TO THE BORROWER; REPAYMENT
Section 5.1. Loan by the Issuer; Repayment................................12
Section 5.2. No Set-Off...................................................12
Section 5.3. Prepayments..................................................12
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Section 5.4. Credits Against the Note.....................................12
Section 5.5. Letter of Credit and Reimbursement Agreement.................12
Section 5.6. Certain Benefits.............................................13
ARTICLE VI
GENERAL COVENANTS
Section 6.1. Maintenance and Modification of the Plant by Borrower........14
Section 6.2. Taxes and Utility Charges....................................14
Section 6.3. Insurance....................................................15
Section 6.4. General Requirements Applicable to Insurance.................15
Section 6.5. Advances by the Issuer or the Trustee........................16
Section 6.6. Borrower to Make up Deficiency in Insurance Coverage.........16
Section 6.7. Eminent Domain...............................................16
Section 6.8. Application of Net Proceeds of Insurance and
Eminent Domain.............................................16
Section 6.9. Parties to Give Notice.......................................17
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. Access to the Project and Inspection.........................17
Section 7.2. Further Assurances and Corrective Instruments................17
Section 7.3. Reserved.....................................................18
Section 7.4. Reserved.....................................................18
Section 7.5. Administrative Expenses......................................18
Section 7.6. Indemnity Against Claims.....................................18
Section 7.7. Release and Indemnification..................................18
Section 7.8. Additional Information.......................................18
Section 7.9. Corporate Existence, Sale of Assets, Consolidation
or Merger..................................................19
Section 7.10. Default Certificates.........................................19
Section 7.11. Reserved.....................................................19
Section 7.12. Additional Reporting Requirements............................19
Section 7.13. Observe Laws.................................................19
ARTICLE VIII
ASSIGNMENT, LEASING AND SELLING
Section 8.1. Assignment of Loan Agreement or Lease or Sale
of Project by the Borrower.................................19
Section 8.2. Restrictions on Transfer of Issuer's Rights..................19
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Events of Default Defined....................................20
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Section 9.2. Remedies on Default..........................................20
Section 9.3. Application of Amounts Realized in Enforcement
of Remedies................................................21
Section 9.4. No Remedy Exclusive..........................................21
Section 9.5. Agreement to Pay Attorneys' Fees and Expenses................21
Section 9.6. Correlative Waivers..........................................22
ARTICLE X
PREPAYMENTS
Section 10.1. Optional Prepayments.........................................22
Section 10.2. Mandatory Prepayments........................................22
Section 10.3. Other Mandatory Prepayments..................................22
ARTICLE XI
MISCELLANEOUS
Section 11.1. References to the Bonds Ineffective After Bonds Paid.........23
Section 11.2. No Implied Waiver............................................23
Section 11.3. Issuer Representative........................................23
Section 11.4. Borrower Representative......................................23
Section 11.5. Notices......................................................23
Section 11.6. If Payment or Performance Date Is Other Than
a Business Day.............................................24
Section 11.7. Binding Effect...............................................24
Section 11.8. Severability.................................................24
Section 11.9. Amendments, Changes and Modifications........................24
Section 11.10. Execution in Counterparts....................................24
Section 11.11. Applicable Law...............................................24
Section 11.12. No Charge Against Issuer Credit..............................24
Section 11.13. Issuer Not Liable............................................25
Section 11.14. Expenses.....................................................25
Section 11.15. Amounts Remaining with the Trustee...........................25
Execution by the Issuer......................................................26
Execution by the Borrower....................................................27
Exhibit A - Promissory Note
Exhibit B - The Project Site
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LOAN AGREEMENT
This LOAN AGREEMENT, dated as of May 1, 1998, between Mississippi
Business Finance Corporation, a political subdivision and body corporate and
politic of the State of Mississippi (the "Issuer"), and Dollar Tree
Distribution, Inc., a Virginia corporation (the "Borrower"),
W I T N E S S E T H:
In consideration of the respective representations and agreements
contained herein, the parties hereto, recognizing that under the Act (as
hereinafter defined) this Loan Agreement shall not in any way obligate the State
of Mississippi or any political subdivision thereof, including, without
limitation, the Issuer or any political subdivision thereof, to raise any money
by taxation or use other public moneys for any purpose in relation to the
Project (as hereinafter defined) and that neither the State of Mississippi nor
any political subdivision thereof, including, without limitation, the Issuer,
shall pay or promise to pay any debt or meet any financial obligation to any
person at any time in relation to the Project, except from moneys received or to
be received under the provisions of this Loan Agreement, the Note and from the
Credit Facility Issuer under a Credit Facility (each as hereinafter defined) or
derived from the exercise of the rights of the Issuer thereunder, agree as
follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. In addition to words and terms elsewhere
defined in this Loan Agreement or in the Indenture, the following words and
terms shall have the following meanings:
"Acquisition", when used in connection with the Project, shall mean,
without limitation, the acquisition, construction, installation and equipping of
the Project.
"Act" shall mean Sections 57-10-401 et seq., Mississippi Code of 1972,
as amended.
"Administrative Expenses" shall mean the amounts payable pursuant to
Section 7.5 hereof by the Borrower to or for the account of the Issuer to
provide for payment of the costs and expenses incurred by the Issuer.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, "control"
when used with respect to a Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Alternate Credit Facility" shall mean an irrevocable direct pay letter
of credit, insurance policy or similar credit enhancement or support facility
for the benefit of the Trustee, the terms of which Alternate Credit Facility
shall in all respects material to the Bondholders be the same (except for the
term set forth in such Alternate Credit Facility) as the Letter of Credit.
"Bank" shall mean First Union National Bank, the issuer of the Letter
of Credit.
"Bond" or "Bonds" shall mean the Mississippi Business Finance
Corporation Taxable Variable Rate Demand Revenue Bonds (Dollar Tree
Distribution, Inc. Project), Series 1998 authorized to be issued pursuant to a
resolution of the Issuer in accordance with the Indenture in the aggregate
principal amount of $19,000,000 including such Bonds issued in replacement for
mutilated, destroyed, lost or stolen Bonds pursuant to Section 211 of the
Indenture, and any amendments and supplements thereto, and any renewals and
extensions thereof, permitted by the Indenture.
"Bond Documents" shall mean collectively the Indenture, the Bonds, this
Loan Agreement, the Note, the Letter of Credit Documents, the Placement
Agreement, the Tender Agency Agreement and the Remarketing Agreement.
"Bondholder" or "Bondholders" or "owner of Bonds" or "owners of Bonds"
shall mean the initial owner or owners and any future owner or owners of the
Bond or Bonds as registered on the books and records of the Bond Registrar
pursuant to Section 204 of the Indenture.
"Bond Fund" shall mean the fund created under Section 502 of the
Indenture.
"Borrower" shall mean Dollar Tree Distribution, Inc., a Virginia
corporation, and its successors and assigns and any surviving, resulting or
transferee corporation or other entity.
"Borrower Representative" shall mean any one of the persons at the time
designated to act on behalf of the Borrower by the written certificate furnished
to the Issuer and the Trustee containing the specimen signatures of such persons
and signed on behalf of the Borrower by the President or any duly authorized
Vice President of the Borrower.
"Business Day" shall mean a day upon which banks in the State and in
the States of North Carolina and Virginia are open for the transaction of
business of the nature required pursuant to this Loan Agreement and the
Indenture.
"Completion Date" shall mean that date certified by the Borrower under
Section 4.3 hereof.
"Consistent Basis" shall mean, in reference to the application of
Generally Accepted Accounting Principles, that the accounting principles
observed in the period referred to are comparable in all material respects to
those applied in the preceding period, except as to any changes consented to by
the Trustee and the Credit Facility Issuer.
"Cost of Acquisition of the Project" shall mean the costs and
allowances for the Acquisition of the Project which are defined as "Approved
Costs" in Section 57-10-401 of the Act. and which include, but are not limited
to, all capital costs of the Project, including the following:
1. The Acquisition of the Project at the Project Site;
2. Preparation of the plans and specifications, if any, for the
Project (including any preliminary study or plan of the
Project or any aspect thereof), any labor, services, materials
and supplies used or furnished in the Acquisition of the
Project, the acquisition and installation necessary to provide
utility services or other services and all real and
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tangible personal property deemed necessary by the Borrower in
connection with the Project;
3. The fees for architectural, engineering, supervisory and
consulting services in connection with the Acquisition of the
Project;
4. To the extent they shall not be paid by a contractor, the
premiums of all insurance and surety and performance bonds
required to be maintained in connection with the Acquisition
of the Project;
5. Any fees and expenses in connection with the acquisition,
perfection and protection of title to the Project Site and any
fees and expenses incurred in connection with the preparation,
recording or filing of such documents, instruments or
financing statements as either the Borrower, the Issuer or the
Trustee may deem desirable to perfect or protect the rights of
the Issuer or the Trustee under this Loan Agreement, the Note,
the Indenture, the Bonds and the Letter of Credit Documents;
6. The legal, accounting and financial advisory fees and
expenses, filing fees, and printing and engraving costs
incurred in connection with the authorization, issuance, sale
and purchase of the Bonds, and the preparation of this Loan
Agreement, the Note, the Indenture, the Bonds, the Letter of
Credit Documents, the Tender Agency Agreement and the
Remarketing Agreement and all other documents in connection
with the authorization, issuance and sale of the Bonds;
7. Interest prior to and during construction of the Project; and
8. Any administrative or other fees charged by the Issuer,
Governing Board, the State Board or reimbursement thereto of
expenses, in connection with the Project to the Completion
Date.
"Counsel" shall mean an attorney or a firm of attorneys acceptable to
the Trustee, and may, but need not, be counsel to the Issuer, the Credit
Facility Issuer or the Borrower.
"Credit Facility" shall mean the Letter of Credit or any Alternate
Credit Facility delivered to the Trustee.
"Credit Facility Issuer" shall mean the Bank with respect to the Letter
of Credit and the institution issuing any Alternate Credit Facility.
"Eminent Domain" shall mean the taking of title to, or the temporary
use of, the Project or any part thereof pursuant to eminent domain or
condemnation proceedings, or any voluntary conveyance of any part of the Project
during the pendency of, or as a result of a threat of, such proceedings.
"Equipment" shall mean, to the extent acquired with the proceeds of
borrowings hereunder, all of the fixtures (including all leasehold
improvements), machinery, equipment and other items of tangible personal
property now owned or hereafter acquired by the Borrower and located or to be
located on or affixed to the Project Site, together with all substitutions
therefor and all repairs, renewals and replacements thereof.
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"Event of Default" or "Default" shall have the meaning set forth in
Section 9.1 hereof.
"Generally Accepted Accounting Principles" shall mean those principles
of accounting set forth in pronouncements of the Financial Accounting Standards
Board and its predecessors or pronouncements of the American Institute of
Certified Public Accountants or those principles of accounting which have other
substantial authoritative support and are applicable in the circumstances as of
the date of application, as such principles are from time to time supplemented
and amended.
"Governing Board" shall mean the Board of Directors of the Issuer.
"Government Obligations" shall mean (i) direct obligations of the
United States of America, (ii) obligations unconditionally guaranteed by the
United States of America, and (iii) securities or receipts evidencing ownership
interests in obligations or specified portions (such as principal or interest)
of obligations described in clause (i) or (ii) above the full and timely payment
of which securities, receipts or obligations is unconditionally guaranteed by
the United States of America.
"Guaranty" means the Guaranty Agreement of even date herewith by and
among the Credit Facility Issuer, Dollar Tree Stores, Inc. and Dollar Tree
Management, Inc.
"Indenture" shall mean the Trust Indenture of even date herewith by and
between the Issuer and the Trustee, together with any amendments or supplements
thereto permitted thereby.
"Initial Administrative Fee" shall mean $20,000 payable by the Borrower
to the Issuer prior to the date of issuance of the Bonds.
"Issuer" shall mean the Mississippi Business Finance Corporation, a
political subdivision and body corporate and politic of the State, and its
successors and assigns and any body resulting from or surviving any
consolidation or merger to which it or its successors may be a party.
"Issuer Representative" shall mean any one of the persons at the time
designated to act on behalf of the Issuer by written certificate furnished to
the Borrower and the Trustee containing the specimen signatures of such persons
and signed on behalf of the Issuer by its Executive Director.
"Letter of Credit" means the irrevocable direct pay letter of credit,
dated May 20, 1998, in the amount equal to the principal amount of the Bonds
outstanding, plus 45 days' interest thereon at an assumed rate of 13% per annum,
including any extensions thereof.
"Letter of Credit Documents" shall mean the Letter of Credit, the
Reimbursement Agreement and the Guaranty.
"Loan Agreement" shall mean this Loan Agreement and any amendments and
supplements hereto permitted by the Indenture.
"Net Proceeds" when used with respect to any insurance proceeds or
award resulting from, or other amount received in connection with, Eminent
Domain shall mean the gross proceeds from such proceeds, award or other amount,
less all expenses (including attorneys' fees) incurred in the realization
thereof.
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"Note" shall mean the promissory note given by the Borrower pursuant to
Section 5.1 of this Loan Agreement, substantially in the form of Exhibit A
attached hereto.
"Official Action" shall mean the action taken by the Governing Board on
January 14, 1998.
"Overdue Rate" shall mean the Prime Rate plus two percent.
"Payment of the Bonds" shall mean payment of (i) the principal of and
interest on the Bonds in accordance with their terms whether through payment at
maturity, upon acceleration or prepayment, (ii) all amounts due as
Administrative Expenses or otherwise, and (iii) any and all other liabilities
and obligations arising under the Indenture and this Loan Agreement; in any
case, in such a manner that all such amounts due and owing with respect to the
Bonds shall have been paid.
"Permitted Liens" shall have the definition ascribed thereto in the
Reimbursement Agreement.
"Person" shall mean an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture, joint-stock company, or
a government or agency or political subdivision thereof.
"Placement Agreement" shall mean the letter agreement of even date
herewith between the Borrower and First Union National Bank, as Placement Agent,
providing for the introducing of the Bonds by the Placement Agent to prospective
purchasers.
"Placement Memorandum" shall mean the Private Placement Memorandum
dated the date of issuance of the Bonds, including the cover page and all
appendices thereto.
"Plans and Specifications" shall mean the plans and specifications used
in the Acquisition of the Project, as the same may be revised from time to time
by the Borrower in accordance with Section 3.3 hereof.
"Plant" shall mean, to the extent acquired with the proceeds of
borrowings hereunder, all buildings, structures, improvements, fixtures,
furniture, machinery, equipment or other property (excluding inventory) of the
Borrower, now or hereafter located at or affixed to the Project Site, including
without limitation the Project.
"Prime Rate" shall mean the rate of interest per annum announced by
First Union National Bank at its principal office in Charlotte, North Carolina
from time to time to be its prime rate.
"Principal Amount Increase Notice" has the meaning assigned to such
term in Section 201(b) of the Indenture.
"Principal Amount Increase Period" means the period from the date of
issuance of the Bonds until the earlier of (i) May 1, 2001 and (ii) the Fixed
Rate Conversion Date.
"Private Placement Memorandum" shall mean that certain Private
Placement Memorandum dated as of May 20, 1998, pertaining to the sale of the
Bonds.
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"Project" shall mean the acquisition, construction and installation of
land, buildings, machinery and equipment constituting a distribution facility,
all to be located on the Project Site.
"Project Site" shall mean the real property located in DeSoto County,
more particularly described in Exhibit B attached hereto and by reference made a
part hereof, upon which the Plant and Equipment is located.
"Reimbursement Agreement" shall mean, with respect to the initial
Letter of Credit, the agreement of the Borrower with a Credit Facility Issuer
setting forth the obligations of the Borrower to such Credit Facility Issuer
arising out of any payments under a Credit Facility and which provides that it
shall be deemed to be a Reimbursement Agreement for the purposes of the
Indenture.
"Remarketing Agent" shall mean First Union National Bank, acting
through its Capital Markets Group as remarketing agent, or any successor in such
capacity.
"Remarketing Agreement" shall mean the Remarketing Agreement of even
date herewith between the Borrower and the Remarketing Agent.
"State" shall mean the State of Mississippi.
"Tender Agency Agreement" shall mean the Tender Agency Agreement of
even date herewith among the Borrower, the Trustee and the Tender Agent.
"Tender Agent" means AmSouth Bank and its successors as provided in
Section 1202 of the Indenture.
"Trustee" shall mean the banking institution at the time serving as
Trustee under the Indenture.
Section 1.2. Rules of Construction.
(a) Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, and words of the
neuter gender shall be deemed and construed to include correlative words of the
masculine and feminine genders.
(b) The table of contents, captions and headings in this Loan Agreement
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Loan Agreement.
(c) All references herein to particular articles or sections are
references to articles or sections of this Loan Agreement unless some other
reference is established.
(d) All accounting terms not specifically defined herein shall be
construed in accordance with Generally Accepted Accounting Principles applied on
a Consistent Basis.
(e) All references herein to the Borrower shall be deemed to refer to
each of the Persons if more than one, as described by such term and any
agreement, obligation, duty or liability of the Borrower shall be a joint and
several agreement, obligation, duty or liability of each of the Persons so
described by such term.
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(f) Any terms not defined herein but defined in any of the other Bond
Documents shall have the same meaning herein.
(g) All references herein to the Code or any particular provision or
section thereof shall be deemed to refer to any successor, or successor
provision or section, thereof, as the case may be.
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations and Warranties by the Issuer. The Issuer
represents and warrants as follows:
(a) The Issuer is a duly constituted public body corporate and politic
of the State created under the Act.
(b) Under the provisions of the Act, the Issuer is duly authorized to
enter into, execute and deliver the Bond Documents to which it is a party, to
undertake the transactions contemplated by the Bond Documents to which it is a
party and to carry out its obligations hereunder and thereunder.
(c) The Issuer proposes to issue the Bonds in the maximum aggregate
principal amount of $19,000,000 to finance all or a portion of the Project in
increments of $100,000 and multiples thereof as directed by the Borrower
pursuant to the terms of the Indenture.
(d) By duly adopted resolution, the Issuer has duly authorized the
execution, delivery and performance of the Bond Documents to which it is a
party, including the borrowing under, issuance and performance of the Bonds and
(as security for the Bonds) the pledge of the Note, endorsed without recourse to
the order of the Trustee, to the Trustee. The Issuer also has duly authorized
the execution, delivery and performance of the Placement Agreement and has
approved the section which describes the Issuer in the Private Placement
Memorandum.
(e) The Bonds will be issued under and pursuant to the Indenture and
will mature, bear interest, and have the other terms and provisions set forth or
provided for in the Indenture.
(f) The execution and delivery of and performance under the Bond
Documents to which the Issuer is a party and the Placement Agreement will not
conflict with, or constitute a breach of or default under, or require any
consent pursuant to any law or regulation presently applicable to the Issuer
(except for such consents and approvals as have heretofore been obtained), the
bylaws of the Issuer, any order of any court, regulatory body or arbitral
tribunal or any agreement or instrument to which the Issuer is party or by which
it is bound.
(g) To the knowledge of the Issuer, there are no judicial, regulatory
or arbitral proceedings pending or threatened against the Issuer which, if
decided adversely to the Issuer, would have a material adverse effect on the
issuance and sale of the Bonds or any of the transactions of the Issuer in
connection therewith.
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(h) When duly executed and delivered on behalf of the Issuer, and
assuming the due authorization, execution and delivery by the Borrower of this
Loan Agreement, and the due authorization, execution and delivery by the Trustee
of the Indenture, each of the Bond Documents to which the Issuer is a party and
the Placement Agreement shall constitute a valid and binding obligation of the
Issuer enforceable against the Issuer in accordance with its terms.
(i) The Borrower constitutes an "Eligible Company" and an "Approved
Company" as those terms are defined in the Act.
(j) The loan of the proceeds of the Bonds for the acquisition,
construction, installation and equipping of the Project by the Company, as
provided by this Agreement, will further the purposes of the Act, to wit: to
induce the location or expansion of manufacturing facilities in the State in
order to relieve unemployment by creating new jobs within the State.
(k) Under existing statutes and decisions, no taxes on income or
profits are imposed on the Issuer.
Section 2.2. Representations, Warranties and Covenants by the Borrower
The Borrower represents, warrants and covenants as follows:
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Virginia, and is
qualified to do business in the State, has legal authority to enter into and to
perform the agreements and covenants on its part contained in the Bond Documents
to which it is a party and has duly authorized the execution, delivery and
performance of the Bond Documents to which it is a party.
(b) The borrowing under the Note, the execution and delivery of this
Loan Agreement and the other Bond Documents to which it is a party, the
Placement Agreement and the approval of the section of the Private Placement
Memorandum entitled "The Borrower," the consummation of the transactions
contemplated hereby and thereby, and the fulfillment of or compliance with the
terms and conditions hereof and thereof do not and will not violate, conflict
with or constitute a breach of or default under or require any consent (except
for such consents and approvals as have heretofore been obtained) pursuant to
the Articles of Incorporation or Bylaws of the Borrower, any law or regulation
of the United States or the State or, to the best knowledge of the Borrower, of
any other jurisdiction presently applicable to the Borrower, any order of any
court, regulatory body or arbitral tribunal or any agreement or instrument to
which the Borrower is a party or by which it or any of its property is bound.
(c) The Borrower will cause the proceeds of the Bonds to be applied to
the Project.
(d) The commencement of the Acquisition of the Project, including the
letting of purchase orders for components thereof, did not occur prior to
Official Action.
(e) The Borrower presently expects to operate the Project as a
distribution facility until Payment of the Bonds.
(f) The Project is an "economic development project" within the meaning
of the Act.
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(g) The Project is located wholly within the City of Olive Branch,
DeSoto County, Mississippi.
(h) Assuming due authorization, execution and delivery by the other
parties thereto, when executed and delivered, the Bond Documents to which the
Borrower is a party will be the valid and binding obligations or agreements of
the Borrower enforceable in accordance with their respective terms, subject to
limitations imposed by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of equity
affecting the remedies provided for in the Bond Documents.
(i) There is no action, suit or proceeding at law or in equity or by or
before any governmental instrumentality or agency or arbitral body now pending,
or to the knowledge of the Borrower threatened, against or affecting the
Borrower or any properties or rights of the Borrower which has not heretofore
been disclosed to the Trustee in writing or which, if adversely determined,
would materially impair the right of the Borrower to carry on its business
substantially as now conducted or would materially adversely affect the
financial condition, business or operations of the Borrower or the transactions
contemplated by, or the validity of, any of the Bond Documents.
(j) The Borrower has filed or properly extended the filing date of all
federal, state and local tax returns which are required to be filed by it and
has paid or caused to be paid all taxes as shown on said returns or on any
assessment received by it, to the extent that such taxes have become due and are
material in amount, and no controversy in respect of additional income taxes,
state or federal, of the Borrower is pending or, to the knowledge of the
Borrower, threatened which has not heretofore been disclosed in writing to the
Trustee and which, if adversely determined, would materially and adversely
affect the financial condition or operations of the Borrower.
(k) None of the Bond Documents to which the Borrower is a party
contains any misrepresentation or untrue statement of material fact with respect
to the Borrower or omits to state a material fact with respect to the Borrower
necessary in order to make any such representation or statement contained
therein not misleading.
(l) The Borrower possesses all patents, licenses, trademarks, trademark
rights, trade names, trade name rights and copyrights material to the
construction and operation of the Project, without known conflict with any
patent, license, trademark, trade name or copyrights of any other Person.
(m) The Project Site is properly zoned, and its intended use and the
operation of the Project comply with the uses permitted by applicable zoning
regulations.
(n) Reserved.
(o) To the best knowledge of the Borrower, all information furnished by
the Borrower to the Issuer for the purpose of approving the financing of the
Project through the issuance and sale of the Bonds taken as a whole, including,
but not limited to, its application for financing is true, accurate and complete
as of the date hereof and thereof.
(p) The Borrower anticipates that the Project will result in the
creation of at least 128 full time jobs and that the Project will require a
capital investment of at least Five Million Dollars ($5,000,000).
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(q) No event has occurred and no condition exists with respect to the
Borrower that would constitute an "Event of Default" under this Loan Agreement
or that, with the lapse of time or the giving of notice or both, would become an
"Event of Default" under this Loan Agreement.
All of the above representations, warranties and covenants shall
survive the execution of this Loan Agreement and the issuance of the Note.
ARTICLE III
ACQUISITION OF THE PROJECT
Section 3.1. Acquisition of the Project. The Borrower shall complete
the Acquisition of the Project with all reasonable dispatch, delays incident to
strikes, riots, acts of God or the public enemy or any delay beyond its
reasonable control only excepted, in accordance with the Plans and
Specifications; provided, however, that if completion of such Acquisition is
delayed for any reason, there shall be no diminution in or postponement of the
payments to be made by the Borrower pursuant to the Note or Section 5.1 hereof.
Section 3.2. Borrower to Obtain Approvals Required for the Project and
the Plant. The Borrower shall obtain or cause to be obtained all necessary
permits and approvals for the Acquisition of the Project and the operation and
maintenance of the Plant and the Equipment and shall comply with all lawful
requirements of any governmental body regarding the use or condition of the
Equipment, the Project Site and the Plant. The Borrower may, however, contest
any such requirement by an appropriate proceeding diligently prosecuted.
Section 3.3. Plans and Specifications. The Borrower shall maintain a
set of Plans and Specifications at the Project Site which shall be available to
the Issuer, the Trustee and the Bondholders for inspection and examination
during the Borrower's regular business hours, and the Issuer and the Borrower
agree that the Borrower may supplement, amend and add to the Plans and
Specifications, and that the Borrower shall be authorized to omit or make
substitutions for components of the Project, without approval of the Issuer,
provided that no such change shall be made which shall be contrary to
subsections (c), (d), (e), (f), (g), (h) and (i) of Section 2.2 hereof or the
provisions of Article IX hereof, and provided further that no such change may
render materially incorrect or incomplete the description of the initial
components of the Project or the description of the Project Site as set forth in
Exhibit B to this Loan Agreement unless such change is consented to by the
Issuer and the Trustee, which consents may not be unreasonably withheld or
delayed. No approval of the Issuer or the Trustee shall be required for the
acquisition of the Project or for the solicitation, negotiation, award or
execution of contracts relating thereto.
ARTICLE IV
ISSUANCE OF THE BONDS; PROJECT FUND
Section 4.1. Agreement to Issue the Bonds. To provide funds for Project
the Issuer agrees that it will from time to time, in accordance with the terms
of the Indenture, sell, issue and deliver the
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Bonds in authorized denominations the principal amount selected by the Borrower
(not to exceed $19,000,000) in the manner set forth in the Indenture and cause
the proceeds of the Bonds to be applied as provided in the Indenture. The Issuer
hereby appoints the Borrower as its agent for the purpose of submitting any
Principal Amount Increase Notice and the issuance of additional amounts of the
Bonds (not to exceed $19,000,000 principal amount).
Section 4.2. Disbursement from the Project Fund. All payments from the
Project Fund to pay the Cost of Acquisition of the Project or to reimburse the
Borrower for any Cost of Acquisition of the Project paid or incurred by the
Borrower before or after the execution and delivery of this Agreement and the
issuance and delivery of the Bonds but only after Official Action shall be made
by the Issuer pursuant to the Indenture upon receipt by the Trustee of a
requisition and certificate substantially in the form of Exhibit A attached to
the Indenture.
Section 4.3. Closeout of the Project Fund. The Completion Date for the
Project shall be promptly established and evidenced to the Trustee and shall be
the date on which the Borrower Representative delivers to the Trustee a
certificate stating that, except for the amounts retained by the Trustee at the
Borrower's direction for any Cost of Acquisition of the Project not then due and
payable, the Acquisition of the Project has been completed substantially in
accordance with the Plans and Specifications, if any, and all costs and expenses
incurred in connection therewith have been paid. Notwithstanding the foregoing,
such certificate may state that it is given without prejudice to any rights
against third parties that exist at the date of such certificate or that may
subsequently come into being.
Section 4.4. Disposition of the Balance in the Project Fund. Pursuant
to the Indenture, as soon as practicable after, and in any event within sixty
(60) days from, the Trustee's receipt of the certificate mentioned in Section
4.3 hereof, all amounts remaining in the Project Fund, including any
unliquidated investments made with money theretofore deposited in the Project
Fund except for amounts to be retained in the Project Fund for any Cost of
Acquisition of the Project not then due and payable as provided in Section 4.3
hereof, shall be transferred by the Trustee to the Bond Fund and shall be
applied to the prepayment of the principal installments of the Bonds in
accordance with the terms of the Indenture.
Section 4.5. Borrower Required to Pay in Event Project Fund
Insufficient. In the event the moneys in the Project Fund should not be
sufficient to pay the total cost of the Project, the Borrower agrees to complete
the Project and to pay that portion of such cost in excess of the moneys
available therefor in the Project Fund. THE ISSUER MAKES NO WARRANTY, EITHER
EXPRESS OR IMPLIED, THAT THE MONEYS PAID INTO THE PROJECT FUND AND AVAILABLE FOR
PAYMENT OF THE COST OF THE PROJECT WILL BE SUFFICIENT TO PAY THE TOTAL COST OF
THE PROJECT. The Borrower agrees that if, after exhaustion of the moneys in the
Project Fund, the Borrower should pay any portion of the total cost of Project
pursuant to the provisions of this Section, it shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or any Bondholder and it
shall not be entitled to any abatement or diminution of the payments required to
be made by the Borrower pursuant to the Note or Section 5.1 hereof.
Section 4.6. No Third Party Beneficiary. It is specifically agreed
between the parties executing this Loan Agreement that it is not intended by any
of the provisions of any part of this Loan Agreement to establish in favor of
the public or any member thereof, other than as may be expressly provided herein
or as contemplated in the Indenture, the rights of a third party beneficiary
hereunder, or to authorize anyone not a party to this Loan Agreement to maintain
a suit for personal injuries or property damage pursuant to the terms or
provisions of this Loan Agreement. The duties, obligations, and
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responsibilities of the parties to this Loan Agreement with respect to third
parties shall remain as imposed by law.
ARTICLE V
LOAN BY THE ISSUER TO THE BORROWER; REPAYMENT
Section 5.1. Loan by the Issuer; Repayment. Upon the terms and
conditions of this Loan Agreement, the Issuer shall lend to the Borrower the
proceeds of the sale of the Bonds. The loan shall be evidenced by and repayable
as set forth in the Note. The loan shall be made by depositing said proceeds in
the Project Fund in accordance with the terms of the Indenture.
As consideration for the issuance of the Bonds and the making of the
loan to the Borrower by the Issuer, the Borrower will execute and deliver this
Loan Agreement and the Note, in the form attached as Exhibit A hereto, and the
Issuer will endorse the Note without recourse to the order of, and pledge the
Note and assign this Loan Agreement and the Note to, the Trustee, as the
assignee of the Issuer under the Indenture, contemporaneously with the issuance
of the Bonds. The Borrower shall repay the loan in accordance with the
provisions of the Note and of this Loan Agreement.
Section 5.2. No Set-Off. The obligation of the Borrower to make the
payments required by the Note shall be absolute and unconditional. The Borrower
will pay without abatement, diminution or deduction (whether for taxes or
otherwise) all such amounts regardless of any cause or circumstance whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
that the Borrower may have or assert against the Issuer, the Trustee, any
Bondholder or any other Person.
Section 5.3. Prepayments. The Borrower may prepay all or any part of
the amounts the Note obligates it to pay as provided in Section 701 of the
Indenture with respect to prepayment of the Bonds. Except as provided in this
Section 5.3 and in Sections 4.4, 10.1(b), 10.2 and 10.3, the Borrower shall not
be entitled to prepay the Note or cause the Bonds to be prepaid. The Borrower
shall prepay all of the amounts it is required to prepay as provided in Sections
10.2 and 10.3 hereof.
Section 5.4. Credits Against the Note. To the extent that principal of
or interest on the Bonds shall be paid, including those payments made pursuant
to a draw under a Credit Facility, there shall be credited against the unpaid
principal of or interest on the Note, as the case may be, an amount equal to the
principal of or interest on the Bonds so paid. If the principal of and interest
on and other amounts payable under the Bonds shall have been paid sufficiently
that Payment of the Bonds shall have occurred, then the Note, ipso facto, shall
be deemed to have been paid in full, the Borrower's obligations thereon shall be
discharged and the Note shall be canceled and surrendered to the Borrower.
Section 5.5. Letter of Credit and Reimbursement Agreement. As a
further condition to the Issuer's making the loan hereunder, the Borrower shall:
(a) cause the Letter of Credit to be issued and delivered to the
Trustee as security for the Bonds. Until the earlier to occur of the Conversion
Date or payment of the Note and the Bonds in full, the Borrower shall cause a
Credit Facility meeting the requirements of Section 603 of the Indenture to be
maintained with the Trustee; and
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(b) enter into the Reimbursement Agreement in form and substance
satisfactory to the Bank and execute and deliver the other Letter of Credit
Documents required by the Bank.
Section 5.6. Certain Benefits.
(a) The parties hereto acknowledge that the Borrower has been induced
to proceed with the Project in part by the benefits conferred by the Act. The
Issuer hereby agrees that the Borrower shall be permitted to take advantage of
all of the benefits provided by the Act to the fullest extent therein set forth
subject to the rules and regulations of the Issuer to the extent that such rules
are applicable to the Project.
(b) With respect to benefits conferred by the Act referenced in (a)
above, the following shall apply:
(1) the maximum income tax credit to be utilized in any taxable
year of the Borrower (the "Taxable Year") is 80% of the tax
liability and shall not exceed the payments of the principal
of, premium, if any, and interest payments on the Bonds during
such year and the fees and expenses of the Trustee and any
other fees and expenses referenced herein.
(2) the deductibility of interest payments on the Bonds shall be
determined in accordance with applicable Mississippi law.
(3) the Borrower shall request the Trustee to provide the Issuer,
not later than ninety (90) days after the end of each calendar
year, with a certificate setting forth the amount of all
payments made to the Trustee with respect to the Bonds whether
for principal, premium, interest or the fees and expenses of
the Trustee.
(4) To the extent that the payments under the Loan Agreement in
any year exceed the amount of the credit authorized pursuant
to the provisions set forth in (b)(1) above, such excess
payment may be recouped from excess credits in succeeding
years not to exceed three (3) years following the date upon
which the credit was earned.
(5) the benefits accruing to the Borrower under this Section 5.6
shall cease in the event:
(A) an Event of Default should occur and be continuing
under this Agreement or the Indenture; or
(B) the Borrower should fail to operate the Project for a
period of nine (9) consecutive months following the
initial start up of the Project except for force
majeure, strikes, lockouts, damage, destruction, acts
of God or in general, reasons beyond the Borrower's
reasonable control excepting, however, general
economic conditions.
With respect to the benefits that may accrue to the company under this
Section 5.6, the Borrower acknowledges and agrees that the Issuer makes no
representation, warranty or covenant regarding the enforceability of the
Borrower's rights to receive the benefits, the extent that such
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benefits may be received nor the term under which the Borrower may be entitled
to receive the benefits.
ARTICLE VI
GENERAL COVENANTS
The provisions of Sections 6.1 and 6.2 shall become effective upon
issuance of the Bonds. The provisions of Sections 6.3 through 6.9 shall become
effective at such time as neither the Borrower nor the Credit Facility Issuer
has any further obligation under the Reimbursement Agreement or the Credit
Facility.
Section 6.1. Maintenance and Modification of the Plant by Borrower. The
Borrower agrees that, until Payment of the Bonds shall be made, it will at its
own expense, (i) keep the Plant and the Project Site or cause the Plant and the
Project Site to be kept in as reasonably safe condition as its operations shall
permit, (ii) make or cause to be made from time to time all necessary repairs
thereto and renewals and replacements thereof and otherwise keep the Plant in
good repair and in good operating condition, normal wear and tear excepted, and
(iii) not permit or suffer others to commit a nuisance on or about the Plant or
the Project Site. The Borrower shall pay or cause to be paid all costs and
expenses of operation and maintenance of the Plant.
The Borrower may, at its own expense, make from time to time any
additions, modifications or improvements to the Plant that it may deem desirable
for its business purposes and that do not materially impair the effective use,
or decrease the value, of the Project.
Section 6.2. Taxes and Utility Charges.
(a) The Borrower shall pay as the same respectively become due, all
taxes, assessments, levies, claims and charges of any kind whatsoever that may
at any time be lawfully assessed or levied against or with respect to the
Project (including, without limiting the generality of the foregoing, any tax
upon or with respect to the income or profits of the Borrower from the Plant and
that, if not paid, would become a charge on the payments to be made under this
Loan Agreement or the Note prior to or on a parity with the charge thereof
created by the Indenture and including ad valorem, sales and excise taxes,
assessments and charges upon the Borrower's interest in the Plant), all utility
and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Project and all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by lien on any
portion of the Project.
(b) The Borrower may, at its expense, contest in good faith any such
levy, tax, assessment, claim or other charge, but the Borrower may permit the
items so contested to remain undischarged and unsatisfied during the period of
such contest and any appeal therefrom only if the Borrower shall notify the
Issuer and the Trustee that in the opinion of Counsel, by non-payment of any
such items, the rights of the Trustee with respect to this Loan Agreement and
the Note created by the assignment under the Indenture, as to the rights
assigned under this Loan Agreement, or any part of the payments to be made under
this Loan Agreement or the Note, will not be materially endangered nor will the
Project or any part thereof be subject to loss or forfeiture. If the Borrower is
unable to deliver such an opinion of
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Counsel, the Borrower shall promptly pay or bond and cause to be satisfied or
discharged all such unpaid items or furnish, at the expense of the Borrower,
indemnity satisfactory to the Trustee; but provided further, that any tax
assessment, charge, levy or claim shall be paid forthwith upon the commencement
of proceedings to foreclose any lien securing the same. The Issuer and the
Trustee, at the expense of the Borrower, will cooperate fully in any such
permitted contest. If the Borrower shall fail to pay any of the foregoing items,
the Issuer or the Trustee may (but shall be under no obligation to) pay the
same, and any amounts so advanced therefor by the Issuer or the Trustee shall
become an additional obligation of the Borrower to the one making the
advancement, which amounts, together with interest thereon at the Overdue Rate,
or the maximum contract rate permitted by law, whichever is lower, from the date
of payment, the Borrower agrees to pay on demand therefor.
(c) The Borrower shall furnish the Credit Facility Issuer and the
Trustee, upon request, with proof of payment of any taxes, governmental charges,
utility charges, insurance premiums or other charges required to be paid by the
Borrower under this Loan Agreement.
Section 6.3. Insurance. Until Payment of the Bonds shall be made, the
Borrower will keep the Plant and the Project Site continuously insured against
such risks as are customarily insured against by businesses of like size and
type engaged in the same or similar manufacturing operations (other than
business interruption insurance) including, without limiting the generality of
the foregoing:
(a) property insurance on the Plant in an amount not less than the full
insurable value of all property located at, and all improvements to, the Project
Site, against loss or damage by fire and lightning and other hazards ordinarily
included under uniform broad form extended coverage policies, limited only as
may be provided in the uniform broad form of extended coverage endorsement at
the time in use in the State;
(b) commercial general liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Plant or the
Project Site (such coverage to include provisions waiving subrogation against
the Issuer and the Trustee) in amounts not less than $1,000,000 with respect to
bodily injury and property damage for each occurrence and $1,000,000 with
respect to bodily injury and property damage general aggregate;
(c) Workers' compensation insurance as required by the laws of the
State; provided, however, that the insurance so required may be provided by
blanket policies now or hereafter maintained by the Borrower; and
(d) if at any time any portion of the Project Site is in an area that
has been identified by the Secretary of Housing and Urban Development as having
special flood and mud slide hazards, a policy of flood insurance covering
improvements located on such portion of the Project Site with amounts and
coverage satisfactory to the Trustee.
Section 6.4. General Requirements Applicable to Insurance.
Each insurance policy obtained in satisfaction of the requirements of
Section 6.3 hereof:
(i) shall be by such insurer (or insurers) which have a
minimum A.M. Best Rating of A- and of recognized standing;
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(ii) shall be in such form and have such provisions
(including, without limitation, the lenders loss payable clause, the
waiver of subrogation clause, the deductible amount, if any, and the
standard mortgagee endorsement clause), as are generally considered
standard provisions for the type of insurance involved and are
reasonably acceptable to the Trustee;
(iii) shall prohibit cancellation or substantial modification,
termination or lapse in coverage by the insurer without at least 30
days' prior written notice to the Issuer and the Trustee; and
(iv) shall provide that losses thereunder shall be adjusted
with the insurer by the Borrower at its expense on behalf of the
insured parties and the decision of the Borrower as to any adjustment
shall be final and conclusive;
Section 6.5. Advances by the Issuer or the Trustee. In the event the
Borrower shall fail to maintain, or cause to be maintained, the full insurance
coverage required by this Loan Agreement or shall fail to keep or cause to be
kept the Plant in good repair and good operating condition, the Issuer or the
Trustee may (but shall be under no obligation to), after 10 days' written notice
to the Borrower, contract for the required policies of insurance and pay the
premiums on the same and make any required repairs, renewals and replacements,
and the Borrower agrees to reimburse the Issuer and the Trustee to the extent of
the amounts so advanced by them or any of them with interest thereon at the
Overdue Rate or the maximum rate permitted by law, whichever is lower, from the
date of advance to the date of reimbursement. Any amounts so advanced by the
Issuer or the Trustee shall become an additional obligation of the Borrower,
shall be payable on demand, and shall be deemed a part of the obligation of the
Borrower evidenced by the Note.
Section 6.6. Borrower to Make up Deficiency in Insurance Coverage. The
Borrower agrees that to the extent that it shall not carry insurance required by
Section 6.3 hereof, in the event of any casualty required to be covered by such
insurance, it shall pay promptly to the Trustee for application in accordance
with the provisions of Section 6.8 hereof, such amount as would have been
received as Net Proceeds by the Trustee under the provisions of Section 6.8
hereof had such insurance been carried to the extent required.
Section 6.7. Eminent Domain. Unless the Borrower shall have prepaid the
Note pursuant to the provisions of Article X hereof, in the event that title to,
or temporary use of, the Project Site, the Plant or any part thereof shall be
taken by Eminent Domain, the Borrower shall be obligated to continue to make the
payments required to be made pursuant to the Note and the Net Proceeds received
as a result of such Eminent Domain shall be applied as provided in Section
6.8(b) hereof.
Section 6.8. Application of Net Proceeds of Insurance and Eminent
Domain.
(a) The Net Proceeds of the insurance carried pursuant to the
provisions of Sections 6.3(b) and 6.3(c) hereof shall be applied by the Borrower
toward extinguishment of the defect or claim or satisfaction of the liability
with respect to which such insurance proceeds may be paid.
(b) The Net Proceeds of the insurance carried with respect to the Plant
pursuant to the provisions of Sections 6.3(a) and 6.3(d) hereof (excluding the
Net Proceeds of any business interruption insurance, which shall be paid to the
Borrower), and the Net Proceeds resulting from Eminent Domain shall be paid to
the Trustee and applied as follows:
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(i) If the amount of the Net Proceeds does not exceed
$500,000, the Net Proceeds shall be paid to the Borrower and shall be
applied to the repair, replacement, renewal or improvement of the Plant
as necessary.
(ii) If the amount of the Net Proceeds exceeds $500,000, the
Net Proceeds shall be paid to and held by the Borrower. At the option
of the Borrower, to be exercised within the period of 90 days from the
receipt by the Borrower of such Net Proceeds, the Borrower shall advise
the Trustee that (A) the Borrower will use the Net Proceeds for the
repair, replacement, renewal or improvement of the Plant, or (B) the
Net Proceeds shall be applied to the prepayment of the Bonds as
provided in Article X hereof (and the Borrower shall transfer such Net
Proceeds to be used to prepay the Bonds to the Trustee).
The Borrower agrees that if it shall elect to use the Net Proceeds
pursuant to subsection (b)(ii) of this Section 6.8 for the repair, replacement,
renewal or improvement of the Plant, it will restore the Plant, or cause the
same to be done, to a condition substantially equivalent to its condition prior
to the occurrence of the event to which the Net Proceeds were attributable.
Section 6.9. Parties to Give Notice. In case of any material damage to
or destruction of all or any part of the Plant, the Borrower shall give prompt
notice thereof to the Issuer and the Trustee. In case of a taking or proposed
taking of all or any part of the Plant, the Project Site or any right therein by
Eminent Domain, the Borrower shall give prompt notice thereof to the Issuer and
the Trustee. Each such notice shall describe generally the nature and extent of
such damage, destruction, taking, loss, proceeding or negotiations.
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. Access to the Project and Inspection. The Credit Facility
Issuer, the Trustee and the Issuer shall have the right, at all reasonable times
upon the furnishing of reasonable notice to the Borrower under the
circumstances, to enter upon the Project Site and to examine and inspect the
Plant and the Equipment. The Trustee, the Credit Facility Issuer, the Issuer and
their duly authorized agents shall also have such right of access to the Project
as may be reasonably necessary to cause to be completed the construction,
acquisition and installation of the Project, and thereafter for its proper
maintenance, in the event of failure by the Borrower to perform its obligations
relating to maintenance under this Loan Agreement. The Borrower hereby covenants
to execute, acknowledge and deliver all such further documents, and do all such
other acts and things as may be necessary to grant to the Issuer Representative
and the Trustee such right of entry. The Issuer Representative, the Trustee and
the Credit Facility Issuer shall also be permitted, at all reasonable times, to
examine the books and records of the Borrower with respect to the Project and
the obligations of the Borrower hereunder, but none of them shall be entitled to
access to trade secrets or other proprietary information (other than financial
information) of the Borrower.
Section 7.2. Further Assurances and Corrective Instruments. Subject to
the provisions of the Indenture, the Issuer and the Borrower agree that they
will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements and amendments hereto and
such further instruments as may reasonably be required for carrying out the
intention or facilitating
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the performance of this Loan Agreement. All such supplements, amendments and
further instruments shall require the approval of the Credit Facility Issuer.
Section 7.3. Reserved.
Section 7.4. Reserved.
Section 7.5. Administrative Expenses. The Borrower shall pay to the
Issuer the Initial Administrative Fee prior to the date of issuance of the
Bonds. The Borrower shall also pay to the Trustee for the account of the Issuer
within 30 days after notice thereof all other reasonable out of pocket costs and
expenses incurred by the Issuer in connection with the financing and
administration of the Project, including, without limitation, the costs of
administering this Loan Agreement and the reasonable fees and expenses of
attorneys, consultants and others. The Borrower shall also pay to the Trustee,
the Bond Registrar and the Paying Agent all reasonable fees and expenses of the
Trustee at the time such amounts are due.
Section 7.6. Indemnity Against Claims. The Borrower will pay and
discharge and will indemnify and hold harmless the Issuer and the Trustee from
(a) any lien or charge upon amounts payable hereunder by the Borrower to the
Issuer (other than the lien of the Indenture), and (b) any taxes, assessments,
impositions and other charges in respect of the Project Site, the Plant or the
Equipment. If any claim of any such lien or charge upon payments, or any such
taxes, assessments, impositions or other charges, are sought to be imposed, the
Issuer or the Trustee, as the case may be, will give prompt notice to the
Borrower, and the Borrower shall have the sole right and duty to assume, and
shall assume, the defense thereof, with full power to litigate, compromise or
settle the same in its sole discretion.
Section 7.7. Release and Indemnification. The Borrower shall at all
times protect and hold the Issuer, the Governing Board, its counsel and the
Trustee, their respective members, officers, employees and agents harmless
against any claims or liability resulting from any loss or damage to property or
any injury to or death of any person that may be occasioned by any cause
whatsoever pertaining to the Project, the Project Site, the Plant and the
Equipment or the use thereof, including without limitation any lease thereof or
assignment of its interest in this Agreement, such indemnification to include
reasonable expenses and attorneys' fees incurred by the Issuer, the Governing
Board and the Trustee, their respective members, officers, employees and agents
in connection therewith, provided that such indemnity shall be effective only to
the extent of any loss that may be sustained by the Issuer, the Governing Board
or the Trustee, their respective members, officers, employees and agents in
excess of the Net Proceeds received by it or them from any insurance carrier
with respect to such loss and provided further that the benefits of this Section
7.7 shall not inure to any person other than the Issuer, the Governing Board or
the Trustee, their respective members, officers, employees and agents.
Section 7.8. Additional Information. Until Payment of the Bonds shall
have occurred, the Borrower shall promptly, from time to time, deliver to the
Trustee such information regarding the operations, business affairs and
financial condition of the Project as the Trustee may reasonably request. The
Trustee is hereby authorized to deliver a copy of any such financial information
delivered hereunder, or otherwise obtained by the Trustee, to any Bondholder or
prospective Bondholder, to any regulatory authority having jurisdiction over the
Trustee and to any other Person as may be required by law. The Issuer and the
Trustee are authorized to provide information concerning the outstanding
principal amount and payment history of, and other information pertaining to,
the Bonds or the Note to any agency or regulatory authority of the State
requesting such information.
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Section 7.9. Corporate Existence, Sale of Assets, Consolidation or
Merger. Unless the Trustee consents in writing, the Borrower will maintain its
corporate existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not enter into any transaction of
merger or consolidation in which it is not the surviving corporation; provided
that, if a Reimbursement Agreement is in effect, the Borrower may take such
action if it is permitted by the terms of the Reimbursement Agreement. If the
Reimbursement Agreement permits such action, the Borrower shall promptly notify
the Trustee.
Section 7.10. Default Certificates. The Borrower shall deliver to the
Trustee annually, within 60 days after the close of each fiscal year, a
certificate that no Event of Default hereunder or under the Note, the Indenture,
or the Reimbursement Agreement, or an event which would constitute such an Event
of Default but for the requirement that notice be given or time elapse or both
has occurred and is continuing, or if such an event has occurred or is
continuing, a certificate of the Borrower specifying the nature and period of
existence thereof and what action the Borrower proposes to take with respect
thereto.
Section 7.11. Reserved.
Section 7.12. Additional Reporting Requirements. Pursuant to the
provisions of Section 5.6 (b)(3), the Borrower hereby requests the Trustee to
provide the Issuer, not later than ninety (90) days after the end of each
calendar year, with a certificate setting forth the amount of all payments made
to the Trustee with respect to the Bonds.
Section 7.13. Observe Laws. The Borrower shall in all material respects
observe all material applicable laws, regulations and other valid requirements
of any regulatory authority with respect to its operations at the Plant and the
Project Site.
ARTICLE VIII
ASSIGNMENT, LEASING AND SELLING
Section 8.1. Assignment of Loan Agreement or Lease or Sale of Project
by the Borrower. Except with the prior written consent of the Issuer, the Credit
Facility Issuer and the Trustee, which consent will not be withheld or delayed
unreasonably, the rights of the Borrower under this Loan Agreement may not be
assigned, and the Project may not be leased or sold as a whole or in part.
Section 8.2. Restrictions on Transfer of Issuer's Rights. Except for
the assignment made pursuant to the Indenture of certain of its rights under
this Loan Agreement and its pledge of the Note, endorsed without recourse to the
order of the Trustee, to the Trustee as security pursuant to the Indenture, the
Issuer will not, during the term of this Loan Agreement, sell, assign, transfer
or convey any of its interests in this Loan Agreement or the Note. The Borrower
hereby assents to such assignment and pledge of the Issuer's rights under the
Loan Agreement and the pledge of the Note to the Trustee.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Events of Default Defined. The term "Event of Default"
shall mean any one or more of the following events:
(a) The failure by the Borrower promptly after receipt of demand
therefor to pay when due any payment of principal or interest on or, any other
amount payable under the Note.
(b) The failure of the Issuer to pay when due any payment of principal
of or interest on or other amount payable under the Bonds.
(c) Reserved.
(d) The occurrence of an "Event of Default" or "event of default" under
any of the other Bond Documents or the Letter of Credit Documents which Event of
Default results in an acceleration of indebtedness due thereunder (which
acceleration has not subsequently been rescinded).
(e) Any representation or warranty of the Borrower contained in Section
2.2 hereof, or in any document, instrument or certificate delivered pursuant
hereto or to the Indenture or in connection with the issuance and sale of the
Bonds, shall be false, misleading or incomplete in any material respect on the
date as of which made.
(f) Failure by the Borrower to observe and perform any covenant,
condition or agreement on the part of the Borrower under the Note or this Loan
Agreement, other than as referred to in the preceding paragraphs of this Section
9.1, for a period of 30 days after written notice, specifying such failure and
requesting that it be remedied, is given to the Borrower by the Issuer or the
Trustee.
(g) The commencement against the Borrower of an involuntary case under
the federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or of any action or proceeding for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Borrower
or for any substantial part of its property, or for the winding-up or
liquidation of its affairs and the continuance of any such case, action, or
proceeding unstayed and in effect for a period of 60 consecutive days.
(h) The commencement by the Borrower of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or the
consent by it to, or its acquiescence in the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or of any substantial part of its property, or
the making by it of or the consent by it to any general assignment for the
benefit of creditors, or the taking of any action by the Borrower in furtherance
of any of the foregoing.
Section 9.2. Remedies on Default. If Payment of the Bonds shall not
have been made, whenever any Event of Default referred to in Section 9.1 hereof
shall have happened and shall not have been cured or waived:
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(a) The Issuer, or the Trustee on behalf of the Issuer, may by written
notice declare all installments of principal repayable pursuant to the Note for
the remainder of the term thereof to be immediately due and payable, whereupon
the same, together with accrued interest thereon as provided for in the Note,
shall become immediately due and payable without presentment, demand, protest or
any other notice whatsoever, all of which are hereby expressly waived by the
Borrower; provided, however, all such amounts shall automatically be and become
immediately due and payable without notice upon the occurrence of any event
described in Section 9.1(g) or 9.1(h) hereof, which notice the Borrower hereby
expressly waives.
(b) The Trustee may take whatever other action at law or in equity may
appear necessary or desirable to collect the amounts payable pursuant to the
Note then due and thereafter to become due, or to enforce the performance and
observance of any obligation, agreement or covenant of the Borrower under this
Loan Agreement or under any of the other Bond Documents.
In the enforcement of the remedies provided in this Section 9.2, the
Issuer may treat all reasonable expenses of enforcement, including, without
limitation, legal, accounting and advertising fees and expenses, as additional
amounts payable by the Borrower then due and owing and the Borrower agrees to
pay such additional amounts upon demand, the amount of such legal fees to be
without regard to any statutory presumption.
Section 9.3. Application of Amounts Realized in Enforcement of
Remedies. Any amounts collected pursuant to action taken under Section 9.2
hereof shall be paid to the Trustee and applied to the payment of, first, any
costs, expenses and fees incurred by the Issuer and the Trustee as a result of
taking such action; second, any interest which shall have accrued on any overdue
interest and any accrued interest on any overdue principal of the Bonds at the
rate set forth in the Bonds; third, any overdue interest on the Bonds; fourth,
any overdue principal of the Bonds; fifth, the outstanding principal balance of
the Bonds; and sixth, if Payment of the Bonds shall have been made, all
remaining moneys as set forth in Article IX of the Indenture.
Section 9.4. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Loan Agreement or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient.
Section 9.5. Agreement to Pay Attorneys' Fees and Expenses. In any
Event of Default, if the Issuer, the Trustee, the Credit Facility Issuer or any
Bondholder employs attorneys or incurs other expenses for the collection of
amounts payable hereunder or for the enforcement of the performance or
observance of any covenants or agreements on the part of the Borrower contained
herein or in the Indenture (in the case of the Issuer, the Trustee or the Credit
Facility Issuer) or contained in the Indenture (on the part of any Bondholder),
the Borrower agrees that it will on demand therefor pay to the Issuer, the
Trustee, the Credit Facility Issuer or such Bondholder the reasonable fees of
such attorneys and such other reasonable out of pocket expenses so incurred by
the Issuer, the Trustee, the Credit Facility Issuer or such Bondholder, the
amount of such fees of attorneys to be without regard to any statutory
presumption.
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Section 9.6. Correlative Waivers. If an event of default under Section
901 of the Indenture shall be cured or waived and any remedial action by the
Trustee rescinded, any correlative default under this Loan Agreement shall be
deemed to have been cured or waived.
ARTICLE X
PREPAYMENTS
Section 10.1. Optional Prepayments.
(a) The Borrower is hereby granted, and shall have, the option to
prepay the unpaid principal of the Note in whole or in part in accordance with
and as set forth in Section 701 of the Indenture with respect to the prepayment
of the Bonds; provided, all prepayments shall be made in immediately available
funds and with accrued interest to the date of prepayment and that any
prepayment of the Note in part shall be applied to unpaid principal. Any
prepayment pursuant to this subsection (a) shall be made by the Borrower taking,
or causing the Issuer to take, the actions required (i) for Payment of the
Bonds, in the case of prepayment of the Note in whole, or (ii) to effect
prepayment of less than all of the Bonds according to their terms in the case of
a partial prepayment of the Note.
(b) In the event of damage, destruction, or condemnation of the Plant
or any part thereof, the Borrower may, at its option, pursuant to Section 6.8
hereof (if it is then effective) and without penalty or premium, prepay the Note
in whole or in part; provided that any such prepayment shall be made in
immediately available funds with accrued interest to the date of whole or
partial prepayment. Any prepayment pursuant to this subsection (b) shall be made
by the Borrower taking, or causing the Issuer to take, the actions required for
the full or partial prepayment of the Bonds as provided for in subsection (a)
hereof.
(c) To exercise the option granted in subsection (a) or (b) of this
Section 10.1, the Borrower shall give written notice to the Issuer and the
Trustee which shall specify therein (i) the date of the intended prepayment of
the Note, which shall not be less than 45 days from the date the notice is
mailed and (ii) the principal amount of the Note to be prepaid. When given such
notice shall be irrevocable by the Borrower.
Section 10.2. Mandatory Prepayments.
(a) Reserved.
(b) Prior to the Conversion Date, in the event any Credit Facility is
not renewed and an Alternate Credit Facility has not been provided in accordance
with Section 603 of the Indenture, the Borrower shall on or before the Interest
Payment Date occurring closest but not less than 15 days prior to the expiration
date of the then current Credit Facility, prepay the entire unpaid principal
balance of the Note in full and the Trustee shall promptly declare the Bonds to
be accelerated pursuant to the provisions of the Indenture. The Borrower shall
promptly notify the Issuer and the Trustee of the date selected for such
payment.
Section 10.3. Other Mandatory Prepayments. The amounts required to be
applied to the prepayment of the Note by Sections 4.4, 5.3 and 6.8 hereof shall
be applied by the Borrower to prepay,
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together with accrued interest, all or a portion of the unpaid principal of the
Note. Such prepayment shall be made by the Borrower taking, or causing the
Issuer to take, the actions required for payment of the Bonds, whether by
redemption prior to the maturity or by payment at maturity, or to effect the
purchase, redemption or payment at maturity of less than all of the principal
installments of the Bonds on a pro rata basis.
ARTICLE XI
MISCELLANEOUS
Section 11.1. References to the Bonds Ineffective After Bonds Paid.
Upon payment of the Bonds, all references in this Loan Agreement to the Bonds
shall be ineffective and the Issuer and any holder of the Bonds shall not
thereafter have any rights hereunder.
Section 11.2. No Implied Waiver. In the event any agreement contained
in the Note or this Loan Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
thereunder or hereunder. Neither any failure nor any delay on the part of the
Trustee to exercise any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege.
Section 11.3. Issuer Representative. Whenever under the provisions of
this Loan Agreement the approval of the Issuer is required or the Issuer is
required to take some action at the request of the Borrower, such approval shall
be made or such action shall be taken by the Issuer Representative; and the
Borrower, the Trustee and the Bondholders shall be authorized to rely on any
such approval or action.
Section 11.4. Borrower Representative. Whenever under the provisions of
this Loan Agreement the approval of the Borrower is required or the Borrower is
required to take some action at the request of the Issuer, such approval shall
be made or such action shall be taken by the Borrower Representative; and the
Issuer, the Trustee and the Bondholders shall be authorized to act on any such
approval or action.
Section 11.5. Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered by hand delivery or mailed by first class, postage prepaid,
registered or certified mail, addressed as follows:
If to the Issuer: Mississippi Business Finance Corporation
Post Office Box 849
Jackson, Mississippi 39205-0849
Attention: Executive Director
If to the Borrower: Dollar Tree Distribution, Inc.
c/o Dollar Tree Stores, Inc.
500 Volvo Parkway
Chesapeake, Virginia 23320
Attention: Corporate Controller
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With a copy to :
Hofheimer Nusbaum, P.C.
Dominion Tower, Suite 1700
999 Waterside Drive
Post Office Box 3460
Norfolk, Virginia 23514-3460
Attention: W.A. Old, Jr.
If to the Trustee: AmSouth Bank
1901 Sixth Avenue North, Suite 730
Birmingham, Alabama 35203
Attention: Corporate Trust Department
If to the Bank: First Union National Bank
Two First Union Center
Charlotte, North Carolina 28288
(Attention: International Operations)
The Issuer, the Borrower or the Trustee may, by notice given hereunder,
designate from time to time any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 11.6. If Payment or Performance Date Is Other Than a Business
Day. If the specified or last date for the making of any payment, the
performance of any act or the exercising of any right, as provided in this Loan
Agreement, shall be a day other than a Business Day, such payment may be made or
act performed or right exercised on the next succeeding Business Day with the
same effect as if made, performed or exercised on the specified date.
Section 11.7. Binding Effect. This Loan Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Borrower and their
respective successors and assigns.
Section 11.8. Severability. In the event any provision of this Loan
Agreement or the Note shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof or thereof.
Section 11.9. Amendments, Changes and Modifications. Subsequent to the
issuance of the Bonds and prior to Payment of the Bonds, this Loan Agreement and
the other Bond Documents may not be effectively amended, changed, modified,
altered or terminated except in accordance with the Indenture.
Section 11.10. Execution in Counterparts. This Loan Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument, and no one counterpart
of which need be executed by all parties.
Section 11.11. Applicable Law. This Loan Agreement shall be governed
by and construed in accordance with the laws of the State.
Section 11.12. No Charge Against Issuer Credit. No provision hereof
shall be construed to impose a charge against the general credit of the Issuer
or any personal or pecuniary liability upon any commissioner, official, employee
or agent of the Issuer.
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Section 11.13. Issuer Not Liable. Notwithstanding any other provision
of this Loan Agreement (a) the Issuer shall not be liable to the Borrower, the
Trustee, any Bondholder or any other Person for any failure of the Issuer to
take action under this Loan Agreement unless the Issuer (i) is requested in
writing by an appropriate Person to take such action, (ii) is assured of payment
of or reimbursement for any expense in such action, and (iii) is afforded, under
the existing circumstances, a reasonable period to take such action, and (b)
except with respect to any action for specific performance or any action in the
nature of a prohibitory or mandatory injunction, neither the Issuer nor any
commissioner of the Issuer nor any other official, employee or agent of the
Issuer shall be liable to the Borrower, the Trustee, any Bondholder or any other
Person for any action taken by the Issuer or by its officers, servants, agents
or employees, or for any failure to take action under this Loan Agreement or the
other Bond Documents to which the Issuer is a party. In acting under this Loan
Agreement, or in refraining from acting under this Loan Agreement, the Issuer
may conclusively rely on the advice of its counsel.
Section 11.14. Expenses. The Borrower agrees to pay all reasonable fees
and expenses incurred in connection with the preparation, execution, delivery,
modification, waiver, and amendment of this Loan Agreement, the other Bond
Documents and related documents, and the fees and expenses of Bond Counsel and
Counsel for the Issuer. The Borrower also agrees to pay all expenses incurred by
the Trustee or the Issuer in collection of any indebtedness incurred hereunder
in the Event of Default by the Borrower, provided that the amount of any legal
fees so incurred shall be without regard to any statutory presumption.
Section 11.15. Amounts Remaining with the Trustee. Any amounts
remaining in the Bond Fund or otherwise in trust with the Trustee under the
Indenture or this Loan Agreement shall, after Payment of the Bonds and all
Administrative Expenses in accordance with this Loan Agreement, be disbursed by
the Trustee in accordance with the provisions of the Indenture or otherwise as
may be required by law.
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IN WITNESS WHEREOF, the Issuer and the Borrower have caused this Loan
Agreement to be executed in their respective legal names by their duly
authorized representatives and their respective seals to be hereunto affixed,
and the signatures of duly authorized persons to be attested, all as of the date
first above written.
MISSISSIPPI BUSINESS FINANCE CORPORATION
ATTEST:
By: /s/ Vernon Smith By: /s/ Bill Barry
------------------------- ---------------------------
Title: Secretary Title: Executive Director
(SEAL)
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DOLLAR TREE DISTRIBUTION, INC.
ATTEST:
By: /s/ Frederick C. Coble By: /s/ H. Ray Compton
-------------------------- --------------------------
Title: Assistant Secretary Title: Executive Vice President
(CORPORATE SEAL)
[Signature page of Loan Agreement]
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RECEIPT
Receipt of the foregoing original counterpart of the Loan Agreement, dated as of
May 1, 1998, between Mississippi Business Finance Corporation and Dollar Tree
Distribution, Inc., is hereby acknowledged.
AmSouth Bank,
as Trustee
By: /s/ Ann M. Harris
-----------------------------
Title: Vice President
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