GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of the 1st day of May, 1998 (this
"Guaranty"), is made by each of the undersigned Affiliates or Subsidiaries of
DOLLAR TREE DISTRIBUTION, INC., a Virginia corporation (the "Borrower"), and
each other Subsidiary of the Borrower that, after the date hereof, executes an
instrument of accession hereto substantially in the form of Exhibit A (a
"Guarantor Accession"; the undersigned and such other Subsidiaries of the
Borrower, collectively, the "Guarantors"), in favor of the Bank (as hereinafter
defined). Capitalized terms used herein without definition shall have the
meanings given to them in the Reimbursement Agreement referred to below.
RECITALS
A. The Borrower and First Union National Bank (the "Bank"), are parties
to a Letter of Credit and Reimbursement Agreement, dated as of the date hereof
(as amended, modified, supplemented or restated from time to time, the
"Reimbursement Agreement"), pursuant to which the Bank has issued an irrevocable
direct-pay letter of credit in the stated amount of $19,304,521 (the "Letter of
Credit"). The Bank has issued the Letter of Credit as credit enhancement for the
Mississippi Business Finance Corporation Taxable Variable Rate Demand Revenue
Bonds (Dollar Tree Distribution, Inc. Project) Series 1998 in the aggregate
principal amount of up to $19,000,000 (the "Bonds"). The Bonds have been issued
by the Mississippi Business Finance Corporation (the "Issuer") pursuant to a
Trust Indenture dated as of the date hereof between the Issuer and AmSouth Bank,
as trustee (the "Trustee").
B. As a condition, among others, to the issuance of the Letter of
Credit pursuant to the Reimbursement Agreement, each Guarantor has agreed, by
executing and delivering this Guaranty, to guarantee to the Bank the payment in
full of the Guaranteed Obligations (as hereinafter defined). The Bank is relying
on this Guaranty in its decision to extend credit to the Borrower under the
Reimbursement Agreement, and would not enter into the Reimbursement Agreement
without this Guaranty.
C. The Borrower and the Guarantors are engaged in related businesses
and undertake certain activities and operations on an integrated basis. Each
Guarantor will therefore obtain benefits as a result of the extension of credit
to the Borrower under the Reimbursement Agreement, which benefits are hereby
acknowledged, and, accordingly, desires to execute and deliver this Guaranty.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to induce the Bank to enter into the Reimbursement Agreement and
to issue the Letter of Credit for the account of the Borrower, each Guarantor
hereby agrees as follows:
1. Guaranty. (a) Each Guarantor hereby irrevocably, absolutely and
unconditionally, and jointly and severally:
(i) guarantees to the Bank the full and prompt payment, at
any time and from time to time as and when due (whether at the stated
maturity, by acceleration or otherwise), of all of the obligations of
the Borrower to the Bank, including without limitation (y) all
principal of and interest on draws on the Letter of Credit, and all
fees, expenses, indemnities and other amounts payable by the Borrower
under the Reimbursement Agreement or any other document executed in
connection therewith (including, to the fullest extent permitted by
law, interest accruing after the filing of a petition or commencement
of a case by or with respect to the Borrower seeking relief under any
Insolvency Laws (as hereinafter defined), regardless of whether a claim
for any such interest is allowed against the Borrower in any such
proceeding), and (z) all obligations under the Reimbursement Agreement
that, but for the operation of the automatic stay under Section 362(a)
of the Bankruptcy Code, would become due (all liabilities and
obligations described in this clause (i), collectively, the "Guaranteed
Obligations"); and
(ii) agrees to pay upon demand all costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) incurred or paid by the Bank in connection with any suit,
action or proceeding to enforce or protect any rights of the Bank
hereunder, including costs and expenses for which the Bank is entitled
to reimbursement under or pursuant to the Reimbursement Agreement or
any other document executed in connection therewith, and in connection
with any amendment, modification, waiver or consent hereof or pursuant
hereto (all liabilities and obligations described in this clause (ii),
collectively, the "Other Obligations"; and the Other Obligations,
together with the Guaranteed Obligations, the "Total Obligations");
provided, however, that notwithstanding any other provisions contained herein,
no provision of this Guaranty shall require or permit the collection from any
Guarantor of interest in excess of the maximum rate or amount that such
Guarantor may be required or permitted to pay pursuant to applicable law.
(b) The guaranty of each Guarantor set forth in this Section is a
guaranty of payment as a primary obligor, and not a guaranty of collection.
2. Guaranty Absolute. Each Guarantor agrees that its obligations
hereunder are irrevocable, absolute and unconditional, are independent of the
Guaranteed Obligations, any other
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obligations of the Borrower and any security for or other guaranty or liability
in respect thereof, whether given by such Guarantor or any other Person, and
shall not be discharged, released, limited, deferred, reduced or otherwise
affected to any extent by reason of any of the following, whether or not such
Guarantor or other Person has notice or knowledge thereof:
(i) any change in the time, manner or place of payment of, or
in any other term of, any Guaranteed Obligations or any guaranty or
other liability in respect thereof, or any amendment, modification or
supplement to, restatement of, or consent to any rescission or waiver
of or departure from, any provisions of the Reimbursement Agreement or
any agreement or instrument delivered pursuant thereto;
(ii) the invalidity or unenforceability of any Guaranteed
Obligations, any guaranty or other liability in respect thereof or any
provisions of the Reimbursement Agreement or any agreement or
instrument delivered pursuant thereto;
(iii) the addition or release of Guarantors hereunder or the
taking, acceptance or release of other guarantees of any Guaranteed
Obligations or other security for any Guaranteed Obligations or for any
guaranty or other liability in respect thereof;
(iv) any discharge, modification, settlement, compromise or
other action in respect of any Guaranteed Obligations or any guaranty
or other liability in respect thereof, including any acceptance or
refusal of any offer or performance with respect to the same or the
subordination of the same to the payment of any other obligations;
(v) any agreement not to pursue or enforce or any failure to
pursue or enforce (whether voluntarily or involuntarily as a result of
operation of law, court order or otherwise) any right or remedy in
respect of any Guaranteed Obligations, any guaranty or other liability
or security in respect thereof; any sale, exchange, release,
substitution, compromise or other action in respect of any security; or
any failure to create, protect, perfect, secure, insure, continue or
maintain any Liens in any security;
(vi) the exercise of any right or remedy available under the
Reimbursement Agreement, at law, in equity or otherwise in respect of
any security for any Guaranteed Obligations or for any guaranty or
other liability in respect thereof, in any order and by any manner
thereby permitted, including, without limitation, foreclosure on any
security by any manner of sale thereby permitted, whether or not every
aspect of such sale is commercially reasonable;
(vii) any bankruptcy, reorganization, arrangement, liquidation,
insolvency, dissolution, termination, reorganization or like change in
the corporate structure or existence of the Borrower or any other
Person directly or indirectly liable for any Guaranteed Obligations;
(viii) any manner of application of any payments by or amounts
received or collected from any Person, by whomsoever paid and howsoever
realized, whether in
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reduction of any Guaranteed Obligations or any other obligations of
the Borrower or any other Person directly or indirectly liable for
any Guaranteed Obligations, regardless of what Guaranteed Obligations
may remain unpaid after any such application; or
(ix) any other circumstance that might otherwise constitute a
legal or equitable discharge of, or a defense, set-off or counterclaim
available to, the Borrower, any Guarantor or a surety or guarantor
generally, other than the occurrence of all of the following: (y) the
indefeasible payment in full of the Total Obligations and (z) the
termination of the Bank's commitments under the Reimbursement Agreement
and the Letter of Credit (the events in clauses (y) and (z) above,
collectively, the "Termination Requirements").
3. Certain Waivers. Each Guarantor hereby knowingly, voluntarily and
expressly waives:
(i) all presentments, demands for payment, demands for
performance, protests and notices of any other kind, including without
limitation notices of nonpayment or other nonperformance (including
notice of default under the Reimbursement Agreement or any documents
executed in connection therewith with respect to any Guaranteed
Obligations), protest, dishonor, acceptance hereof, extension of
additional credit to the Borrower and of any of the matters referred to
in Section 2 and of any rights to consent thereto;
(ii) any right to require the Bank, as a condition of payment
or performance by such Guarantor hereunder, to proceed against, or to
exhaust or have resort to any security from or any deposit balance or
other credit in favor of, the Borrower, any other Guarantor or any
other Person directly or indirectly liable for any Guaranteed
Obligations, or to pursue any other remedy or enforce any other right;
and any other defense based on an election of remedies with respect to
any security for any Guaranteed Obligations or for any guaranty or
other liability in respect thereof, notwithstanding that any such
election (including any failure to pursue or enforce any rights or
remedies) may impair or extinguish any right of indemnification,
contribution, reimbursement or subrogation or other right or remedy of
any Guarantor against the Borrower, any other Guarantor or any other
Person directly or indirectly liable for any Guaranteed Obligations or
any such security; and, without limiting the generality of the
foregoing, each Guarantor hereby specifically waives the benefits of
Sections 26-7 through 26-9, inclusive, of the General Statutes of North
Carolina, as amended from time to time, and any similar statute or law
of any other jurisdiction, as the same may be amended from time to
time;
(iii) any right or defense based on or arising by reason of any
right or defense of the Borrower or any other Person, including,
without limitation, any defense based on or arising from a lack of
authority or other disability of the Borrower or any other Person, the
invalidity or unenforceability of any Guaranteed Obligations, any
security therefor or the Reimbursement Agreement or any other agreement
or instrument delivered pursuant thereto, or the cessation of the
liability of the Borrower for any reason other than the satisfaction of
the Termination Requirements;
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(iv) any defense based on the Bank's acts or omissions in the
administration of the Guaranteed Obligations, any guaranty or other
liability in respect thereof or any security for any of the foregoing,
and promptness, diligence or any requirement that the Bank create,
protect, perfect, secure, insure, continue or maintain any Liens in any
such security;
(v) any right to assert against the Bank, as a defense,
counterclaim, crossclaim or set-off, any defense, counterclaim, claim,
right of recoupment or set-off that it may at any time have against the
Bank (including, without limitation, failure of consideration, statute
of limitations, payment, accord and satisfaction and usury), other than
compulsory counterclaims; and
(vi) any defense based on or afforded by any applicable law
that limits the liability of or exonerates guarantors or sureties or
that may in any other way conflict with the terms of this Guaranty.
4. Waiver of Subrogation; Subordination. Each Guarantor hereby
knowingly, voluntarily and expressly waives all claims and rights that it may
have against the Borrower at any time as a result of any payment made under or
in connection with this Guaranty or the performance or enforcement hereof,
including all rights of subrogation to the rights of any of the Bank against the
Borrower, all rights of indemnity, contribution or reimbursement against the
Borrower, all rights to enforce any remedies of the Bank against the Borrower,
and any benefit of, and any right to participate in, any Collateral or other
security held by the Bank to secure payment of the Guaranteed Obligations, in
each case whether such claims or rights arise by contract, statute (including
without limitation the Bankruptcy Code), common law or otherwise. Each Guarantor
agrees that all indebtedness and other obligations, whether now or hereafter
existing, of the Borrower or any of its Subsidiaries or other Affiliates to such
Guarantor, including without limitation any such indebtedness in any proceeding
under the Bankruptcy Code and any intercompany receivables, together with any
interest thereon, shall be, and hereby are, subordinated and made junior in
right of payment to the Total Obligations. Each Guarantor further agrees that if
any amount shall be paid to or any distribution received by any Guarantor (i) on
account of any such indebtedness at any time after the occurrence and during the
continuance of an Event of Default, or (ii) on account of any such rights of
subrogation, indemnity, contribution or reimbursement at any time prior to the
satisfaction of the Termination Requirements, such amount or distribution shall
be deemed to have been received and to be held in trust for the benefit of the
Bank, and shall forthwith be delivered to the Bank in the form received (with
any necessary endorsements in the case of written instruments), to be applied
against the Guaranteed Obligations, whether or not matured, in accordance with
the terms of the Reimbursement Agreement and without in any way discharging,
limiting or otherwise affecting the liability of such Guarantor under any other
provision of this Guaranty. Additionally, in the event the Borrower or any
Subsidiary or other Affiliate of the Borrower becomes a "debtor" within the
meaning of the Bankruptcy Code, the Bank shall be entitled, at its option, as
attorney-in-fact for each Guarantor, and is hereby authorized and appointed by
each Guarantor, to file proofs of claim on behalf of each relevant Guarantor and
vote the rights of each such Guarantor in
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any plan of reorganization, and to demand, sue for, collect and receive every
payment and distribution on any indebtedness of the Borrower or such Subsidiary
or Affiliate to any Guarantor in any such proceeding, each Guarantor hereby
assigning to the Bank all of its rights in respect of any such claim, including
the right to receive payments and distributions in respect thereof.
5. Representations and Warranties. Each Guarantor hereby represents and
warrants to the Bank as follows:
(a) Such Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the full corporate power and authority (i) to execute, deliver and perform
this Guaranty and any other document in respect of the Total Obligations to
which it is or will be a party, including without limitation the Reimbursement
Agreement (all such other documents, the "Reimbursement Documents"), (ii) to own
and hold its property and (iii) to engage in its business as presently
conducted.
(b) Such Guarantor has taken all necessary corporate action to execute,
deliver and perform this Guaranty and the Reimbursement Documents to which it is
or will be a party, and has, or on any later date of execution and delivery will
have, validly executed and delivered the Guaranty and each of the Reimbursement
Documents to which it is or will be a party. This Guaranty constitutes, and each
of such Reimbursement Documents upon execution and delivery will constitute, the
legal, valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general equitable principles.
(c) The execution, delivery and performance by such Guarantor of this
Guaranty and the other Reimbursement Documents to which it is a party, and
compliance by it with the terms hereof and thereof, do not and will not (i)
violate any provision of its articles or certificate of incorporation or bylaws,
(ii) contravene any requirement of law applicable to it, (iii) conflict with,
result in a breach of or constitute (with notice, lapse of time or both) a
default under any indenture, loan agreement, mortgage, deed of trust, lease or
other agreement or instrument to which it is a party, by which it or any of its
properties is bound or to which it is subject, or (iv) result in or require the
creation or imposition of any Lien upon any of its properties, other than Liens
created pursuant to the Reimbursement Documents.
(d) No consent, approval, authorization or other action by, notice to,
or registration or filing with, any Governmental Authority is or will be
required as a condition to or otherwise in connection with the due execution,
delivery and performance by such Guarantor of this Guaranty and the other
Reimbursement Documents to which it is a party or the legality, validity or
enforceability hereof or thereof.
(e) Except as may be disclosed in Schedule 2.6 to the Reimbursement
Agreement, there are no actions, investigations, suits or proceedings pending
or, to the knowledge of such Guarantor, threatened, at law, in equity or in
arbitration, before any court, other Governmental Authority or other Person, (i)
against or affecting such Guarantor or any of its properties that
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would, if adversely determined, be reasonably likely to have a Material Adverse
Effect or (ii) with respect to this Guaranty or any of the other Reimbursement
Documents to which such Guarantor is a party.
(f) Such Guarantor has been provided with a true and complete copy of
the executed Reimbursement Agreement, as in effect as of the date it became a
party hereto, and its principal officers are familiar with the contents thereof,
particularly insofar as the contents thereof relate or apply to such Guarantor.
6. Financial Condition of Borrower. Each Guarantor represents that it
has knowledge of the Borrower's financial condition and affairs and that it has
adequate means to obtain from the Borrower on an ongoing basis information
relating thereto and to the Borrower's ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect with respect to such
Guarantor. Each Guarantor agrees that the Bank shall have no obligation to
investigate the financial condition or affairs of the Borrower for the benefit
of any Guarantor nor to advise any Guarantor of any fact respecting, or any
change in, the financial condition or affairs of the Borrower that might become
known to the Bank at any time, whether or not such Bank knows or believes or has
reason to know or believe that any such fact or change is unknown to any
Guarantor, or might (or does) materially increase the risk of any Guarantor as
guarantor, or might (or would) affect the willingness of any Guarantor to
continue as a guarantor of the Guaranteed Obligations.
7. Events Of Default. The occurrence of any one or more of the
following events shall constitute an event of default hereunder (each, an "Event
of Default"):
(a) Failure of any Guarantor to pay any of the Total Obligations after
the same shall become due, whether at maturity, by acceleration or otherwise;
(b) Failure of any Guarantor to observe and perform the covenants
contained Articles V and VI of the Reimbursement Agreement required to be
observed and performed by it;
(c) Any warranty or representation made by any Guarantor in this
Guaranty, the Reimbursement Agreement or any document, instrument or certificate
delivered to the Bank in connection therewith shall be incorrect in any material
sense when made or deemed made;
(d) The occurrence and continuance of any default or event of default
under the Reimbursement Agreement, or in any other agreement now existing or
hereafter executed evidencing or securing any of the Total Obligations; or
(e) The occurrence and continuance of any default or event of default
in any agreement between any Guarantor and the Bank.
8. Payments; Application; Setoff. (a) Each Guarantor agrees that, upon
the failure of the Borrower to pay any Guaranteed Obligations when and as the
same shall become due
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(whether at the stated maturity, by acceleration or otherwise), and without
limitation of any other right or remedy that the Bank may have at law, in equity
or otherwise against such Guarantor, such Guarantor will forthwith pay or cause
to be paid to the Agent, for the benefit of the Bank, an amount equal to the
amount of the Guaranteed Obligations then due and owing as aforesaid.
(b) All payments made by each Guarantor hereunder will be made in
dollars to the Bank, without set-off, counterclaim or other defense.
(c) All payments made hereunder shall be applied upon receipt as
follows:
(i) first, to the payment of all Other Obligations owing
to the Bank;
(ii) second, after payment in full of the amounts specified in
clause (i) above, to the ratable payment of all other Total Obligations
owing to the Bank; and
(iii) third, after payment in full of the amounts specified in
clauses (i) and (ii) above, and following the termination of this
Guaranty, to the Guarantors or any other Person lawfully entitled to
receive such surplus.
(d) The Guarantors shall remain jointly and severally liable to the
extent of any deficiency between the amount of all payments made hereunder and
the aggregate amount of the sums referred to in clauses (i) and (ii) of
subsection (c) above.
(e) In addition to all other rights and remedies available under the
Reimbursement Agreement or applicable law or otherwise, upon and at any time
after the occurrence and during the continuance of any Event of Default, the
Bank may, and is hereby authorized by each Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by each Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by the Bank to
or for the credit or the account of such Guarantor against any or all of the
obligations of such Guarantor to the Bank hereunder now or hereafter existing,
whether or not such obligations may be contingent or unmatured, each Guarantor
hereby granting to the Bank a continuing security interest in and Lien upon all
such deposits and other property as security for such obligations. The Bank
agrees to notify any affected Guarantor promptly after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
9. No Waiver. The rights and remedies of the Bank expressly set forth
in this Guaranty and the Reimbursement Agreement are cumulative and in addition
to, and not exclusive of, all other rights and remedies available at law, in
equity or otherwise. No failure or delay on the part of the Bank in exercising
any right, power or privilege 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 or be construed to
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be a waiver of any Default or Event of Default. No course of dealing between any
of the Guarantors and the Bank or their agents or employees shall be effective
to amend, modify or discharge any provision of this Guaranty or the
Reimbursement Agreement or to constitute a waiver of any Default or Event of
Default. No notice to or demand upon any Guarantor in any case shall entitle
such Guarantor or any other Guarantor to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the right of the
Bank to exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
10. Enforcement. The obligations of each Guarantor hereunder are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against each Guarantor whether or not action is brought against the
Borrower or any other Guarantor and whether or not the Borrower or any other
Guarantor is joined in any such action. Each Guarantor agrees that to the extent
all or part of any payment of the Guaranteed Obligations made by any Person is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid by or on behalf of the Bank to a trustee, receiver or
any other party under any insolvency law (the amount of any such payment, a
"Reclaimed Amount"), then, to the extent of such Reclaimed Amount, this Guaranty
shall continue in full force and effect or be revived and reinstated, as the
case may be, as to the Guaranteed Obligations intended to be satisfied as if
such payment had not been received; and each Guarantor acknowledges that the
term "Guaranteed Obligations" includes all Reclaimed Amounts that may arise from
time to time.
11. Amendments, Waivers, etc. (a) This Guaranty contains the complete
understanding of the parties hereto with respect to the subject matter herein.
Each Guarantor acknowledges that it is not relying upon any statements or
representations of the Bank not contained in this Guaranty and that such
statements or representations, if any, are of no force or effect and are fully
superseded by this Guaranty. No amendment, modification, waiver, discharge or
termination of this Guaranty or any provision hereof, nor any consent to any
departure by any Guarantor therefrom, shall in any event be effective unless in
writing and signed by the Bank and such Guarantor.
(b) No delay or failure to take action on the part of the Bank in
exercising any right, power or privilege shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude other or further exercise thereof or the exercise of any other right,
power or privilege or shall be construed to be a waiver of any Event of Default.
No course of dealing between any Guarantor and the Bank or its agents or
employees shall be effective to change, modify or discharge any provision of
this Guaranty or to constitute a waiver of any Event of Default. No notice to or
demand upon any Guarantor in any case shall entitle such Guarantor or any other
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Bank to exercise any
right or remedy or take any other or further action in any circumstances without
notice or demand. All rights and remedies under this Guaranty, the Reimbursement
Agreement and the other documents executed in connection therewith are
cumulative to, and not exclusive of, any rights or remedies that are available
at law, in equity or otherwise.
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12. Addition, Release of Guarantors. Each Guarantor recognizes that the
provisions of the Reimbursement Agreement require Persons that become
Subsidiaries of the Borrower and that are not already parties hereto to become
Guarantors hereunder by executing a Guarantor Accession, and agrees that its
obligations hereunder shall not be discharged, limited or otherwise affected by
reason of the same, or by reason of the Bank's actions in effecting the same or
in releasing any Guarantor hereunder, in each case without the necessity of
giving notice to or obtaining the consent of any other Guarantor.
13. Continuing Guaranty; Term; Successors and Assigns; Survival. This
Guaranty is a continuing guaranty and covers all of the Guaranteed Obligations
as the same may arise and be outstanding at any time and from time to time from
and after the date hereof, and shall (i) remain in full force and effect until
satisfaction of all of the Termination Requirements, (ii) be binding upon and
enforceable against each Guarantor and its successors and assigns (provided,
however, that no Guarantor may sell, assign or transfer any of its rights,
interests, duties or obligations hereunder without the prior written consent of
the Bank) and (iii) inure to the benefit of and be enforceable by the Bank and
its successors and assigns. All representations, warranties, covenants and
agreements herein shall survive the execution and delivery of this Guaranty and
any Guarantor Accession.
14. Governing Law; Consent to Jurisdiction; Appointment of Borrower as
Representative, Process Agent, Attorney-in-Fact. (a) THIS GUARANTY HAS BEEN
EXECUTED, DELIVERED AND ACCEPTED AT, AND SHALL BE DEEMED TO HAVE BEEN MADE IN,
NORTH CAROLINA AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
BANK AND THE GUARANTORS DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NORTH CAROLINA. AS PART
OF THE CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED, EACH GUARANTOR HEREBY
CONSENTS TO THE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY, NORTH
CAROLINA OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE STATE
OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF THE
OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR
ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE BANK OR SUCH
GUARANTOR IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE BANK OR SUCH GUARANTOR. EACH GUARANTOR
IRREVOCABLY AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY
JUDGMENT RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION
THAT IT MAY HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY SUCH PROCEEDING.
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(b) EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES AND APPOINTS THE
BORROWER AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE ON ITS BEHALF ALL
SERVICE OF PROCESS IN ANY ACTION OR PROCEEDING AND ANY OTHER NOTICE OR
COMMUNICATION HEREUNDER, CONSENTS THAT ALL SERVICE OF PROCESS UPON IT MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO THE BORROWER AT ITS ADDRESS SET
FORTH HEREINABOVE (AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) BUSINESS DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY ADDRESSED), AND
AGREES THAT SERVICE SO MADE SHALL BE EFFECTIVE AND BINDING UPON SUCH GUARANTOR
IN EVERY RESPECT AND THAT ANY OTHER NOTICE OR COMMUNICATION GIVEN TO THE
BORROWER AT THE ADDRESS AND IN THE MANNER SPECIFIED HEREIN SHALL BE EFFECTIVE
NOTICE TO SUCH GUARANTOR. FURTHER, EACH GUARANTOR DOES HEREBY IRREVOCABLY MAKE,
CONSTITUTE AND APPOINT THE BORROWER AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT,
WITH FULL AUTHORITY IN ITS PLACE AND STEAD AND IN ITS NAME, THE BORROWER'S NAME
OR OTHERWISE, AND WITH FULL POWER OF SUBSTITUTION IN THE PREMISES, FROM TIME TO
TIME IN THE BORROWER'S DISCRETION TO AGREE ON BEHALF OF, AND SIGN THE NAME OF,
SUCH GUARANTOR TO ANY AMENDMENT, MODIFICATION OR SUPPLEMENT TO, RESTATEMENT OF,
OR WAIVER OR CONSENT IN CONNECTION WITH, THIS GUARANTY, THE REIMBURSEMENT
AGREEMENT OR ANY DOCUMENT OR INSTRUMENT PURSUANT HERETO OR THERETO, AND TO TAKE
ANY OTHER ACTION AND DO ALL OTHER THINGS ON BEHALF OF SUCH GUARANTOR THAT THE
BORROWER MAY DEEM NECESSARY OR ADVISABLE TO CARRY OUT AND ACCOMPLISH THE
PURPOSES OF THIS GUARANTY AND THE REIMBURSEMENT AGREEMENT. THE BORROWER WILL NOT
BE LIABLE FOR ANY ACT OR OMISSION NOR FOR ANY ERROR OF JUDGMENT OR MISTAKE OF
FACT UNLESS THE SAME SHALL OCCUR AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE BORROWER. THIS POWER, BEING COUPLED WITH AN INTEREST, IS
IRREVOCABLE BY ANY GUARANTOR FOR SO LONG AS THIS GUARANTY SHALL BE IN EFFECT
WITH RESPECT TO SUCH GUARANTOR. BY ITS SIGNATURE HERETO, THE BORROWER CONSENTS
TO ITS APPOINTMENT AS PROVIDED FOR HEREIN AND AGREES PROMPTLY TO DISTRIBUTE ALL
PROCESS, NOTICES AND OTHER COMMUNICATIONS TO EACH GUARANTOR.
(c) NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE BANK TO
BRING ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION.
15. Arbitration; Preservation and Limitation of Remedies. (a) Upon
demand of any party hereto, whether made before or after institution of any
judicial proceeding, any dispute,
11
claim or controversy arising out of, connected with or relating to this Guaranty
or the Reimbursement Agreement ("Disputes") between or among the Guarantors and
the Bank, or any of them, shall be resolved by binding arbitration as provided
herein. Institution of a judicial proceeding by a party does not waive the right
of that party to demand arbitration hereunder. Disputes may include, without
limitation, tort claims, counterclaims, claims brought as class actions, claims
arising from documents executed in the future, or claims arising out of or
connected with the transactions contemplated by this Guaranty and the
Reimbursement Agreement. Arbitration shall be conducted under and governed by
the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of
the American Arbitration Association (the "AAA"), as in effect from time to
time, and Title 9 of the U.S. Code, as amended. All arbitration hearings shall
be conducted in the city in which the principal office of the Bank is located.
The expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted.
(b) Notwithstanding the preceding binding arbitration provisions, the
parties hereto agree to preserve, without diminution, certain remedies that any
party hereto may employ or exercise freely, either alone, in conjunction with or
during a Dispute. Any party hereto shall have the right to proceed in any court
of proper jurisdiction or by self-help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any security by
exercising a power of sale granted pursuant to the Reimbursement Agreement or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help, including peaceful occupation
of real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies, including
injunctive relief, sequestration, garnishment, attachment, appointment of a
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute. The parties hereto agree that no party shall
have a remedy of punitive or exemplary damages against any other party in any
Dispute, and each party hereby waives any right or claim to punitive or
exemplary damages that it has now or that may arise in the future in connection
with any Dispute, whether such Dispute is resolved by arbitration or judicially.
16. Waiver of Jury Trial. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, THE BANK, HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ITS RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR THE REIMBURSEMENT
AGREEMENT, OR ANY PROCEEDING TO WHICH THE BANK OR SUCH GUARANTOR IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE
12
BANK OR SUCH GUARANTOR. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including, without limitation,
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each Guarantor and, by its acceptance of the benefits hereof,
the Bank, (i) acknowledges that this waiver is a material inducement to enter
into a business relationship, that it has relied on this waiver in entering into
this Guaranty or accepting the benefits hereof, as the case may be, and that it
will continue to rely on this waiver in its related future dealings with the
other parties hereto, and (ii) further warrants and represents that it has
reviewed this waiver with its legal counsel and that, based upon such review, it
knowingly and voluntarily waives its jury trial rights to the extent permitted
by applicable law. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, MODIFICATIONS OR SUPPLEMENTS TO OR RESTATEMENTS OF THIS
GUARANTY OR THE REIMBURSEMENT AGREEMENT. IN THE EVENT OF LITIGATION, THIS
GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. IN THE EVENT
THAT THE WAIVER OF JURY TRIAL HEREIN SHALL BE DETERMINED TO BE INVALID OR
UNENFORCEABLE AS A MATTER OF LAW WITH RESPECT TO ANY PARTY, THE PROVISIONS OF
SECTION 15 SHALL GOVERN AS TO THE MATTERS SET FORTH THEREIN WITH RESPECT TO SUCH
PARTY.
17. Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered (a) if to any Guarantor, in care of the Borrower
and at the Borrower's address for notices set forth in the Reimbursement
Agreement and (b) if to the Bank, at its address for notices set forth in the
Reimbursement Agreement; or to such other address as any of the Persons listed
above may designate for itself by like notice to the other Persons listed above;
and in each case, with copies to such other Persons as may be specified under
the provisions of the Reimbursement Agreement. All such notices and
communications shall be deemed to have been given (i) if mailed as provided
above by any method other than overnight delivery service, on the third Business
Day after deposit in the mails, (ii) if mailed by overnight delivery service,
telegraphed, telexed, telecopied or cabled, when delivered for overnight
delivery, delivered to the telegraph company, confirmed by telex answerback,
transmitted by telecopier or delivered to the cable company, respectively, or
(iii) if delivered by hand, upon delivery; provided that notices and
communications to the Bank shall not be effective until received by the Bank.
18. Severability. To the extent any provision of this Guaranty is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Guaranty in any jurisdiction.
19. Construction. The headings of the various sections and subsections
of this Guaranty have been inserted for convenience only and shall not in any
way affect the meaning or
13
construction of any of the provisions hereof. Unless the context otherwise
requires, words in the singular include the plural and words in the plural
include the singular.
20. Counterparts; Effectiveness. This Guaranty may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. This Guaranty shall
become effective, as to any Guarantor, upon the execution and delivery by such
Guarantor of a counterpart hereof or a Guarantor Accession.
14
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed by its duly authorized officers as of the date first above written.
The Borrower hereby joins in this Guaranty for purposes of evidencing
its consent to, and agreement to perform, the provisions of Section 14(b).
GUARANTORS:
DOLLAR TREE STORES, INC.
By: /s/ H. Ray Compton
----------------------------
Title: Executive Vice President
DOLLAR TREE MANAGEMENT, INC.
By: /s/ H. Ray Compton
----------------------------
Title: Executive Vice President
Accepted and agreed to:
FIRST UNION NATIONAL BANK
By: /s/ Hal A. Telimen
----------------------------
Title: Senior Vice President
[Signatures continued]
BORROWER:
DOLLAR TREE DISTRIBUTION, INC.
By: /s/ H. Ray Compton
-------------------------------
Title: Executive Vice President