PLACEMENT LETTER AGREEMENT
May 1, 1998
Mississippi Business Finance Corporation
Jackson, Mississippi
Dollar Tree Distribution, Inc.
Chesapeake, Virginia
Re: Placement of Mississippi Business Finance Corporation Incremental
Taxable Variable Rate Demand Revenue Bonds (Dollar Tree Distribution,
Inc. Project) Series 1998
Ladies and Gentlemen:
This letter confirms our agreement to act as your agent (the "Placement
Agent") in introducing certain institutional investors, as prospective initial
purchasers, to the Bonds in caption (collectively, the "Bonds"), designated
Mississippi Business Finance Corporation Incremental Taxable Variable Rate
Demand Revenue Bonds (Dollar Tree Distribution, Inc. Project) Series 1998. The
Bonds are to be issued, in the aggregate principal amount of up to $19,000,000,
by Mississippi Business Finance Corporation (the "Issuer") pursuant to a
resolution adopted by the Issuer and a Trust Indenture dated as of May 1, 1998
between the Issuer and AmSouth Bank, as Trustee (the "Trustee"). Proceeds of the
Bonds will be lent to Dollar Tree Distribution, Inc. (the "Borrower") pursuant
to a Loan Agreement dated as of May 1, 1998 between the Issuer and the Borrower,
such loan to be evidenced by the Borrower's promissory note (the "Note"). The
payment when due of the principal of and interest on (and purchase price of) the
Bonds is to be secured, to the extent provided therein, by an irrevocable Letter
of Credit issued by First Union National Bank (in such capacity, the "Bank")
pursuant to a Letter of Credit and Reimbursement Agreement dated as of May 1,
1998 between the Borrower and the Bank (the "Reimbursement Agreement"). The
Borrower and the undersigned (in such capacity, the "Remarketing Agent") have
entered into a Remarketing Agreement dated as of May 1, 1998 (the "Remarketing
Agreement") pursuant to which the Remarketing Agent, after the initial placement
of the Bonds, will determine the interest rate on the Bonds and will use its
best efforts to remarket any Bonds tendered for purchase pursuant to the terms
of the Indenture.
It is understood by and between the parties hereto that the Bonds will be
sold to the purchasers (each a "Purchaser"), each of which shall be an
"accredited investor" within any of the following categories at the time of the
sale of the Bonds to that entity:
(i) a bank, as defined in Section 3(a)(2) of the Securities
Act of 1933 as amended, (the "Securities Act"), acting in its individual or
fiduciary capacity;
(ii) a broker-dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(iii) an insurance company, as defined in Section 2(13) of the
Securities Act;
(iv) an investment company, as defined under the Investment
Company Act of 1940;
(v) a natural person whose individual net worth, or joint net
worth with such person's spouse, at the time of his or her purchase exceeds
$1,000,000;
(vi) a natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint income with the
person's spouse in excess of $300,000 in each of those years and who has a
reasonable expectation of reaching the same income level in the current
year;
(vii) a trust with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Bonds, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
promulgated under the Securities Act; or
(viii) any entity in which all the owners are accredited
investors.
As Placement Agent, we will use our best efforts to identify potential
initial purchasers of the Bonds and introduce them to the Issuer. The Issuer and
the Borrower hereby agree to perform such of their obligations as may be set
forth in a purchase agreement, if any, that may be entered into by the Issuer
with the Purchaser. For purposes of soliciting the interest of potential
purchasers, you hereby confirm your authorization for us to use a private
placement memorandum, including any appendices attached thereto (the "Placement
Memorandum") prepared from information provided by the Issuer, First Union
National Bank as issuer of a Letter of Credit and the Borrower.
In connection with the above-referenced matter, we hereby confirm our
understanding with you as follows:
1. No representative of the Borrower, the Issuer, the Placement Agent or
any other person has been authorized to give any information or make any
representations in connection with the offer or sale of the Bonds other than
those contained in the Placement Memorandum. The Placement Memorandum shall
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provide that the information contained therein is not guaranteed as to accuracy
or completeness by, and is not to be construed as a representation of, the
Placement Agent. Neither the Placement Agent, the Borrower, the Issuer or any
person acting on behalf of the Borrower, the Placement Agent or the Issuer will
utilize any form of general solicitation or general advertising in offering the
Bonds.
2. The Borrower shall be solely responsible for the contents of the
Placement Memorandum entitled "Use of Proceeds," and the "Project" and Appendix
A, "The Company," and hereby represents and warrants that the Placement
Memorandum did not and will not, as of the date of any offer or sale of the
Bonds, contain any untrue statement of a material fact relating to the Borrower
or the Project or omit to state a material fact necessary in order to make the
statements relating to the Borrower or the Project made, in light of the
circumstances in which they were made, not misleading.
3. Neither the Borrower nor the Issuer shall, directly or indirectly
(except through the Placement Agent), sell or offer, or attempt or offer to
dispose of, or solicit any offer to buy, or otherwise approach or negotiate with
any person in respect of, any of the Bonds and neither the Issuer nor the
Borrower has heretofore done any of the foregoing.
4. (a) The Borrower agrees with the Placement Agent that each of the
Borrower's representations and warranties contained in the Loan Agreement and
the Reimbursement Agreement, all of which shall survive delivery of the Bonds,
are and will, as of the date of delivery of the Bonds, be true and correct in
all material respects and are hereby made to the Placement Agent as if set forth
herein.
(b) The Placement Agent hereby represents and warrants to the Issuer and
the Borrower that it will offer the Bonds only in states or other jurisdictions
where the offer and sale of the Bonds are legal, either as exempt securities, as
exempt transactions or as a result of due registration of the Bonds for sale in
such state or jurisdiction, and will comply with all applicable state and
federal securities laws, and with all applicable regulations of the Securities
and Exchange Commission and other federal regulatory agencies; provided,
however, this representation and warranty shall not affect or diminish the
Borrower's obligations hereunder, including without limitation, Section 7.
(c) The Issuer and the Borrower hereby agree promptly from time to time to
take such action as the Placement Agent may reasonably request to qualify the
Bonds for offering and sale under the securities laws of such states as the
Placement Agent may reasonably request and to comply with such laws so as to
permit such offers and sales; provided that in connection therewith the Issuer
shall not be required to file a general consent to service of process.
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5. The obligations of the Placement Agent hereunder shall be conditioned on
the performance by the Issuer and the Borrower of their obligations hereunder
and on the following additional conditions:
(a) all conditions to issuance of the Bonds set forth in Section 214 of the
Indenture shall have been satisfied.
(b) The Borrower shall have furnished to the Placement Agent an opinion of
counsel for the Borrower, addressed to the Placement Agent dated the Closing
Date, as to such matters as may be requested by the Placement Agent and shall,
at a minimum, include the matters set forth in Exhibit C to the Reimbursement
Agreement (as defined in the Loan Agreement).
(c) The Issuer shall have furnished to the Placement Agent an opinion of
counsel for the Issuer, addressed to the Placement Agent and each Purchaser,
dated the Closing Date, as to the matters contained in the opinion of counsel to
the Issuer required by Section 214(d) of the Indenture.
(d) The Placement Agent shall have received (i) a supplemental opinion of
Bond Counsel, dated as of the Closing Date, substantially in the form attached
hereto as Exhibit A; (ii) the opinion of Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.,
counsel to the Placement Agent, dated as of the Closing Date, substantially in
the form attached hereto as Exhibit B; and (iii) the opinion of Xxxxxxxx,
Xxxxxxxx & Xxxxxx, P.A., counsel to the Bank, dated as of the Closing Date,
substantially in the form attached hereto as Exhibit C.
6. The Placement Agent hereby covenants that:
(a) Upon request, it will provide the Borrower and the Issuer with a
complete list of all persons that it has contacted regarding their interest in
purchasing the Bonds, such list to be provided at such time or times as the
Borrower and the Issuer shall reasonably request;
(b) In the event it learns of any circumstances or facts which it believes
would make the Placement Memorandum inaccurate or misleading as to any material
fact, it will immediately bring such circumstances to the attention of the
Issuer and the Borrower.
7. The Borrower and the Placement Agent hereby agree as follows:
(a) The Borrower agrees to indemnify and hold harmless the Placement Agent
and the Issuer, their respective directors, officers, employees and agents and
each person, if any, and its directors, officers, employees and agents, who
controls the Placement Agent within the meaning of the Securities Act or the
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Exchange Act (collectively, the "Indemnified Persons" and individually, an
"Indemnified Person") against any and all losses, claims, damages, liabilities
and costs (i) arising out of any statement or information contained in the
Placement Memorandum, except for statements pertaining to the Bank or the
Placement Agent, that is untrue or incorrect, or alleged to be untrue or
incorrect, in any material respect or the omission or alleged omission therefrom
of any statement or information that is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading in any material respect, (ii) to the extent of the aggregate amount
paid in settlement of any litigation commenced or threatened arising from a
claim based upon any such untrue statement or omission if such settlement is
effected without the written consent of the Indemnified Persons, and (iii) to
which the Indemnified Persons may become subject under the Securities Act, the
Exchange Act or other federal or state statutory laws or regulations insofar as
such losses, claims, damages, liabilities and costs (and any legal or other
expenses incurred by the Indemnified Persons in investigating or defending the
same or in giving testimony or furnishing documents in response to a request of
any government agency or subpoena) that in any way relate to or in any way arise
out of the activities of the Indemnified Persons contemplated by this letter
agreement; provided, however, that the Borrower shall not be liable in any such
case (a) to the Placement Agent, any director, officer or employee of the
Placement Agent, or any person controlling the Placement Agent, to the extent
that any such loss, claim, damage, liability or cost arises out of, or is based
upon, (x) any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information about the Placement Agent, the Bank (as defined in the Indenture),
the rating assigned to the Bonds, or the manner in which the Bonds are to be
placed or sold furnished by persons other than the Borrower for use in
preparation of the Placement Memorandum, (y) any such person's negligence or
willful misconduct, or (z) any untrue statement or alleged untrue statement or
omission or alleged omission contained in the sections of the Placement
Memorandum entitled "Book Entry System," "THE LETTER OF CREDIT AND THE
REIMBURSEMENT AGREEMENT," "TAX TREATMENT," "PLACEMENT AGENT," and "REMARKETING
AGENT"; (b) to the Issuer, its commissioners, officers and employees or any
person controlling the Issuer, to the extent that any such loss, claim, damage,
liability or cost arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Placement Memorandum under
the captions "The Issuer" or "Litigation" (to the extent related to the Issuer),
or arising out of or based upon any failure to state under either of such
captions (to the extent related to the Issuer) any material fact necessary to
make the statements under such captions, in light of the circumstances under
which they were made, not misleading; or (c) to the Placement Agent, to the
extent the person asserting any such loss, claim, damage or liability purchased
Bonds through the Placement Agent, and delivery to such person of the Placement
Memorandum in the form available at closing for the Bonds would have been a
valid defense to the action from which such loss, claim, damage or liability
arose but the Placement Memorandum was not delivered to such person by or on
behalf of the Placement Agent. Such indemnity agreement shall also not cover any
loss, claim, damage, liability or cost which is held in a final judgment of a
court to have arisen
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out of the negligence or bad faith of the Indemnified Persons contained herein.
This indemnity agreement will be in addition to any liability which the Borrower
may otherwise have, but shall not be construed to cause the Borrower to pay any
Indemnified Person twice for the same loss, claim, damage, liability or cost.
(b) If any claims shall be made or action brought against any of the
Indemnified Persons for which indemnity may be sought against the Borrower, such
Indemnified Persons or Person shall promptly notify the Borrower in writing
setting forth the particulars of such claim or action. Failure to so notify the
Borrower will reduce the liability of the Borrower under this Agreement by the
amount of damages directly attributable to the failure of the Indemnified Person
to give such notice, but shall not relieve the Borrower from any liability that
it may have otherwise than on account of this section. The Borrower may
participate at its own expense in defense of such action. If the Borrower so
elects within a reasonable time after receipt of such notice, the Borrower may
assume the defense of such action with counsel chosen by it and approved by the
Indemnified Persons in such action, unless such Indemnified Persons reasonably
object in writing on the ground that there may be legal defenses available to
them that are different from or in addition to those available to the Borrower,
in which case the Indemnified Persons shall have the right to designate and
retain separate counsel in such action and the fees and expenses of such counsel
so designated and retained shall be paid by the Borrower.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraphs (a) and
(b) of this Section 7 is due in accordance with its terms but is for any reason
held by a court to be unavailable on grounds of policy or otherwise, the
Borrower and the Indemnified Persons shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending the same) to which the
Borrower and the Indemnified Persons may be subject in such proportion as is
appropriate to reflect not only the relative benefits received by the Borrower
on the one hand and the Indemnified Persons on the other hand, but also the
relative fault of the Borrower and the Indemnified Persons, as well as any
relevant equitable considerations.
(d) This indemnity agreement shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the Placement
Agent or the Borrower, or on delivery of and payment for any Bonds hereunder,
and shall survive the termination or cancellation of this letter agreement.
8. The Placement Agent's aggregate fee for introducing the prospective
purchasers will be $66,500. Such fee shall be payable by the Borrower at the
closing of the sale of the Bonds and may be paid out of the proceeds from the
sale of the Bonds. The Borrower hereby represents and warrants to the Placement
Agent that it has not had, and will not have prior to the Closing
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Date, any discussion with any person other than representatives of the Placement
Agent for the purpose of engaging, or considering the engagement of, such person
as a finder or broker in connection with the sale of the Bonds or similar
securities. In addition to the fee that is payable hereunder to the Placement
Agent at the closing of the sale of the Bonds, the Borrower shall reimburse the
Placement Agent for all of the Placement Agent's reasonable out-of-pocket
expenses incurred in connection with the Placement Agent's engagement hereunder
(including the reasonable fees and disbursements of counsel for the Placement
Agent).
9. The benefits of this letter agreement shall inure to the respective
successors and assigns of the parties hereto, and the obligations and
liabilities assumed in this letter agreement by the parties hereto shall be
binding upon their respective successors and assigns.
10. This engagement shall be governed by the laws of the State of North
Carolina.
11. This letter agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be the same agreement.
12. The Borrower hereby agrees that the Placement Agent will be acting as
the Borrower's agent in the introduction of potential purchasers of the Bonds
and that the Placement Agent's responsibility in this transaction is limited to
a "best efforts" basis in identifying potential purchasers of the Bonds, with no
understanding, expressed or implied, of a commitment by the Placement Agent to
purchase or place the Bonds.
13. If the foregoing is in accordance with your understanding, kindly
confirm your acceptance and agreement by signing and returning one of the
enclosed duplicates of this letter which will thereupon constitute an agreement
between us.
Very truly yours,
FIRST UNION NATIONAL BANK
By: /s/ Xxx X. Telimen
-----------------------------
Xxx X. Xxxxxxx, Xx. Vice President
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ACCEPTED AND AGREED TO:
MISSISSIPPI BUSINESS FINANCE CORPORATION
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Executive Director
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DOLLAR TREE DISTRIBUTION, INC.
By: /s/ X. Xxx Xxxxxxx
---------------------------------
Name: X. Xxx Xxxxxxx
Title: Executive Vice President
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