PURCHASE AND SALE AGREEMENT
AGREEMENT dated as of September 30, 1999, by and between Dollar Tree
Stores, Inc., a Virginia corporation, with an office address of 000 Xxxxx
Xxxxxxx, Xxxxxxxxxx, XX 00000 (hereinafter "Seller"), and DTS Properties, Inc.,
a Delaware company, with an office address 00000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx
000, Xxxxxx, XX 00000 (hereinafter "Buyer").
WHEREAS, Seller is the owner of certain improvements more fully described
on Schedule A attached hereto (the "Improvements");
WHEREAS, Seller conducts a retail sales outlet at each of the locations
identified on Schedule B attached hereto (hereinafter individually and
collectively referred to as the "Outlet" and "Outlets", respectively);
WHEREAS, each Outlet contains Improvements similar to those described in
Schedule A attached hereto but not all Outlets contain identical Improvements;
WHEREAS, the Improvements contained or existing in any particular Outlet
shall be referred to as a "Unit";
WHEREAS, the Improvements contained at each and every Outlet identified on
Schedule B attached hereto shall be referred to collectively as the "Property";
WHEREAS, Seller or its affiliates, occupy each Outlet pursuant to a lease
agreement which in each instance may be supplemented or modified by amendment to
lease agreement and/or side agreement (separately the "Underlying Lease" and
collectively the "Underlying Leases") with a land or building owner, or
sublessor from a land or building owner (collectively a land or building owner
including Seller solely in its capacity as such shall be referred to as the
"Titleholder");
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, all of the Property, encumbered by and subject to the terms of (a) the
Underlying Leases for the Property described in Schedule B attached hereto; (b)
the rights of Seller under the Underlying Leases; (c) the rights of or created
by or arising through each Titleholder; and (d) the rights of Seller and certain
third parties pursuant to license agreements between Seller and said third
parties for the operation of specific departments within certain of the Outlets
(collectively or individually the "Senior Liens");
WHEREAS, Buyer's purchase price for each Unit shall be set forth as
"Lessor's Cost" on Schedule B attached hereto; and
WHEREAS, the percentage of Lessor's Cost for each Unit as compared to
Lessor's Costs for all Units shall be referred to as such Unit's "Percentage
Factor".
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NOW THEREFORE, in consideration of the premises, the parties hereto,
intending to be legally bound, hereby agrees as follows:
1. Purchase of Property
1.1 Conveyance of Property. Subject to the terms and conditions
hereof, Seller hereby sells and Buyer hereby purchases from the Seller, all of
Seller's right, title and interest in and to the Property, encumbered by the
Senior Liens. Seller shall and hereby does deliver to Buyer, a xxxx of sale (the
"Xxxx of Sale") transferring, conveying, assigning, selling and delivering unto
Buyer all of its right, title and interest in each Unit encumbered by the Senior
Liens.
1.2 Purchase Price. The full purchase price (the "Purchase Price") to
be paid by Buyer to Seller for the Property shall be in the amount and payable
as set forth in Schedule C attached hereto
1.3 Lease. Simultaneously, upon its acquisition of the Property, Buyer
shall lease the Property to Seller; subject to the Senior Liens and the Rent
Purchaser Lien described below, pursuant to a Master Lease Agreement of even
date herewith (the "Master Lease").
1.4 Encumbrances. (a) It is understood, agreed and acknowledged that
Buyer intends to sell all of the Rents due under the Master Lease to BankBoston
Leasing, Inc. ("Rent Purchaser") for the purpose of paying the purchase price
hereunder. In connection therewith, Buyer has or will grant Rent Purchaser a
security interest in the Property, all substitutions, replacements and the
proceeds therefrom and the Master Lease and all schedules thereto and certain
other collateral (the "Rent Purchaser Lien"); (b) Buyer and Seller acknowledge
and agree that Buyer's interest in the Property is or will be, encumbered by,
and subject to the terms of, in all respects, the Senior Liens and the Rent
Purchaser Lien; (c) Buyer and Seller agree to execute and deliver any and all
documents reasonably requested by either party, Rent Purchaser, or the holder of
any of the Senior Liens to grant or confirm same.
1.5 Delivery. Buyer shall accept delivery of each Unit of Property at
its current Outlet location.
2. Representations and Warranties.
2.1 Representations and Warranties of Seller. Seller represents and
warrants to, and covenants and agrees with, Buyer as follows:
(a) To the best of Seller's knowledge, (i) the Property has
been placed in service on or before the date hereof; (ii) the existing
Underlying Lease(s) have been duly executed and delivered, are in full force and
effect, constitute the valid and binding obligations of the respective lessees
and lessors thereunder, and are enforceable
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against each materially in accordance with its terms (subject to laws of general
application affecting creditors' rights); (iii) the existing Underlying Lease(s)
represent the entire agreements between the lessee(s) and lessor(s) under the
existing Underlying Lease(s); (iv) the copies of the Underlying Lease(s) made
available to Buyer for its review at Seller's headquarters are true and
accurate; and (v) the term including renewals of the Underlying Leases averages
at least nine (9) years from the date hereof, or the exercise of the replacement
option provided under Section 4.2(b) to insure the lease terms with renewals of
each Underlying Lease and the replacement Underlying Lease total in the
aggregate at least nine (9) years; and (vii) with respect to Outlets in which
Seller is the Titleholder, there are no existing liens, encumbrances, charges or
restrictions which would prevent Seller from conveying the Property to Buyer.
(b) On the closing date, Seller conveys to Buyer all of
Seller's rights, title and interest in and to the Property, free and clear of
any and all leases, liens, claims and encumbrances arising through or by Seller
affecting the Property except for the Senior Liens and the expectation of the
immediately ensuing Rent Purchaser Lien.
(c) Seller is a corporation duly and validly organized and
existing in good standing under the laws of its organization and in
substantially all jurisdictions in which it is required to qualify.
(d) Seller has the power and authority to enter into this
Purchase and Sale Agreement, the Master Lease and all other related documents
(collectively, the "Other Documents") executed and delivered or to be executed
and delivered in connection with the transactions herein referred to and to
carry out the transactions contemplated hereunder and thereunder.
(e) The execution and delivery of this Purchase and Sale
Agreement and the Other Documents by Seller and the performance by it of its
obligations hereunder and thereunder, including the conveyance of the Property
and the acceptance of the Purchase Price in exchange therefor, have been duly
authorized by all necessary corporate action of the Seller.
(f) This Agreement and the Other Documents constitute the
valid and binding obligations of the Seller enforceable in accordance with their
respective terms, subject, however, to laws of general application affecting
creditor's rights.
(g) Seller is not subject to any restriction or agreement
which, with or without the giving of notice, the passage of time, or both,
prohibits or would be violated by the execution, delivery and consummation of
the documents and transactions herein referred to except such restrictions
contained in any Underlying Lease.
(h) EXCEPT AS SPECIFICALLY SET FORTH IN THIS SECTION 2.1,
THERE ARE NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, CONCERNING (A) THE PROPERTY, ITS
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CONDITION, ITS FITNESS FOR A PARTICULAR PURPOSE, ITS MERCHANTABILITY, ITS
SUITABILITY, ITS CONDITION OR WITH RESPECT TO ANY OTHER MATTER, AND (B) ANY
LIABILITY FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OR INABILITY TO USE
THE PROPERTY.
2.2 Representations and Warranties of the Buyer. The Buyer represents
and warrants to, and agrees with, the Seller as follows:
(a) Buyer has the power and authority to enter into this
Purchase and Sale Agreement, the loan described in Section 1.4(a) hereof and the
Other Documents and to carry out the transactions contemplated hereunder and
thereunder.
(b) This Agreement, the Master Lease Agreement, the loan and
the Other Documents constitute the valid and binding obligations of Buyer
enforceable in accordance with their respective terms, subject, however, to laws
of general application affecting creditors' rights.
(c) Buyer is not subject to any restriction or agreement
which, with or without the giving of notice, the passage of time, or both,
prohibits or would be violated by, the execution, delivery and consummation of
the documents and transactions referred to herein.
(d) Prior to this transaction, Buyer has not engaged in any
business of any kind or nature and further shall not engage in any business
activity other than such activities contemplated herein and which are consistent
with its acquisition and economic exploitation of the Property.
(e) Buyer is purchasing the Property "AS IS" and "WHERE IS" in
reliance solely upon its own investigation including title except for such
matters specifically set forth herein.
3. Covenants of Seller. Seller covenants and agrees with Buyer as
follows:(a) It will timely cure any material event of default now or hereafter
existing in any Underlying Lease and capable of being cured within thirty (30)
days after written notice thereof has been given to Seller by Buyer (or its
assign, including BancBoston Leasing Inc.); (b) It will execute at the time it
comes due under the terms of the respective Underlying Lease each and every
renewal term contained in any Underlying Lease to ensure the term of each
Underlying Lease meets the conditions of Section 2.1(a)(vi) hereof; or exercise
the replacement option provided under Section 4.2(b) to insure the lease terms
with renewals of the Underlying Lease and Replacement Lease, as applicable,
total in the aggregate at least an average of nine (9) years; (c) Seller
covenants and agrees with Buyer that it will promptly pay when due all sales,
use, property or other taxes, licenses, tolls, inspection or other fees, bonds,
permits or other
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certificates which were or may be required to be paid or obtained in connection
with the Property.
4. Indemnification. The parties agree to indemnify each other as follows:
4.1 Scope of Indemnification.
(a) Indemnity by Seller. Seller agrees to indemnify, in
accordance with paragraph 4.2 hereof, Buyer and its assignees, and to protect,
defend and hold them harmless, from and against any and all loss, cost, damage,
injury or expense, including without limitation, reasonable attorneys' fees and
other legal expenses, which Buyer and/or its assignees may incur for or by
reason of: (i) the untruthfulness of any of the warranties and representations
of Seller contained herein or in any of the Other Documents contemplated hereby;
or (ii) a breach by Seller of any of the warranties, agreements and covenants of
Seller contained herein or in any of the Other Documents contemplated hereby,
less any amounts which Buyer, as Lessor, receives as a result thereof from
Seller, as Lessee, pursuant to the Master Lease.
(b) Indemnity by Buyer. Buyer agrees to indemnify Seller and
to protect, defend and hold it harmless, from and against any and all loss,
cost, damage, injury or expense, including, without limitation, reasonable
attorneys' fees and other legal expenses, which Seller may incur for or by
reason of: (i) the untruthfulness of any of the warranties and representations
of Buyer contained herein or in any of the Other Documents contemplated hereby;
or (ii) a breach by Buyer of any of the warranties, agreements and covenants of
Buyer contained herein or in any of the Other Documents contemplated hereby.
4.2 Method of Payment. (a) In case claim is made against, or any
action, suit or proceeding is brought against, any indemnified person with
respect to any claim indemnified against hereunder, indemnitor may (if such
indemnitor has admitted in writing to each indemnified person that such claim is
indemnifiable if adversely determined following a permitted contest thereof
pursuant to this Section) and, upon such indemnified person's request, will at
indemnitor's expense cause the same to be contested by counsel selected by
indemnitor and reasonably satisfactory to such indemnified person, and, in the
event of any failure by the indemnitor to do so, the indemnitor shall pay all
reasonable legal fees and other expenses incurred by such indemnified person in
connection with the defense of such claim. The indemnitor shall permit such
indemnified person to participate in such contest at its own expense but
indemnitor shall control all aspects of such contest so long as indemnitor
complies with this subsection and such control or contest does not involve
indemnitor or its counsel in a material conflict of interest with such
indemnified person in which event such indemnified person shall be separately
represented, at indemnitor's expense, by counsel selected by such indemnified
person and such indemnified person shall thereupon control its own defense
provided, however, no settlement shall be consummated without the indemnitor's
consent, which can be withheld
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by the indemnitor in the event reasonable assurance of payment of any claim by
the indemnitor is provided.
(b) If at any time within nine (9) years of the date of this
Agreement, any loss or damage is caused by the termination or expiration of an
Underlying Lease, Seller shall have the option to indemnify Buyer by replacing
such Property or Unit or portion thereof, as the case may be (the "Substituted
Property"), with any item or items of like kind Property reasonably satisfactory
to Buyer; provided, however, that (i) Seller transfers to Buyer (by xxxx of sale
or other documents necessary to effect such transfer) such Substituted Property,
free and clear of all security interests, liens, leases, claims, charges and
encumbrances, other than Senior Liens and/or the lien of Permitted Subleases as
defined in the Master Lease; (ii) at the time of such replacement, the
Substituted Property shall have an aggregate book value (as reflected in
Seller's books of account) equal to or greater than the aggregate Replacement
Value, as herein defined, of the replaced Property (the "Replaced Property")
immediately prior to the damage or loss requiring its replacement; and (iii) the
Substituted Property has the same cost recovery period under Section 168 (c) of
the Internal Revenue Code of 1986 as in effect on the date hereto as the
Replaced Property. For all purposes hereunder, the Replacement Value of the
Replaced Property shall be determined by multiplying the Buyer's original
purchase price for the Unit by the appropriate percentage for the year of
replacement in the Replacement Value schedule attached hereto as Schedule C; and
Seller shall give Buyer notice of such substitution by an annual accounting,
including statements of costs associated with the Substituted Property, and
access to copies of any and all leases, and other documents relating to leases
or encumbrances imposed or to be imposed, as permitted hereunder, on the item or
items of proposed Substituted Property. In addition, effective upon such
substitution, all of Buyer's right, title and interest in and to the Replaced
Property shall be automatically assigned and shall pass to Seller, free of the
Rent Purchase Lien, and Buyer shall have no further interest therein. Seller and
Buyer agree to execute and deliver such documents as are necessary to transfer
title to and ownership of the Substituted Property to Buyer and title to and
ownership of the Replaced Property to Seller in either case, subject to any
existing Senior Liens, including the lien of any existing Permitted Subleases as
that term is defined in the Master Lease.
5. Miscellaneous.
5.1 Survival. The representations and warranties made herein and the
obligations to indemnify contained in Section 4 shall survive the execution and
delivery of this Purchase and Sale Agreement and the consummation of the
transactions described herein and shall continue until such time as all
obligations created hereunder, or in the other transaction documents have been
performed and/or paid.
5.2 Successors and Assigns. The rights and obligations of the parties
hereunder shall inure to the benefit of, and be binding and enforceable upon,
the respective successors, assigns and transferees of either party.
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5.3 Notices. Any notice, request or other communication to either
party by the other hereunder shall be given in writing and shall be deemed given
on the earlier of the date the same is (i) personally delivered with receipt
acknowledged, or (ii) deposited in the mail system of the U.S. Postal Service by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the party for which it is intended. The parties' respective
addresses for notice are stated at the beginning of this Agreement. The place to
which notices or copies of notices are to be given to either party may be
changed from time to time by such party by written notice to the other party.
5.4 Governing Law. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Virginia, applicable to contracts made and
to be performed therein without giving effect to the principles of conflict of
laws thereof.
5.5 Captions. Captions used herein are inserted for reference purposes
only and shall not affect the interpretations or construction of this Agreement.
5.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
5.7 Further Instruments. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents and take such other action as may be required to effectively carry out
the transactions contemplated herein.
SELLER:
Dollar Tree Stores, Inc.
By: /s/ H. Xxx Xxxxxxx
Name: H. Xxx Xxxxxxx
Title: Executive Vice President
BUYER:
DTS Properties, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
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