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Exhibit 10.3

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) dated as of the date the
last of Seller or Buyer to this Agreement executes the same (the “Effective
Date”), by and between FRED’S INC., a Delaware corporation (the “Seller”), and
PERRY ELLIS INTERNATIONAL, INC, a Florida corporation (the “Buyer”) or assignee
or designee thereof.

WHEREAS, on September 9, 2019 (the “Petition Date”), Seller and its affiliates
(the “Debtors”) filed voluntary petitions for relief under the chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”), commencing cases (the “Chapter 11 Cases”)
which are being jointly administered under the caption In re Fred’s, Inc.,
No. 19-11984 (CSS); and

WHEREAS, Seller is continuing to manage its properties and operate its business
as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in
accordance with applicable provisions of the Bankruptcy Code; and

WHEREAS, Seller’s ability to consummate the transactions set forth in this
Agreement is subject to the Order (I) Establishing Procedures for the Sale of
Debtors’ Real Estate Assets, (II) Authorizing the Debtors to Retain and
Compensate Real Estate Brokers in Connection Therewith, (III) Approving Stalking
Horse Bid Protections and (IV) Granted Related Relief dated September 27, 2019
(“Bidding Procedures Order”), entered by the Bankruptcy Court, entry of a final
order approving any transaction (as contemplated in the Bidding Procedures
Order) (a “Sale Order”) and the requirements generally applicable to Bankruptcy
debtors, including debtors’ obligations to consider higher or better offers (the
Bidding Procedures Order, the Sale Order and operation of applicable U.S.
Bankruptcy law collectively, hereinafter “Bankruptcy Requirements”; and

WHEREAS, Buyer desires to purchase the Property (as defined below) from Seller,
and Seller desires to sell, convey, and transfer to Buyer the Property in a sale
authorized by the Bankruptcy Court pursuant to, inter alia, sections 105 and 363
of the Bankruptcy Code, all on the terms and subject to the conditions set forth
in this Agreement and the Bidding Procedures Order and any additional terms that
may be included in a Sale Order; and

WHEREAS, the Property shall be conveyed to Buyer pursuant to the Sale Order free
and clear of liens, claims, interests, or encumbrances (collectively, the
“Interests”), pursuant to Sections 105 and 363 of the Bankruptcy Code, and Rules
6004 and 6006 of the Federal Rules of Bankruptcy Procedure, all in the manner
and subject to the terms and conditions set forth in this Agreement and the Sale
Order and in accordance with other applicable provisions of the Bankruptcy Code
and the Federal Rules of Bankruptcy Procedure and the Local Rules of Bankruptcy
Practice and Procedure of the United States Bankruptcy Court for the District of
Delaware.

NOW THEREFORE, Buyer and Seller hereby agree as set forth below:

 

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1. SALE AND PURCHASE.

Subject to the Bankruptcy Requirements, Seller agrees to sell, assign, transfer
and convey to Buyer, and the Buyer agrees to purchase from Seller all of
Seller’s right, title and interest in and to the following:

(a) All of that certain tract or parcel of land located at 2815 GA Highway 257;
Dublin, Georgia 31021, with the tax parcel number as described on Exhibit “A”
attached hereto and by this reference made a part hereof; and

(b) All of Seller’s right, title and interest in and to any improvements,
appurtenances, rights, easements, rights-of-way, tenements and hereditaments
incident thereto, and to all strips and any land lying in the bed of any street,
if any, including fixtures and all equipment (including, for avoidance of doubt,
all racking and conveyor equipment and any other equipment located on the
Property as of October 26, 2019), but excluding personal property of Seller that
is not specified above.

The property described in subsections 1(a) and 1(b) is collectively referred to
herein as the “Property.”

2. PURCHASE PRICE AND PAYMENT.

(a) In consideration of the conveyance of the Property to Buyer, Buyer shall pay
to Seller the sum of fourteen million, six hundred thousand and No/100 Dollars
($15,700,000.00) (the “Purchase Price”).

(b) Upon execution of this Agreement, Buyer shall pay to First American Title
Insurance Company (the “Escrow Agent” or “Title Company”), by wire transfer
pursuant to the wiring instructions on Exhibit “B” attached hereto and by this
reference made a part hereof, the sum of one million, five hundred seventy
thousand and No/100 Dollars ($1,570,000.00) as an earnest money deposit,
amounting to 10% of the Purchase Price. Such sum, together with any interest
earned thereon and any additions thereto are hereinafter collectively referred
to as the “Deposit.” The Escrow Agent may, if possible, but shall not be
required to, invest such sum in interest bearing obligations of a national bank
or banking association in the area in which Escrow Agent is located. The Deposit
shall not become property of the Debtors absent a further order of the
Bankruptcy Court that Buyer is not entitled to a return of its deposit,
provided, however, that the Deposit shall be applied as a credit to Buyer
against the Purchase Price in the event the sale contemplated hereby is
consummated. Buyer agrees to sign all forms required in connection with Escrow
Agent’s holding and investing the Deposit, such as IRS and bank account forms
and reports, and for such purposes the Deposit shall be considered the property
of Buyer until such time as Escrow Agent disburses the Deposit to another party.
The preceding sentence shall not change in any way the other provisions in this
Agreement concerning Escrow Agent’s holding and disbursing the Deposit.

(c) Notwithstanding anything to the contrary contained herein, One Hundred
Dollars ($100.00) of the Deposit (the “Independent Consideration”) is
non-refundable to Buyer

 

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upon deposit with the Escrow Agent, is fully earned by Seller for entering into
this Agreement, and shall be paid to Seller at Closing (as defined below) or the
earlier termination of this Agreement. The Independent Consideration shall be
applied against the Purchase Price at Closing, if any.

(d) The Purchase Price (less credit for the Deposit which shall be paid to
Seller at Closing, and any adjustments for any pro-rations and expenses as
provided in this Agreement) shall be paid by wire transfer to Seller at Closing.

3. PROPERTY CONVEYED “AS IS.”

OTHER THAN AS EXPRESSLY STATED TO THE CONTRARY IN THIS AGREEMENT, IT IS
UNDERSTOOD AND AGREED THAT SELLER DISCLAIMS ALL WARRANTIES OR REPRESENTATIONS OF
ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR REPRESENTATIONS AS TO MATTERS OF
TITLE, ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITIONS,
AVAILABILITY OF ACCESS, INGRESS OR EGRESS, PROPERTY VALUE, OPERATING HISTORY,
GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS OR ANY OTHER MATTER OR THING
RELATING TO OR AFFECTING THE PROPERTY. BUYER AGREES THAT WITH RESPECT TO THE
PROPERTY, BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR
INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF SELLER OR OF SELLER’S BROKERS,
AGENTS OR EMPLOYEES. BUYER REPRESENTS THAT IT IS A KNOWLEDGEABLE BUYER OF REAL
ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE AND THAT OF BUYER’S
CONSULTANTS, AND THAT BUYER WILL CONDUCT SUCH INSPECTIONS AND INVESTIGATIONS OF
THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF, AND SHALL RELY UPON SAME, AND, UPON CLOSING, SHALL ASSUME
THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL
AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER’S INSPECTIONS
AND INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER
SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY “AS IS, WHERE
IS”, WITH ALL FAULTS, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR
REPRESENTATIONS COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLER OR ANY THIRD
PARTY. THE TERMS AND CONDITIONS OF THIS SECTION 3 SHALL EXPRESSLY SURVIVE THE
CLOSING.

4. SURVEY.

The Property is being sold AS IS with all faults. Buyer, at Buyer’s expense, may
have the Property surveyed and certified by a registered land surveyor in
accordance with applicable statutes.

 

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5. TITLE.

Subject to the Bankruptcy Requirements, Seller shall convey title to the
Property by limited warranty deed subject to (i) ad valorem taxes and
assessments not yet due and payable, (ii) zoning and other ordinances affecting
the Property, (iii) all matters which would be shown by a current accurate
survey and inspection of the Property, and (iv) all matters of record (the
foregoing items (i) – (iv), subject to Buyer’s right to object thereto as
provided below, being hereinafter referred to collectively as the “Permitted
Title Exceptions”)). Subject to the Sale Order, with the exception of the
Permitted Title Exceptions, title to the Property shall be good and marketable
and such as will be insured by the Title Company at its regular rates for
regular risks pursuant to the standard stipulations and conditions of an ALTA
policy of owner’s title insurance. Prior to Closing, Buyer shall obtain from the
Title Company and deliver to Seller an owner’s title insurance commitment for
the Property and may notify Seller in writing of any valid objections to the
Permitted Title Exceptions. In the event Buyer does not notify Seller of any
unacceptable defects in the Permitted Title Exceptions, Buyer shall have waived
the right to object to same, and shall have agreed to accept title subject to
the Permitted Title Exceptions. In the event Buyer notifies Seller of any
defects to the Permitted Title Exceptions, Seller shall notify Buyer within five
(5) business days after receipt of Buyer’s Objection Notice as to which title
defects Seller shall cure or refuse to cure; provided, in no event shall Seller
be obligated to cure any such defects other than monetary liens (including,
without limitation, the Interests to be removed pursuant to the Sale Order). If
Seller fails to give Buyer written notice as to which title defects Seller shall
cure or refuse to cure, Seller shall be deemed to have refused to cure such
title defects. Buyer shall have one business day from receipt (or deemed
receipt) of Seller’s notice in which to elect to accept the Property subject to
such matters without deduction from the Purchase Price, or to decline to accept
the Property in which event the Deposit (less the Independent Consideration)
shall be returned to Buyer, and this Agreement shall terminate, and the parties
shall have no further obligations hereunder, except as to matters which
expressly survive as set forth in this Agreement. If Buyer fails to give Seller
written notice of Buyer’s election by the end of said one (1) business day
period, then Buyer shall be deemed to have elected to accept the Property
subject to the Permitted Title Exceptions without deduction from the Purchase
Price. If Seller satisfies all such title defects that Seller has agreed to
satisfy prior to Closing, then the transaction contemplated hereby shall be
closed in accordance with its terms. If Seller does not satisfy all such title
defects that Seller has agreed to satisfy on or before the Closing, then Buyer
shall have the right to elect on or before the date of Closing either: (i) not
to close the transaction contemplated hereby in which event the Deposit (less
the Independent Consideration) shall be refunded to Buyer, this Agreement shall
terminate, and the parties shall have no further obligations hereunder, except
as to matters which expressly survive as set forth in this Agreement, or (ii) to
close the transaction contemplated hereby without regard to such unsatisfied
defects and encumbrances, in which event the transaction contemplated hereby
shall be closed in accordance with its terms, without a reduction in Purchase
Price. The provisions of this Section 5 shall survive the Closing.

6. COVENANTS AND CONDITIONS OF SETTLEMENT.

 

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On the date of Closing, Seller shall execute and deliver a limited warranty deed
(the “Deed”) to Buyer substantially in the form attached hereto as Exhibit “C”.
Seller and/or Buyer shall execute closing statements, a FIRPTA certificate, a
Seller’s Affidavit substantially in the form attached hereto as Exhibit “D”, and
such other documents as may be reasonably required to complete Closing and
accomplish transfer of the Property to Buyer hereunder (including, without
limitation a bill of sale and general assignment of intangible rights without
representations or warranties) and to enable the Title Company to issue the
owner’s title insurance policy to Buyer.

7. FURTHER ENCUMBRANCES.

Seller hereby covenants and agrees that from and after the Effective Date until
the earlier of the termination of this Agreement or the date of Closing, that
Seller shall operate and maintain and keep the Property in a manner consistent
with Seller’s past practices with respect to the Property and Seller shall not,
without the prior written consent of Buyer (not to be unreasonably withheld,
conditioned or delayed), grant or otherwise voluntarily create or consent to the
creation of any easement, restriction, lien, lease, service contract or
encumbrances affecting the Property.

8. CLOSING AND CLOSING DATE.

Subject to the entry of, and provisions of, the Sale Order, which Sale Order
shall be in a form and substance acceptable to the Buyer in its sole direction,
and Section 36 of this Agreement, the consummation of this sale by Seller and
the purchase by Buyer of the Property (the “Closing”) shall be held on or before
5:00 p.m. Eastern Standard Time on or before November 22, 2019, at a time and
place selected by the parties (the “Closing Date”), but if none is selected in
escrow with the Escrow Agent.

9. APPORTIONMENTS.

Except as otherwise set forth below, Seller shall be responsible for the payment
of any title clearance costs. Seller shall be responsible for the payment of all
ad valorem taxes and assessments applicable to the Property applicable to the
period prior to the Closing Date. If after Closing any city, county, or state
level taxing authority issues or remits to Buyer any refunds, repayments of
taxes, or corrected tax billings that reduce the tax obligation for any periods
of time that the Property was under the ownership and control of Seller and for
which Seller has paid or been charged for the taxes, Buyer shall remit or refund
those monies back to Seller for its pro-rated period of ownership. Buyer shall
cooperate with Seller by providing to Seller any documentation or evidence of
such tax reductions or other reasonably requested materials that Buyer has in
its records or receives. The provisions of this Section 9 shall survive the
Closing.

10. CLOSING COSTS.

Seller shall pay Seller’s attorneys’ fees. Buyer shall pay the cost of Buyer’s
inspections, the cost to record the Deed and any deed tax associated with
recording the Deed any other recording fees for the sale or Buyer’s loan, any
sales taxes, the cost of the survey (if any), the title examination costs, the
owner’s and lender’s title insurance premium and the cost of any

 

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endorsement to the title policies, any charges for the Escrow Agent, Buyer’s
attorneys’ fees, and any other charges incurred by Buyer. The provisions of this
Section 10 shall survive the Closing.

11. BROKERS.

(a) Seller has employed and/or dealt with Binswanger Southern Company (the
“Seller’s Broker”) in connection with this transaction. At Closing, if and only
if this transaction is consummated, Seller shall pay the Seller’s Broker its
commission, subject to the Sale Order. Buyer shall have no liability to the
Seller or the Seller’s Broker for this commission.

(b) Seller and Buyer each warrant and represent to the other that, with the
exception of the Seller’s Broker and Buyer’s Broker identified herein or
identified as set forth above, such party has not employed or dealt with a real
estate broker or agent in connection with the transaction contemplated hereby.
Seller and Buyer covenant and agree, each to the other, to indemnify the other
against any loss, liability, costs, claims, demands, damages, causes of action,
and suits arising out of or in any manner related to the alleged employment or
use by the indemnifying party of any real estate broker or agent other than the
Seller’s Broker and Buyer’s Broker identified herein.

This Section 11 shall survive the Closing and any termination of this Agreement.

12. REMEDIES

Subject to the Bankruptcy Requirements, in the event that Seller fails to comply
with or perform any of the covenants, agreements or obligations to be performed
by Seller under the terms and provisions of this Agreement, then the Buyer shall
be entitled to elect, as its sole and exclusive remedy (i) to terminate this
Agreement, upon which the Deposit shall be refunded to Buyer, and the parties
shall have no further rights hereunder, except as to matters which expressly
survive as set forth in this Agreement or (ii) to seek specific performance of
this Agreement, provided any action for specific performance is brought within
sixty (60) days of the alleged default. Buyer waives any and all other remedies
it may have in law and/or in equity. Under no circumstances shall Buyer be
entitled to sue Seller or any of Seller’s principals, officers, partners or
members for damages, and Buyer specifically hereby waives the right to sue, and
covenants not to sue, Seller or any of Seller’s principals, officers, partners
or members for damages. Buyer acknowledges that Buyer’s agreements in this
Section 12 are a material inducement for Seller to enter into this Agreement and
without which Seller would not have entered into this Agreement.

Unless excused by the Bankruptcy Requirements, if the Buyer shall fail to make
any payment or deposit when due or to comply with or perform any of the
covenants, agreements, or obligations to be performed by Buyer under the terms
and provisions of this Agreement and such failure is not cured within five
(5) business days following receipt of written notice from Seller, then Seller
shall, as its sole and exclusive remedy, have the right to terminate this
Agreement and receive the Deposit as full liquidated damages. In view of the
difficulty of accurately estimating Seller’s actual damages in the event of a
default hereunder by Buyer, and in recognition that it is

 

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impossible more precisely to estimate the damages to be suffered by Seller upon
a default by Buyer, the parties have agreed that the Deposit shall be paid to
Seller not as a penalty, but as full liquidated damages pursuant to applicable
law; furthermore, such amount constitutes a good faith and reasonable estimate
of the potential damages arising from a default by Buyer hereunder.

Nothing in this Section 12 shall limit a party’s indemnification obligations
under this Agreement. The provisions of this Section 12 shall survive Closing.

13. NOTICES.

All notices, demands, requests and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered personally, or
delivered by overnight courier, or mailed by first class, registered or
certified mail, return receipt requested, postage prepaid, or delivered by email
(provided that a notice delivered by email shall promptly thereafter be
delivered by one of the other methods permitted in this Section 13), as follows:

 

in the case of Seller:    Fred’s Stores of Tennessee, Inc.    2001 Bryan Street,
Suite 1150    Dallas, TX 75201    Attn: Kenny Lipschutz    Telephone:
914-980-9685    Email: klipschutz@fredsinc.com with a copy to Seller’s
attorneys:    Kasowitz Benson Torres LLP    1633 Broadway    New York, New York
10019-6799    Attn: Adam L. Shiff and Robert M. Novick    Email:
ashiff@kasowitz.com                rnovick@kasowitz.com and:       Bradley Arant
Boult Cummings LLP    One Federal Place    1819 5th Ave North    Birmingham, AL
35203    Attn: Dawn Helms Sharff    Telephone: 205-521-8200    Email:
dsharff@bradley.com in the case of Buyer:       Perry Ellis International, Inc.
   Attn: Tricia McDermott Thompkins    Telephone:(305) 873 1735

 

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Email: tricia.thompkins@pery.com

with a copy to Buyer’s    attorney:    Olshan Frome Wolosky LLP    1325 Avenue
of the Americas    Attn: Adam H. Friedman, Esq. & Jonathan T. Koevary, Esq.   
Telephone:(212) 451-2300    Email: jkoevary@olshanlaw.com in the case of Escrow
   Agent:    First American Title Insurance Company    6 Concourse Parkway, NE
Suite 2000    Atlanta, Georgia 30328    Attn: Angie Yarbrough    Telephone:
(770) 390-6513    Email: ayarbrough@firstam.com

or at such other address as the party may specify from time to time by written
notice to the other party. Any such notice, request, consent or other
communication shall be deemed received at such time as it is actually delivered
(if personally delivered) or sent by e-mail (if delivered by e-mail), on the
first business day following an overnight delivery, or on the fifth business day
after a mailing, as the case may be. Rejection or other refusal by the addressee
to accept, or the inability of a party to deliver because of a changed address
of which no notice was given, shall be deemed receipt of the notice sent. Any
party hereto may change the address for receiving notices hereunder by notice
sent in accordance with the terms of this Section 13. Notice may be given by
counsel on behalf of either party.

14. SUCCESSORS AND ASSIGNS; ASSIGNMENT.

All terms of this Agreement shall be binding upon, and shall inure to the
benefit of and be enforceable by the parties hereto and their respective legal
successors and assigns. This Agreement may not be assigned by Buyer without the
written consent of Seller. Notwithstanding the foregoing, Buyer shall have the
right to assign this Agreement to an affiliate or designee of Buyer.

15. GOVERNING LAW; CONSENT TO JURISDICTION.

This Agreement is intended to be performed in the State of Georgia and shall be
governed and construed in all respects in accordance with the laws of,
applicable to, the State of Georgia, except to the extent superseded by or
inconsistent with U.S. Bankruptcy law applicable to the Seller’s Chapter 11
Cases In the event of any dispute arising out of or under this Agreement,
including the Exhibits annexed hereto, each party shall irrevocably submit to
(a) the exclusive jurisdiction of the Bankruptcy Court, and (b) the appropriate
court of the State of Georgia, if and only if, following commencement of
litigation, it is determined by the Bankruptcy Court that it cannot exercise
jurisdiction.

 

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16. CAPTIONS.

The captions of this Agreement are inserted for convenience or reference only
and not to define, describe or limit the scope or the intent of this Agreement
or any term hereof.

17. CHANGES AND MODIFICATIONS; CHANGES AND INCORPORATIONS OF PRIOR AGREEMENTS.

This Agreement may not be orally changed, modified or terminated; it supersedes
any and all prior understandings and/or letter agreements; other matters of
similar nature shall be deemed to be of no force or effect in the interpretation
of this Agreement, it being intended that this Agreement represents the entire
understanding of the parties. No waiver of any provision hereof shall be valid
unless in writing and signed by a party against whom it is to be enforced. This
Agreement may not be amended except by written instrument executed by Buyer and
Seller or by the terms of the Sale Order.

18. WAIVER.

No failure of either party to exercise any power given hereunder to insist upon
strict compliance with any obligations specified herein, and no custom or
practice at variance with the terms hereof, shall constitute a waiver of any
party’s right to demand strict compliance with the terms hereof; provided,
however, that any party may, at its sole option, waive any requirement, covenant
or condition herein established for the benefit of such party without affecting
any of the other provisions of this Agreement.

19. FURTHER ASSURANCES.

Seller and Buyer each agree to execute and deliver to the other such further
documents and instruments as may be reasonable and necessary in furtherance of,
and to effectuate the intent of, the parties as expressed by the terms and
conditions hereof.

20. ATTORNEYS’ FEES.

If either party commences an action against the other to enforce any of the
terms hereof, or because of the breach by either party of any of the covenants,
terms or conditions hereof, each party shall bear its own attorneys’ fees,
costs, and expenses.

21. CONDITION OF PROPERTY.

(a) Buyer agrees to accept the transfer and conveyance of the Property by Seller
without any warranty or representation, except as otherwise set forth in this
Agreement and in the Deed, concerning the quantity, quality, or condition or the
Property or Seller’s interest therein, the availability of water, water
pressure, sewer, sewer capacity, rock, poor soils, endangered species, specimen
trees, utilities or necessary governmental authorizations, or any other matter
not expressed in this contract for sale. Buyer is accepting the Property “AS IS”
with all faults, except as otherwise set forth in this Agreement. Seller will
not make any investigation

 

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of the condition of the Property. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES
GIVEN TO BUYER IN CONNECTION WITH THE SALE OF THE SUBJECT PROPERTY, EXCEPT AS
OTHERWISE SET FORTH IN THIS AGREEMENT AND IN THE DEED. SELLER DOES HEREBY
DISCLAIM ANY AND ALL WARRANTIES OF MERCHANTABILITY AND FITNESS THAT MAY BE DUE
FROM SELLER TO BUYER. BUYER HEREBY FOREVER DISCHARGES, DEFENDS, ACQUITS,
RELEASES, WAIVES AND HOLDS SELLER HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS,
CAUSES OF ACTION OR LIABILITIES RELATING TO THE PROPERTY WHATSOEVER, EXCEPT AS
OTHERWISE SET FORTH IN THIS AGREEMENT.

(b) The provisions of this Section 21 shall survive Closing.

22. EMINENT DOMAIN.

If, after the Effective Date and prior to Closing, Seller receives notice of the
commencement or threatened commencement of eminent domain or other like
proceedings against the Property or any portion thereof, Seller shall promptly
give written notice thereof to Buyer. In the event of any eminent domain or
other like proceedings, Buyer shall close the transaction contemplated hereby in
accordance with its terms but subject to such proceedings, in which event the
Purchase Price shall not be reduced but Seller shall assign to Buyer Seller’s
rights in any condemnation award or proceeds attributable to the Property.

23. TIME OF ESSENCE.

TIME IS OF THE ESSENCE IN THIS AGREEMENT.

24. SURVIVAL.

Except as otherwise provided herein, the terms and provisions of this Agreement
shall not survive Closing or termination of this Agreement.

25. CONSTRUCTION.

Each party hereto acknowledges that all parties hereto participated in the
drafting of this agreement and consulted with its own legal counsel in
connection therewith. Accordingly, this Agreement shall not be construed more
strictly against any one party.

26. ACCEPTANCE.

The offer by the first party to execute this Agreement to sell or buy the
Property shall terminate unless this Agreement is accepted and executed by the
other party within five (5) business days after the offer is made.
Notwithstanding the preceding, all of the Seller’s obligations shall be
conditioned by the Bankruptcy Requirements.

 

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27. EXHIBITS.

The Exhibits referred to herein and attached to this Agreement are incorporated
herein by full reference.

28. COUNTERPART EXECUTION.

This Agreement may be executed in separate counterparts, and copies delivered
electronically, by PDF or facsimile shall be deemed originals. It shall be fully
executed when each party whose signature is required has signed and delivered to
the other at least one counterpart even though no one counterpart contains the
signatures of all the parties. Once Buyer and Seller have each signed at least
one counterpart of this Agreement, this Agreement shall constitute a valid and
binding agreement between Buyer and Seller even though this Agreement has not
yet been signed by Escrow Agent.

29. SEVERABILITY.

The invalidity or unenforceability of a particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.

30. BUSINESS DAY CONVENTION.

Should any time period provided in this Agreement expire on a Saturday, Sunday
or legal holiday, such time period shall automatically be extended to the next
date that is not a Saturday, Sunday or legal holiday.

31. ESCROW AGENT. The Deposit and any other money deposited in escrow hereunder
(collectively, the “Escrowed Funds”) shall be held by Escrow Agent in escrow
upon the following terms and conditions:

(a) It is agreed that the duties of Escrow Agent are purely ministerial in
nature, and that Escrow Agent shall incur no liability whatever except for
willful misconduct or gross negligence so long as Escrow Agent has acted in good
faith. Seller and Buyer release Escrow Agent from any act done or omitted to be
done by Escrow Agent in good faith in the performance of Escrow Agent’s duties
hereunder.

(b) Escrow Agent shall be under no responsibility in respect to any of the
monies deposited with it other than faithfully to follow the instructions herein
contained. Escrow Agent may consult with counsel and shall be fully protected in
any actions taken in good faith, in accordance with the advice of counsel.
Escrow Agent shall not be required to defend any legal proceedings which may be
instituted regarding this escrow or any escrow instructions unless requested to
do so by Seller and Buyer and indemnified to the satisfaction of Escrow Agent
against the cost and expense of such defense. Escrow Agent shall not be required
to institute legal proceedings of any kind. Escrow Agent shall have no
responsibility for the genuineness or validity of any document or other item
deposited with Escrow Agent, and shall be fully protected

 

-11-

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

in acting in accordance with any written instructions given to Escrow Agent
hereunder and believed by Escrow Agent to have been signed by the proper
parties.

(c) Escrow Agent assumes no liability under this Agreement except that of a
stakeholder. If there is any dispute as to whether Escrow Agent is obligated to
deliver the escrow monies, or as to whom that sum is to be delivered, Escrow
Agent shall not be obligated to make any delivery of the sum, but in such event
may hold the sum until: (i) receipt by Escrow Agent of any authorization in
writing signed by all the persons having an interest in such dispute, directing
the disposition of the sum, or in the absence of such authorization until the
determination of the rights of the parties in an appropriate proceeding or
(ii) the Escrow Agent receives a certified copy of a final non-appealable
judgment of a court of competent jurisdiction directing the release and delivery
of the escrow monies in which event the Escrow Agent shall then release and
deliver the escrow monies in accordance with said direction. Upon making
delivery of the moneys in the manner provided for in this Agreement, Escrow
Agent shall have no further liability in its capacity as Escrow Agent in this
matter.

(d) Escrow Agent has executed this Agreement to confirm that Escrow Agent is
holding (drafts are subject to collection) and will hold the Escrowed Funds in
escrow pursuant to the provisions of this Agreement. All interest earned on the
Escrowed Funds shall be for the benefit of Buyer unless and until such interest
is delivered to Seller in accordance with the terms of this Agreement. Buyer and
Seller agree to execute such documents as Escrow Agent may reasonably request in
connection with Escrow Agent acting in such capacity and holding and investing
the Deposit.

32. CONFIDENTIALITY.

Seller may publicly file a copy of this Agreement with the Bankruptcy Court,
provide a copy of this Agreement to other parties in interest in the Chapter 11
Cases, and may publicly announce its terms. Any press releases, public
statements or other public disclosures by Seller or Buyer of this transaction or
the terms of this transaction shall be subject to the prior written consent of
the other party and such party’s approval of the content thereof, which
provision, with respect to the terms of this transaction (except as reflected in
public records) shall survive Closing.

33. REPRESENTATIONS

A. Seller’s Representations and Warranties; Qualifications and Limitations.
Subject to the qualifications and limitations set forth at the end of this
Section, Seller represents and warrants to Buyer that as of the date of this
Agreement (unless otherwise stated below) and as of the Closing Date:

(i) Subject to the applicable provisions of the Bankruptcy Code, Seller is a
duly formed and validly existing corporation organized under the laws of
Delaware and is in good standing.

(ii) Subject to the applicable provisions of the Bankruptcy Code and any other
conditions of the Bankruptcy Requirements, Seller has the full legal right,
power and

 

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PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

authority to execute and deliver this Agreement and all documents now or
hereafter to be executed by it pursuant hereto, to consummate the transaction
contemplated in this Agreement, and to perform its obligations under this
Agreement and such documents. The person signing this Agreement on behalf of
Seller is authorized to do so.

(iii) The Property is and shall be vacant and free and clear of all leases,
tenants, and occupants at the Closing.

(iv) All equipment located on the Property as of October 26, 2019 shall remain
on the Property as of Closing.

Said warranties and representations shall survive Closing for three (3) months.

B. Buyer’s Representations and Warranties. Buyer represents and warrants to
Seller that as of the date of this Agreement:

(i) Buyer is a duly formed and validly existing corporation organized under the
laws of Florida and is in good standing.

(ii) Buyer has the full legal right, power and authority to execute and deliver
this Agreement and all documents now or hereafter to be executed by Buyer
pursuant to this Agreement (collectively, the “Buyer’s Documents”), to
consummate the transaction contemplated hereby, and to perform its obligations
hereunder and under Buyer’s Documents.

(iii) Neither the entering into of this Agreement nor the consummation of this
sale will constitute a violation or breach by Buyer of any contract or other
instrument to which it is a party, or to which it is subject, or by which any of
its assets or properties may be affected, or a violation or breach of any
judgment, order, writ, injunction or decree issued against or imposed upon
Buyer, or to Buyer’s knowledge, will result in a violation of any applicable
law, order, rule or regulation of any governmental authority.

(iv) Buyer is entering into this Agreement in “good faith” within the meaning of
section 363(m) of the Bankruptcy Code, without collusion, at arm’s length, and
is not an Insider as that term is defined in section 101 of the Bankruptcy Code.

(v) Buyer has transferred the Deposit into the Buyer’s outside counsel’s
interest on lawyer account.

34. EXCHANGE. Each party shall cooperate with the other and shall execute any
and all documents necessary to allow such party (or its affiliates) to
effectuate the conveyance of the Property as an exchange under Section 1031 of
the Internal Revenue Code; provided, however, that at no time shall the
cooperating party be required to take title to real estate other than the
Property or incur any obligations other than those set forth elsewhere in this
Agreement. The exchanging party shall pay all reasonable costs which may be
incurred by the cooperating party in connection with such tax free exchange, and
the exchanging party shall indemnify the

 

-13-

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

cooperating party and hold it harmless from any loss, cost, damage, expense or
liability incurred in connection therewith.

35. BANKRUPTCY APPROVAL. The parties acknowledge and agree that this Agreement
is subject to the Bankruptcy Requirements and entry of a Sale Order.

36. STALKING HORSE BID CONTINGENCY.

(a) Auction. In accordance with the Bidding Procedures Order, Seller may sell
the Property (a) at an auction (the “Auction”) as more specifically set forth in
the Bidding Procedures Order and (b) pursuant to and in accordance with a Sale
Order.

(b) Other Bids. Buyer acknowledges that, pursuant to the Bidding Procedures
Order, Seller will solicit bids from one or more other prospective purchasers
for the sale of some or all of the Property in accordance with the procedures
set forth in the Bidding Procedures Order. The winning bidder at the Auction
will be the successful bidder (“Successful Bidder”). The winning bidder shall be
selected in the exercise of the Seller’s business judgment.

(c) Bid Process. If Buyer is the Successful Bidder at the Auction and the
Bankruptcy Court approves the sale contemplated by this Agreement, the parties
shall close in accordance with the terms of this Agreement and the Sale Order.
If Buyer is the Successful Bidder at the Auction but the Bankruptcy Court does
not approve the sale contemplated by this Agreement through no fault of Buyer,
Seller shall have the right to terminate this Agreement, in which event the
Deposit shall be returned to Buyer, and this Agreement shall terminate, and the
parties shall have no further obligations hereunder, except as to matters which
expressly survive as set forth in this Agreement. If Buyer is not the Successful
Bidder at the Auction, Seller may determine that the Buyer is the next highest
or otherwise best bid, as determined in Seller’s sole discretion (“Back-Up
Bidder”). In the event the Successful Bidder fails to close on the sale of the
Property within the time parameters approved by the Bankruptcy Court (unless
extended by agreement of the Seller in its sole discretion to the extent it is
permitted to grant any such extension), Seller shall retain the Successful
Bidder’s deposit and Seller will be released from its obligation to sell the
Property to the Successful Bidder, and the Seller may then sell the Property to
the Back-Up Bidder approved by the Bankruptcy Court at the hearing respecting
the Sale Order. In such instance the Back-Up Bidder shall in accordance with its
last bid at Auction, pay as the purchase price for the Property, the amount of
the Back-Up Bid, (receiving credit for its deposit), and all closing costs
payable by the purchaser, upon the close of escrow for the sale.

 

-14-

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

IN WITNESS WHEREOF, the duly authorized representatives of the parties have set
their hands and seals hereto as of the day and year indicted next to their
signatures.

 

BUYER: PERRY ELLIS INTERNATIONAL, INC By:   /s/ Jorge Narino Name:   Jorge
Narino Title:   CFO Date: October 28, 2019

[SIGNATURES CONTINUED ON NEXT PAGE]

 

-15-

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

SELLER: FRED’S, INC.

By:   /s/ Joe Anto Name   Joe Anto Title:   Ceo Date:   11/1/2019

[SIGNATURES CONTINUED ON NEXT PAGE]

 

-16-

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

Escrow Agent hereby agrees to comply with Sections 2 and 31 of this Agreement.

 

ESCROW AGENT: FIRST AMERICAN TITLE INSURANCE COMPANY

By:    

Name:    

Title:    

Date:    

 

-17-

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

DISCUSSION DRAFT

Exhibit “A”

Tax Parcel Number of the Property

101B 032 C

 

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

DISCUSSION DRAFT

Exhibit “B”

Wiring Instructions

(to be provided by Escrow Agent)

 

PSA (Dublin, Georgia)

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

DISCUSSION DRAFT

Exhibit “C”

Form of Special Warranty Deed

After Recording Return to:

LIMITED WARRANTY DEED

THIS INDENTURE, made as of the _____ day of __________, 2019, is by FRED’S INC.
_______________________________ (“Grantee”).

WITNESSETH, Grantor for and in consideration of the sum of TEN DOLLARS ($10.00)
AND OTHER GOOD AND VALUABLE CONSIDERATION, cash in hand paid, the receipt of
which is hereby acknowledged, has bargained, sold and does by these presents
bargain, sell, remise, release, and forever quitclaim to Grantee all the right,
title, interest, claim or demand which Grantor has or may have had in and to all
that tract of land, if any, described on Exhibit A attached hereto and made a
part hereof.

Together with all the rights, members and appurtenances to the said described
premises in anywise appertaining or belonging.

TO HAVE AND TO HOLD the said described premises unto Grantee, so that neither
Grantor nor any other person or persons claiming under Grantor shall at any
time, claim or demand any right, title or interest to the aforesaid described
premises or its appurtenances.

This Deed and the warranty of title contained herein are made expressly subject
to the items set forth on Exhibit B attached hereto and made a part hereof.

Grantor will warrant and forever defend the right and title to the Property unto
Grantee against the lawful claims of all persons claiming by, through, or under
Grantor.

(The words “Grantor” and “Grantee” include all genders, plural and singular, and
their respective heirs, successors and assigns where the context permits.)

PSA (City, State)

4833-1860-0358.1

 

5197957-2

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

IN WITNESS WHEREOF, Grantor has signed and sealed this Deed as of the day and
year above written.

 

FRED’S INC.,

a Delaware corporation

  By:       (Seal) Name:       Title:      

[NOTE – APPROPRIATE FORM OF AUTHENTICATION

AND NOTARY ACKNOWLEDGEMENT TO BE INSERTED,

TOGETHER WITH ANY STATE PRESCRIBED REVISIONS]

PSA (City, State)

4833-1860-0358.1

5197957-2

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

Exhibit A to Exhibit “C”

Legal Description

PSA (City, State)

4833-1860-0358.1

5197957-2

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

DISCUSSION DRAFT

Exhibit B to Exhibit “C”

Permitted Exceptions

 

1.

All taxes and assessments for the year 2020 and subsequent years, not yet due
and payable.

 

2.

All easements, restrictions, reservations, encumbrances and other matters
appearing of record.

 

3.

Zoning and building laws and other ordinances affecting the Property.

 

4.

All matters that would be disclosed by an accurate survey and inspection of the
Property.

 

5.

Any claim to (a) ownership of or rights to minerals and similar substances,
including but not limited to ores, metals, coal, lignite, oil, gas, uranium,
limestone, clay, rock, sand, and gravel located in, on, or under the Property or
produced from the Property, whether such ownership or rights arise by lease,
grant, exception, conveyance, reservation, or otherwise, and (b) any rights,
privileges, immunities, rights of way, and easements associated therewith or
appurtenant thereto, whether or not the interests or rights in (a) or (b) appear
in the public records.

 

6.

[Insert additional exceptions from Schedule B, Part II of the Title Commitment]

PSA (City, State)

4833-1860-0358.1

5197957-2

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

DISCUSSION DRAFT

Exhibit “D”

Form of Seller’s Affidavit

SELLER’S AFFIDAVIT

Personally appeared before me the undersigned deponent,
__________________________, who, first being duly sworn, deposes and says on
oath that he/she is the _________________________ of FRED’S INC., a Delaware
corporation (the “Grantor”), and in such capacity is authorized to make this
affidavit, and does further depose and say under oath, to the best of his/her
knowledge and belief but without independent investigation, the following:

THAT, subject to the Permitted Title Exceptions set forth on Exhibit “B”
attached hereto, no liens, encumbrances, covenants or restrictions affecting
that certain tract or parcel of land described on Exhibit “A” attached hereto
and any improvements thereon (the “Property”) have been created by acts of the
Grantor during any time that the Grantor has held fee simple title to the
Property; and

THAT, any improvements or repairs made on the Property at the behest of the
Grantor during the ninety-five (95) days immediately preceding this date have
been fully paid for or will be paid for when due, and there are no outstanding
bills incurred for labor or materials used in making improvements or repairs on
the Property which were suffered or incurred by the Grantor, or for services of
architects, engineers, or registered surveyors incurred by the Grantor in
connection therewith; and

THAT, apart from brokers (if any) engaged by the Grantor for the sale of the
Property, the fees or commissions of which brokers will be paid concurrently
with the consummation of the transaction for which this Affidavit is given, no
brokers have been engaged by the Grantor with regard to the sale of the
Property; and

THAT, the deponent makes this affidavit for the purpose of inducing its
purchaser to purchase the Property and to induce a title insurance company to
issue its policy or policies of title insurance with respect to the Property.

PSA (City, State)

4833-1860-0358.1

4832-9869-0984.2

5197957-2

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

Sworn to and subscribed    before me this               day of   
                                                      (Seal) _________________,
20__.    _____________________, not individually    but solely as the
                                     of _______________________   

Fred’s, Inc.

Notary Public

  

(NOTARY SEAL)

  

My Commission Expires:

   _______________________   

PSA (City, State)

4833-1860-0358.1

5197957-2

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

Exhibit “A” to Exhibit “D”

Legal Description of the Property

PSA (City, State)

4833-1860-0358.1

5197957-2

 

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

Exhibit “B” to Exhibit “D”

(Permitted Title Exceptions)

 

1.

All taxes and assessments for the year 2020 and subsequent years, not yet due
and payable.

 

2.

All easements, restrictions, reservations, encumbrances and other matters
appearing of record.

 

3.

Zoning and building laws and other ordinances affecting the Property.

 

4.

All matters that would be disclosed by an accurate survey and inspection of the
Property.

 

5.

Any claim to (a) ownership of or rights to minerals and similar substances,
including but not limited to ores, metals, coal, lignite, oil, gas, uranium,
limestone, clay, rock, sand, and gravel located in, on, or under the Property or
produced from the Property, whether such ownership or rights arise by lease,
grant, exception, conveyance, reservation, or otherwise, and (b) any rights,
privileges, immunities, rights of way, and easements associated therewith or
appurtenant thereto, whether or not the interests or rights in (a) or (b) appear
in the public records.

 

6.

[Insert additional exceptions from Schedule B, Part II of the Title Commitment]

PSA (City, State)

4833-1860-0358.1

5197957-2

 

 

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DocuSign Envelope ID: 488E3366-4F8B-480D-AC37-056D2486A759

 

PSA (City, State)

4833-1860-0358.1

5197957-2