
                                AGENCY AGREEMENT


                            Dated as of June 2, 1999



                                     between

                         DOLLAR TREE DISTRIBUTION, INC.,
                            as the Construction Agent


                                       and


                   FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                       not individually, but solely as the
                Owner Trustee under the DTSD Realty Trust 1999-1,
                                  as the Lessor







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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I DEFINITIONS; RULES OF USAGE......................................   2
         1.1 Definitions...................................................   2
         1.2 Interpretation................................................   2
ARTICLE II APPOINTMENT OF THE CONSTRUCTION AGENT...........................   2
         2.1 Appointment...................................................   2
         2.2 Acceptance and Undertaking....................................   3
         2.3 Term..........................................................   3
         2.4 Scope of Authority............................................   3
         2.5 Delegation of Duties..........................................   4
         2.6 Covenants of the Construction Agent...........................   4
ARTICLE III THE PROPERTIES.................................................   6
         3.1 Construction..................................................   6
         3.2 Amendments; Modifications.....................................   6
ARTICLE IV PAYMENT OF FUNDS................................................   7
         4.1 Right to Receive Construction Cost............................   7
ARTICLE V EVENTS OF DEFAULT................................................   7
         5.1 Events of Default.............................................   7
         5.2 Damages.......................................................   8
         5.3 Remedies; Remedies Cumulative.................................   8
         5.4 Limitation on Recourse........................................  10
ARTICLE VI THE LESSOR'S RIGHTS.............................................  11
         6.1 Exercise of the Lessor's Rights...............................  11
         6.2 The Lessor's Right to Cure the Construction Agent's Defaults..  11
ARTICLE VII MISCELLANEOUS..................................................  11
         7.1 Notices.......................................................  11
         7.2 Successors and Assigns........................................  11
         7.3 GOVERNING LAW.................................................  11
         7.4 SUBMISSION TO JURISDICTION; VENUE; WAIVERS; ARBITRATION.......  12
         7.5 Amendments and Waivers........................................  12
         7.6 Counterparts..................................................  12
         7.7 Severability..................................................  12
         7.8 Headings and Table of Contents................................  12
         7.9 WAIVER OF JURY TRIAL..........................................  12

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                                AGENCY AGREEMENT


         THIS AGENCY AGREEMENT,  dated as of June 2, 1999 (as amended, modified,
extended,  supplemented,  restated  and/or  replaced  from  time  to  time,  the
"Agreement"),  between FIRST SECURITY  BANK,  NATIONAL  ASSOCIATION,  a national
banking association ("FSB"), not individually, but solely as Owner Trustee under
the DTSD Realty Trust 1999-1 (the "Lessor") and DOLLAR TREE DISTRIBUTION, INC. a
Virginia corporation (the "Construction Agent").


                              PRELIMINARY STATEMENT

         A. The Lessor and the  Construction  Agent are parties to that  certain
Lease Agreement dated as of even date herewith (as amended, modified,  extended,
supplemented, restated and/or replaced from time to time, the "Lease"), pursuant
to which the Construction Agent, as lessee (in such capacity,  the "Lessee") has
agreed to lease certain Land,  Improvements  and Equipment  and/or to sublease a
ground leasehold in certain  Properties subject to one (1) or more Ground Leases
from the Lessor.

         B. In connection  with the execution and delivery of the  Participation
Agreement,  the Lease and the other  Operative  Agreements,  and  subject to the
terms and conditions  hereof, (i) the Lessor desires to appoint the Construction
Agent as its sole and exclusive agent in connection with the  identification and
acquisition or ground lease of the Properties (provided, title to the Properties
shall be held in the name of the Lessor,  except that the interest of the Lessor
in certain of the Properties  shall be a ground leasehold  interest  pursuant to
one (1) or more Ground Leases,  if requested by the Construction  Agent) and the
development,  acquisition,   installation,   construction  and  testing  of  the
Improvements  and the Equipment in accordance with the Plans and  Specifications
and (ii) the  Construction  Agent  desires,  for the benefit of the  Lessor,  to
identify  and  acquire  or  ground  lease  the   Properties  and  to  cause  the
development,  acquisition,   installation,   construction  and  testing  of  the
Improvements,  the  Equipment  and the other  components  of the  Properties  in
accordance  with the  Plans  and  Specifications  and to  undertake  such  other
liabilities and obligations as are herein set forth.

         NOW, THEREFORE,  in consideration of the foregoing,  and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

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                                    ARTICLE I

                           DEFINITIONS; RULES OF USAGE

         1.1      Definitions.

                  For purposes of this Agreement, capitalized terms used in this
Agreement and not otherwise  defined herein shall have the meanings  assigned to
them in Appendix A to that certain  Participation  Agreement dated as of June 2,
1999 (as amended,  modified,  extended,  supplemented,  restated and/or replaced
from time to time in accordance  with the  applicable  provisions  thereof,  the
"Participation  Agreement")  among the  Construction  Agent, the various parties
thereto  from time to time,  as the  Guarantors,  the  Lessor,  and First  Union
National  Bank  ("Bank"),  as lender and  holder.  Unless  otherwise  indicated,
references  in  this  Agreement  to  articles,  sections,  paragraphs,  clauses,
appendices, schedules and exhibits are to the same contained in this Agreement.

         1.2      Interpretation.

                  The  rules  of  usage  set   forth  in   Appendix   A  to  the
Participation Agreement shall apply to this Agreement.


                                   ARTICLE II

                      APPOINTMENT OF THE CONSTRUCTION AGENT

         2.1      Appointment.

         Subject  to  the  terms  and  conditions   hereof,  the  Lessor  hereby
irrevocably  designates  and appoints the  Construction  Agent as its  exclusive
agent, and the Construction  Agent accepts such appointment,  in connection with
the  identification  and  acquisition  from  time  to  time  of  the  Properties
(provided,  title to the  Properties  shall  be held in the name of the  Lessor,
except that the interest of the Lessor in certain  Properties  shall be a ground
leasehold interest pursuant to one (1) or more Ground Leases if requested by the
Construction Agent) and the development, acquisition, installation, construction
and testing of the  Improvements,  the Equipment and the other components of the
Properties  in accordance  with the Plans and  Specifications  on the Land,  and
pursuant  to  the  terms  of  the  Operative  Agreements.   Notwithstanding  any
provisions  hereof or in any other  Operative  Agreement  to the  contrary,  the
Construction Agent acknowledges and agrees that the Lessor shall advance no more
than the sum of the aggregate Commitment plus the aggregate amount of the Holder
Commitments in regard to the Properties  (including  without  limitation for any
and all Advances in the aggregate under the Credit Agreement and under the Trust
Agreement).

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         2.2      Acceptance and Undertaking.

         The  Construction  Agent  hereby  unconditionally  accepts  the  agency
appointment  and  undertakes,  for the  benefit of the Lessor,  to identify  and
acquire certain Properties  (provided,  title to the Properties shall be held in
the name of the  Lessor,  except  that the  interest  of the  Lessor in  certain
Properties  shall be a ground  leasehold  interest  pursuant  to one (1) or more
Ground  Leases if  requested  by the  Construction  Agent) and the  development,
acquisition,  installation,  construction and testing of the  Improvements,  the
Equipment  and the other  components of the  Properties  in accordance  with the
Plans and Specifications and the Operative Agreements.

         2.3      Term.

         This Agreement shall commence on the date hereof and shall terminate on
the Construction Period Termination Date.

         2.4      Scope of Authority.

                  (a) The Lessor hereby  expressly  authorizes the  Construction
         Agent, or any agent or contractor of the  Construction  Agent,  and the
         Construction  Agent  unconditionally  agrees  for  the  benefit  of the
         Lessor,  subject to Section  2.4(b),  to take all action  necessary  or
         desirable for the  performance  and  satisfaction of any and all of the
         Lessor's  obligations  under any construction  agreement and to fulfill
         all of the  obligations of the  Construction  Agent  including  without
         limitation:

                           (i)      the  identification  and assistance with the
                  acquisition of Properties in accordance with the terms and
                  conditions of the Participation Agreement;

                           (ii) all design and supervisory functions relating to
                  the development, acquisition,  installation,  construction and
                  testing  of the  related  Improvements,  Equipment  and  other
                  components  of the  applicable  Property  and  performing  all
                  engineering work related thereto;

                           (iii) (A) negotiating,  entering into, performing and
                  enforcing all contracts and  arrangements to acquire or ground
                  lease the Properties and to procure the equipment necessary to
                  construct  the  Properties  and  (B)  negotiating,  executing,
                  performing  and enforcing all  contracts and  arrangements  to
                  develop,   acquire,   install,    construct   and   test   the
                  Improvements,  the Equipment  and the other  components of the
                  Properties  on such terms and  conditions as are customary and
                  reasonable  in light  of  local  and  national  standards  and
                  practices and the businesses in which the Lessee is engaged;

                           (iv)  obtaining  all  necessary  permits,   licenses,
                  consents,  approvals,  entitlements and other  authorizations,
                  including without limitation all of the foregoing required for
                  the  Properties  and the use and  occupancy  thereof and those
                  required under  applicable Law (including  without  limitation
                  Environmental

                                       3
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                  Laws),  from all  Governmental  Authorities in connection with
                  the  development, acquisition, installation, construction  and
                  testing of  the  Improvements,  the Equipment  and  the  other
                  components of the Properties in accordance with  the Plans and
                  Specifications;

                           (v) maintaining all books and records with respect to
                  the Properties and the construction,  operation and management
                  thereof; and

                           (vi)   performing   any  other  acts   necessary   in
                  connection with the  identification  and acquisition or ground
                  leasing of the  Properties and the  development,  acquisition,
                  installation,   construction   and   testing  of  the  related
                  Improvements, Equipment and all other additional components of
                  the   Properties   in   accordance    with   the   Plans   and
                  Specifications.

                  (b) Neither the  Construction  Agent nor any of its Affiliates
         or agents  shall enter into any  contract or consent to any contract in
         the name of the Lessor without the Lessor's prior written consent, such
         consent  to be  given  or  withheld  in the  exercise  of the  Lessor's
         reasonable  discretion;  provided,  however,  that (i) no such contract
         will increase the  obligations of the Lessor beyond the  obligations of
         the Lessor as are expressly set forth in the Operative  Agreements  and
         (ii) each such contract shall be expressly  non-recourse  to the Lessor
         on terms and conditions that are reasonably acceptable to the Lessor.

                  (c) Subject to the terms and  conditions of this Agreement and
         the other Operative Agreements,  the Construction Agent shall have sole
         management and control over the installation,  construction and testing
         means,   methods,   sequences  and  procedures   with  respect  to  the
         Properties.

         2.5      Delegation of Duties

         The  Construction  Agent  may  execute  any of its  duties  under  this
Agreement by or through  agents,  contractors,  employees or  attorneys-in-fact;
provided,  however, that no such delegation shall limit or reduce in any way the
Construction Agent's duties and obligations under this Agreement.

         2.6      Covenants of the Construction Agent.

         The Construction Agent hereby covenants and agrees that it will:

                  (a)  following  the  Construction  Commencement  Date for each
         Property,   cause   the   development,    acquisition,    installation,
         construction  and testing of such  Property to be  prosecuted in a good
         and workmanlike manner, and respecting each Property in accordance with
         the applicable Plans and Specifications,  the Construction  Budget, the
         applicable contracts relating to the Improvements, the Equipment, other
         components of such Property and procurement of construction  materials,
         the applicable  construction

                                       4

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         contracts,  the  applicable  construction  schedule, prevalent industry
         practices and otherwise in accordance with Section 3.1 hereof;

                  (b) not commence construction with respect to any Improvements
         on a date  that is  within  six (6)  months  prior to the  Construction
         Period Termination Date;

                  (c) cause the Completion Date for any Improvements to occur on
         or before the earlier of (i) the date that is twelve (12) months  after
         the  initial   Construction   Advance  made  in  connection  with  such
         Improvements or (ii) the Construction  Period Termination Date, in each
         case free and clear (by  removal  or  bonding)  of Liens or claims  for
         materials  supplied or labor or services  performed in connection  with
         the  development,  acquisition,  installation,  construction or testing
         thereof;

                  (d) cause all  outstanding  punch list  items with  respect to
         such Improvements to be completed by the Completion Date;

                  (e) at all times subsequent to the initial Advance  respecting
         a  Property  (i)  cause  good and  marketable  title to the  applicable
         Property to vest in the Owner Trustee  (except that the interest of the
         Lessor  in  certain  Properties  shall be a ground  leasehold  interest
         pursuant  to  one  (1)  or  more  Ground  Leases  if  requested  by the
         Construction Agent) (ii) cause a valid, perfected,  first priority Lien
         on the applicable  Property to be in place in favor of the Bank,  (iii)
         file all necessary documents under the applicable real property law and
         Article 9 of the  Uniform  Commercial  Code to  perfect  such title and
         Liens and (iv) not permit Liens (other than Permitted  Liens and Lessor
         Liens) to be filed or maintained respecting the applicable Property;

                  (f) no less than five (5) Business Days prior to the scheduled
         date for the initial Construction Advance to be made in connection with
         any Property, the Construction Agent shall deliver to the Bank (for the
         benefit  of the  Lessor)  true,  complete  and  correct  copies  of the
         Construction Budget therefor;

                  (g)  procure   insurance   for  the   Properties   during  the
         Construction Period in accordance with the provisions of Article XIV of
         the Lease; and

                  (h) on or before the  Construction  Period  Termination  Date,
         cause  the  Rent  Commencement  Date  to  occur  with  respect  to  all
         Properties or purchase any such  Properties  for an amount equal to the
         sum  referenced  in Section  5.3(b)  hereof and otherwise in compliance
         with the other terms and provisions of the Operative Agreements.

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                                   ARTICLE III

                                 THE PROPERTIES

         3.1      Construction.

         The Construction Agent shall cause the Improvements,  the Equipment and
all other  components of the  Properties to be developed,  acquired,  installed,
constructed and tested in compliance with all Legal Requirements,  all Insurance
Requirements,  all manufacturer's specifications and standards and the standards
maintained by the Construction Agent for similar properties owned or operated by
the  Construction  Agent,  and all  specifications  and standards  applicable to
properties of the Lessee which are similar to the Permitted  Facilities,  unless
non-compliance,  individually or in the aggregate,  shall not have and could not
be reasonably expected to have a Material Adverse Effect.

         3.2      Amendments; Modifications.

         (a) The Construction Agent may at any time revise,  amend or modify (i)
the Plans and Specifications without the consent of the Lessor;  provided,  that
any such  amendment to the Plans and  Specifications  does not (x) result in the
Completion  Date of the  Improvements  occurring  on or after  the  Construction
Period Termination Date or (y) result in the cost of all Improvements  exceeding
the amount specified in the Construction  Budget,  as amended from time to time,
or an amount equal to the sum of the then  Available  Commitments  plus the then
Available Holder  Commitments  (reduced by the amount, if any,  necessary to pay
for the cost of construction and development of Improvements on other Properties
which are currently  under  construction  but have not yet been completed  (such
amount the "Unfunded Amount")),  and (ii) the Construction Budget and enter into
any related amendments,  modifications or supplements without the consent of the
Lessor; provided, that such revisions,  amendments or modifications to the Plans
and  Specifications or related  amendments,  modifications or supplements to the
Construction  Budget  do not  result in any  increase  in total  Property  Costs
greater than the amount  specified in the Construction  Budget,  as amended from
time to time, or the then Available  Commitments and Available Holder Commitment
(reduced  by  the  Unfunded  Amount).   Notwithstanding  the  foregoing,  it  is
specifically  understood and agreed that if at any time the total Property Costs
remaining to be expended  exceed the Unfunded  Amount,  the  Construction  Agent
shall  have  the  rights  to  purchase  set  forth  in  Section  5.3(c)  and the
limitations on recourse set forth in Section 5.4.

         (b) The  Construction  Agent  agrees  that it will  not  implement  any
revision,  amendment or  modification  to the Plans and  Specifications  for any
Property if the aggregate  effect of such revision,  amendment or  modification,
when taken together with any previous or contemporaneous revision,  amendment or
modification  to the Plans or  Specifications  for any  Property,  would cause a
material  reduction in value in excess of the cost  reduction of such  revision,
amendment or modification of the Property when completed,  unless such revision,
amendment or modification is required by Legal Requirements.

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                                   ARTICLE IV

                                PAYMENT OF FUNDS

         4.1      Right to Receive Construction Cost.

                  (a)  In   connection   with  the   development,   acquisition,
         installation,  construction  and testing of any Property and during the
         course of the  construction of the  Improvements  on any Property,  the
         Construction  Agent may request that the Lessor  advance  funds for the
         payment of Property  Acquisition Costs or other Property Costs, and the
         Lessor will comply with such  request to the extent  provided for under
         the  Participation  Agreement.  The  Construction  Agent and the Lessor
         acknowledge  and agree that the  Construction  Agent's right to request
         such funds and the  Lessor's  obligation  to advance such funds for the
         payment  of  Property  Acquisition  Costs  or other  Property  Costs is
         subject  in  all   respects  to  the  terms  and   conditions   of  the
         Participation  Agreement  and each of the other  Operative  Agreements.
         Without  limiting the  generality of the  foregoing it is  specifically
         understood  and agreed  that in no event  shall the  aggregate  amounts
         advanced by the Bank for Property  Acquisition  Costs or other Property
         Costs and any other amounts due and owing hereunder or under any of the
         other Operative  Agreements exceed the sum of the aggregate  Commitment
         plus the aggregate amount of the Holder Commitments,  including without
         limitation  such  amounts  owing  for  (i)  development,   acquisition,
         installation,   construction  and  testing  of  the  Properties,   (ii)
         additional  amounts  which  accrue  or become  due and owing  under the
         Credit  Agreement or Trust Agreement as obligations of the Lessor prior
         to any Completion Date or (iii) any other purpose.

                  (b) The proceeds of any funds made  available to the Lessor to
         pay Property  Acquisition  Costs or other  Property Costs shall be made
         available to the Construction  Agent in accordance with the Requisition
         relating  thereto  and the terms of the  Participation  Agreement.  The
         Construction  Agent  will use such  proceeds  only to pay the  Property
         Acquisition  Costs or other Property Costs set forth in the Requisition
         relating to such funds.


                                    ARTICLE V

                                EVENTS OF DEFAULT

         5.1      Events of Default.

         If any one  (1) or  more  of the  following  events  (each  an  "Agency
Agreement Event of Default") shall occur:

                  (a) the  Construction  Agent  fails to apply any funds paid by
         the Lessor to the  Construction  Agent in a manner  consistent with the
         requirements  of  the  Operative  Agreements  and as  specified  in the
         applicable Requisition for the development,

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         acquisition,  installation, construction  and testing of the Properties
         and related  Improvements and  Equipment  or otherwise  respecting  the
         Properties  to  the  payment of  Property  Acquisition  Costs  or other
         Property Costs;

                  (b) the  Completion  Date with respect to any  Property  shall
         fail to occur  for any  reason on or prior to the  Construction  Period
         Termination Date or the Construction Agent shall abandon or permanently
         discontinue  the  construction  and  development  of such  Construction
         Period Property (which abandonment or permanent discontinuance shall be
         deemed to have occurred if no work at such Construction Period Property
         is  undertaken  or completed  during a continuous  period of sixty (60)
         days or more);

                  (c) any Event of Default  (as such term is defined in Appendix
         A to the Participation  Agreement) shall have occurred and not be cured
         within  any cure  period  expressly  permitted  under  the terms of the
         applicable Operative Agreement;

                  (d) the Construction  Agent shall materially breach any of its
         representations  or warranties  under any Operative  Agreement or shall
         fail to observe or  perform  any term,  covenant  or  condition  of any
         Operative  Agreement  other than as set forth in paragraphs (a), (b) or
         (c) of this Section 5.1 and such failure to observe or perform any such
         term,  covenant or condition  shall continue for more than fifteen (15)
         days after notice thereof to the Construction Agent; and

                  (e) there occurs an Environmental Violation that is reasonably
         likely to cost or actually costs more than $50,000 to remediate;

then,  in any such event,  the Lessor  may, in addition to the other  rights and
remedies provided for in this Agreement,  terminate this Agreement by giving the
Construction Agent written notice of such termination and upon the expiration of
the time  fixed in such  notice  and the  payment  of all  amounts  owing by the
Construction Agent hereunder (including without limitation any amounts specified
under Section 5.3 hereof),  this Agreement  shall  terminate.  The  Construction
Agent shall pay all costs and  expenses  incurred by or on behalf of the Lessor,
including  without  limitation fees and expenses of counsel,  as a result of any
Agency Agreement Event of Default hereunder.

         5.2      Damages.

         The  termination of this Agreement  pursuant to Section 5.1 shall in no
event relieve the Construction Agent of its liability and obligations hereunder,
all of which shall survive any such termination.

         5.3      Remedies; Remedies Cumulative.

                  (a)  If an  Agency  Agreement  Event  of  Default  shall  have
         occurred and be continuing,  the Lessor shall have all rights available
         to the Lessor under the Lease and the

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         other Operative Agreements  and all other rights otherwise available at
         law, equity or otherwise.

                  (b)  Upon  the  occurrence  of an  Agency  Agreement  Event of
         Default,  the Lessor  shall have (in  addition to its rights  otherwise
         described in this  Agreement or existing at law,  equity or  otherwise)
         the option (and shall be deemed automatically,  and without any further
         action,  to have exercised such option upon the occurrence of any Lease
         Event of Default  arising  under  Sections  17.1(g),  (h) or (i) of the
         Lease) to  transfer  and convey to the  Construction  Agent upon a date
         designated by the Lessor all right, title and interest of the Lessor in
         and to any Property or Properties  (including  without  limitation  any
         Land and/or any  Improvements,  any interest in any  Improvements,  any
         Equipment and any Property then under  construction) for which the Rent
         Commencement  Date  has  not  yet  occurred  (a  "Construction   Period
         Property"). On any transfer and conveyance date specified by the Lessor
         pursuant to this  Section  5.3(b),  (i) the Lessor  shall  transfer and
         convey (at the cost of the  Construction  Agent)  all right,  title and
         interest  of the Lessor in and to any or all such  Construction  Period
         Properties  free  and  clear of the Lien of the  Lease  and all  Lessor
         Liens, (ii) the Construction  Agent hereby covenants and agrees that it
         will accept such transfer and  conveyance of right,  title and interest
         in and to the respective  Construction  Period Property or Construction
         Period  Properties and (iii) the Construction  Agent hereby promises to
         pay to the Lessor, as liquidated damages (it being agreed that it would
         be impossible  accurately to determine  actual  damages),  an aggregate
         amount equal to the Termination  Value of any or all such  Construction
         Period Properties. The Construction Agent specifically acknowledges and
         agrees  that its  obligations  under  this  Section  5.3(b),  including
         without   limitation  its   obligations  to  accept  the  transfer  and
         conveyance  of   Construction   Period   Properties   and  its  payment
         obligations  described in  subparagraph  (iii) of this Section  5.3(b),
         shall be absolute and unconditional under any and all circumstances and
         shall be performed  and/or paid, as the case may be,  without notice or
         demand  and  without  any  abatement,  reduction,  diminution,  setoff,
         defense,  counterclaim or recoupment  whatsoever.  Notwithstanding  the
         foregoing  provisions of this Section 5.3(b), the Lessor shall have the
         right in its sole  discretion  to rescind  any  exercise  of its option
         under this Section  5.3(b) upon the giving of its written  confirmation
         of such rescission to the Construction Agent on or prior to the earlier
         to  occur  of (a) the  actual  date of  transfer  and (b) the  date one
         hundred  and  twenty  (120)  days  after the date the  Lessor has given
         notice  of its  intent to  transfer  and  convey  any  Property  to the
         Construction Agent as referenced above in this Section 5.3(b).

                  (c) The  Construction  Agent  shall  have the right to cure an
         Agency  Agreement Event of Default  hereunder with respect to any given
         Property by  purchasing or causing the Lessee to purchase such Property
         from the Lessor (to the extent such Agency  Agreement  Event of Default
         is no longer  continuing  with respect to any other Property  remaining
         subject to this  Agreement  after such purchase) for an amount equal to
         the  liquidated  damages  amount  set forth in  Section  5.3(b) of this
         Agreement.

                  (d) No failure to exercise and no delay in exercising,  on the
         part of the Lessor,  any right,  remedy,  power or privilege under this
         Agreement or under the other  Operative

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         Agreements  shall operate as a waiver thereof;  nor shall any single or
         partial  exercise of  any right remedy,  power or privilege  under this
         Agreement  preclude  any  other  or further  exercise  thereof  or  the
         exercise of any other right,  remedy, power or  privilege. The  rights,
         remedies,  powers  and   privileges  provided  in  this  Agreement  are
         cumulative  and  not  exclusive  of  any rights,  remedies, powers  and
         privileges provided by law.

         5.4      Limitation on Recourse.

         Notwithstanding  anything  contained  herein or in any other  Operative
Agreement to the contrary,  upon the occurrence and during the continuance of an
Agency  Agreement  Event  of  Default  relating  solely  to one or  more  of the
Construction Period Properties, the maximum aggregate amount that the Lessor, or
any  person or  entity  acting  by or  through  the  Lessor,  including  without
limitation the Bank,  shall be entitled to recover from the Lessee on account of
such Agency  Agreement  Event of Default  shall be an amount equal to the sum of
(i) 89% of the aggregate  Property Cost for all Construction  Period Properties,
exclusive  of the  portion  of the  aggregate  Property  Cost  expended  for the
purchase of the Land related to such  Construction  Period Properties (the "Land
Cost")  plus (ii) 100% of the Land  Cost,  plus  (iii) all  amounts  owed by the
Lessee  or the  Construction  Agent  under  or  with  respect  to any  Operative
Agreement  in  connection  with  any  Environmental  Violation  related  to such
Construction  Period  Properties  plus (iv) any loss, cost or damage suffered by
the  Lessor  or the  Bank  in  connection  with  or as a  result  of (1)  fraud,
misapplication of funds,  illegal acts or willful  misconduct on the part of the
Lessee or the  Construction  Agent or (2) any claim by any third party caused by
or resulting from the Lessee's or the Construction Agent's actions or failure to
act while in possession or control of any Construction Period Property (it being
understood  and  agreed  that the  Construction  Agent  shall be deemed to be in
possession and control of each  Construction  Period Property at all times until
such  possession  and  control  is  relinquished  pursuant  to the  terms of the
Operative  Agreements)  or (3) a  bankruptcy  of the Lessee or the  Construction
Agent minus (v) any amount expended by the  Construction  Agent on behalf of the
Lessor if the Lessor is obligated to reimburse the  Construction  Agent for such
amount but such  reimbursement  has not yet  occurred.  The  Construction  Agent
nonetheless  acknowledges and agrees that (y) even though the maximum  aggregate
recovery from the Credit Parties is limited as aforesaid,  the Lessor's right of
recovery from the  Construction  Period  Properties  (as opposed to any recovery
from the Credit  Parties) is not so limited and the Lessor  shall be entitled to
recover 100% of the amounts owed to the Lessor in accordance  with the Operative
Agreements  from its interest in the  Properties  and (z) the provisions of this
Section 5.4 shall in no way limit or  otherwise  affect the  obligations  of the
Lessee and the  Construction  Agent (or the  recourse  of the Bank  against  the
Lessee and the  Construction  Agent) with respect to the Properties that are not
Construction Period Properties (whether such obligations or recourse arise under
the Operative Agreements or otherwise).

                                       10

<PAGE>


                                   ARTICLE VI

                               THE LESSORS RIGHTS

         6.1      Exercise of the Lessors Rights.

         Subject to the Excepted Payments, the Construction Agent and the Lessor
hereby  acknowledge and agree that,  subject to and in accordance with the terms
of the Security  Agreement  made by the Lessor in favor of the Bank,  the rights
and powers of the Lessor under this Agreement have been assigned to the Bank.

         6.2      The Lessors Right to Cure the Construction Agents Defaults.

         The Lessor,  without  waiving or  releasing  any  obligation  or Agency
Agreement Event of Default, may (but shall be under no obligation to) remedy any
Agency  Agreement  Event of Default  for the account of and at the sole cost and
expense of the  Construction  Agent.  All  out-of-pocket  costs and  expenses so
incurred  (including without limitation fees and expenses of counsel),  together
with  interest  thereon at the Overdue  Rate from the date on which such sums or
expenses are paid by the Lessor,  shall be paid by the Construction Agent to the
Lessor on demand.


                                   ARTICLE VII

                                  MISCELLANEOUS

         7.1      Notices.

         All notices  required  or  permitted to  be given under this  Agreement
shall  be  in  writing  and  delivered  as  provided  in  Section  12.2  of  the
Participation Agreement.

         7.2      Successors and Assigns.

         This  Agreement  shall be binding  upon and inure to the benefit of the
Lessor, the Construction  Agent and their respective  successors and the assigns
of the Lessor.  The  Construction  Agent may not assign this Agreement or any of
its rights or obligations  hereunder or with respect to any Property in whole or
in part to any  Person  without  the prior  written  consent of the Bank and the
Lessor.

         7.3      GOVERNING LAW.

         THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT  SHALL BE GOVERNED  BY, AND  CONSTRUED,  INTERPRETED  AND  ENFORCED IN
ACCORDANCE  WITH,  THE LAW OF THE  STATE OF NORTH  CAROLINA,  WITHOUT  REGARD TO
CONFLICTS OF LAWS PRINCIPLES.

                                       11

<PAGE>


         7.4      SUBMISSION TO JURISDICTION; VENUE; WAIVERS; ARBITRATION.

         The provisions of the Participation Agreement relating to submission to
jurisdiction, venue AND ARBITRATION are hereby incorporated by reference herein,
mutatis mutandis.

         7.5      Amendments and Waivers.

         This Agreement may not be terminated, amended, supplemented,  waived or
modified  except  in  accordance  with the  provisions  of  Section  12.4 of the
Participation Agreement.

         7.6      Counterparts.

         This  Agreement may be executed in any number of separate  counterparts
and all of said  counterparts  taken  together shall be deemed to constitute one
(1) and the same instrument.

         7.7      Severability.

         Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

         7.8      Headings and Table of Contents.

         The headings and table of contents  contained in this Agreement are for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

         7.9      WAIVER OF JURY TRIAL.

         TO THE FULLEST  EXTENT  ALLOWED BY  APPLICABLE  LAW, THE LESSOR AND THE
CONSTRUCTION  AGENT IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY
LEGAL  ACTION OR  PROCEEDING  RELATING TO THIS  AGREEMENT  AND ANY  COUNTERCLAIM
THEREUNDER.



                            [signature page follows]

                                       12


<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the day and year first above written.


                                     DOLLAR TREE DISTRIBUTION, INC,
                                     as the Construction Agent


                                     By: /s/ Frederick C. Coble

                                     Name: Frederick C. Coble

                                     Title: Sr. V.P.



                                     FIRST SECURITY BANK, NATIONAL
                                     ASSOCIATION, not individually, but solely
                                     as Owner Trustee under the DTSD Realty
                                     Trust  1999-1, as the Lessor


                                     By: /s/ Val T. Orton

                                     Name: Val T. Orton

                                     Title: Vice President


