AGREEMENT

Exhibit 10(a)

AGREEMENT

by and among

REX RADIO AND TELEVISION, INC., REX ALABAMA, INC., KELLY & COHEN
APPLIANCES, INC. and STEREO TOWN, INC., as Seller,
REX STORES CORPORATION,

and

APPLIANCE DIRECT, INC., as Purchaser

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AGREEMENT

          THIS AGREEMENT (this “ Agreement ”) is made as of the 29 ^th day of January, 2009 (the “ Effective Date ”), by and between REX RADIO AND TELEVISION, INC., an Ohio corporation (“ Seller One ”), KELLY & COHEN APPLIANCES, INC., an Ohio corporation (“ Seller Two ”), and STEREO TOWN, INC., a Georgia corporation (“ Seller Three ”), REX ALABAMA, INC., an Ohio corporation (“Seller Four”) (collectively, Seller One, Seller Two, Seller Three and Seller Four, “ Seller ”), REX STORES CORPORATION, a Delaware corporation (“ REX Stores ”), all having an address at 2875 Needmore Road, Dayton, OH 45414, and APPLIANCE DIRECT, INC., a Florida corporation (“ Purchaser ”), having an address at 397 North Babcock Street, Melbourne, Florida 32935.

RECITALS

          NOW, THEREFORE, in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1 DEFINITIONS

          The following capitalized terms shall have the meanings set forth in this Section 1 for all purposes under this Agreement:

          “ Agreement ” shall have the meaning set forth in the first paragraph hereof.

          “ Appliances ” shall have the meaning set forth in Section 2.1(a).

           “Assets” shall have the meaning set forth in Section 2.1.

          “ Bill of Sale and Assignment ” shall have the meaning set forth in Section 4.2(a)(vii).

          “ Business Day ” shall have the meaning set forth in Section 14.10.

          “ Closing ”“ shall mean the consummation of the transactions described herein as more fully described in Section 4 below.

          “ Closing Date ” shall mean January 30, 2009.

          “ Closing Statement ” shall have the meaning set forth in Section 5.1(a).

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          “ Creditors’ Rights Statutes ” shall have the meaning set forth in Section 6.1(k).

          “ Delivery Items ” shall have the meaning set forth in Section 3.1(a).

          “ Due Diligence Period ” shall have the meaning set forth in Section 3.2.

          “ Effective Date ” shall have the meaning set forth in the first paragraph hereof.

          “ Equipment ” shall have the meaning set forth in Section 2.1(b).

          “ General Warranty Period ” shall have the meaning set forth in Section 3.5.

          “ Governmental Notices ” shall have the meaning set forth in Section 3.1(a)(iv).

           “Implementation Date” shall have the meaning set forth in Section 2.6.

           “Implementation Schedule” shall have the meaning set forth in Section 2.6.

          “ Indemnitee ” shall have the meaning set forth in Section 6.4.

          “ Indemnitor ” shall have the meaning set forth in Section 6.4.

          “ Inspections ” shall have the meaning set forth in Section 3.2.

          “ Lease ” shall have the meaning set forth in Section 2.2.

          “ Leased Properties ” shall have the meaning set forth in Section 2.3.

          “ Notice ” shall have the meaning set forth in Section 10.

          “ Person ” shall mean an individual, corporation, partnership, limited liability company, association, trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.

          “ Prohibited Transaction ” shall have the meaning set forth in Section 14.13.

          “ Property ” or “ Properties ” shall have mean each location listed on Exhibit 2.2 .

          “ Proposed Transaction ” shall mean the transactions contemplated by this Agreement.

          “ Purchase Option Agreements ” shall have the meaning set forth in Section 6.1(c).

          “ Purchase Price ” shall have the meaning set forth in Section 2.4.

          “ Purchaser ” shall have the meaning set forth in the first paragraph hereof.

          “ Required Consents ” shall have the meaning set forth in Section 6.1(g).

          “ Restricted Parties ” shall mean and include REX Stores and each of the Sellers.

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          “ REX Stores ” shall have the meaning set forth in the first paragraph hereof.

          “ Right of First Refusal Agreements ” shall have the meaning set forth in Section 6.1(c).

          “ Seller ” shall have the meaning set forth in the first paragraph hereof.

          “ Seller One ” shall have the meaning set forth in the first paragraph hereof.

          “ Seller Three ” shall have the meaning set forth in the first paragraph hereof.

          “ Seller Two ” shall have the meaning set forth in the first paragraph hereof.

          “ Service Contracts ” shall have the meaning set forth in Section 3.1(a)(viii).

          “ Sites ” shall mean the sites of each Property identified on Exhibit 2.2 or Exhibit 2.3 attached hereto.

          “ Surviving Obligations ” shall mean all obligations of Purchaser or Seller hereunder that expressly survive the Closing or termination of this Agreement.

          “ Wholesale Cost of Appliance Inventory ” shall have the meaning set forth in Section 2.4.

All terms defined in this Agreement in the singular shall have comparable meanings when used in the plural and vice versa.

SECTION 2 AGREEMENT TO SELL AND PURCHASE

          2.1 Assets to be Purchased. “ Assets ” means all right, title and interest of Seller in, to and under all assets used in or related to the conduct of Seller’s businesses at each of the Properties or Leased Properties, including, without limitation:

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          “Permits” means those federal, state, local or other governmental licenses, permits, consents, approvals and authorizations listed or described on Schedule 2.1(c) .

          2.2 Leases . (a) Subject to the terms and conditions of this Agreement, at Closing, Purchaser shall execute and deliver counterparts of a lease in the form of Exhibit 2.2(a) attached hereto with Seller, as landlord, and Purchaser (or its nominee or nominees), as tenant, for the Properties (each, a “ Lease ”). The delineation of the Properties and which Property is owned by Seller One, Seller Two and Seller Three is set forth in Exhibit 2.2 attached hereto. Each Lease shall be for an initial term of six and one quarter (6.25) years with one (1) five (5) year option to renew. The lease rate shall be $65,000, $75,000 and $85,000 annually for each Property in first through third lease years, respectively, year four shall be at the rate of $75,000 and subsequent years, including years 4, 5 and 6 shall include annual CPI increases. The lease terms shall be triple net and include a cross default provision for all the Properties. Each Lease shall grant Purchaser an option to be exercised once to terminate the leases on up to ten (10) of the Properties, with not less than six (6) months notice, without penalty, twenty-four (24) months following commencement of the lease. Upon six (6) months notice prior to the expiration of the initial terms of 6.25 years, Purchaser may exercise its option to renew leases as to specific locations on a site by site basis without limitation on quantity. Each Lease shall include an option for Purchaser to purchase all of the Properties during the first two (2) years of the lease term. During the initial six (6) months of the initial term, the option shall be at a fixed price of $70.00 per square foot and during the following eighteen (18) months of the initial term at $76.00 per square foot. Seller agrees to provide Purchaser with financing of eighty percent (80%) loan to cost at an interest rate equal to WSJ Prime, plus two percent (2%) with an annual interest rate floor of 6.25% per annum and with an amortization period of twenty years. Additionally, Seller financing provided herein shall have a balloon of all unpaid principal at thirty-six (36) months from the closing of the purchase of the Properties. Purchaser and Seller shall agree that all costs customarily born by buyer/mortgagors and sellers/mortgagees shall be born by the respective party based upon the custom of the county and state in which the real property is located. Purchaser and Seller agree at the request of either party to record in the applicable public records a memorandum of interest identifying Purchaser’s option to purchase the Properties.

          2.3 Leased Properties . Purchaser shall use good faith efforts to negotiate, subject to the terms and conditions of this Agreement, either (i) an assumption of Seller’s existing leases (“Assumption”) or (ii) new leases (“New Lease”) for the properties identified on Exhibit 2.3 attached hereto (the “ Leased Properties ”). If Purchaser is successful in negotiating either an Assumption or a New Lease at Purchaser’s option, such sites shall be added to the Implementation Schedule and the parties shall execute an amendment to this Agreement reflecting the revised Implementation Schedule. Notwithstanding the foregoing, Seller shall have the right, in its sole discretion, on or after February 28, 2009, to cease operations of any or all of the Leased Properties and terminate any or all of the employees at each of the Leased Properties subsequent to February 27, 2009.

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          2.4 Purchase Price . The aggregate price to be paid for the Assets shall be the total wholesale cost of Seller’s Whirlpool Appliance inventory as of the “Implementation Date” as hereinafter defined, as the same may be adjusted as provided below plus One and 00/100 Dollar ($1.00) (collectively the “ Purchase Price ”). Seller’s wholesale cost of its Whirlpool Appliance inventory shall mean the lesser of (i) Seller’s manufacturer cost, net of all manufacturer credits, including volume rebate, damage, advertising/co-op credit, etc. or (ii) Purchaser’s manufacturer cost, net of all manufacturer credits, including volume rebate, damage, advertising/co-op credit, etc, (the “ Wholesale Cost of Appliance Inventory ”), provided, however, any Appliances held in Seller’s inventory at the Site as of its Implementation Date which have been in Seller’s inventory for greater than twelve (12) months shall at fifty percent (50%) of the Wholesale Cost and any Appliance that is deemed “scrap” shall be retained by Seller. The Wholesale Cost of Appliance Inventory shall be calculated on behalf of Purchaser and Seller by the manufacturer by providing the aggregate price to the parties as calculated based upon Seller’s inventory of Appliance as of the Implementation Date and shall be paid to Seller by the applicable manufacturer. Purchaser shall, prior to the Closing Date, arrange any financing arrangements necessary to allow it to purchase the Appliances directly with the respective manufacturers of such Appliances or through third party financing such that Seller shall receive a credit or payment from the respective manufacturers on the Implementation Date on terms acceptable to Seller. Purchaser and Seller may reach an agreement following closing and during implementation concerning the Purchaser’s potential purchase of Seller’s Frigidaire Appliances remaining at each Property or Leased Property as of the Implementation Date for each Site. Any Appliances held in Seller’s inventory at the Site as of its Implementation Date which have been in Seller’s inventory for greater than twelve (12) months shall be re-billed to Purchaser by manufacture(s) at fifty percent (50%) of the Wholesale Cost. Any appliances in Seller’s inventory at the Site as of its Implementation Date which are “scrap” shall be re-billed to Purchaser by the respective manufacturer at a rate of $0.01 for each scrap Appliance.

          2.5 Extended Service Plan (“ESP”) Payment . Purchaser agrees to accept Seller’s customer ESP for Seller’s Frigidaire and Whirlpool appliances (excluding air conditioners and dehumidifiers). Seller shall pay to Purchaser, in connection with such assumption as of the Implementation Date, Seller’s profit in the Book Value of Seller’s Frigidaire and Whirlpool appliances’ ESP for the Properties and Leased Properties (“Seller’s Profit”). Seller’s Profit shall be equal to Seller’s Book Value (Seller’s reported liability related to ESP less Seller’s reported commissions as both are shown on the books and records of Seller in the ordinary course of its business) less Seller’s cost to transfer the ESP related to the Properties and Leased Properties (the “ ESP Credit ”). Seller shall arrange for the transfer of its entire ESP to a company of its selection. For the purposes of this provision, Seller’s profit in the Book Value of Seller’s Frigidaire and Whirlpool appliances shall be allocated on the profit of the overall Seller portfolio. As of the Implementation Date for each Site, Purchaser shall place into escrow, pursuant to an agreement to be mutually acceptable to the parties, with Dinsmore & Shohl LLP as escrow agent, an amount equal to forty percent (40%) of the ESP Credit (the “ Escrowed Funds ”) applicable to that Site. The Escrowed Funds shall be used to offset Purchaser’s obligation for rent under the Leases as follows: beginning with the “Rent Commencement Date” as defined in each Lease, the Escrow Agent shall transfer to Seller, as payment for Purchaser’s rent obligation under the Lease, an amount equal to the then due monthly rent for each Lease for which Purchaser’s obligation to pay rent has commenced; provided that the total of all amounts drawn from the Escrowed Funds shall at no time exceed that proportion of the Escrowed Funds determined by multiplying the Escrowed Funds by a

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fraction, the numerator of which is all of the Properties which Purchaser has accepted delivery and possession and the denominator of which is the total number of Properties.

          2.6 Implementation Schedule . The Properties and Leased Properties shall be turned over to Purchaser on the date specified (the “ Implementation Date ”) on the implementation schedule attached as Exhibit 2.6 hereto (the “ Implementation Schedule ”).

          2.7 Rex Gift Cards . Seller agrees to reimburse Purchaser for those gift cards issued by Seller which Purchaser honors after the Closing. Purchaser shall forward to Seller invoices indicating the purchase and amount of the gift card honored and Seller shall pay the amount of the gift card honored within thirty (30) days of receipt of the request for reimbursement.

SECTION 3 SELLER’S DELIVERIES; CONDITIONS PRECEDENT

          3.1 Seller’s Deliveries .

          (a) Seller has provided or will provide within five (5) Business Days prior to the Implementation Date, to Purchaser, to the extent within Seller’s possession or control, true, correct and complete copies of the following items relating to the ownership and operation of the Properties being turned over as of such Implementation Date (collectively, the “ Delivery Items ”):

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          3.2 Inspections and Access . At any reasonable time and from time to time prior to the close of business January __, 2009 (the “ Due Diligence Period ”) or earlier termination of this Agreement, Purchaser and its representatives shall be permitted (i) to enter upon the Properties or Leased Properties to examine, inspect and investigate the same, and (ii) to access all books, records, drawings and other documentation relating to the Properties or the Leased Properties in the possession or control of Seller (collectively, the “ Inspections ”). Purchaser agrees to use commercially reasonable efforts to (1) keep the purpose of the Inspections confidential and (2) not disclose the existence of or terms of this Agreement to any of Seller’s personnel located at the retail operations at the Properties or Leased Properties; provided, however, that the foregoing shall not prohibit any disclosure required pursuant to any federal or state law or regulation or by governmental authorities. Seller shall cooperate with Purchaser in conducting the Inspections, which cooperation shall include, without limitation facilitating interviews with Leased Property landlords. Seller agrees to respond promptly to any inquiry which Purchaser may make from time to time, and shall instruct its property manager and other agents and employees to give specific answers to Purchaser’s inquiries from time to time relating to the condition and operation of the Properties. Notwithstanding any other provision of this Agreement, no Inspections shall constitute a waiver or relinquishment on the part of Purchaser of its rights under any covenant, condition, representation, or warranty of Seller under this Agreement.

          Purchaser agrees to indemnify, defend and hold Seller harmless from and against any and all claims, losses or damages suffered or incurred by Seller to the extent directly resulting from Purchaser’s or its agents’ negligence or willful misconduct in connection with the Inspections, and Purchaser agrees to restore any Property damaged by the Inspections to its condition prior to Purchaser’s Inspections to the extent practicable; provided, however, that Purchaser’s foregoing obligations shall specifically exclude any damages arising as a result of Purchaser’s discovery of any condition existing on the Property prior to Purchaser’s entry on the Property. The provisions of the immediately preceding sentence of this Section 3.2 shall survive termination of this Agreement for three hundred sixty five (365) days, if this Agreement shall be terminated.

          3.3 Additional Conditions to Purchaser’s Obligation to Close . (a) In addition to all other conditions set forth herein, the obligation of Purchaser to consummate the transactions contemplated hereunder shall be contingent on the following:

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(b) If any of the conditions set forth in Section 3.3(a)(i) through (xii) are not satisfied on the Closing Date, Purchaser may elect either to (i) terminate this Agreement, or (ii) to the extent such failure constitutes a default by Seller, exercise its rights under Section 13. In the event of the termination of this Agreement pursuant to this Section 3.3, each party shall pay any costs theretofore incurred by it, whereupon neither party shall have any additional liability hereunder and this Agreement shall be terminated, except for the Surviving Obligations.

          3.4 Additional Conditions to Seller’s Obligations to Close . (a) In addition to all other conditions set forth herein, the obligation of Seller to consummate the transactions contemplated hereunder shall be contingent on the following:

(b) If any of the conditions set forth in Section 3.4(a)(i) or (ii) are not satisfied on the Closing Date, Seller may elect either to (i) terminate this Agreement, or (ii) to the extent such failure constitutes a default by Purchaser, exercise its rights under Section 13. In the event of the termination of this Agreement pursuant to this Section 3.4, Purchaser shall promptly return to Seller the Delivery Items, and each party shall pay any costs theretofore incurred by it, whereupon neither party shall have any additional liability hereunder and this Agreement.

          3.5 Covenants Regarding Property Condition . All materials, Equipment and systems incorporated at each Property or Leased Property shall be suitable for use under the normal operating conditions in existence at the Site at which it is located, and otherwise consistent with and in compliance with the ordinary use and purpose of the Equipment. The Equipment shall perform its intended functions. If Purchaser notifies Seller in writing during the General Warranty Period (as defined below), or no later than thirty (30) days after the expiration of the General Warranty Period, that a breach of the foregoing warranty has occurred during the General Warranty Period, Seller shall correct (or cause to be corrected) the defects and deficiencies promptly at no cost to Purchaser. The “ General Warranty Period ” shall be ninety (90) days from the Implementation Date for the respective Property. The terms “defects” and deficiencies” shall not include damage arising from Purchaser’s misuse or negligence, acts of God or normal wear and tear. Seller shall enforce all corresponding warranties provided by equipment vendors, and if Seller fails to do so, Purchaser shall have the right to enforce such warranties directly against the equipment vendors. At Purchaser’s election, Seller shall arrange for (or enter into and assign to Purchaser at the Closing) long-term service agreements with respect to major equipment on terms acceptable to Purchaser.

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SECTION 4 CLOSING

          4.1 Time and Place . The Closing shall be held on the Closing Date in the offices of counsel to Purchaser or counsel to Purchaser’s lender, or at any other location mutually acceptable to the parties.

          4.2 Deliveries .

          (a) In addition to the items and documents required under other provisions of this Agreement to be delivered by Seller to Purchaser at or prior to Closing (or the Implementation Date, as indicated below), Seller (or whichever of Seller One, Seller Two or Seller Three is identified on Exhibit 1.1 as the owner of the Site to which such items and documents relate) shall execute and/or deliver (or cause to be executed and/or delivered) to Purchaser through escrow each of the following at Closing:

          (b) In addition to the items and documents required under other provisions of this Agreement to be delivered by Purchaser to Seller at or prior to Closing, Purchaser also shall execute and/or deliver (or cause to be executed and/or delivered) to Seller through escrow each of the following at Closing:

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          (c) Possession . Seller shall deliver actual possession of the Properties to Purchaser pursuant to the Implementation Schedule set forth in Schedule 2.6.

SECTION 5 PRORATIONS/PAYMENT OF PURCHASE PRICE

          5.1 Prorations and Adjustments .

          (a) A statement of prorations and other adjustments shall be prepared by Seller for each Property as of the Implementation Date for that Property in conformity with the provisions of this Agreement and submitted to Purchaser for review and approval not less than three (3) Business Days prior to the Implementation Date for that Property (the “ Closing Statement ”). For purposes of prorations and other adjustments under this Section 5, Purchaser shall be deemed the tenant of a Property as of 12:00 a.m. on the Implementation Date for that Property. Subject to the foregoing, and in addition to other adjustments that may be provided for in this Agreement, the following items with respect to each Property are to be prorated or adjusted, as the case may require, as of the Implementation Date:

 

 

 

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          (b) On the Implementation Date, the parties shall execute a Closing Statement for each Property being turned over to Purchaser which will reflect the prorations for that Property, including prorated rent under the Lease for that Property and payment of that portion of the Purchase Price allocable to that Property’s Whirlpool Appliances inventory as well as an amendment to the Lease specifying the Rent Commencement date for that Property.

          (c) The provisions of this Section 5 shall survive the Closing.

          5.2 Post Implementation Adjustments . All items to be adjusted, for which figures are not available as of the Implementation Date, will be adjusted and payment therefor will be made by Seller to Purchaser or by Purchaser to Seller, as the case may be, as soon as figures are available after the Implementation Date. Purchaser or Seller, as appropriate, will deliver simultaneously with such payment any and all data, information or other backup it may have with respect to such payment and/or such proration so as to fully indicate to the other party the calculation of the amount of payment contained therewith. Further, in the event either Seller or Purchaser determine that an item adjusted as of the Implementation Date was adjusted incorrectly, Purchaser or Seller, as appropriate, will deliver to the other party all data, information or other backup it may have with respect to such incorrect adjustment and the parties

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shall correct the adjustment with the appropriate party making payment to the party entitled to such payment.

SECTION 6 REPRESENTATIONS AND WARRANTIES

          6.1 Seller’s Representations and Warranties . Seller represents and warrants to Purchaser as follows:

          (a) Seller has the legal power, right and authority to enter into this Agreement and to consummate the transactions contemplated hereby. Neither this Agreement nor the transactions contemplated hereby will require any approval of the shareholders of REX Stores. This Agreement and the transactions contemplated hereby have been approved by the Board of Directors of REX Stores.

          (b) Neither the execution and delivery of this Agreement nor the consummation of the transactions herein contemplated conflict with or result in the material breach of any terms, conditions or provisions of or constitute a default under, any bond, note or other evidence of indebtedness or any agreement to which Seller is a party.

          (c) To Seller’s knowledge, no Person other than Purchaser has an option or right of first refusal to purchase the Assets or any Property or any portion thereof, except as set forth on Schedule 6.1(c)(i) (the “ Purchase Option Agreements ”) and Schedule 6.1(c)(ii) (the “ Right of First Refusal Agreements ”). The copies of the Purchase Option Agreements and Right of First Refusal Agreements delivered by Seller to Purchaser are true, correct and complete.

          (d) To Seller’s knowledge, there is no pending or threatened condemnation action affecting any Property.

          (e) To Seller’s knowledge, except as set forth on Schedule 6.1(e) attached hereto, there is no action, suit or proceeding pending or, to Seller’s knowledge, threatened against Seller in any court or by or before any other governmental agency or instrumentality which would affect any of the Assets, the Properties or would materially and adversely affect the ability of Seller to carry out the transactions contemplated by this Agreement.

          (f) To Seller’s knowledge, neither Seller nor any other party under any REAs is in default under any REAs in any material respect.

          (g) To Seller’s knowledge after due inquiry, neither this Agreement nor the transactions contemplated hereby will constitute a breach or violation of, or default under, or will be modified, restricted or precluded by, the REAs or any other agreement binding Seller or the Properties, provided that Seller obtains the consents from the parties identified on Schedule 6.1(g) attached hereto (the “ Required Consents ”) in form and substance satisfactory to Purchaser. Neither this Agreement nor the transactions contemplated hereby will constitute a breach or violation of, or default under, or will be modified, restricted or precluded by, or any other agreement to which Seller is a party or by which Seller or any Property is bound.

          (h) Seller has obtained or will obtain prior to Closing the Required Consents.

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          (i) Seller is not required to make any filing with, or to obtain any permit, authorization, consent or approval of, any governmental or regulatory authority (including, without limitation, any securities exchange) as a condition to the execution and delivery or performance of this Agreement and the consummation of transactions contemplated hereby.

          (j) The Assets will be conveyed to Purchaser at Closing free and clear of any and all liens, encumbrances, charges or adverse interests.

          (k) Neither Seller nor any of the entities constituting Seller: (i) is “insolvent” or will be, after completion of the transactions contemplated hereby, rendered “insolvent”, as the term “insolvent” is used in the Bankruptcy Code or in the Uniform Fraudulent Conveyance Act as enacted in either any state in which any Property is located or the state in which Seller’s principal office is located (the “ Creditors’ Rights Statutes ”); (ii) has, or after completion of the transactions contemplated hereby will be left with, an unreasonably small capital within the meaning of the Creditors Rights Statutes; (iii) in entering into and carrying out its obligations hereunder, intends to incur, or believes that it will incur, debts beyond its ability to satisfy such debts as they mature within the meaning of the Creditors Rights Statutes; (iv) has commenced a case under Title 11 of the U.S. Code, or under any other applicable federal or state bankruptcy or similar law; (v) appointed a trustee or receiver of any property interest; (vi) made an assignment for the benefit of creditors; (vii) suffered an attachment, execution or other judicial seizure of a substantial property interest; (viii) suffered a dissolution or liquidation; or (ix) suffered the discontinuation of trading of shares on the New York Stock Exchange;

          (l) The representations and warranties of Seller set forth in this Agreement are true, accurate and complete; and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statement therein not misleading.

Whenever in this Agreement there is a reference to the “knowledge” of Seller, such term refers to the actual (as opposed to the constructive or imputed) knowledge, with no duty to undertake inquiries or investigations, of (i) Stuart Rose, Chief Executive Officer of REX Stores, and (ii) Douglas Bruggeman, Chief Financial Office of REX Stores.

          6.2 Purchaser’s Representations and Warranties . Purchaser hereby represents and warrants to Seller as follows:

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          6.3 Survival . The representations and warranties of Seller and Purchaser set forth in this Agreement shall be deemed remade as of Closing, and said representations and warranties as so remade shall survive Closing for a period of three hundred sixty five (365) days after the Closing Date (other than the representations made in Sections 6.1(a) and 6.2(a), which shall have no expiration date), after which all of the representations and warranties of Seller and Purchaser set forth in this Agreement shall become void and of no further force or effect.

          6.4 Indemnification . Seller hereby indemnifies and agrees to defend, hold harmless and protect Purchaser, each partner or shareholder, as the case may be, in Purchaser, and their respective officers, directors, members, shareholders, partners, employees, agents and consultants, from and against any and all loss, costs, expenses (including reasonable attorneys’ fees), obligations, liabilities, claims (including any claim for damage to property or injury to death of any persons), liens, or encumbrances, but not consequential damages, punitive damages or lost profits, arising from: (i) the Properties and arising or accruing on or before the Closing Date, including, without limitation, matters arising under Environmental Laws or relating to Hazardous Materials; (ii) any act, conduct, omission, contract or commitment of Seller occurring on or before the Closing Date; or (iii) any material inaccuracy in or material breach of any representation or warranty of Seller resulting from any breach or default by Seller under this Agreement, provided the claim for indemnity was timely made during the survival period set forth in Section 6.3 above. The party claiming indemnification under this Section 6.4 or under Section 3.2(c), Section 9 or Section 14.14 hereof (the “ Indemnitee ”) shall notify the other party (the “ Indemnitor ”) of any such claim for indemnification within forty-five (45) days after the Indemnitee receives notice of the basis for such claim, but failure to notify the Indemnitor shall in no case limit the obligations of the Indemnitor under this Section 6.4 except to the extent Indemnitor shall be prejudiced by such failure. Should Indemnitor fail to discharge or undertake to defend against such claim upon learning of the same, then the Indemnitee may litigate or settle such liability or submit such liability to arbitration or other alternative dispute resolution in its reasonable discretion and Indemnitor’s liability shall include, but not be limited to, the amount of such settlement. The provisions of this Section 6.4 shall survive the Closing for a period of two (2) years, if the Closing shall occur, and shall survive termination of this Agreement, if this Agreement shall be terminated.

SECTION 7 PURCHASE AS-IS

          EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER WARRANTS AND ACKNOWLEDGES TO AND AGREES WITH SELLER THAT PURCHASER IS PURCHASING THE PROPERTIES IN THEIR “AS-IS, WHERE IS” CONDITION “WITH ALL FAULTS” AS OF THE CLOSING DATE AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, AS TO THEIR CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY KIND, NATURE, OR TYPE WHATSOEVER FROM OR ON BEHALF OF SELLER.

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SECTION 8 CLOSING COSTS

          8.1 Seller’s Closing Costs . Seller shall pay the following expenses incurred in connection with the transactions described herein Seller’s legal fees.

          8.2 Purchaser’s Closing Costs . Purchaser shall pay the following expenses incurred in connection with the transactions described herein: (a) Purchaser’s legal fees and expenses, (b) the cost to obtain new leases for the Leased Properties, if any, and (c) the cost to complete any of Purchaser’s due diligence.

SECTION 9 BROKERAGE COMMISSIONS

          Seller and Purchaser each warrant and represent to the other that neither has had any dealings with any broker, agent or finder relating to the sale of any Property or the other transactions contemplated hereby except Brown Gibbons Lang & Company whose fee shall be paid by Seller. Each agrees to indemnify, defend and hold the other harmless from and against any claim for brokerage commissions, compensation or fees by any broker, agent or finder in connection the sale of any Property or the other transactions contemplated hereby resulting from the acts of the indemnifying party. This Section 9 shall survive the Closing, if the Closing shall occur, and shall survive termination of this Agreement, if this Agreement shall be terminated.

SECTION 10 NOTICE

          All notices, demands and communications (a “ Notice ”) under this Agreement shall be delivered or sent by: (a) first class, registered or certified mail, postage prepaid, return receipt requested, (b) nationally recognized overnight courier, or (c) facsimile with confirmation of receipt of such facsimile, addressed to the address of the intended recipient set forth below or to such other address as either party may designate by notice pursuant to this Section. Notices shall be deemed given upon receipt or refusal. Any notice may be given by counsel to the party giving such notice.

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SECTION 11 CASUALTY AND CONDEMNATION

          11.1 Casualty . If any Property is damaged by fire or other casualty prior to the Implementation Date and the cost to repair would exceed twenty-five percent (25%) of the value of the retail space for such Property, then either Seller or Purchaser may terminate this Agreement, but only with respect to the Property that is affected by such casualty, by written notice to Seller given on or before the earlier of (i) twenty (20) days following such casualty or (ii) the Implementation Date. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property. If neither Seller or Purchaser are entitled to terminate this Agreement with respect to the affected Property pursuant to the foregoing (or otherwise under this Agreement) or, either Seller or Purchaser are so entitled to terminate this Agreement, but do not elect to do so, then the Property shall be delivered to Purchaser on the Implementation Date, including, without limitation, without abatement of the Purchase Price and with Seller’s delivery of the Lease, executed by Seller, for the affected Property, and Seller shall assign and transfer to Purchaser on the Implementation Date, without warranty or recourse, (A) all of Seller’s right, title and interest in and to all insurance proceeds paid or payable to Seller on account of such fire or casualty (less Seller’s reasonable costs of collection thereof and, provided that Seller obtained Purchaser’s prior written approval therefor, the reasonable amounts spent by Seller toward the restoration or repair of the Property, as supported by reasonable evidence of such expenditures provided to Purchaser), and (B) all of Seller’s rights under any contract with respect to any restoration or repair. Seller shall credit Purchaser the amount of the deductible except to the extent that Seller has already expended the deductible on the aforementioned restoration or repair costs, as supported by reasonable evidence of such expenditures provided to Purchaser.

          11.2 Condemnation . If a Property or any portion thereof is taken in eminent domain proceedings prior to the Implementation Date, and if such taking materially adversely interferes with the value or operation of such Property, Purchaser may, as its sole and exclusive right and remedy, terminate this Agreement, but only with respect to the Property that is affected by such taking, by notice to Seller given on or before the earlier of (a) twenty (20) days after such taking or (b) the Implementation Date. In the event of such termination, all exhibits and schedules

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hereto and definitions herein shall be deemed modified to remove such affected Property. If Purchaser is not entitled to or does not elect to so terminate, the Property shall be delivered to Purchaser on the Implementation Date, including, without limitation, and Seller shall assign and transfer to Purchaser on the Implementation Date, without warranty or recourse, all of Seller’s right, title and interest in and to all condemnation awards paid or payable to Seller on account of such eminent domain proceedings (if any) less Seller’s reasonable costs of collection thereof and, provided that Seller obtained Purchaser’s prior written approval therefor, the reasonable amounts spent by Seller toward the restoration or repair of the Property, as supported by reasonable evidence of such expenditures.

SECTION 12 OPERATIONS PRIOR TO CLOSING OR TERMINATION

          Seller covenants and agrees with Purchaser that after the date hereof until the Implementation Date for each Site or termination of this Agreement, Seller shall conduct its business involving the Properties as follows:

          (a) Seller shall not transfer title to any Property or create any easements or mortgages encumbering any Property that will survive past the Implementation Date.

          (b) Subject to 12(c)-(d) below, Seller shall not enter into or amend the Service Contracts or any other contracts affecting the Properties, other than contracts entered into in the ordinary course of business and which are cancelable by the owner of such Property without penalty or fee at or prior to the Implementation Date.

          (c) Seller shall not amend or agree to amend any REA without Purchaser’s prior written consent, which Purchaser shall not unreasonably withhold or delay, and Seller shall pay and perform or cause to be paid and performed Seller’s obligations under the REAs and otherwise comply with the requirements of the REAs.

          (d) Seller shall maintain or cause to be maintained the Properties in the same condition and repair as existed as of the date Purchaser completes its due diligence, normal wear and tear and damage by fire or other casualty excepted, in which case Section 11 of this Agreement shall control.

          (e) Seller shall maintain or cause to be maintained the existing casualty, liability and other insurance policies relating to the Properties that are currently maintained by Seller as evidenced by the certificate attached hereto as Exhibit 12(e).

          (f) Seller shall promptly deliver to Purchaser copies of any (i) notices received by Seller from any governmental authority alleging any violation of any applicable law or ordinance with respect to any Property; (ii) notices from the parties under the REAs alleging any default or default with the giving of notice or passage of time, or both, on the part of Seller received by Seller; or (iii) notices from Seller alleging any default or any event which with the giving of notice or passage of time, or both, constitutes a default on the part of any party to the Space Leases or REAs; provided, however, that no such notice alleging a default on the part of any party to the REAs shall be given by Seller without Purchaser’s prior consent, which Purchaser may withhold in its sole discretion.

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          (g) Seller shall not institute any zoning proceeding affecting any Property without Purchaser’s prior written consent, which Purchaser may withhold in its sole discretion. Seller shall regularly communicate with Purchaser regarding the status of and developments in any pending property tax complaints or proceedings. Seller shall deliver written notice to Purchaser prior to instituting any additional property tax complaints or proceedings.

SECTION 13 DEFAULTS AND REMEDIES

          13.1 Seller Defaults . In the event that Seller, on or prior to the Closing Date, shall default in the performance of its obligations hereunder (other than de minimis obligations that do not affect the use or value of the transactions contemplated hereunder in any material respect), Purchaser, as its sole and exclusive remedy and in lieu of all other rights or remedies otherwise provided at law or in equity, may either (a) seek specific performance of Seller’s obligations hereunder, or (b) terminate this Agreement.

          13.2 Purchaser Defaults . In the event that Purchaser, on or prior to the Closing Date, shall default in the performance of its obligations under this Agreement (other than de minimis obligations that do not affect the value of the transactions contemplated hereunder in any material respect), then Seller, as its sole and exclusive remedy and in lieu of all other rights or remedies otherwise provided at law or in equity, may terminate this Agreement and receive and retain the Earnest Money as full and complete liquidated damages for such default of Purchaser. The parties hereto acknowledge that it is impossible to estimate more precisely the damages which might be suffered by Seller upon Purchaser’s default. Seller’s receipt of the Earnest Money is intended not as a penalty, but as full liquidated damages. The right to retain such sums as full liquidated damages is Seller’s sole and exclusive remedy in the event the purchase and sale of the Property is not consummated because of a default hereunder by Purchaser, and, upon receipt of such sums, Seller hereby waives and releases any right to (and hereby covenants that it shall not) sue Purchaser: (i) for specific performance of this Agreement, or (ii) to recover actual, punitive, consequential, special or exemplary damages in excess of such sums in connection with any such default.

          13.3 Dispute Resolution . All disputes that cannot be resolved between the respective chief executive officers of the Seller and Purchaser shall be referred to mediation prior to commencement of litigation. Mediation shall be held in Brevard County, Florida and shall be conducted by a mediator mutually acceptable by the parties. If the parties are unable to agree on a mediator, each party shall nominate a Florida Supreme Court Certified Mediator who shall jointly select the mediator to be appointed as the mediator for the parties.

SECTION 14 MISCELLANEOUS

          14.1 Entire Agreement; Amendments . This Agreement, together with the exhibits attached hereto, constitutes the entire agreement of the parties hereto regarding the purchase and sale of the Properties, and all prior agreements, understandings, representations and statements, oral or written, including any so-called offer letters or letters of intent, are hereby merged herein and superseded hereby. This Agreement may be amended or modified only by an instrument in writing, signed by the party or parties intended to be bound thereby. !

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          14.2 Time . All parties hereto agree that time is of the essence in the performance of the provisions of this Agreement.

          14.3 Counterpart Execution . This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original. The execution of this Agreement by facsimile signature or other electronic means shall be binding and enforceable as an original.

          14.4 Governing Law . This Agreement shall be deemed to be a contract made under the internal laws of the State of Ohio and for all purposes shall be governed by and interpreted in accordance with the laws of the State of Ohio.

          14.5 Assignment; Third Party Beneficiaries . Neither Purchaser or Seller shall assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other party. Notwithstanding this foregoing, without the prior written consent of Seller, Purchaser shall have the right to designate a nominee or nominees to enter into the Leases, which nominee shall be an affiliate of Purchaser. Subject to the foregoing, this Agreement sha