PURCHASE AND SALE AGREEMENT

Purchase and Sale Agreement

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REX STORES CORP | REX RADIO AND TELEVISION, INC | KELLY & COHEN APPLIANCES, INC | STEREO TOWN, INC | REX STORES CORPORATION | COVENTRY REAL ESTATE INVESTMENTS, LLC

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Title: PURCHASE AND SALE AGREEMENT
Governing Law: Ohio Date: 4/16/2007
Industry: Retail (Technology) Sector: Services

Exhibit 10(o)

Execution Version

PURCHASE AND SALE AGREEMENT

by and among

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

and

COVENTRY REAL ESTATE INVESTMENTS, LLC, as Purchaser

TABLE OF CONTENTS

		PAGE

SECTION 1	DEFINITIONS	1
SECTION 2	AGREEMENT TO SELL AND PURCHASE; PURCHASE PRICE;
	LEASEBACK	6
2.1	Agreement to Sell and Purchase	6
2.2	Payment of Purchase Price; Earnest Money	7
2.3	Leaseback; License	8
SECTION 3	Seller’s DELIVERIES; CONDITIONS PRECEDENT	9
3.1	Seller’s Deliveries	9
3.2	Inspections and Access	11
3.3	Title and Survey; Material Due Diligence Issues	12
3.4	Estoppels and Consents	15
3.5	Right of First Refusal and Purchase Option Properties	16
3.6	Memorandum regarding No Shareholder Approval; SNDAs	19
3.7	Additional Conditions to Purchaser’s Obligation to Close	19
3.8	Additional Conditions to Seller’s Obligations to Close	20
3.9	Fairness Opinion	21
3.10	Covenants Regarding Change in Property Condition	22
3.11	Delivery of New Surveys in Event of Termination	22
SECTION 4	CLOSING	22
4.1	Time and Place	22
4.2	Deliveries	23
SECTION 5	PRORATIONS	25
5.1	Prorations and Adjustments	25
SECTION 6	REPRESENTATIONS AND WARRANTIES	27
6.1	Seller’s Representations and Warranties	27
6.2	Purchaser’s Representations and Warranties	30
6.3	Survival	31
6.4	Indemnification	31
SECTION 7	PURCHASE AS-IS	31
SECTION 8	CLOSING COSTS	32
8.1	Seller’s Closing Costs	32
8.2	Purchaser’s Closing Costs	32
SECTION 9	BROKERAGE COMMISSIONS	32
SECTION 10	NOTICE	32
SECTION 11	CASUALTY AND CONDEMNATION	33
11.1	Casualty	33
11.2	Right of First Refusal in the Event of Termination Post-Casualty	34
11.3	Condemnation	34
SECTION 12	OPERATIONS PRIOR TO CLOSING OR TERMINATION	35
SECTION 13	DEFAULTS AND REMEDIES	36
13.1	Seller Defaults	36
13.2	Purchaser Defaults	36

SECTION 14	OTHER OFFERS		37
SECTION 15	MISCELLANEOUS		38
15.1	Entire Agreement; Amendments		38
15.2	Time		38
15.3	Counterpart Execution		38
15.4	Governing Law		38
15.5	Assignment; Third Party Beneficiaries		38
15.6	Section Headings		38
15.7	Severability		39
15.8	WAIVER OF TRIAL BY JURY		39
15.9	No Waiver		39
15.10	Time of Performance		39
15.11	Commercially Reasonable Efforts		39
15.11	Termination; Reduction of Purchase Price		39
15.13	Further Assurances		39
15.14	Non-Solicitation		40
15.15	1031 Exchange		40
15.16	Joint and Several Liability		40
15.17	Allocations		40
SECTION 16	ESCROW		40
16.1	Earnest Money		40
16.2	Duties		41
16.3	Closing		42


Exhibit 1.1		List of Sites
Exhibit 2.1(a)(i)		Legal Descriptions
Exhibit 2.3(a)		Form of Lease
Exhibit 2.3(b)		Form of Guaranty
Exhibit 2.3(c)		Form of License Agreement
Exhibit 3.4(a)		Form of Space Lease Estoppel
Exhibit 3.4(b)		Form of REA Estoppel
Exhibit 4.2(a)(i)		Form of Deed
Exhibit 4.2(a)(ii)		Form of Space Lease Assignment
Exhibit 4.2(a)(iii)		Form of Non-Foreign Transferor Certification
Exhibit 4.2(a)(vii)		Form of Date-Down Letter
Exhibit 4.2(a)(x)		Form of REA Assignment
Exhibit 4.2(a)(xii)		Form of Bill of Sale and Assignment
Exhibit 12(f)		Insurance Certificate
Schedule 2.1(a)(iv)		Schedule of Space Lease Documents
Schedule 2.3(a)(i)		Schedule of Twenty Leased Properties
Schedule 2.3(a)(ii)		Schedule of Twenty Non-Leased Properties
Schedule 2.3(e)		Schedule of Twenty-Two Properties
Schedule 3.1(a)(xix)		Schedule of Service Contracts
Schedule 3.3(f)		Schedule of Additional Properties
Schedule 3.3(i)		Schedule of Environmental Assessment Properties
Schedule 3.6(a)(vii)		Schedule of 25 Properties

Schedule 6.1(c)(i)		Schedule of Purchase Options
Schedule 6.1(c)(ii)		Schedule of Rights of First Refusal
Schedule 6.1(e)		Schedule of Litigation
Schedule 6.1(h)		Schedule of Leasing Commissions
Schedule 6.1(j)		Schedule of Required Consents
Schedule 15.17		Purchase Price Allocations

iii

LIST OF DEFINED TERMS

90-Day License Agreement		9
Additional Properties		14
Additional Properties Material Maintenance Issue		15
Adjusted Aggregate Square Footage		42
Adjusted Purchase Price		41
Agreement		1, 2
Beltline		19
Beltline Release		19
Bill of Sale and Assignment		25
Business Day		40
CBL		18
CBL Release		18
CERCLA		29
Closing		2
Closing Date		2
Closing Statement		26
Creditors' Rights Statutes		30
Default Notice		42
Delivery Items		10
Earnest Money		8
Effective Date		1
Environmental Evaluation Property		15
Environmental Laws		29
Escrow Agent		2
Existing Survey		12
Existing Surveys		12
Fairness Opinion		21
Governmental Notices		10
Guaranty		9
Hazardous Materials		29
Improvements		6
Indemnitee		32
Indemnitor		32
Inspections		11
Intangible Property		7
Land		6
Lease		8
Leased Property		3
Leasing Commissions		29
Material Due Diligence Issue		3
Material Due Diligence Issue Objection		14
Met Life		17
Met Life Release		17
Newtowne		18
Newtowne Release		18

Notice		33
Offer		22
Offer Notice		22
Owner’s Title Policies		20
Permitted Exceptions		12
Personal Property		7
Pre-Closing Impositions		28
Prohibited Transaction		41
Properties		7
Property		7
Proposed Transaction		4
PSI Reports		33
Purchase Option Agreements		28
Purchase Price		7
Purchaser		1
Purchaser Right of First Refusal		22
Randolph		19
Randolph Release		19
REA		10
REA Assignments		24
REA Estoppel		16
Real Property		4
Rent Roll		11
Required Consents		30
Restricted Parties		4
REX Stores		1
Right of First Refusal Agreements		28
ROFR Holder		16
ROFR Notice		16
ROFR Release		17
Seller		1
Seller One		1
Seller Three		1
Seller Two		1
Seller’s Material Due Diligence Issue Response Notice		14
Seller’s REA Estoppel		16
Seller’s Space Lease Estoppel		16
Seller’s Title Response Notice		13
Seller’s Update Title Response Notice		13
Service Contracts		11
SNDA		20
Space Lease		7
Space Lease Tenant		11
Space Lease Assignment		24
Space Lease Estoppel		16
Space Lease Tenants		11

Square Footage Allocation		41
Superior Transaction		5
Surviving Obligations		6
Termination Fee		39
Title Commitments		12
Title Company		6
Title Objection		12
Title/Survey Review Period		6
Uncured Material Due Diligence Issue Objection		14
Uncured Title Objection		13
Uncured Update Objection		13
Update Objection		13
Woelfel		18
Woelfel Release		18

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made as of the 8th day of February, 2007 (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 ”), all having an address at 2875 Needmore Road, Dayton, OH 45414 (collectively, Seller One, Seller Two and Seller Three, “ Seller ”), REX STORES CORPORATION, a Delaware corporation (“ REX Stores ”), and COVENTRY REAL ESTATE INVESTMENTS, LLC, a Delaware limited liability company having an address c/o Coventry Real Estate Advisors, L.L.C., 1 East 52 ^nd Street, 4 ^th Floor, New York, NY 10022 (“ Purchaser ”).

RECITALS

A. Seller is the owner of the Properties (as defined below) and desires to sell the Properties, subject to the terms and conditions of this Agreement.

B. Purchaser desires to purchase the Properties, subject to the terms and conditions of this Agreement.

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:

“ 90-Day License Agreement ” shall have the meaning set forth in Section 2.3(c) .

“ Acquisition Agreement ” shall have the meaning set forth in Section 14.2.

“ Acquisition Proposal ” means any good faith offer or proposal for the direct or indirect purchase of all or a material portion of the Properties.

“ Additional Properties ” shall have the meaning set forth in Section 3.3(f) .

“ Additional Properties Material Maintenance Issue ” shall have the meaning set forth in Section 3.3(f) .

“ Adjusted Aggregate Square Footage ” shall have the meaning set forth in Section 15.17.

“ Adjusted Purchase Price ” shall have the meaning set forth in Section 15.17.

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

“ Beltline ” shall have the meaning set forth in Section 3.5(h) .

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“ Beltline Release ” shall have the meaning set forth in Section 3.5(h) .

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

“ Business Day ” shall have the meaning set forth in Section 15.10.

“ CBL ” shall have the meaning set forth in Section 3.5(e) .

“ CBL Release ” shall have the meaning set forth in Section 3.5(e) .

“ CERCLA ” shall have the meaning set forth in Section 6.1(f) .

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

“ Closing Date ” shall mean April 30, 2007.

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

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

“ Default Notice ” shall have the meaning set forth in Section 16.1(b)(ii)(B) .

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

“ Earnest Money ” shall have the meaning set forth in Section 2.2(b) .

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

“ Environmental Evaluation Properties ” shall have the meaning set forth in Section 3.3(i) .

“ Environmental Laws ” shall have the meaning set forth in Section 6.1(f) .

“ Escrow Agent ” shall mean the Title Company.

“ Existing Survey ” shall have the meaning set forth in Section 3.3(a) .

“ Fairness Opinion ” shall have the meaning set forth in Section 3.9.

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

“ Guaranty ” shall have the meaning set forth in Section 2.3(b) .

“ Hazardous Materials ” shall have the meaning set forth in Section 6.1(f) .

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

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

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

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

“ Intangible Property ” shall have the meaning set forth in Section 2.1(a)(v) .

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

“ Lease ” shall have the meaning set forth in Section 2.3(a) .

“ Leased Property ” shall mean any Property that is to be subject to a Lease at Closing.

“ Leasing Commissions ” shall have the meaning set forth in Section 6.1(h) .

“ Material Due Diligence Issue ” means any zoning, litigation, leasing or other due diligence issue that may materially and adversely affect the condition, operations or valuation of any Property, as determined by Purchaser, excluding any matter expressly identified in the PSI Reports for a Property other than an Additional Property or any Permitted Exception and subject to Sections 3.3(f) and (i) hereof. Purchaser agrees that zoning restrictions on any Property that prohibit a restaurant use shall not be deemed a Material Due Diligence Issue, if such restrictions do not prohibit other non-restaurant retail uses.

“ Material Due Diligence Issue Objection ” shall have the meaning set forth in Section 3.3(e) .

“ Met Life ” shall have the meaning set forth in Section 3.5(c) .

“ Met Life Release ” shall have the meaning set forth in Section 3.5(c) .

“ Newtowne ” shall have the meaning set forth in Section 3.5(f) .

“ Newtowne Release ” shall have the meaning set forth in Section 3.5(f) .

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

“ Offer ” shall have the meaning set forth in Section 3.9(c) .

“ Offer Notice ” shall have the meaning set forth in Section 3.9(c) .

“ Owner’s Title Policies ” shall have the meaning set forth in Section 3.7(a)(vi) .

“ Permitted Exceptions ” shall have the meaning set forth in Section 3.3(b) .

“ 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.

“ Personal Property ” shall have the meaning set forth in Section 2.1(a)(iii) .

“ Pre-Closing Impositions ” shall have the meaning set forth in Section 5.1(b) .

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“ Prohibited Transaction ” shall have the meaning set forth in Section 15.14.

“ Property ” or “ Properties ” shall have the meaning set forth in Section 2.1(a) .

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

“ PSI Reports ” shall have the meaning set forth in Section 8.2.

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

“ Purchase Price ” shall have the meaning set forth in Section 2.2(a).

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

“ Purchaser’s Right of First Refusal ” shall have the meaning set forth in Section 3.9(c).

“ Randolph ” shall have the meaning set forth in Section 3.5(g).

“ Randolph Release ” shall have the meaning set forth in Section 3.5(g).

“ REA ” and “ REAs ” shall have the meanings set forth in Section 3.1(a)(vii). “ REA Assignments ” shall have the meaning set forth in Section 4.2(a)(x). “ REA Estoppel ” shall have the meaning set forth in Section 3.4(b) .

“ Real Property ” shall mean the Land and the Improvements.

“ Rent Roll ” shall have the meaning set forth in Section 3.1(a)(xvii).

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

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

“ 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).

“ ROFR Holder ” shall have the meaning set forth in Section 3.5(a).

“ ROFR Notice ” shall have the meaning set forth in Section 3.5(a).

“ ROFR Release ” shall have the meaning set forth in Section 3.5(a) . “ 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.

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

“ Seller’s Material Due Diligence Issue Response Notice ” shall have the meaning set forth in Section 3.3(e).

“ Seller’s REA Estoppel ” shall have the meaning set forth in Section 3.4(b).

“ Seller’s Space Lease Estoppel ” shall have the meaning set forth in Section 3.4(a).

“ Seller’s Title Response Notice ” shall have the meaning set forth in Section 3.3(b).

“ Seller’s Update Title Response Notice ” shall have the meaning set forth in Section 3.3(c).

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

“ Sites ” shall mean the sites of each Property identified on Exhibit 1.1 attached hereto.

“ SNDA ” shall have the meaning set forth in Section 3.6(b).

“ Space Lease ” and “ Space Leases ” shall have the meanings set forth in Section 2.1(a)(iv).

“ Space Lease Assignment ” shall have the meaning set forth in Section 4.2(a)(ii) .

“ Space Lease Estoppel ” shall have the meaning set forth in Section 3.4(a).

“ Space Lease Tenant ” shall have the meaning set forth in Section 3.1(a)(xvii).

“ Square Footage Allocation ” shall have the meaning set forth in Section 15.17.

“ Superior Transaction ” means a transaction embodying an Acquisition Proposal having terms (including conditions to consummation of the contemplated transaction) that the Board of Directors of REX Stores determines, in its good faith judgment, to be more favorable to REX Stores and its stockholders than the Proposed Transaction and for which financing, to the extent required, is then committed or is reasonably likely to be obtained in a timely manner.

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

“ Termination Fee ” shall have the meaning set forth in Section 14.2.

“ Title Commitments ” shall have the meaning set forth in Section 3.3(a).

“ Title Company ” shall mean Chicago Title Insurance Company, 1360 East 9th Street, Suite 500, Cleveland, Ohio 44114.

“ Title Objection ” shall have the meaning set forth in Section 3.3(b).

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“ Title/Survey Review Period ” shall mean the period commencing on the Effective Date and continuing until 5:00 p.m. eastern time on April 18, 2007.

“ Uncured Material Due Diligence Issue Objection ” shall have the meaning set forth in Section 3.3(e).

“ Uncured Update Objection ” shall have the meaning set forth in Section 3.3(c).

“ Update Objection ” shall have the meaning set forth in Section 3.3(c).

“ Woelfel ” shall have the meaning set forth in Section 3.5(d).

“ Woelfel Release ” shall have the meaning set forth in Section 3.5(d).

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; PURCHASE PRICE; LEASEBACK

2.1 Agreement to Sell and Purchase .

(a) Subject to the terms and conditions of this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, the following:

	(i)	fee simple title to the land described on Exhibit 2.1(a)(i) attached hereto and all rights, easements and appurtenances thereto, including any right, title or interest of Seller in and to adjacent streets, alleys or rights-of-way (the “ Land ”).
	(ii)	all buildings, improvements, structures and fixtures situated on the Land, excluding trade fixtures owned by Space Lease Tenants (as defined below) (the “ Improvements ”);
	(iii)	all equipment and other personal property owned by Seller and located in, or affixed to, the Improvements, excluding inventory owned by Seller and held for sale in the ordinary course of business and sale and inventory scanning systems, cash registers, computer equipment and hardware systems utilized by Seller in the ordinary course of business as a consumer electronics retailer and audio and car display boards (collectively, the “ Personal Property ”);
	(iv)	all of Seller’s right, title and interest as landlord in and to each of the leases and other occupancy agreements (including any amendments or modifications thereto) encumbering the Land and Improvements, each as described on Schedule 2.1(a)(iv) attached hereto, together with any new leases and other occupancy

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		agreements entered into prior to the Closing Date and permitted under the terms of this Agreement (each, a “ Space Lease ”); Land ”).
	(v)	Seller’s right, title and interest in and to any intangible property owned by Seller and currently used in the ownership or operation for the Property, including, without limitation, plans and specifications, architectural and engineering reports, surveys, permits, licenses, guarantees and warranties, excluding Seller’s right, title and interest (if any) in and to the trade names “Rex”, “Rex Radio and Television”, “Rex Television and Appliance Centers”, “Rex TV & Appliance Centers”, “rexstores.com”, “Kelly & Cohen Appliances”, “Stereo Town”, and “T.V. & Stereo Town” or any variation thereof (collectively, the “ Intangible Property ”); and
	(vi)	all of Seller’s right, title and interest in the REAs (as defined below).

Items (i)-(vi) above collectively are referred to in this Agreement as to each Site as a “ Property ” and as to all Sites as the “ Properties .” The delineation of which Property is owned by Seller One, Seller Two and Seller Three is set forth in Exhibit 1.1 attached hereto.

2.2 Payment of Purchase Price; Earnest Money .

(a) The total purchase price to be paid by Purchaser to Seller for the Properties shall be Eighty Four Million Thirteen Thousand Two Hundred Thirty One and 86/100 Dollars ($84,013,231.86), subject to reduction and adjustment as set forth in this Agreement (the “ Purchase Price ”). If the aggregate square footage for the Properties measured based on dimensions of outside wall, as actually determined by surveys of the Properties, varies by more than three percent (3%) from 1,099,218 aggregate square feet, up or down, the Purchase Price shall be adjusted by $76.43 per square foot based on the actual aggregate square footage; provided, however, that in the event that Purchaser does not obtain surveys of any Property or Properties (which Purchaser shall not be obligated to so obtain), the square footage of such Property or Properties shall be deemed to be the square footage reflected on Exhibit 1.1 hereof.

(b) Within two (2) Business Days after the Effective Date, Purchaser shall deposit the sum of Three Hundred Seventy Five Thousand and 00/100 Dollars ($375,000.00) (together with any interest earned thereon, the “ Earnest Money ” ) with the Escrow Agent which Earnest Money shall be applied as a credit against the Purchase Price or otherwise applied in accordance herewith. The Escrow Agent will promptly invest the Earnest Money and disburse same in accordance with the terms, conditions and provisions of this Agreement. Whenever the Earnest Money is by the terms hereof to be disbursed by the Escrow Agent, Seller and Purchaser agree promptly to execute and deliver such notice or notices as shall be necessary or, in the opinion of the Escrow Agent, appropriate to authorize the Escrow Agent to make such disbursement.

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(c) At Closing, Purchaser shall deposit with the Escrow Agent the Purchase Price, less the Earnest Money and any costs and expenses chargeable to Seller pursuant to this Agreement, by wire transfer of immediately available funds, for payment to Seller at Closing.

2.3 Leaseback; License .

(a) At Closing, Purchaser shall execute and deliver counterparts of a lease in the form of Exhibit 2.3(a) attached hereto with Seller, as lessee, and Purchaser (or its nominee or nominees), as lessor, for forty (40) Properties (each, a “ Lease ”). Twenty (20) of the forty (40) Properties that will be subject to a Lease at Closing are the Properties identified on Schedule 2.3(a)(i) attached hereto. On or prior to March 30, 2007, Seller shall deliver written notice to Purchaser identifying the other twenty (20) Properties that will be subject to a Lease at Closing, which twenty (20) Properties shall not include the Properties identified on Schedule 2.3(a)(ii) . In the event that this Agreement is terminated with respect to any of the Properties that was contemplated to be subject to a Lease at Closing pursuant to this Section 2.3(a), then Seller shall deliver written notice to Purchaser identifying a Property to serve as a replacement for such terminated Property within five (5) Business Days of such termination (but in any event at least two (2) Business Days prior to Closing), which replacement Property shall be subject to a Lease at Closing. Notwithstanding the foregoing, in the event that this Agreement is terminated pursuant to Section 3.3(e) with respect to twenty (20) or more Properties, then Seller shall have a right to proportionately decrease the number of Properties that will be subject to a Lease at Closing, which right shall be exercisable by delivery of written notice to Purchaser on or before five (5) Business Days after receipt of Purchaser’s notice of termination pursuant to Section 3.3(e) with respect to twenty (20) or more Properties. [For example, if this Agreement is terminated pursuant to Section 3.3(e) with respect to twenty (20) Properties, Seller shall have a right to decrease the number of Properties subject to a Lease at Closing to thirty-one (31) Properties (31/40 =74/94).] In the event that Seller decreases the number of Properties that will be subject to a Lease at Closing pursuant to the foregoing, Schedule 2.3(a) shall be deemed modified to remove the affected Properties.

(b) At Closing, Seller shall deliver a guaranty of Seller’s obligations under the Leases in the form of Exhibit 2.3(b) attached hereto (the “ Guaranty ”), executed by REX Stores.

(c) At Closing, Purchaser shall execute and deliver counterparts of a license agreement in the form of Exhibit 2.3(c) attached hereto with Seller, as licensee, and Purchaser (or its nominee or nominees), as licensor, for each of the Properties that will not be subject to a Lease or Space Lease at Closing (each, a “ 90-Day License Agreement ”). Notwithstanding the foregoing, in the event that Seller ceases operating in and vacates any Property prior to the Closing Date, which Property will not be subject to a Lease or Space Lease at Closing, Seller shall provide Purchaser with written notice of such cessation and vacation and such Property shall not be subject to a 90-Day License Agreement at Closing.

(d) Notwithstanding any other provision of this Agreement, each Property subject to a Space Lease shall not be subject to a Lease or 90-Day License Agreement.

(e) On or prior to March 30, 2007, Seller shall deliver written notice Purchaser identifying no less than ten (10) and no more than fifteen (15) of the twenty-two (22)

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Properties identified on Schedule 2.3(e) , each of which shall be subject to a Lease at Closing, which Lease shall not include Article III.B and Article XXIII.M.4.(b) in the form of Lease attached hereto as Exhibit 2.3(a) . Within ten (10) Business Days of receipt of the aforementioned notice from Seller, Purchaser may elect by delivery of written notice to Seller to identify up to two (2) Properties identified on Schedule 2.3(e) (and not previously identified by Seller pursuant to the preceding sentence), each of which shall be subject to a Lease at Closing, which Lease shall not include Article III.B and Article XXIII.M.4.(b) in the form of Lease attached hereto as Exhibit 2.3(a) .

(f) In the event that the Property located at 2313 N. Monroe, Monroe, MI and known as Store No. 264 is subject to a Lease at Closing pursuant to Section 2.3(a) hereof, Purchaser agrees that only the premises at the Property currently occupied by Seller shall be subject to a Lease; provided, however, that (i) Seller shall be responsible for (A) all Taxes (as defined in the form of Lease attached hereto as Schedule 2.3(a)(i)) , (B) insurance required by and utility charges payable under the form of Lease attached hereto as Schedule 2.3(a)(i) (excluding separately metered utility charges with respect only to the portion of the building at the Premises not currently occupied by Seller), and (C) operating expenses, common area or similar charges due under any Restrictions (as defined in the form of Lease attached hereto as Schedule 2.3(a)(i)) , with respect to the entirety of the Property, until such time as the remainder of the Property not leased by Seller are occupied by another tenant, and (ii) the Lease for such Property shall provide that the landlord thereunder shall be responsible for either separately metering or submetering the utilities that may be so separately metered or submetered with respect to the portion of the building at the Premises not currently occupied by Seller by such time as such portion becomes occupied by another tenant.

SECTION 3 Seller’s DELIVERIES; CONDITIONS PRECEDENT

3.1 Seller’s Deliveries .

(a) Seller has provided or, with respect to the Additional Properties, will provide within three (3) Business Days of the Effective 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 (collectively, the “ Delivery Items ”):

	(i)	existing engineering or property condition reports;
	(ii)	historical CAM budgets (if any) and reconciliations for the Properties;
	(iii)	existing owner’s title policies, the Title Commitments (as hereinafter defined) and the Existing Surveys (as hereinafter defined);
	(iv)	existing appraisals of the Properties;
	(v)	permits and licenses for the Property, including, without limitation, certificates of occupancy, site plan approvals, zoning approvals and zoning variances, if any;

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	(vi)	plans and specifications and site plans relating to the Properties;
	(vii)	all reciprocal easement agreements, operating agreements, development agreements and other similar agreements, declarations, deeds and instruments relating to the integrated use, operation and maintenance of the Properties and properties in the vicinity of, adjacent to, contiguous with, or peripheral to the Properties (each, an “REA”);
	(viii)	real and personal property tax bills (including bills for special assessments) for the Properties for the period from January 1, 2003 through December 31, 2006, and copies of all notices, correspondence and files from governmental authorities relating to the Properties, including notices of building safety, health code or environmental violations, and all files related thereto in Seller’s possession or control (the “ Governmental Notices ”);
	(ix)	the latest real and personal property tax bills for the Properties and of any pending property tax complaints or proceedings;
	(x)	[intentionally omitted]
	(xi)	a schedule of utility costs for the Properties for the twelve (12) months prior to the Effective Date;
	(xii)	any soils or environmental reports or studies relating to the Properties;
	(xiii)	any and all notices, correspondence, files, pleadings or other documents relevant to Purchaser’s evaluation of pending or threatened claims or litigation by any Person relating to or affecting the Properties, including, without limitation, claims or litigation relating to the REAs and including, without limitation, information regarding pending lawsuits affecting the Properties, even if covered by insurance;
	(xiv)	all warranties or guarantees regarding major systems or structural items comprising part of the Properties;
	(xv)	the following insurance information and documentation for each of the Properties: (A) a certificate of liability insurance (Acord Form 25), (B) a certificate of property insurance (Acord Form 28), (C) if property insurance provides for “blanket limits”, information on the insured building and rent values for the affected Properties, (D) copies of property loss control recommendations for the three (3) years prior to the Effective Date, (E) information regarding currently valued general liability losses for the five (5) years prior to the Effective Date, and (F) information

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		regarding how long the Seller and Tenant have been insured with their current insurers;
	(xvi)	all Space Leases and any guarantees thereof and the Right of First Refusal Agreements and the Purchase Option Agreements;
	(xvii)	a rent roll for the Space Lease Properties, including the name of each tenant (each, a “ Space Lease Tenant ”, and, collectively, the “ Space Lease Tenants ”), the expiration dates of the Space Lease, the rent and any security deposit (the “ Rent Roll ”);
	(xviii)	all notices and correspondence to and from the Space Lease Tenants and Seller’s files relating to the Space Leases; and
	(xix)	all service, vendor, equipment leasing, management, development and other contracts relating to the operation or maintenance of the Real Property (the “ Service Contracts ”), each as identified on Schedule 3.1(a)(xix) attached hereto.

3.2 Inspections and Access .

(a) At any reasonable time and from time to time prior to the Closing or earlier termination of this Agreement, Purchaser and its representatives shall be permitted (i) to enter upon the Real Property to examine, inspect and investigate the Real Property, and (ii) to access all books, records, drawings and other documentation relating to the 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 Real Property; 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 Space Lease Tenants. 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.

(b) 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.

(c) 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

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Property. The provisions of the immediately preceding sentence of this Section 3.2(c) shall survive termination of this Agreement for three hundred sixty five (365) days, if this Agreement shall be terminated.

3.3 Title and Survey; Material Due Diligence Issues .

(a) Seller shall obtain and deliver to Purchaser in accordance with Section 3.1 hereof: (i) current commitments for ALTA owner’s policies of title insurance (Form B 10-17-92, with the creditors’ rights and arbitration clauses deleted (except in Texas, where the policy shall be TLTA with the creditors’ rights and arbitration clauses deleted), together with legible copies of recorded documents listed in such commitments (collectively, the “ Title Commitments ”) issued by the Title Company and (ii) all existing surveys of the Real Property in the possession or control of Seller (each, an “ Existing Survey ”, and, collectively, the “ Existing Surveys ”). Purchaser shall order any updates to the Existing Surveys that Purchaser may require within five (5) Business Days of the Effective Date.

(b) In the event that any of the Title Commitments or Existing Surveys disclose title defects other than (i) real estate taxes and assessments which are a lien but not yet due and payable, (ii) building and zoning laws, ordinances and regulations, and (iii) public streets and rights of way (collectively, the “ Permitted Exceptions ”), then, prior to expiration of the Title/Survey Review Period, Purchaser shall notify Seller of any such defects to which it objects (each, a “ Title Objection ”). Any defects not objected to by Purchaser prior to expiration of the Title/Survey Review Period shall be deemed Permitted Exceptions. Within eight (8) Business Days after receipt of notice of any Title Objection delivered by Purchaser to Seller on or prior to April 1, 2007 and within three (3) Business Days after receipt of notice of any Title Objection delivered by Purchaser after April 1, 2007, Seller shall provide written notice to Purchaser specifying with respect to each Title Objection whether Seller will cause such matter to be removed or cured by Closing (“ Seller’s Title Response Notice ”). If Seller elects not to remove or cure any Title Objection (each, an “ Uncured Title Objection ”) in Seller’s Title Response Notice or fails to so deliver Seller’s Title Response Notice, Purchaser shall elect, by written notice given to Seller within five (5) Business Days after the aforementioned deadline for Seller’s delivery of Seller’s Title Response Notice if such deadline is on or prior to April 11, 2007 and within two (2) Business Days after the aforementioned deadline if such deadline is after April 11, 2007 to either (i) accept the Properties subject to the Uncured Title Objection, with no reduction in the Purchase Price and such Uncured Title Objections shall be deemed included in the Permitted Exceptions, or (ii) terminate this Agreement with respect to the Properties affected by the Uncured Title Objections only. If Purchaser fails to so make the foregoing election, Purchaser shall be deemed to have elected (ii) above. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Properties, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(c) In the event that (i) any update to any of the Title Commitments or Existing Surveys discloses title defects that were not disclosed on the initial Title Commitments or the Existing Surveys and that are not otherwise Permitted Exceptions, or (ii) with respect to any such Properties for which there was no Existing Survey, any new survey obtained by Purchaser, at Purchaser’s cost, discloses title defects that are not otherwise Permitted Exceptions,

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then, in each case, Purchaser shall notify the related Seller of any such defects relating to any individual Property to which it objects (an “ Update Objection ”). Any defects disclosed in any update to any of the Title Commitments or Existing Surveys or new surveys and not objected to by Purchaser shall be deemed Permitted Exceptions. Within eight (8) Business Days after receipt of notice of any Update Objection delivered by Purchaser to Seller on or prior to April 1, 2007 and within three (3) Business Days after receipt of notice of any Update Objection delivered by Purchaser after April 1, 2007, Seller shall provide written notice to Purchaser specifying with respect to each Update Objection whether Seller will cause such matter to be removed or cured by Closing (“ Seller’s Update Title Response Notice ”). If Seller elects not to remove or cure any Update Objection (an “ Uncured Update Objection ”) or fails to so deliver Seller’s Update Title Response Notice, Purchaser shall elect, by written notice given to Seller within five (5) Business Days after the aforementioned deadline for delivery of Seller’s Update Response Notice if such deadline is on or prior to April 11, 2007 and within two (2) Business Days after the aforementioned deadline if such deadline is after April 11, 2007 to either (i) accept the Properties subject to an Uncured Update Objection, with no reduction in the Purchase Price and such Uncured Update Objection shall be deemed included in the Permitted Exceptions, or (ii) terminate this Agreement with respect to the Properties affected by an Uncured Update Objection only. If Purchaser fails to so make the foregoing election, Purchaser shall be deemed to have elected (ii) above. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Properties, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof. The Closing Date shall be extended as necessary to permit each of such Seller and Purchaser to exercise its rights and perform its obligations within the time periods set forth in this Section; provided, however, that, at Purchaser’s option, exercisable by the delivery of written notice to Seller, the extension of the Closing Date shall apply only to Properties affected by an Uncured Update Objections and the Closing Date shall not be extended with respect to the remainder of the Properties.

(d) Notwithstanding anything herein to the contrary, Seller shall have the unconditional obligation to remove or cure, at no cost to Purchaser, any mortgage, mechanics or other lien and any other encumbrance that can be removed by the payment of a definite sum of money, which matters shall be deemed Title Objections without requiring Purchaser to provide written notice thereof.

(e) In the event that any of the Inspections disclose a Material Due Diligence Issue to Purchaser, then, prior to expiration of the Title/Survey Review Period, Purchaser shall notify Seller of any such Material Due Diligence Issue to which it objects (each, a “ Material Due Diligence Issue Objection ”). Any Material Due Diligence Objection not objected to by Purchaser prior to expiration of the Title/Survey Review Period shall be deemed acceptable by Purchaser. Within eight (8) Business Days after receipt of notice of any Material Due Diligence Objection delivered by Purchaser to Seller on or prior to April 1, 2007 and within three (3) Business Days after receipt of notice of any Material Due Diligence Objection delivered by Purchaser to Seller after April 1, 2007, Seller shall provide written notice to Purchaser specifying with respect to each Material Due Diligence Objection whether Seller will cause such matter to be removed or cured by Closing (“ Seller’s Material Due Diligence Issue Response Notice ”), which cure shall be acceptable to Purchaser. If Seller elects not to remove or so cure any Material Due Diligence Objection (each, a “ Uncured Material Due Diligence Issue Objection ”)

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or fails to so deliver Seller’s Material Due Diligence Issue Response Notice, Purchaser shall elect, by written notice given to Seller within five (5) Business Days after the aforementioned deadline for delivery of Seller’s Update Response Notice if such deadline is on or prior to April 11, 2007 and within two (2) Business Days after the aforementioned deadline if such deadline is after April 11, 2007 to either (i) accept the Properties subject to any such Uncured Material Due Diligence Issue Objection, with no reduction in the Purchase Price and Purchaser shall be deemed to have accepted such Uncured Material Due Diligence Issue Objections, or (ii) terminate this Agreement with respect to the Properties affected by the Uncured Material Due Diligence Issue Objections only. If Purchaser fails to so make the foregoing election, Purchaser shall be deemed to have elected (ii) above. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Properties, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(f) Notwithstanding anything herein to the contrary, with respect to the Properties identified on Schedule 3.3(f) attached hereto (the “ Additional Properties ”), any of the following shall constitute a Material Due Diligence Issue:

	(i)	any recognized environmental condition or other potential environmental issue disclosed in any PSI Reports, which may materially and adversely affect the condition, operations or valuation of such Property, as determined by Purchaser; or
	(ii)	any repair, replacement or maintenance needs identified as recommended for attention in 2007-2009 as identified in any PSI Reports and/or needs spreadsheet prepared by Professional Service Industries, which in the aggregate, as indicated in such report and/or needs spreadsheet, will cost in excess of Fifty Thousand Dollars ($50,000.00) per Additional Property (an “ Additional Properties Material Maintenance Issue ”) to remedy.

(g) With respect to any Additional Properties Material Maintenance Issue, Seller and Purchaser shall have the rights set forth in Section 3.3(e) . Seller and Purchaser agree that, an acceptable cure of same for the purpose of Section 3.3(e) hereof shall include (i) a reduction in the Purchase Price equal to the amount by which the cost to remedy such Additional Properties Material Maintenance Issue exceeds Fifty Thousand Dollars ($50,000) according to the relevant PSI Report and/or needs spreadsheet, or (ii) Seller completing the work to remove or remedy the Additional Properties Material Maintenance Issue, at Seller’s sole cost, to the reasonable satisfaction of Purchaser prior to the Closing.

(h) For each Property (excluding any Additional Properties and Environmental Evaluation Properties) with respect to which this Agreement is terminated pursuant to Section 3.3(e), Seller may elect, by delivery of written notice to Purchaser delivered on or before five (5) Business Days after receipt of any Purchaser’s notice of termination pursuant to Section 3.3(e) delivered to Seller on or prior to April 18, 2007 and within two (2) Business Days after receipt of such notice if such receipt is after April 18, 2007, to remove one (1) Property from the transaction contemplated by this Agreement. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to

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remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(i) Seller acknowledges that Purchaser may cause additional environmental assessments (e.g., Phase II testing) to be conducted with respect to the Properties, including the Properties identified on Schedule 3.3(i) attached hereto (each “ Environmental Evaluation Property ”). Notwithstanding anything herein to the contrary, if such assessments with respect to any Environmental Evaluation Property identify any recognized environmental condition or other potential environmental issue for which the estimated remediation costs exceed $50,000 or may materially and adversely affect the condition, operations or valuation of such Property, as determined by Purchaser, such matters shall constitute a Material Due Diligence Issue.

3.4 Estoppels and Consents .

(a) At least five (5) days prior to the Closing Date, Seller shall have delivered to Purchaser an estoppel certificate, substantially in the form set forth in Exhibit 3.4(a) or such other form as is attached to the applicable Space Lease and, in each case, dated not more than thirty (30) days prior to the Closing Date (each, a “ Space Lease Estoppel ”) from Space Lease Tenants leasing at least eighty percent (80%) of the aggregate square footage subject to Space Leases. In the event that Seller fails to obtain any Space Lease Estoppel, Seller shall deliver to Purchaser an estoppel certificate from Seller substantially in the form set forth in Exhibit 3.4(a) with respect to such Space Lease (each, a “ Seller’s Space Lease Estoppel ”). Each statement in any Seller’s Space Lease Estoppel shall survive the Closing until the earlier of three hundred sixty five (365) days after the Closing Date and the date on which Purchaser receives an executed Space Lease Estoppel in the form required by this Section 3.4(a) executed by the Space Lease Tenant in question.

(b) At least five (5) days prior to the Closing Date, Seller shall have delivered to Purchaser an estoppel certificate from each party under any REAs, excluding any REAs that consist solely of a standard utility easement, substantially in the form set forth in Exhibit 3.4(b) or such other form as is attached to the applicable REA and, in each case, dated not more than thirty (30) days prior to the Closing Date (each, a “ REA Estoppel ”). In the event that Seller fails to obtain any REA Estoppel, Seller shall deliver to Purchaser an estoppel certificate from Seller substantially in the form set forth in Exhibit 3.4(b) with respect to such REA (each, a “ Seller’s REA Estoppel ”). Each statement in any Seller’s REA Estoppel shall survive the Closing until the earlier of three hundred sixty five (365) days after the Closing Date and the date on which Purchaser receives an executed REA Estoppel in the form required by this Section 3.4(b) executed by the party to the REA in question.

(c) At least five (5) days prior to the Closing Date, Seller shall have delivered to Purchaser copies of the executed written consents to this Agreement and the transactions contemplated hereby, in form and substance satisfactory to Purchaser, for each of the Required Consents.

(d) If Seller fails to deliver any of the items set forth in Section 3.4(a)-(c), then, in addition to any rights or remedies hereunder, Purchaser shall have a right to terminate this Agreement with respect to the Properties affected by such failure, which right shall be

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exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Properties, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

3.5 Right of First Refusal and Purchase Option Properties .

(a) Within five (5) Business Days after the Effective Date, in accordance with the terms and conditions of each of the Right of First Refusal Agreements, Seller shall deliver notice (the “ ROFR Notice ”) of (i) this Agreement, and (ii) if any rights under such Right of First Refusal Agreement would be applicable to a lease of any Property and such Property is to be leased-back to Seller under a Lease pursuant to Section 2.3 hereof, the applicable Lease, to the holder of the right of first refusal under each Right of First Refusal Agreement (each, a “ ROFR Holder ”), excluding (A) the Right of First Refusal Agreement affecting the Property located at 2550 E. Morris Blvd., Morristown, TN and known as Store No. 207, which is addressed in Section 3.5(e) below, (B) the Right of First Refusal Agreement affecting the Property located at 1603 E. Dixie Drive, Asheboro, NC and known as Store No. 316, which is addressed in Section 3.5(g) below, and (C) the Right of First Refusal Agreement affecting the Property located at 1821 Beltline Road SW, Decatur, AL and known as Store No. 103, which is addressed in Section 3.5(h) below. If the ROFR Holder exercises its right to purchase the affected Property, then Seller shall deliver written notice of such exercise to Purchaser. In such event this Agreement shall be deemed terminated with respect to the affected Property and all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced by the amount of the Purchase Price allocated to such affected Property as shown on Schedule 15.17 attached hereto. If the ROFR Holder does not exercise its right to purchase the affected Property, then Seller shall obtain a recordable release of the right of first refusal under the Right of First Refusal Agreement in a form reasonably acceptable to Purchaser or other evidence of the termination of the rights of first refusal reasonably acceptable to Purchaser and the Title Company (the “ ROFR Release ”). If Seller fails to deliver the ROFR Release with respect to any Property subject to a Right of First Refusal Agreement to Purchaser at least five (5) Business Days prior to Closing, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereto. If the time period for a ROFR Holder to respond to a ROFR Notice extends beyond the Closing Date, the Closing Date with respect to the affected Property only shall be extended for ten (10) Business Days after such time period, which extension shall not affect the Closing Date with respect to the Properties other than the affected Property.

(b) [Intentionally omitted.]

(c) Within five (5) Business Days after the Effective Date, Seller shall request from Metropolitan Life Insurance Company (or its successor or assign) (“ Met Life ”) a written release in recordable form reasonably acceptable to Purchaser of the expired right of first refusal under that certain Covenants, Conditions, Restrictions Agreement, between Met Life and Seller Two, dated August 17, 1994, with respect to the Property located at 6967 U.S. Route 322,

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Cranberry, PA and known as Store No. 237 (the “ Met Life Release ”). If Seller fails to deliver the Met Life Release to Purchaser at least five (5) Business Days prior to the Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller; provided, however, that such right to terminate shall be null and void if the Title Company will insure Purchaser that the affected Property is no longer subject to the right of first refusal described in this Section 3.5(c) in the Owner’s Title Policy for the affected Property. In the event of a termination of this Agreement with respect to the affected Property pursuant to this Section 3.5(c), all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(d) Within five (5) Business Days after the Effective Date, Seller shall request from George W. Woelfel and Marguerite D. Woelfel and George W. Woelfel and Peoples First National Bank and Trust Company, Trustees under Deed of George W. Woelfel dated March 29, 1968 (or their successors or assigns) (collectively, “ Woelfel ”) a written release in recordable form reasonably acceptable to Purchaser of Woelfel’s purchase option under that certain Supplemental Agreement, dated November 26, 1971, with respect to the Property located at 96 Airport Beltway, Hazelton, PA 18201 and known as Store No. 252 (the “ Woelfel Release ”). If Seller fails to deliver the Woelfel Release to Purchaser at least five (5) Business Days prior to the Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(e) Within five (5) Business Days after the Effective Date, Seller shall request from CBL Morristown, Ltd. (or its successor or assign) (“ CBL ”) a written release in recordable form reasonably acceptable to Purchaser of CBL’s purchase option and right of first refusal under that certain Special Warranty Deed, by CBL, as grantor, to Kelly & Cohen Appliances, Inc., as grantee, dated October 15, 1993, with respect to the Property located at 2550 E. Morris Blvd., Morristown, TN and known as Store No. 207 (the “ CBL Release ”). If CBL exercises its right to purchase the affected Property, then Seller shall deliver written notice of such exercise to Purchaser. In such event this Agreement shall be deemed terminated with respect to the affected Property and all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced by the amount of the Purchase Price allocated to such affected Property as shown on Schedule 15.17 attached hereto. If CBL does not exercise its right to purchase the affected Property, then Seller shall obtain the CBL Release. If Seller fails to deliver the CBL Release to Purchaser at least five (5) Business Days prior to the Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereto.

(f) Within five (5) Business Days after the Effective Date, Seller shall request from Newtowne Mall Associates Limited Partnership (or its successor or assign) (“ Newtowne ”)

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a written release in recordable form reasonably acceptable to Purchaser of Newtowne’s purchase option under that certain General Warranty Deed, by Newtowne, as grantor, to Rex Radio and Television, Inc., as grantee, dated August 25, 1993, with respect to the Property located at 331 Graft Road, New Philadelphia, OH and known as Store No. 201 (the “ Newtowne Release ”). If Seller fails to deliver the Newtowne Release to Purchaser at least five (5) Business Days prior to the Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(g) Within five (5) Business Days after the Effective Date, Seller shall request from Randolph Fringe Land, Ltd. (or its successor or assign) (“ Randolph ”) a written release in recordable form reasonably acceptable to Purchaser of Randolph’s right of first refusal and purchase option under that certain Easement and Restriction Agreement dated September 5, 2000, by and among Randolph, Seller Two. and JG Randolph LLC and that certain Special Warranty Deed, by Randolph, as grantor, to Seller Two, as grantee, dated September 5, 2000, with respect to the Property located at 1603 E. Dixie Drive, Asheboro, NC and known as Store No. 316 (the “ Randolph Release ”). If Randolph exercises its right to purchase the affected Property, then Seller shall deliver written notice of such exercise to Purchaser. In such event this Agreement shall be deemed terminated with respect to the affected Property and all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced by the amount of the Purchase Price allocated to such affected Property as shown on Schedule 15.17 attached hereto. If Randolph does not exercise its right to purchase the affected Property, then Seller shall obtain the Randolph Release. If Seller fails to deliver the Randolph Release to Purchaser at least five (5) Business Days prior to the Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 attached hereto.

(h) Within five (5) Business Days after the Effective Date, Seller shall request from Beltline-Decatur (or its successor or assign) (“ Beltline ”) a written release in recordable form reasonably acceptable to Purchaser of Beltline’s right of first refusal and purchase options under that certain deed to Seller, dated October 22, 1986, with respect to the Property located at 1821 Beltline Road SW, Decatur, AL and known as Store No. 103 (the “ Beltline Release ”). If Beltline exercises its right to purchase the affected Property, then Seller shall deliver written notice of such exercise to Purchaser. In such event this Agreement shall be deemed terminated with respect to the affected Property and all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced by the amount of the Purchase Price allocated to such affected Property as shown on Schedule 15.17 attached hereto. If Beltline does not exercise its right to purchase the affected Property, then Seller shall obtain the Beltline Release. If Seller fails to deliver the Beltline Release to Purchaser at least five (5) Business Days prior to the Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination,

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all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereto.

3.6 Memorandum regarding No Shareholder Approval; SNDAs .

(a) Within thirty (30) days of the Effective Date, Seller shall deliver to Purchaser a copy of the memorandum from Seller’s counsel confirming that neither this Agreement nor the transactions contemplated hereby require any approval of the shareholders of REX Stores and any analysis supporting such memorandum.

(b) If requested to do so by Purchaser, Seller shall send out a Subordination, Non-Disturbance and Attornment Agreement in the form requested by Purchaser’s lender (a “ SNDA ”) to each of the Space Lease Tenants and exercise good faith efforts to obtain each SNDA prior to Closing. Notwithstanding the foregoing, receipt of a SNDA from each Space Lease Tenants shall not be a condition to Purchaser’s obligation to close the transaction contemplated by this Agreement. If requested to do so by Purchaser, Seller shall execute and deliver at Closing a SNDA and memorandum of lease with respect to each Lease.

3.7 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:

	(i)	Seller’s representations and warranties contained herein shall be true, correct and complete in all material respects as of the Closing Date;
	(ii)	As of the Closing Date, the Seller shall have performed its obligations hereunder and all deliveries to be made by Seller at Closing have been tendered;
	(iii)	At no time on or before the Closing Date shall any of the following have occurred with respect to Seller and/or REX Stores: (1) the commencement of a case under Title 11 of the U.S. Code, or under any other applicable federal or state bankruptcy or similar law; (2) the appointment of a trustee or receiver of any property interest; (3) an assignment for the benefit of creditors; (4) an attachment, execution or other judicial seizure of a substantial property interest; or (5) a dissolution or liquidation;
	(iv)	[Intentionally omitted];
	(v)	[Intentionally omitted];
	(vi)	The Title Company shall be ready and willing to deliver to Purchaser owner’s title policies in the form required by the

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		Title Commitments in Section 3.3 above in the amount of the Purchase Price, subject only to the Permitted Exceptions, with the endorsements reasonably requested by Purchaser (the “ Owner’s Title Policies ”); and
	(vii)	This Agreement shall not have been terminated with respect to fifteen (15) or more of the twenty-five (25) Properties identified on Schedule 3.6(a)(vii) hereto by (A) Purchaser pursuant to terms and conditions of this Agreement, or (B) Seller pursuant to Section 3.3(h) .

(b) If any of the conditions set forth in Section 3.7(a)(i), (ii), (iii), (vi) or (vii) 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 3.7, the Earnest Money and any other sums deposited by Purchaser with the Escrow Agent shall be returned to Purchaser, all documents delivered into escrow shall be returned by the Escrow Agent to the depositing party, 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 shall be terminated, except for the Surviving Obligations.

3.8 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:

	(i)	The Purchaser’s representations and warranties contained herein shall be true, correct and complete in all material respects as of the Closing Date;
	(ii)	As of the Closing Date, the Purchaser shall have performed its obligations hereunder and all deliveries to be made by Purchaser at Closing have been tendered; and
	(iii)	This Agreement shall not have been terminated with respect to twenty-five (25) or more Properties by (A) Purchaser pursuant to terms and conditions of this Agreement, or (B) Seller pursuant to Section 3.3(h) .

(b) If any of the conditions set forth in Section 3.8(a)(i), (ii) or (iii) 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 3.8, the Earnest Money and any other sums deposited by Purchaser with the Escrow Agent shall be returned to Purchaser, all documents delivered into escrow shall be returned by the Escrow Agent to the depositing party, 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 shall be terminated, except for the Surviving Obligations.

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3.9 Fairness Opinion .

(a) Seller may elect, in its discretion, to obtain an opinion from an investment banking firm of national standing as to whether or not the consideration to be received by Seller for the Properties pursuant to the transactions contemplated by this Agreement is fair to Seller and the stockholders of REX Stores from a financial point of view (the “ Fairness Opinion ”). If Seller obtains a Fairness Opinion on or prior to the date that is thirty (30) days after the Effective Date that the consideration to be received by Seller for the Properties is not fair to Seller and the stockholders of REX from a financial point of view, then Seller shall have a right to terminate this Agreement, which right shall be exercisable by (i) delivery to Purchaser of written notice of termination and a copy of the Fairness Opinion on or prior to the date that is thirty (30) days after the Effective Date, and (ii) within two (2) Business Days of such termination, payment to Purchaser of a fee of Seven Hundred Fifty Thousand Dollars ($750,000.00) to cover Seller’s costs, expenses and other losses. In such event of termination, the Earnest Money and any other sums deposited by Purchaser with the Escrow Agent shall be returned to Purchaser, all documents delivered into escrow shall be returned by the Escrow Agent to the depositing party, 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, except for the Surviving Obligations.

(b) Seller acknowledges and agrees that Seller shall have no right to terminate this Agreement if, after the date that is thirty (30) days after the Effective Date, Seller obtains a Fairness Opinion that the consideration to be received by Seller for the Properties is not fair to Seller and the stockholders of REX from a financial point of view.

(c) If Seller terminates this Agreement pursuant to Section 3.9(a) hereof, then Purchaser shall have a right of first refusal which expires on December 31, 2007 (“ Purchaser Right of First Refusal ”) with respect to any sale, joint venture or other direct or indirect disposition by Seller and/or REX Stores of fifty (50) or more of the Properties. If at any time prior to December 31, 2007, Seller and/or REX Stores receive a bona fide offer with respect to a sale, joint venture or other direct or indirect disposition of fifty (50) or more of the Properties (“ Offer ”) that Seller and/or REX Stores desire to accept, then prior to accepting the Offer, Seller and/or REX shall deliver written notice of the Offer to Purchaser (“ Offer Notice ”). The Offer Notice shall include a copy of the Offer. Purchaser shall have ten (10) Business Days after receipt of the Offer Notice to exercise the Right of First Refusal and accept the Offer, which right shall be exercisable by delivery of written notice to Seller and/or REX Stores. If Purchaser so accepts the Offer, then Purchaser shall have the right and the obligation to enter into the transaction contemplated by the Offer upon the same terms and conditions as are set forth in the Offer, except that periods of time for purchaser performance shall be extended so that Purchaser shall have at least ten (10) Business Days from the date of Purchaser’s acceptance of the Offer for such performance and at least thirty (30) days from the date of Purchaser’s acceptance of the Offer to close on the transaction contemplated by the Offer. If Purchaser does not so accept the Offer, then Seller and/or REX Stores may accept the Offer and enter into the transaction contemplated by the Offer pursuant to the terms and conditions set forth in the Offer and the Purchaser Right of First Refusal remain in effect with respect to any future Offer during the 365-day period. This Section 3.9(c) shall survive the termination of this Agreement and constitutes a Surviving Obligation.

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3.10 Covenants Regarding Change in Property Condition .

(a) Notwithstanding anything herein to the contrary in Section 11.1 hereof, in the event there is a material adverse change in the condition of any one or more of the Properties from the condition reported in the PSI Reports prior to Closing that requires repairs with respect to any one Property that cost in excess of Twenty-Five Thousand and 00/100 Dollars ($25,000.00) but less than Seventy-Five Thousand and 00/100 Dollars ($75,000.00), Seller shall complete such repairs, at Seller’s sole cost, to the reasonable satisfaction of Purchaser with good speed and diligence and the Closing Date with respect to the affected Property only shall be extended to permit the completion of the aforementioned repairs, which extension shall not affect the Closing Date with respect to the Properties other than the affected Property. Notwithstanding the foregoing, in the event the aforementioned repairs are not completed within sixty (60) days after the originally scheduled Closing Date, then Purchaser shall have a right to terminate this Agreement with respect to the affected Property, which right shall be exercisable by the delivery of written notice to Seller. In the event of such termination, all exhibits and schedules hereto and definitions herein shall be deemed modified to remove such affected Property, and the Purchase Price shall be reduced in accordance with Section 15.12 hereof.

(b) Notwithstanding anything he

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