THIRD AMENDMENT TO AMENDED AND RESTATED LOAN
AGREEMENT

This
  Third Amendment to Amended and Restated Loan Agreement(the Third
  Amendment) is made as of the 4th of May, 2006 by and among

REX RADIO AND TELEVISION, INC., an Ohio corporation
(Rex Radio), as lead borrower
(in such capacity, Lead Borrower),
for itself and the other Borrowers being KELLY & COHEN APPLIANCES, INC., an
Ohio corporation (Kelly), REX ALABAMA, INC.,
an Ohio corporation (Rex Alabama),
REX KANSAS, INC., a Kansas
corporation (Rex Kansas), REXSTORES.COM, INC., an Ohio corporation (Rex Internet), and
STEREO TOWN, INC., a Georgia corporation (Stereo Town); and

REX STORES CORPORATION, a Delaware
corporation (the Parent); and

the
LENDERS party hereto; and

BANK OF AMERICA, N.A., f/k/a Fleet Retail
Group, Inc., as agent for the Lenders, a Delaware corporation, having a place
of business at 40 Broad Street, Boston, Massachusetts 02109; and

KEYBANK NATIONAL ASSOCIATION, as
Syndication Agent;
in
consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

RECITALS

A.          The
Lead Borrower, the other Borrowers, the Agent, the Lenders, and the Syndication
Agent have entered into an Amended and Restated Loan Agreement dated as of
September 14, 2004 (as amended and in effect, the Loan Agreement).

B.          The
Borrowers, the Agent, the Parent, the Lenders, and the Syndication Agent have
agreed to amend certain provisions of the Loan Agreement all as set forth
herein.

NOW THEREFORE, it is hereby agreed as
follows:

1.  Amendments
to Loan Agreement.

| |                                                                                                                                |                                                                                                                                          
| | ------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------
| | (a)                                                                                                                            | Definitions: All capitalized terms used
  herein and not otherwise defined shall have the same meaning herein as in the
  Loan Agreement.
| |                                                                                                                                |                                                                                                                                          
| | (b)                                                                                                                            | Amendments to Section 1.01.                                                                                                              
| |                                                                                                                                |                                                                                                                                          
| | (i)          The
definition of Borrowing Base
is hereby deleted in its entirety, and the following is inserted in its
place:
| |                                                                                                                                |                                                                                                                                          
| |                                                                                                                                | Borrowing Base
shall mean at any time of
  calculation, an amount equal to:                                                            
| |                                                                                                                                |                                                                                                                                          
| |                                                                                                                                | (a) the
face amount of Eligible Credit Card Receivables multiplied by the Credit Card
Advance Rate, plus                                 

1

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| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                     | (b)the
  greater of (i) Appraised Value of Eligible Inventory, net of Inventory
  Reserves, multiplied by the Appraisal Percentage or (ii) the Cost of Eligible
  Inventory, net of Inventory Reserves, multiplied by the Inventory Advance
  Rate, plus                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     | (c)the
  FMV of Eligible Real Estate multiplied by the Real Estate Advance Rate, plus                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     | (d)100%
  of all Eligible Cash on Hand, minus                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     | (d)the
  then amount of all Availability Reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     | (ii)    The
  following is added in the proper alphabetical order in Section 1.01:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     | Eligible Cash on Hand means cash of a
  Borrower from time to time deposited in a DDA in the name of a Borrower, or
  other account acceptable to Agent, in each case which is maintained with the
  Agent (excluding any amounts on deposit in the Cash Collateral Account or in
  any other escrow, special purpose or restricted account, such as an account
  specifically designated for payroll or sales taxes) and is subject to a first
  perfected security interest in favor of the Agent for the benefit of itself
  and the other Credit Parties.                                          
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | (c)                                                                                                                                                                                 | Amendment to
  Section 3.05. Section 3.05 is hereby amended by
  adding the following at the end thereof:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     | (l)
  Eligible Cash on Hand may not be withdrawn from the applicable DDA or any
  other account with Agent in which it is held, thereby reducing the Borrowing
  Base, unless (i) no Default or Event of Default shall have occurred and be
  continuing or would result from such withdrawal and (ii) the Lead Borrower
  furnishes the Agent with (x) not less than three (3) days prior notice of
  such intended withdrawal and (y) a Borrowing Base Certificate as of the date
  of such proposed withdrawal reflecting that, after giving effect to such withdrawal,
  no Overadvance will result.
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 2. | Conditions to Effectiveness. This Third
  Amendment shall not be effective until each of the following conditions
  precedent have been fulfilled to the satisfaction of the Agent:
| |    |                                                                                                                                                                                    
| |    | (a)                                                                                                                                                                                 | This Third
  Amendment shall have been duly executed and delivered by the Borrowers, the
  Parent, the Agent and the Required Lenders. The Agent shall have received a
  fully executed copy hereof and of each other document required hereunder.                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | (b)                                                                                                                                                                                 | All action
  on the part of the Borrowers and the Parent necessary for the valid
  execution, delivery and performance by the Borrowers and the Parent of this
  Third Amendment shall have been duly and effectively taken.                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | (c)                                                                                                                                                                                 | The
  Borrowers and the Parent shall have provided such additional instruments,
  documents, and opinions of counsel to the Agent as the Agent and its counsel
  may have reasonably requested.                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 3. | Miscellaneous.                                                                                                                                                                     

2

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|                         |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------ | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         | (a) | Except as
  provided herein, all terms and conditions of the Loan Agreement and the other
  Loan Documents remain in full force and effect.  The Borrowers and the Parent each hereby ratifies, confirms,
  and reaffirms all of the representations, warranties and covenants therein
  contained.  Without limiting the
  generality of the foregoing, the Borrowers and the Parent each hereby
  acknowledges, confirms and agrees that all Collateral shall continue to
  secure the Obligations as modified and amended pursuant to this Third
  Amendment, and any future modifications, amendments, substitutions or
  renewals thereof.
|                         |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                         | (b) | This Third
  Amendment may be executed in several counterparts and by each party on a
  separate counterpart, each of which when so executed and delivered, shall be
  an original, and all of which together shall constitute one instrument.  Delivery of an executed counterpart of a
  signature page hereto by telecopy shall be effective as delivery of a
  manually executed counterpart hereof.                                                                                                                                                                                                                                       
|                         |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                         | (c) | This Third
  Amendment expresses the entire understanding of the parties with respect to
  the matters set forth herein and supersedes all prior discussions or
  negotiations hereon.  Any
  determination that any provision of this Third Amendment or any application hereof
  is invalid, illegal or unenforceable in any respect and in any instance shall
  not effect the validity, legality, or enforceability of such provision in any
  other instance, or the validity, legality or enforceability of any other
  provisions of this Third Amendment.                                                                              
|                         |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|[SIGNATURE PAGES FOLLOW]

3

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IN
WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
executed and their seals to be hereto affixed as the date first above written.

| |  |                                                    |                       | 
| |  | -------------------------------------------------- | --------------------- | 
| |  | REX RADIO AND TELEVISION, INC., as Lead
  Borrower
| |  |                                                   
| |  | By:                                                | /s/ Douglas Bruggeman | 
| |  |                                                    |                       | 
| |  | Name: Douglas
  Bruggeman                         
| |  | Title: Vice
  President - Finance                 
| |  |                                                   
| |  | KELLY & COHEN APPLIANCES, INC., as a
  Borrower   
| |  |                                                   
| |  | By:                                                | /s/ Douglas Bruggeman | 
| |  |                                                    |                       | 
| |  | Name:
  Douglas Bruggeman                         
| |  | Title: Vice
  President - Finance                 
| |  |                                                   
| |  | REX ALABAMA, INC., as a Borrower                  
| |  |                                                   
| |  | By:                                                | /s/ Douglas Bruggeman | 
| |  |                                                    |                       | 
| |  | Name: Douglas
  Bruggeman                         
| |  | Title: Vice
  President - Finance                 
| |  |                                                   
| |  | REX KANSAS, INC., as a Borrower                   
| |  |                                                   
| |  | By:                                                | /s/ Douglas Bruggeman | 
| |  |                                                    |                       | 
| |  | Name:
  Douglas Bruggeman                         
| |  | Title: Vice
  President - Finance                 
| |  |                                                   
| |  | REXSTORES.COM, INC., as a Borrower                
| |  |                                                   
| |  | By:                                                | /s/ Douglas Bruggeman | 
| |  |                                                    |                       | 
| |  | Name:
  Douglas Bruggeman                         
| |  | Title: Vice
  President - Finance                 

S/1

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| |                                    |                       | 
| | ---------------------------------- | --------------------- | 
| | STEREO TOWN, INC., as a Borrower   |                      
| |                                    |                       | 
| | By:                                | /s/ Douglas Bruggeman | 
| |                                    |                       | 
| | Name:  Douglas Bruggeman           |                      
| | Title:  Vice President - Finance   |                      
| |                                    |                       | 
| | REX STORES CORPORATION., as Parent
| |                                    |                       | 
| | By:                                | /s/ Douglas Bruggeman | 
| |                                    |                       | 
| | Name:  Douglas Bruggeman           |                      
| | Title:  Vice President - Finance   |                      

S/2

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| |                                    |                 | 
| | ---------------------------------- | --------------- | 
| | BANK OF AMERICA, N.A.,
as Agent    |                
| |                                    |                 | 
| | By:                                | /s/ Peter Foley | 
| |                                    |                 | 
| | Name:  Peter Foley                 |                
| | Title:  Vice President             |                
| |                                    |                 | 
| | BANK OF AMERICA, N.A., as a Lender
| |                                    |                 | 
| | By:                                | /s/ Peter Foley | 
| |                                    |                 | 
| | Name:  Peter Foley                 |                
| | Title:  Vice President             |                

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| |                                                                                                     |                    | 
| | --------------------------------------------------------------------------------------------------- | ------------------ | 
| |                                                                                                     |                    | 
| | JPMORGAN CHASE BANK, N.A.
        (as successor in interest to BANK ONE, DAYTON, N.A.), as a Lender
| |                                                                                                    
| | By:                                                                                                 | /s/ Stephen Christ | 
| |                                                                                                     |                    | 
| | Name:  Stephen Christ                                                                              
| | Title:    Account
        Executive                                                                

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| |                                                      |                  | 
| | ---------------------------------------------------- | ---------------- | 
| | KEYBANK NATIONAL ASSOCIATION, as a Lender           
| |                                                      |                  | 
| | By:                                                  | /s/ John P. Dunn | 
| |                                                      |                  | 
| | Name: John
  P. Dunn                                 |                 
| | Title: Vice
  President                              |                 
| |                                                      |                 
| | KEYBANK NATIONAL ASSOCIATION, as Syndication
  Agent
| |                                                      |                  | 
| | By:                                                  | /s/ John P. Dunn | 
| |                                                      |                  | 
| | Name: John
  P. Dunn                                 |                 
| | Title: Vice
  President                              |                 

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| |                                         |                       |  |  | 
| | --------------------------------------- | --------------------- |  |  | 
| | NATIONAL CITY BANK, DAYTON, as a Lender
| |                                         |                      
| | By:                                     | /s/ Donald W. Jennett | 
| |                                         |                       | 
| | Name:                                   | Donald W. Jennett     | 
| |                                         |                       | 
| | Title:                                  | Vice President        | 
| |                                         |                       | 

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