Document:

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                                                                   EXHIBIT 10.22

                              AMENDED AND RESTATED
                         FRANCHISEE FINANCING AGREEMENT

         This Amended and Restated Franchisee Financing Agreement ("Agreement")
is made and entered into by and among Wells Fargo Foothill, Inc., a Delaware
corporation ("Lender"), ColorTyme, Inc., a Texas corporation ("ColorTyme"), and
Rent-A-Center East, Inc., a Delaware corporation formerly known as
Rent-A-Center, Inc., which was formerly known as Renters Choice, Inc. ("RAC").

                                    RECITALS

         A.       ColorTyme is a franchisor of "rent-to-own" stores (each, a
"Store") operated by franchisees licensed by ColorTyme (each, a "Franchisee"),
offering various home entertainment equipment, household equipment, and consumer
products and parts, accessories, and other goods used in connection therewith
(collectively, "Inventory").

         B.       Textron Financial Corporation ("TFC"), ColorTyme and RAC are
parties to that certain Amended and Restated Franchisee Financing Agreement,
dated March 27, 2002, as amended July 23, 2002, September 30, 2002, and March
24, 2003 (as previously amended, the "Original Agreement").

         C.       Effective as of the date hereof, TFC is assigning to Lender
all of TFC's right, title and interest in and to the Original Agreement, and
Lender, ColorTyme and RAC desire to amend and restate the Original Agreement.

                                    AGREEMENT

         In consideration of the premises and other valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and intending to be
legally bound hereby, Lender, ColorTyme and RAC agree to amend and restate the
Original Agreement as follows:

                                    ARTICLE I
                                 CREDIT FACILITY

         1.1      Credit Facility. Lender shall provide a credit facility for
Franchisees on the terms and subject to the conditions set forth in this
Agreement. The amount of the credit facility shall be up to, but not in excess
of, fifty million and no/100 dollars ($50,000,000.00).

         1.2      Financing Procedures. The following procedures shall be
employed in determining the availability of financing for Franchisees under this
Agreement:

                  (a)      In the event a Franchisee shall indicate an interest
         in obtaining financing for any of the purposes described in Section
         1.6, ColorTyme shall provide the Franchisee with a credit application
         and other credit documentation, in form and substance acceptable to
         Lender and ColorTyme, and ColorTyme shall assist the Franchisee in
         completing such credit application and other credit documents.

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                  (b)      After the Franchisee has completed the credit
         application and provided the other credit documents specified by
         Lender, if such credit application and other credit documents are
         acceptable to ColorTyme, ColorTyme shall promptly forward the executed
         credit application and other credit documents to Lender at its office
         in Dallas, Texas.

                  (c)      If, following completion of its review of such credit
         application and other credit documents and its credit investigation,
         Lender determines that it will provide the financing requested, it
         shall so notify the Franchisee and ColorTyme and, upon receipt of such
         additional closing documents as Lender reasonably determines to be
         necessary for the approval of the credit, Lender shall either (i)
         establish a revolving line of credit for the Franchisee in accordance
         with the terms of this Agreement (each such line of credit is referred
         to herein as a "Line of Credit"), or (ii) provided Lender has
         previously or contemporaneously established a Line of Credit for the
         Franchisee, make a term loan to the Franchisee in accordance with the
         terms of this Agreement (each such term loan is referred to herein as a
         "Term Loan"). For purposes of this Agreement, the obligations of a
         Franchisee to Lender under a Line of Credit and/or a Term Loan are
         collectively referred to as a "Receivable."

         1.3      Interest Rates. The interest rate on each Receivable shall be
determined in accordance with this Section 1.3.

                  (a)      Unless otherwise agreed by Lender and ColorTyme and
         except as otherwise provided in paragraphs (b) or (c) of this Section
         1.3, the interest rate on each Receivable shall be the rate established
         by the following schedule: (i) for each Line of Credit with a Credit
         Limit (as that term is hereinafter defined) of $1,000,000 or less, the
         rate will be the Prime Rate plus 4.75%; (ii) for each Line of Credit
         with a Credit Limit of more than $1,000,000, the rate will be the Prime
         Rate plus 3.75%; and (iii) for each Term Loan, the rate will be the
         same as the rate applicable to the Franchisee's Line of Credit on the
         date of such Term Loan. For purposes of this section, "Prime Rate"
         shall mean the rate of interest announced within Wells Fargo Bank,
         N.A., at its principal office in San Francisco as its "prime rate,"
         with the understanding that the "prime rate" is one of Wells Fargo
         Bank's base rates (not necessarily the lowest of such rates) and serves
         as the basis upon which effective rates of interest are calculated for
         those loans making reference thereto and is evidenced by the recording
         thereof after its announcement in such internal publication or
         publications as Wells Fargo Bank, N.A. may designate. The applicable
         interest rate will be a floating rate; changes in such interest rate
         will be established monthly, effective as of the last business day of
         the preceding month. Interest will be calculated on the basis of a
         360-day year.

                  (b)      The interest rates specified in Section 1.3(a) of
         this Agreement shall apply to all Receivables originated on or after
         the date hereof from Franchisees not currently borrowing pursuant to
         this Agreement and to all Receivables outstanding on such date, for
         which the Franchisees obligated to Lender thereunder consent to the
         change in the interest rates on such Receivables to those established
         by this Section 1.3; the interest rates on all Receivables outstanding
         on such date, for which the Franchisees obligated to Lender thereunder
         do not consent to the change in the interest rates on such Receivables

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         to those established by this Section 1.3 will continue at the existing
         rates, subject to the right of Lender to terminate such Franchisee's
         line of credit, in accordance with the terms of its governing
         agreements. ColorTyme and RAC agree to assist Lender in obtaining the
         consent of all Franchisees to the modifications of Receivables to
         conform to the interest rates specified in Section 1.3(a) of this
         Agreement.

         1.4      Credit Limits. When a Line of Credit is established for a
Franchisee pursuant to this Agreement, Lender shall fix a credit limit for the
Franchisee of (i) two hundred fifty thousand dollars ($250,000) if such
Franchisee is not designated by ColorTyme as having prior "rent-to-own"
experience; (ii) three hundred thousand dollars ($300,000) if such Franchisee is
designated by ColorTyme as having prior "rent-to-own" experience; or (iii) such
other amount as may be agreed upon from time to time by Lender and ColorTyme
(the credit limit established for each Franchisee is referred to herein as the
"Credit Limit"). The amount of the Credit Limit may be adjusted from time to
time upon agreement by Lender and ColorTyme. When a Term Loan is made to a
Franchisee pursuant to this Agreement, the principal amount of the Term Loan and
the interest thereon shall not be included in or subject to the Credit Limit.

         1.5      Advance Limits. The amount of credit available under each
Receivable (notwithstanding the amount of a Franchisee's Credit Limit, in the
case of a Line of Credit) shall be limited to the product of the Franchisee's
Average Monthly Revenue multiplied by five (the advance limit established for
each Franchisee is referred to herein as the "Total Advance Limit"). For
purposes of this Agreement, a Franchisee's "Average Monthly Revenue" shall mean
the average monthly total revenue of the Franchisee (exclusive of sales tax)
from the sale, lease or rental of Inventory and other customary fees, calculated
in accordance with generally accepted accounting principles applied on a
consistent basis, for the three calendar months preceding the most recent
periodic review of such Franchisee's Receivable(s). Notwithstanding anything in
this section to the contrary, if the Total Advance Limit established pursuant to
this section would otherwise be an amount that is less than the then outstanding
balance of such Receivable (each such Receivable is referred to herein as an
"Overline Receivable"), the Total Advance Limit for such Overline Receivable
will be set at the then outstanding balance thereof, and such Overline
Receivable will continue to be administered as provided herein, unless Lender
and ColorTyme agree otherwise. The provisions of this section shall not apply to
any Receivable until all the Stores for which the financing was provided under
the Receivable have been open for business for one (1) year.

         1.6      Use of Proceeds. Lender will advance funds pursuant to a
Franchisee's Line of Credit or Term Loans only for the following purposes: (i)
the Franchisee's acquisition of Inventory; (ii) the Franchisee's acquisition or
conversion of a Store; (iii) the buyout of an ownership interest in the
Franchisee; and/or (iv) the Franchisee's working capital.

                  (a)      Inventory. Advances to a Franchisee for inventory
         will be limited to the lesser of (i) the cost of the Inventory acquired
         by such Franchisee; (ii) the amount of such Franchisee's Credit Limit;
         or (iii) the amount of the Franchisee's Total Advance Limit after
         deducting the outstanding balance of all Term Loans to such Franchisee.

                  (b)      Store Acquisitions and Conversions. Advances to a
         Franchisee for Store acquisitions and/or conversions (i.e., the
         acquisition of existing ColorTyme Stores and/or

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         the acquisition of other "rent-to-own" stores for conversion to
         ColorTyme Stores) will be limited to the lesser of (i) in the case of a
         Store that has been open for business (either as a ColorTyme Store or
         as another "rent-to-own" store) for one (1) year or more, the product
         of the Average Monthly Revenue of the individual Store multiplied by
         nine (9); and (ii) the amount that, when added to the Credit Limit and
         other Term Loans to such Franchisee, would cause the Debt-to-Revenue
         Ratio for the Franchisee to equal or exceed 5:1. For purposes of this
         paragraph, "Debt-to-Revenue Ratio" shall mean the ratio of (x) Funded
         Debt to (y) the Average Monthly Revenue of the Franchisee (calculated
         on an aggregate basis for all Stores owned and/or operated, including
         such Stores to be acquired, by such Franchisee and any and all
         affiliates of such Franchisee); and "Funded Debt" shall mean, as of any
         date, the total amount of liabilities (including the advance
         contemplated by this paragraph) that would be reflected on the
         consolidated balance sheet of Franchisee and its parent and any and all
         subsidiaries and affiliates, if any, in accordance with generally
         accepted accounting principles applied on a consistent basis. All
         Advances for Store acquisitions and/or conversions will be subject to
         the approval of ColorTyme, but shall otherwise be at the sole
         discretion of Lender.

                  (c)      Franchisee Owner Buyouts. Advances for the buyout of
         an ownership interest in a Franchisee, either by the Franchisee or by
         one (1) or more other owners of interests in the Franchisee, will be
         limited to the amount of the Franchisee's Total Advance Limit minus the
         Franchisee's Credit Limit and minus the outstanding balance of all
         other Term Loans to such Franchisee and owners. All Advances for
         Franchisee owner buyouts will be subject to the approval of ColorTyme,
         but shall otherwise be at the sole discretion of Lender.

                  (d)      Working Capital. Advances to a Franchisee for working
         capital will be limited to the lesser of (i) the amount by which
         ColorTyme's minimum working capital requirement exceeds such
         Franchisee's working capital available from other sources; (ii) sixty
         thousand and no/100 dollars ($60,000.00); (iii) the amount of such
         Franchisee's Total Advance Limit minus such Franchisee's Credit Limit
         and minus the outstanding balance of all other Term Loans to such
         Franchisee. Financing for working capital will be made available only
         to Franchisees designated by ColorTyme as having prior "rent-to-own"
         experience and approved by ColorTyme for such financing in connection
         with the opening of a Store, but shall otherwise be at the sole
         discretion of Lender.

For purposes of this section, Lender may rely fully on the representations
and/or agreements of the Franchisee with respect to the use of funds, with no
obligation to independently verify such information. The use of any such funds
by a Franchisee for any purpose not permitted by this section will not affect
the obligations of ColorTyme or RAC under this Agreement.

         1.7      Payment Terms. Each Receivable will be repayable as follows:

                  (a)      In the case of a Line of Credit, (i) accrued and
         unpaid interest shall be payable monthly, and (ii) principal shall be
         payable in monthly installments equal to 1/21 of the initial principal
         amount of each advance made by Lender under such Line of Credit. Both
         interest and principal shall generally be due and payable on the 26th
         day of each month.

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                  (b)      In the case of a Term Loan, (i) accrued and unpaid
         interest shall be payable monthly, and (ii) principal shall be payable
         in equal monthly installments over the term of the Term Loan, with the
         amount of the monthly installments calculated by dividing the original
         principal amount of the Term Loan by the number of months in the term
         thereof. Both interest and principal shall generally be due and payable
         on the 26th day of each month. The term of any Term Loan shall not
         exceed sixty (60) months.

         1.8      Suspension of Advances. Advances to a Franchisee under any
Line of Credit may, at Lender's sole discretion, be suspended or limited at any
time that the unpaid balance of all Advances under such Line of Credit, when
added to the outstanding principal balance of all Term Loans made to such
Franchisee exceeds the product of the Franchisee's Average Monthly Revenue
multiplied by four (4) where (i) the ratio of cash expenses (total annual
expenses, less depreciation directly related to the operation of the
Franchisee's Store(s), calculated in accordance with generally accepted
accounting principles applied on a consistent basis) to total revenue
(calculated in accordance with generally accepted accounting principles applied
on a consistent basis, excluding extraordinary items, based on a three (3) month
rolling average) exceeds 64%; (ii) the Franchisee fails to maintain the number
of rental contracts that are seven (7) or more days past due (calculated on a
three (3) month rolling average) at 8% or less of its total outstanding rental
contracts; (iii) expenses of a Store that has been open for business for less
than twelve (12) months cause the ratio of actual expenses to actual revenue to
exceed the ratio of expenses to revenue reflected in the proforma cash flow
projections for that Store; (iv) payments (principal and/or interest) under any
Receivable of the Franchisee are more than fifteen (15) days past due; (v) the
idle inventory percentage (the quotient of the idle inventory divided by the
total inventory, calculated on a three (3) month rolling average and based on
the idle inventory and total inventory figures reflected on the Franchisee's
monthly royalty reports) exceeds twenty-five percent (25%); or (vi) in Lender's
determination, the Receivable is otherwise in default.

         1.9      Financing Terms and Credit Standards. The specific terms of
any financing provided by Lender to Franchisees under this Agreement shall be
determined from time to time by Lender in accordance with its ordinary and
customary business practices. The credit standards for approval of any financing
provided by Lender to Franchisees under this Agreement shall be determined from
time to time by Lender and ColorTyme; provided however, the application of such
credit standards to particular transactions shall be at Lender's sole
discretion.

         1.10     Credit Approval. Nothing herein shall obligate Lender to
accept or approve any application for financing submitted by or on behalf of any
Franchisee. Lender may, in its sole discretion, reject or decline any
application for financing submitted by or on behalf of any Franchisee; provided,
if Lender rejects or declines any such application, it shall inform ColorTyme
and the Franchisee of the reasons therefor.

         1.11     Leased Stores. In connection with financing for Stores that
are leased by Franchisees, Lender may, at its sole discretion, approve any such
Franchisee's application for financing without any requirement that the
Franchisee provide (i) a copy of the ground or building lease; (ii) the
landlord's consent to the collateral assignment of such lease, (iii) a
disclaimer of the landlord's interest in the fixtures, equipment, inventory or
other goods in which Lender may obtain a security interest; or (iv) any other
consent, waiver or other matter related to

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such lease. Any approval by Lender of a Franchisee's application for financing
that does not require any such items related to the lease shall not in any way
affect the obligations of ColorTyme or RAC under this Agreement.

         1.12     Collection Procedures. Lender may use its ordinary and
customary practices and procedures to collect outstanding Receivables, subject
to the provisions of this Agreement, which practices and procedures may or may
not be consistent with those used in the past by TFC.

         1.13     Modification of Receivables. Notwithstanding anything in this
Agreement to the contrary, Lender reserves the right to make such modifications,
adjustments and/or revisions to any Receivables, including the Credit Limits,
payment terms and conditions for advances thereunder, as it deems necessary or
appropriate under the circumstances, provided Lender may not make any
modifications, adjustments or revisions to the extent such modifications,
adjustments and/or revisions have not been approved by ColorTyme. Lender may at
any time, at its sole discretion, amend payment schedules, defer payments or
otherwise modify the terms of any such Receivable, without in any way affecting
the obligations of ColorTyme or RAC under this Agreement, except to the extent
such amendment, deferral or other modification shall cause such Receivable to
exceed the Advance Limit for such Receivable determined in accordance with
Section 1.5 on the basis of information provided to the Lender on or before the
effective date of such amendment, deferral or other modification.

         1.14     Periodic Review of Receivables. Lender may periodically review
any Receivable, at such times or intervals and taking into consideration such
matters (including without limitation the Average Monthly Revenue of the
Franchisee named in such Receivable) as may be agreed upon from time to time by
Lender and ColorTyme. Lender shall prepare a written report of each such
periodic review, and promptly provide ColorTyme with a copy of such report.

         1.15     Payments to ColorTyme. Lender shall pay to ColorTyme, from the
interest portion of each payment received by Lender on account of each
Receivable (whether a Line of Credit or a Term Loan), an amount calculated by
multiplying the amount of each such interest payment by a fraction, the
denominator of which is the rate of interest applicable to such Receivable and
the numerator of which is determined on the following scale: (i) 2.00% if the
Franchisee's Credit Limit is $1,000,000 or less; or (ii) 1.50% if the
Franchisee's Credit Limit is greater than $1,000,000. The amounts payable
pursuant to this section shall be payable on a monthly basis within 20 days
after the end of the month in which an interest payment is received by Lender.

         1.16     Franchisee Credit Facility Fee. Lender shall use commercially
reasonable efforts to amend the credit agreements with the Franchisees to
require the Franchisees to pay, directly to ColorTyme, a non-refundable credit
facility fee equal to eight-tenths of one percent (0.80%) of the Credit Limit
established for the Franchisee by Lender pursuant to such credit agreements,
such credit facility fee to be due and payable upon execution of such amendment.
The form and substance of the amendment to the credit agreements shall be
subject to ColorTyme's approval. ColorTyme shall be solely responsible for
collecting the credit facility fee from the Franchisees; Lender shall have no
obligation or responsibility to collect the credit facility fee from the
Franchisees. In the event any Franchisee fails to amend its applicable credit
agreement as described pursuant to this Section 1.16, then, at the request of
ColorTyme, Lender shall terminate such Franchisee's line of credit in accordance
with the terms of its governing agreements.

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                                   ARTICLE II
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         2.1      Representations and Warranties of ColorTyme and RAC. ColorTyme
and RAC, jointly and severally, represent and warrant to Lender that:

                  (a)      ColorTyme. ColorTyme is a corporation duly organized,
         validly existing and in good standing under and pursuant to the laws of
         the State of Texas. ColorTyme has duly qualified and is authorized to
         conduct business and is in good standing as a foreign corporation in
         all jurisdictions where such qualification is necessary. ColorTyme has
         all requisite corporate power and authority to enter into this
         Agreement and to consummate the transactions herein contemplated,
         ColorTyme has taken all corporate action necessary to duly authorize
         the execution of this Agreement and the consummation of all
         transactions herein contemplated.

                  (b)      RAC. RAC is a corporation duly organized, validly
         existing and in good standing under and pursuant to the laws of the
         State of Delaware. RAC has duly qualified and is authorized to conduct
         business and is in good standing as a foreign corporation in all
         jurisdictions where such qualification is necessary. RAC has all
         requisite corporate power and authority to enter into this Agreement
         and to consummate the transactions herein contemplated. RAC has taken
         all corporate action necessary to duly authorize the execution of this
         Agreement and the consummation of all transactions herein contemplated.

                  (c)      Enforceable Agreement. This Agreement has been duly
         executed and delivered by ColorTyme and RAC and is a legal, valid and
         binding obligation of ColorTyme and RAC, fully enforceable in
         accordance with its terms.

                  (d)      The Receivables. The credit applications and other
         credit documents provided to Lender by ColorTyme pursuant to Section
         1.2. in connection with each application by a Franchisee for financing
         pursuant to this Agreement will in each case be all the documents
         received or acquired by ColorTyme or RAC in connection with such
         application; to the best of ColorTyme's and RAC's knowledge, each such
         document will have been duly executed by the persons whose signatures
         purport to appear thereon; to the best of ColorTyme's and RAC's
         knowledge, none of such documents or any other materials submitted
         therewith will contain any false or misleading statements or
         information; and at the time such documents are provided to Lender and,
         if the application for financing is approved by Lender, at the time the
         resulting Receivable is funded by Lender, neither ColorTyme nor RAC
         will have any knowledge of any fact or circumstance that would
         materially adversely affect the enforceability or collectability of the
         Receivable or Lender's rights thereunder or in the collateral securing
         such Receivable.

                  (e)      Accurate Information. Neither ColorTyme nor RAC has
         made any misstatement of material fact to Lender or provided Lender
         with any false or misleading information relevant to this Agreement or
         withheld from Lender any information known to ColorTyme or RAC which
         would be material to Lender's decision to enter into this Agreement.

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         2.2      Covenants of ColorTyme and RAC. At all times during which any
of the Receivables are outstanding or during which ColorTyme and/or RAC have any
obligations, including contingent obligations, to Lender under this Agreement,
unless Lender shall otherwise consent in writing:

                  (a)      Consolidated Leverage Ratio. ColorTyme and RAC shall
         not permit the Consolidated Leverage Ratio (as that term is defined in
         the Credit Agreement among Rent-A-Center, Inc., as borrower, the
         several lenders from time to time parties thereto, Morgan Stanley
         Senior Funding Inc., as Documentation Agent, JPMorgan Chase Bank and
         Bear, Stearns & Co., Inc., as Syndication Agents, Wachovia Bank,
         National Association, UBS Warburg LLC, United Overseas Bank and Credit
         Lyonnais, as Managing Agents, and Lehman Commercial Paper Inc., as
         Administrative Agent, dated as of May 28, 2003 (as the same has been or
         may be amended, restated or modified from time to time, the "Senior
         Credit Agreement"), as of the last day of any period of four (4)
         consecutive fiscal quarters to exceed 2.75 to 1.00.

                  (b)      Consolidated Fixed Charge Coverage Ratio. ColorTyme
         and RAC shall not permit the Consolidated Fixed Charge Coverage Ratio
         (as that term is defined in the Senior Credit Agreement), for any
         period of four (4) consecutive fiscal quarters of Rent-A-Center, Inc,
         to be less than the ratio of 1.50 to 1.00.

                  (c)      Receipt of Funds. If ColorTyme or RAC receive any
         money or property as payment on any of the Receivables, they shall
         receive and hold such money or property in trust for Lender and
         immediately deliver such money or property to Lender with any necessary
         endorsements.

                  (d)      The Receivables. Neither ColorTyme nor RAC shall take
         any action, or fail to take any action, which could adversely affect
         Lender's rights with respect to any of the Receivables. Neither
         ColorTyme nor RAC will make any misstatement of material fact to Lender
         or provide Lender with any false or misleading information relevant to
         any credit application or other credit documents submitted pursuant to
         this Agreement or any Receivable or omit to provide Lender with any
         information known to ColorTyme or RAC which would be material to
         Lender's decision regarding any such credit application or Receivable.

                  (e)      Confidentiality; Proprietary Rights. During the term
         of this Agreement, Lender shall provide to ColorTyme various forms,
         documents, procedures manuals and other information and materials for
         use in connection with the financing contemplated by this Agreement.
         ColorTyme and RAC acknowledge and agree that all such information and
         materials are proprietary to Lender and constitute private business
         information intended for Lender's exclusive benefit. Neither ColorTyme
         nor RAC shall use, and neither shall permit its employees or agents to
         use, any such materials or information for any purpose other than as
         expressly contemplated by this Agreement. ColorTyme and RAC shall
         maintain the confidentiality of all such materials and information with
         the same degree of diligence as they use to protect their own
         proprietary information and trade secrets from disclosure to other
         parties.

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                  (f)      Indemnity. ColorTyme and RAC, jointly and severally,
         shall indemnify Lender and its successors, assigns and participants,
         and their respective officers, directors, employees, attorneys and
         agents, from, and shall hold each of them harmless against, any and all
         losses, liabilities, claims, damages, costs and expenses (including
         reasonable attorneys' fees) to which any of them may become subject
         (INCLUDING LOSSES, LIABILITIES, CLAIMS, DAMAGES, COSTS AND EXPENSES
         WHICH ARISE IN WHOLE OR IN PART OUT OF THE NEGLIGENCE OF LENDER) which
         directly or indirectly arise from or relate to (i) this Agreement or
         any of the transactions contemplated hereby, (ii) the sale of
         franchises by ColorTyme or any dealings between ColorTyme and
         Franchisees; (iii) the enforcement by Lender of its rights hereunder,
         or (iv) any investigation, litigation or other proceeding, including,
         without limitation, any threatened investigation, litigation or other
         proceeding, relating to any of the foregoing, excluding, however, (x)
         any losses, liabilities, claims, damages, costs and expenses which
         arise exclusively from the willful misconduct or gross negligence of
         Lender, and (y) expenses incurred by Lender pursuant to Section 3.2.
         The obligations of ColorTyme and RAC under this section shall survive
         the termination of this Agreement.

                  (g)      Financial Statements and Reports. RAC shall provide
         to Lender a copy of each Form l0-K, Form 10-Q and Form 8-K of
         Rent-A-Center, Inc., filed with the U.S. Securities and Exchange
         Commission, within two (2) business days after the filing thereof.
         ColorTyme shall provide to Lender (i) a copy of its audited individual
         and consolidated year-end financial statements within ninety (90) days
         following the end of each fiscal year; (ii) a copy of its monthly
         financial statements within thirty (30) days following the end of each
         month; (iii) a copy of its Uniform Franchise Offering Circular and all
         amendments thereto, within one hundred twenty (120) days following the
         end of each fiscal year; and (iv) royalty reports and financial
         statements for each Franchisee, promptly upon request by Lender. RAC
         and ColorTyme shall provide to Lender a quarterly compliance
         certificate in the form of Exhibit A attached hereto within thirty (30)
         days following the end of each calendar quarter.

                  (h)      Notification of Senior Credit Agreement Modification.
         Each of ColorTyme and RAC agrees to provide, or cause to be provided,
         to Lender a copy of each modification of the Senior Credit Agreement
         within ten (10) business days after such modification has been duly
         executed by all required parties and is deemed effective.

                  (i)      Further Assurances. ColorTyme and RAC shall, upon
         request of Lender, execute and deliver such additional documents and
         instruments as may be reasonably required by Lender for carrying out
         the purposes of this Agreement.

                                   ARTICLE XII

                               RECEIVABLE DEFAULTS

         3.1      Notice of Default. In the event any payments due under any of
the Receivables are delinquent by more than ninety (90) days or Lender otherwise
declares a default under any of the Receivables, Lender shall give notice
thereof to ColorTyme.

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         3.2      Foreclosure. Following notice of a default under a Receivable
pursuant to Section 3.1, in the exercise of its sole and absolute discretion,
Lender shall attempt to collect the outstanding obligations under the Receivable
and, if necessary, commence appropriate legal actions to recover the collateral
securing such Receivable and to collect the accounts owing by the account
debtor(s) and other persons, if any, in connection with such collateral. The
costs incurred by Lender in connection with such actions shall be shared by
Lender and ColorTyme in accordance with subpart (z) of Section 3.4 and sub-part
(a) of Section 6.1 (i.e., the first one thousand dollars ($1,000.00) is to be
paid by ColorTyme, and all costs in excess of that amount are to be paid by
Lender). Lender may take collection actions consistent with those taken in the
past by TFC.

         3.3      Letter of Credit. Within five (5) business days following
notice of a default under a Receivable pursuant to Section 3.1, RAC shall cause
a standby letter of credit to be issued to Lender in an amount equal to one
hundred fifteen percent (115%) of the outstanding balance of the defaulted
Receivable. The letter of credit shall secure the obligations of ColorTyme under
Section 3.4 with respect to such defaulted Receivable. Upon payment by ColorTyme
of the Recourse Amount (as that term is hereinafter defined) with respect to the
defaulted Receivable, such letter of credit shall be promptly returned to RAC
for cancellation. The letter of credit shall provide for a term of one (1) year;
shall be payable upon presentation to the issuing bank of a certificate of
Lender stating that ColorTyme has failed to pay all amounts due under Section
3.4 with respect to the Receivable for which the letter of credit was issued;
shall be issued by a bank located in the United States that is included in the
bank group party to the Senior Credit Agreement (or such other bank as may be
approved by Lender in its sole discretion), but excluding any bank that has a
participation interest in any of the Receivables or this Agreement, which bank
must have a senior unsecured issuer rating of Aa or above as determined by
Moody's Investors Service or a short-term issue credit rating of Al or above as
determined by Standard & Poors; and shall otherwise be acceptable to Lender in
all respects.

         3.4      ColorTyme's Recourse Obligation; Assignment to ColorTyme.
ColorTyme shall pay to Lender an amount (the "Recourse Amount") equal to the sum
of (x) the outstanding principal balance of a defaulted Receivable, (y) all
accrued and unpaid interest thereon and (z) all reasonable expenses incurred by
Lender, including the fees and expenses of its legal counsel, in connection with
the enforcement of such Receivable, up to a maximum of one thousand and no/100
dollars ($1,000.00) per Receivable, upon the earliest to occur of (a)
repossession and/or foreclosure of the collateral securing the defaulted
Receivable, (b) the entry by a court of competent jurisdiction of an order
staying or barring such actions or adjudicating the rights of Lender with
respect to such collateral, (c) eleven (11) months following the issuance of the
letter of credit with respect to the defaulted Receivable pursuant to Section
3.3, or (d) thirty (30) days after Lender sends notice of a default in
accordance with Section 3.1 if, but only if, Lender has not received a letter of
credit issued in accordance with Section 3.3, whereupon Lender shall
contemporaneously assign to ColorTyme Lender's interest in the defaulted
Receivable and the collateral securing such defaulted Receivable, WITHOUT
RECOURSE OR WARRANTY OF ANY KIND WHATSOEVER.

                                     - 10 -
<PAGE>

                                       IV.
                          DEFAULT UNDER THIS AGREEMENT

         4.1      Events of Default. An "Event of Default" shall exist if any
one or more of the following events (herein collectively called "Events of
Default") shall occur and be continuing:

                  (a)      ColorTyme or RAC shall fail to pay any amount due
         under the terms of this Agreement within ten (10) business days
         following demand therefor.

                  (b)      ColorTyme or RAC shall fail to perform, observe or
         comply with any of their covenants, agreements or obligations contained
         in this Agreement, and such failure shall remain uncured thirty (30)
         days following notice thereof.

                  (c)      Any representation or warranty made by ColorTyme or
         RAC in this Agreement or any of the documents delivered to Lender
         pursuant to this Agreement shall prove to be untrue, misleading or
         inaccurate in any material respect.

                  (d)      ColorTyme, RAC or any of their affiliates shall
         default in their respective obligations to Lender under any other
         agreement to which they, or any of them, are parties.

                  (e)      ColorTyme, RAC or any of their affiliates shall
         default in their respective obligations under agreements with their
         primary lenders or any other agreement involving indebtedness in excess
         of fifty thousand and no/100 dollars ($50,000.00).

                  (f)      ColorTyme, RAC or any of their affiliates shall (i)
         apply for or consent to the appointment of a receiver, custodian,
         trustee, liquidator, or similar official for themselves or all or a
         substantial part of their property, (ii) admit in writing that they are
         unable to pay their debts generally as they become due, (iii) make a
         general assignment for the benefit of creditors, (iv) file a petition
         or answer seeking liquidation, reorganization or an arrangement with
         creditors or to take advantage of any bankruptcy, reorganization or
         insolvency laws, (v) file an answer admitting the material allegations
         of or consent to or default in answering a petition filed against them
         in any bankruptcy, reorganization or insolvency proceeding, (vi) become
         the subject of an order for relief under any bankruptcy, reorganization
         or insolvency proceeding which shall continue unstayed and in effect
         for thirty (30) days, or (vii) an order, judgment or decree shall be
         entered by any court of competent jurisdiction or other competent
         authority approving a petition appointing a receiver, custodian,
         trustee, liquidator or similar official for them or of all or a
         substantial part of their property and such other, judgment or decree
         shall continue unstayed and in effect for a period of thirty (30) days.

                  (g)      ColorTyme or RAC shall cease doing business as a
         going concern.

                  (h)      This Agreement or any other documents delivered to
         Lender pursuant to this Agreement or in connection herewith shall for
         any reason cease to be in full force and effect, or shall be declared
         null or unenforceable in whole or in material part, or the validity or
         enforceability thereof shall be challenged or denied by any party
         thereto excluding Lender.

                                     - 11 -
<PAGE>

         4.2      Remedies Upon Default. If an Event of Default shall occur and
be continuing, Lender at its sole discretion may, without notice (i) terminate
this Agreement, (ii) elect to have ColorTyme repurchase all Receivables then
held by Lender (without recourse or warranty by Lender), whereupon ColorTyme
shall so repurchase such Receivables for an amount equal to the outstanding
principal balance thereof plus all accrued and unpaid interest thereon, (iii)
reduce any claim to judgment, (iv) set off and apply against the obligation of
ColorTyme, without notice to ColorTyme or RAC, any and all deposits or other
sums at any time credited or held by Lender or owing from Lender to ColorTyme,
RAC or any of their affiliates, whether or not said obligations are then due,
and (v) without further notice of default or demand, pursue and enforce any of
Lender's rights and remedies under this Agreement and any of the other documents
delivered to Lender pursuant to this Agreement or otherwise provided under or
pursuant to any applicable law or any other agreement.

                                       V.
                                    GUARANTY

         5.1      Guaranty. RAC hereby guaranties the full and prompt payment
and performance of all debts, liabilities and obligations of ColorTyme to Lender
arising out of or in any way related to this Agreement (as amended, restated or
otherwise modified), whether for principal, interest (including any interest
which, but for the application of the provisions of the Bankruptcy Code, would
have accrued on such amounts), premium, reimbursement obligations, fees, costs,
expenses, recourse or indemnity obligations (collectively, the "Obligations").
RAC represents and warrants to Lender that it will receive a substantial
economic benefit from the financing provided by Lender pursuant to this
Agreement, and acknowledges that Lender would not provide such financing if it
did not receive this guaranty. RAC hereby waives promptness, diligence, notice
of acceptance and any other notice with respect to the Obligations or this
guaranty, and any requirement that Lender protect, secure, perfect or insure any
security interest or lien or any property subject thereto, or exhaust any right
or take any action against ColorTyme or any other person or entity or any
collateral. The liability of RAC under this guaranty shall be absolute,
unconditional, irrevocable and continuing, irrespective of any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to departure
from the terms of the Obligations. RAC hereby consents to any and all extensions
or other indulgences granted by Lender to ColorTyme and consents to the release
or substitution of any or all collateral securing the Obligations. RAC hereby
irrevocably waives any and all rights it may now or hereafter have under any
agreement or at law or in equity (including, without limitation, any law
subrogating it to the rights of Lender) to assert any claim or seek
contribution, indemnification or any other form of reimbursement from ColorTyme
for any payment made by RAC under or in connection with this guaranty. This
guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Obligations is rescinded or must otherwise
be returned by Lender upon the insolvency, bankruptcy or reorganization of
ColorTyme or otherwise, all as though such payment had not been made. RAC agrees
that in light of the immediately foregoing waivers, the execution of this
Guaranty shall not be deemed to make RAC a "creditor" of ColorTyme, and that for
purposes of Sections 547 and 550 of the Bankruptcy Code, RAC shall not be deemed
a "creditor" of ColorTyme.

                                     - 12 -
<PAGE>

         To the maximum extent permitted by law, RAC hereby waives: (1) any
rights to assert against Lender any defense (legal or equitable), set-off,
counterclaim, or claim which RAC may now or at any time hereafter have against
ColorTyme or any other party liable to Lender; (2) any defense RAC has to
performance hereunder, except the defense of discharge by payment in full of the
Obligations and any right RAC has to be exonerated, provided by statute or
otherwise, arising by reason of any claim or defense based upon an election of
remedies by Lender including any defense based upon an election of remedies by
Lender; (3) the benefit of any statute of limitations affecting RAC's liability
hereunder or the enforcement thereof, and any act which shall defer or delay the
operation of any statute of limitations applicable to the Obligations shall
similarly operate to defer or delay the operation of such statute of limitations
applicable to RAC's liability hereunder; and (4) any discharge of ColorTyme's
obligations to Lender by operation of law as a result of Lender's intervention
or omission; or the acceptance by Lender of anything in partial satisfaction of
the Obligations. RAC consents and agrees that Lender shall be under no
obligation to marshal any assets of ColorTyme or any Franchisee or other
guarantor in favor of RAC, or against or in payment of any or all of the
Obligations.

         RAC hereby waives any and all benefits or defenses arising directly or
indirectly under any state statutes pertaining to "anti-deficiency" or "one
action" statutes such as California's Code of Civil Procedure Sections 580a,
580d and 726, or any other similar statutes or judicial opinions concerning the
subject matter connected therewith. RAC understands that the effect of the
foregoing waivers may be that RAC may have liability hereunder for amounts with
respect to which RAC may be left without rights of subrogation, reimbursement,
contribution or indemnity against ColorTyme or other guarantors or sureties.

         Lender shall have the right to seek recourse against RAC to the fullest
extent provided for herein, and no election by Lender to proceed in one form of
action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of Lender's right to proceed in any other form of action or
proceeding or against other parties unless Lender has expressly waived such
right in writing. Specifically, but without limiting the generality of the
foregoing, no action or proceeding by Lender under any document or instrument
evidencing the Obligations shall serve to diminish the liability of RAC under
this Guaranty except to the extent that Lender finally and unconditionally shall
have realized indefeasible payment by such action or proceeding.

         RAC hereby agrees that any and all present and future indebtedness of
ColorTyme owing to RAC is postponed in favor of and subordinated to payment, in
full, in cash, of the Obligations. In this regard, following notice from Lender
under Section 3.1, no payment of any kind whatsoever shall be made with respect
to such indebtedness until the Obligations have been indefeasibly paid in full.

                                   ARTICLE VI

                                  MISCELLANEOUS

         6.1      Expenses. Each party hereto shall pay and be responsible for
its own expenses incurred in connection with this Agreement and the transactions
herein contemplated; provided, however, ColorTyme and RAC shall reimburse Lender
(and any participant in this Agreement or any of the Receivables) for all of its
reasonable out-of-pocket expenses, including the reasonable fees and expenses of
its legal counsel, incurred in connection with (a) the preparation,

                                     - 13 -
<PAGE>

negotiation and execution of this Agreement and each amendment hereto, (b) the
enforcement and collection of Receivables that default, up to a maximum of one
thousand and no/100 dollars ($1,000.00) for each such default; and (c) the
enforcement or preservation of Lender's rights under this Agreement following an
Event of Default. All such expenses shall be paid promptly upon request by
Lender.

         6.2      Relationship of the Parties. The parties are not engaged in a
partnership or joint venture, and nothing herein shall confer on any party
hereto the authority to act for or on behalf of the other party, except as
expressly provided herein. Lender has no fiduciary or other special relationship
with ColorTyme, the guarantor or any of their affiliates.

         6.3      Compliance with Laws. Throughout the term of this Agreement,
ColorTyme, RAC and Lender shall each comply with all laws, regulations, rules
and orders applicable to them.

         6.4      No Waiver; Cumulative Remedies. No failure to exercise, and no
delay in exercising, on the part of Lender, any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies provided for in
this Agreement and the other documents executed in connection herewith are
cumulative and not exclusive of any other rights or remedies provided by law.

         6.5      Notices. All notices or other communications hereunder shall
be given in writing by either overnight courier service or pre-paid registered
or certified mail, to the respective addresses of the parties following their
names on the signature page of this Agreement. Such notice or other
communication shall be deemed to have been given upon actual delivery or one (1)
business day after depositing it with an overnight courier service or three (3)
business days after depositing it with the United States Postal Service.

         6.6      Severability. If at any time any provision, or the application
of any provision, of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision, or the
application thereof, shall be of no force or effect, but the illegality or
unenforceability of such provision, or the application thereof, shall have no
effect upon and shall not impair the enforceability of any other provision of
this Agreement.

         6.7      Entire Agreement; Amendments. This Agreement embodies the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, conditions and understandings, and
may be amended only by an instrument executed in writing by an authorized
officer of the party against whom such amendment is sought to be enforced.

         6.8      Survival. All agreements, representations and warranties
contained herein or made in writing by or on behalf of the ColorTyme or RAC in
connection with the transactions contemplated hereby shall survive the execution
and delivery of this Agreement, and any investigation at any time made by
Lender, and the delivery of any documents to Lender pursuant to this Agreement
and payment of the obligations of ColorTyme hereunder and any sale or assignment
or other disposition by Lender of this Agreement, the Receivables or any other

                                     - 14 -
<PAGE>

documents delivered to Lender pursuant to this Agreement. All statements
contained in any certificate or other instrument delivered by or on behalf of
the ColorTyme or RAC pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed representations and warranties by such
parties hereunder.

         6.9      Binding Effect; No Third Party Beneficiaries. This Agreement
shall inure to the benefit of, and the obligations created hereby shall be
binding upon, the parties and their permitted successors and assigns. This
Agreement is solely for the benefit of the parties hereto (and their successors
and permitted assigns); nothing herein shall be construed to give any other
person any right or claim with respect to this Agreement.

         6.10     Assignment; Participations. Neither ColorTyme nor RAC may
assign any of their rights or obligations under this Agreement without the prior
written consent of Lender. Lender may at any time assign or sell this Agreement,
or any rights hereunder or interest herein, and the Receivables, without the
consent of ColorTyme or RAC; provided, that in the event Lender assigns or sells
all or substantially all of Lender's rights in this Agreement and the
Receivables, Lender (or its assignee or transferee) shall send, within at most
thirty (30) days after such assignment or sale, written notice to ColorTyme and
RAC of such assignment or sale (such notice is herein referred to as "Lender's
Assignment Notice"). After receipt of the Lender's Assignment Notice, ColorTyme
and RAC shall have the right, upon ninety (90) days' prior written notice to
Lender's assignee or transferee, to terminate this Agreement and arrange for the
payment in full of all Receivables (such notice is herein referred to as
"ColorTyme's Termination Notice" and the date specified in such notice for
termination and payment in full of all Receivables is herein referred to as the
"Early Termination Date"). Notwithstanding ColorTyme's Termination Notice and
termination of this Agreement, all rights of Lender (and its assignee or
transferee) and all duties and obligations of ColorTyme and RAC under this
Agreement with respect to outstanding Receivables and all advances made to
Franchisees pursuant to Lines of Credit prior to such termination shall continue
until all such Receivables are fully paid in accordance with their terms and all
such Lines of Credit are terminated. After receipt of ColorTyme's Termination
Notice, Lender, its assignee or transferee, may notify any or all Franchisees
obligated on outstanding Receivables that no advances will be made and all Lines
of Credit shall be terminated on the Early Termination Date, and Lender, its
assignee or transferee, shall have no obligation to make any advances to any
Franchisee from and after the Early Termination Date; provided however, so long
as no event of default has occurred and is continuing under the Receivables of
any Franchisee, Lender's assignee or transferee, as the case may be, shall
continue to make advances available under the applicable Line of Credit and/or
Term Loans to such Franchisee in accordance with such Franchisee's applicable
credit agreement and other credit documentation at all times prior to the Early
Termination Date. Lender may at any time sell to one or more persons
participating interests in any Receivables and this Agreement without the prior
consent of ColorTyme or RAC.

         6.11     Audit. Lender shall have the right to inspect the books and
records of ColorTyme relating to Franchisees that are obligated to Lender under
Receivables, including the obligations of such Franchisees to ColorTyme. Lender
shall keep the information obtained from such books and records confidential;
nothing herein, however, shall limit (a) Lender's rights to use such information
in administering the Receivables or in enforcing its rights under the
Receivables or under this Agreement, or (b) Lender's rights to use such
information in connection with any

                                     - 15 -
<PAGE>

prospective sale or assignment of any or all of the Receivables or this
Agreement, or any interest therein or herein, provided the prospective
purchaser, assignee or participant enters into a written agreement to maintain
the confidentiality of such information.

         6.12     Term; Termination. This Agreement shall be effective on and as
of the date of its execution, and shall continue in effect until September 30,
2006; provided, that in the event the Senior Credit Agreement is modified and
such modification changes the definition of Consolidated Leverage Ratio or
Consolidated Fixed Charge Coverage Ratio in a manner that is not acceptable to
Lender, in its sole discretion, then Lender may terminate this Agreement by
sending to ColorTyme and RAC at least one hundred twenty days' prior written
notice. Notwithstanding the termination of this Agreement, all rights of Lender
and all duties and obligations of ColorTyme and RAC under this Agreement with
respect to outstanding Receivables and additional advances made to Franchisees
pursuant to Lines of Credit shall continue until all such Receivables are fully
paid in accordance with their terms and all such Lines of Credit are terminated.

         6.13     Construction. Each of the parties to this Agreement
acknowledges that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and all the other
documents and instruments executed in connection herewith with its respective
legal counsel and that this Agreement and all other documents and instruments
executed in connection herewith shall be construed as if jointly drafted by all
the parties hereto.

         6.14     Amendment and Restatement. This Agreement amends and restates
in its entirety the Original Agreement. The terms and provisions of the Original
Agreement are hereby superseded by this Agreement. This Agreement is given in
substitution for the Original Agreement. Each reference to the Original
Agreement in any other document, instrument or agreement executed and/or
delivered in connection therewith shall mean and be a reference to this
Agreement. This Agreement amends, restates and supersedes only the Original
Agreement. This Agreement is not a novation. Nothing contained herein, unless
expressly herein to the contrary, is intended to amend, modify or otherwise
affect any other instrument, document or agreement executed and/or delivered in
connection with the Original Agreement. This Agreement shall govern the rights
and obligations of the parties hereto with respect to all existing Receivables
arising out of the Original Agreement, as well as all future Receivables. All
obligations of ColorTyme under the Original Agreement and all obligations of RAC
under the Original Agreement shall hereafter be deemed obligations of such
parties under this Agreement.

         6.15     GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

         6.16     Acknowledgments by ColorTyme and RAC. Each of ColorTyme and
RAC acknowledges, represents, warrants and agrees that (a) as of the date hereof
and after giving effect to this Agreement, no Event of Default or condition, or
event which would with notice or the lapse of time, or both, result in an Event
of Default, has occurred and is continuing, and it is not aware of the
occurrence or continuance of any default with respect to the Original Agreement
on the date hereof, (b) it does not have any grounds and hereby agrees not to
challenge (or to allege or to pursue any matter, cause or claim arising under or
with respect to the Original

                                     - 16 -
<PAGE>

Agreement or any of the existing Receivables, the existing Recourse Amount or
the existing Obligations or the status of any thereof as legal, valid and
binding obligations enforceable in accordance with their respective terms; and,
to the best of its knowledge, it does not possess (and hereby forever waives,
remises, releases, discharges and holds harmless the Lender, and its parents,
subsidiaries, affiliates, stockholders, directors, officers, employees,
attorneys, agents and representatives and each of their respective heirs,
executors, administrators, successors and assigns (collectively, the "Lender
Parties") from and against, and agree not to allege or pursue) any action, cause
of action, suit, debt, claim, counterclaim, cross-claim, demand, defense,
offset, opposition, demand and other right of action whatsoever, whether in law,
equity or otherwise (which it, all those claiming by, through or under it, or
its successors or assigns, have or may have) against the Lender Parties, or any
of them, prior to or as of the date of this Agreement for, upon, or by reason
of, any matter, cause or thing whatsoever, arising out of, or relating to, the
Original Agreement, the existing Receivables, the Recourse Amount, the
Obligations or any other document, instrument or agreement relating to any of
the foregoing (including, without limitation, any payment, performance, validity
or enforceability of any or all of the indebtedness, covenants, promises,
agreements, provisions, rights, remedies, obligations, duties and liabilities
thereunder) or any transaction relating to any of the foregoing, or any or all
actions, courses of conduct or other matters in any manner whatsoever relating
to or otherwise connected with any of the foregoing, provided, that the
foregoing agreement shall not affect any action, cause of action, suit, debt,
claim, counterclaim, cross-claim, demand, defense, offset, opposition, demand or
other right of action whatsoever, whether in law, equity or otherwise that
ColorTyme or RAC may have with respect to TFC, provided, further, that none of
the foregoing rights with respect to TFC shall offset or be the basis of a
counterclaim or otherwise affect the obligations of ColorTyme or RAC under this
Agreement, and (c) it is obligated to pay to Lender on the effective date of
this Agreement a fee in the amount set forth in a fee letter agreement between
Lender, ColorTyme and RAC.

         6.17     Receivables Purchase Obligation. In connection with the
assignment by TFC to Lender of TFC's interest in the Original Agreement, and in
accordance with Section 1.3(b) hereof, ColorTyme and RAC agree to use
commercially reasonable efforts in assisting Lender in obtaining from each
Franchisee executed amendments and restatements or modifications of each loan
document evidencing each Receivable transferred by TFC to Lender (each, a
"Receivable Modification"), the form of such Receivable Modification to be in
form and substance reasonably acceptable to each of ColorTyme and Lender.

         IN WITNESS WHEREOF, the parties have executed this Agreement on this
1st day of October, 2003.

                                           COLORTYME, INC.
                                           5700 Tennyson Parkway, Suite 180
                                           Plano, Texas 75024

                                           By: /s/ Steve Arendt
                                               ----------------------------
                                           Title: President and Chief
                                                  Executive Officer

                                     - 17 -
<PAGE>

                                           RENT-A-CENTER EAST, INC.
                                           5700 Tennyson Parkway, 3rd Floor
                                           Plano, Texas 75024

                                           By: /s/ Mitchell E. Fadel
                                              ----------------------------------
                                           Title: Vice President

                                           WELLS FARGO FOOTHILL, INC.
                                           2450 Colorado Avenue, Suite 3000 West
                                           Santa Monica, California 90404

                                           By: /s/ David B. Fricke
                                              ----------------------------------
                                           Title: Vice President

                                     - 18 -
<PAGE>

                                    EXHIBIT A

                             COMPLIANCE CERTIFICATE

This Compliance Certificate is executed and delivered to Wells Fargo Foothill,
Inc. ("Lender") by Rent-A-Center East, Inc. ("RAC") and ColorTyme, Inc.
("ColorTyme") this ____ day of ____________, 20___, pursuant to Section ___ of
that certain Amended and Restated Franchisee Financing Agreement (the
"Franchisee Financing Agreement") dated September ____, 2003 among Lender,
ColorTyme and RAC. All capitalized terms used but not defined herein shall have
the meanings assigned to such terms in the Franchisee Financing Agreement. The
undersigned hereby certify to Lender as follows:

1.       The undersigned are the duly elected, qualified and acting ____________
         of ColorTyme and ____________ of RAC, and as such officers, are
         authorized to make and deliver this Compliance Certificate.

2.       The undersigned have reviewed the provisions of the Franchisee
         Financing Agreement and confirm that, as of the date hereof:

         a.       The representations and warranties contained in the Franchisee
                  Financing Agreement are true and correct in all material
                  respects on and as of the date hereof with the same force and
                  effect as though made on the date hereof;

         b.       ColorTyme and RAC have complied with all the terms, covenants
                  and conditions set forth in the Franchisee Financing
                  Agreement;

         c.       No Event of Default, and no event that with notice or the
                  passage of time or both will constitute an Event of Default,
                  has occurred and is continuing; and

         d.       Attached hereto as Schedule A is a report prepared by the
                  undersigned setting forth information and calculations that
                  demonstrate compliance (or noncompliance) with each of the
                  covenants set forth in Section 2.2 of the Franchisee Financing
                  Agreement.

The foregoing certificate is given in our respective capacities as officers of
ColorTyme and RAC, and not in our individual capacities.

COLORTYME, INC.                                       RENT-A-CENTER EAST, INC.

By:___________________________                        By:_______________________
Name:_________________________                        Name:_____________________
Its:__________________________                        Its:______________________

<PAGE>

                                   SCHEDULE A
                                       TO
                             COMPLIANCE CERTIFICATE

Consolidated Leverage Ratio

         ColorTyme and RAC shall not permit the Consolidated Leverage Ratio, as
of the last day of any period of four (4) consecutive fiscal quarters of
Rent-A-Center, Inc., to exceed 2.75 to 1.00.

Covenant Satisfied:        __________________________
Covenant Not Satisfied:    __________________________

Consolidated Fixed Charge Coverage Ratio

         ColorTyme and RAC shall not permit the Consolidated Fixed Charge
         Coverage Ratio, for any period of four (4) consecutive fiscal quarters
         of Rent-A-Center, Inc., to be less than the ratio of 1.50 to 1.00.

Covenant Satisfied:     _______________
Covenant Not Satisfied: _______________<PAGE>
                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT

            THIS AGREEMENT is entered into as of September 15, 2003, by and
between THE SPORTSMAN'S GUIDE, INC., a Minnesota corporation ("Borrower"), and
WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

                                    RECITALS

            Borrower has requested that Bank extend or continue credit to
Borrower as described below, and Bank has agreed to provide such credit to
Borrower on the terms and conditions contained herein.

            NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as
follows:

                                    ARTICLE I
                                  CREDIT TERMS

         SECTION 1.1. LINE OF CREDIT.

         (a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including September 30, 2005, not to exceed at any time the aggregate
principal amount of Fifteen Million Dollars ($15,000,000.00) ("Line of Credit"),
the proceeds of which shall be used for working capital and to allow for letters
of credit. Borrower's obligation to repay advances under the Line of Credit
shall be evidenced by a promissory note substantially in the form of Exhibit A
attached hereto ("Line of Credit Note"), all terms of which are incorporated
herein by this reference.

         (b)      Limitation on Borrowings. At any time when outstanding
                  borrowings under the Line of Credit exceed $10,000,000.00, and
                  Borrower's ratio of Total Liabilities to Tangible Net Worth
                  under Section 4.9 is greater than 2.50 to 1.0, and Borrower's
                  Current Ratio under Section 4.9 is less than 1.20 to 1., the
                  outstanding borrowings under the Line of Credit, to a maximum
                  of the principal amount set forth above, shall not at any time
                  exceed an aggregate of Seventy-Five percent (75%) of
                  Borrower's Eligible Accounts Receivable (as hereinafter
                  defined), plus Fifty percent (50%) of the value of Borrower's
                  Eligible Inventory (as hereinafter defined). All of the
                  foregoing shall be determined by Bank in its reasonable
                  discretion upon receipt and review of all collateral reports
                  required hereunder and such other documents and collateral
                  information as Bank may from time to time reasonably require.
                  Borrower acknowledges that said borrowing base was established
                  by Bank with the understanding that, among other items, the
                  aggregate of all returns, rebates, discounts, credits and
                  allowances for the current quarter shall at all times be less
                  than ten percent (10%) of Borrower's gross sales for the
                  current quarter. If such dilution of Borrower's accounts for
                  the immediately preceding three (3) months at any time exceeds
                  ten percent (10%) of Borrower's gross sales for said period,
                  or if there at any time exists any other matters, events,
                  conditions or contingencies which Bank reasonably believes

                                       1
<PAGE>

                  may affect payment of any portion of Borrower's accounts,
                  Bank, in its sole discretion, may reduce the foregoing advance
                  rate against eligible accounts receivable to a percentage
                  appropriate to reflect such additional dilution and/or
                  establish additional reserves against Borrower's eligible
                  accounts receivable.

         As used herein, "Eligible Accounts Receivable" shall consist solely of
trade accounts created in the ordinary course of Borrower's business, upon which
Borrower's right to receive payment is absolute and not contingent upon the
fulfillment of any condition whatsoever, and in which Bank has a perfected
security interest of first priority, and shall not include:

                  (i) any account which is past due more than twice Borrower's
         standard selling terms;

                  (ii) that portion of any account for which there exists any
         right of setoff, defense or discount (except regular discounts allowed
         in the ordinary course of business to promote prompt payment) or for
         which any defense or counterclaim has been asserted;

                  (iii) any account which represents an obligation of any state
         or municipal government or of the United States government or any
         political subdivision thereof (except accounts which represent
         obligations of the United States government and for which the
         assignment provisions of the Federal Assignment of Claims Act, as
         amended or recodified from time to time, have been complied with to
         Bank's reasonable satisfaction);

                  (iv) any account which represents an obligation of an account
         debtor located in a foreign country unless such accounts are backed by
         a bank letter of credit naming Bank as beneficiary or assigned to Bank
         with respect to which a assignment agreement concerning the
         letter-of-credit rights is in effect, and acceptable to Bank in its
         reasonable discretion or are covered by a foreign receivables insurance
         policy acceptable to Bank in its reasonable discretion;

                  (v) any account which arises from the sale or lease to or
         performance of services for, or represents an obligation of, an
         employee, affiliate, partner, parent or subsidiary of Borrower;

                  (vi) that portion of any account, which represents interim or
         progress billings or retention rights on the part of the account
         debtor;

                  (vii) any account which represents an obligation of any
         account debtor when twenty percent (20%) or more of Borrower's accounts
         from such account debtor are not eligible pursuant to (i) above;

                  (viii) that portion of any account from an account debtor
         which represents the amount by which Borrower's total accounts from
         said account debtor exceeds twenty-five percent (25%) of Borrower's
         total accounts;

                  (ix) any account deemed ineligible by Bank when Bank, in its
         reasonable discretion, deems the creditworthiness or financial
         condition of the account debtor, or the industry in which the account
         debtor is engaged, to be unsatisfactory.

                                        2

<PAGE>

         As used herein, the term "Eligible Inventory" shall mean all of
         Borrower's Inventory valued at cost, as reduced by an Eligible
         Inventory Reserve. "Eligible Inventory Reserve" means the sum of: (A)
         for inventory that has been held for one year or more but less than two
         years, 25% of cost for such inventory; plus (B) for inventory that has
         been held for two years or more, 50% of the cost of such Inventory;
         plus (C) for The Sportsman's Guide Outlet, Inc., the greater of five
         percent of its inventory or the actual "shrink reserve" for The
         Sportsman's Guide Outlet, Inc. The parties expressly acknowledge and
         agree that Eligible Inventory shall include any inventory acquired with
         the support of a letter of credit, whether or not such inventory is in
         transit.

         (c) Letter of Credit Subfeature. As a subfeature under the Line of
Credit, Bank agrees from time to time during the term thereof to issue or cause
an affiliate to issue letters of credit for the account of Borrower (each, a
"Letter of Credit" and collectively, "Letters of Credit"); provided however,
that the aggregate undrawn amount of all outstanding Letters of Credit shall not
at any time exceed Ten Million Dollars ($10,000,000.00). The form and substance
of each Letter of Credit shall be subject to approval by Bank, in its sole
discretion. No Letter of Credit shall have an expiration date subsequent to the
maturity date of the Line of Credit. The undrawn amount of all Letters of Credit
shall be reserved under the Line of Credit and shall not be available for
borrowings thereunder. Each Letter of Credit shall be subject to the additional
terms and conditions of the Letter of Credit agreements, applications and any
related documents required by Bank in connection with the issuance thereof. Each
drawing paid under a Letter of Credit shall be deemed an advance under the Line
of Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that
if advances under the Line of Credit are not available, for any reason, at the
time any drawing is paid, then Borrower shall immediately pay to Bank the full
amount drawn, together with interest thereon from the date such drawing is paid
to the date such amount is fully repaid by Borrower, at the rate of interest
applicable to advances under the Line of Credit.

         (d) Borrowing and Repayment. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.

         SECTION 1.2. INTEREST/FEES.

         (a) Interest. The outstanding principal balance of each credit subject
hereto shall bear interest, and the amount of each drawing paid under each
Letter of Credit paid to the date such amount is fully repaid by Borrower, at
the rate of interest set forth in each promissory note or other instrument or
document executed in connection therewith.

         (b) Computation and Payment. Interest shall be computed on the basis of
a 360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.

         (c) Commitment Fee. Borrower shall pay to Bank an annual non-refundable
commitment fee for the Line of Credit equal to ($18,750.00), which fee shall be
waived for the first year and then shall be due and payable annually in advance,
commencing August 31, 2004.

                                       3

<PAGE>

         (d) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to
(.250%) per annum (computed on the basis of a 360-day year, actual days elapsed)
on the average daily unused amount of the Line of Credit, which fee shall be
calculated on a quarterly basis by Bank and shall be due and payable by Borrower
in arrears within ten (10) days after each billing is sent by Bank. Such fee is
waived for the first two months and shall commence for the period beginning
November 15, 2003.

         (e) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the
issuance of each Letter of Credit equal to (1.25%) per annum (computed on the
basis of a 360-day year, actual days elapsed) of the face amount thereof, and
(ii) fees upon the payment or negotiation of each drawing under any Letter of
Credit and fees upon the occurrence of any other activity with respect to any
Letter of Credit (including without limitation, the transfer, amendment or
cancellation of any Letter of Credit) determined in accordance with Bank's
standard fees and charges then in effect for such activity.

         (f) Termination Fee. If the Line of Credit is terminated prior to
September 30, 2005 (other than through a refinancing with an affiliate of the
Bank), a termination fee starting at 2% of the maximum amount of the Line of
Credit, and declining by 1% after each 12-month anniversary, will be payable to
the Bank. The Bank hereby expressly acknowledges and agrees that any and all
termination fees that may have been payable under the Amended and Restated
Agreement dated as of September 5, 2002 by and between Borrower, Wells Fargo
Bank Minnesota, N.A. and The Sportsman's Guide Outlet, Inc. are hereby waived
and of no further force and effect.

         SECTION 1.3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to
collect all principal, interest, letter of credit reimbursements and fees due
under each credit subject hereto by charging Borrower's deposit account number
6355031049 with Bank, or any other deposit account maintained by Borrower with
Bank, for the full amount thereof. Should there be insufficient funds in any
such deposit account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by Borrower.

         SECTION 1.4. COLLATERAL.

         As security for all indebtedness of Borrower to Bank subject hereto,
Borrower hereby grants to Bank security interests of first priority in all
Borrower's accounts receivable and other rights to payment, general intangibles,
inventory and equipment.

All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance reasonably satisfactory
to Bank. Borrower shall reimburse Bank immediately upon demand for all
reasonable costs and expenses incurred by Bank in connection with any of the
foregoing security, including without limitation, filing and recording fees and
costs of appraisals, audits and title insurance.

         SECTION 1.5. BANKING RELATIONSHIP. The Borrower's primary operating
accounts shall be maintained at the Bank or one of its affiliates.

                                       4
<PAGE>

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

         Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to Bank
subject to this Agreement.

         SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized
and existing and in good standing under the laws of the State of Minnesota, and
is qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
would have a material adverse effect on Borrower.

         SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower, enforceable in accordance
with their respective terms.

         SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of Borrower, or result in any breach of or default under any contract,
obligation, indenture or other instrument to which Borrower is a party or by
which Borrower may be bound.

         SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.

         SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial
statement of Borrower dated December 31, 2002, a true copy of which has been
delivered by Borrower to Bank prior to the date hereof, (a) is complete and
correct in all material respects and presents fairly the financial condition of
Borrower, (b) discloses all liabilities of Borrower that are required to be
reflected or reserved against under generally accepted accounting principles,
whether liquidated or unliquidated, fixed or contingent, and (c) has been
prepared in accordance with generally accepted accounting principles
consistently applied. Since the date of such financial statement there has been
no material adverse change in the financial condition of Borrower, nor has
Borrower mortgaged, pledged, granted a security interest in or otherwise
encumbered any of its assets or properties except in favor of Bank or as
otherwise permitted by Bank in writing.

         SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any
pending assessments or adjustments of its income tax payable with respect to any
year.

         SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower is a party or by which Borrower may be
bound that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.

         SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all

                                       5
<PAGE>

trademarks, trade names, patents, and fictitious names, if any, necessary to
enable it to conduct the business in which it is now engaged in compliance with
applicable law where the failure to do so would have a material adverse effect
on Borrower.

         SECTION 2.9. ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

         SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.

                                  ARTICLE III
                                   CONDITIONS

         SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation
of Bank to extend any credit contemplated by this Agreement is subject to the
fulfillment to Bank's reasonable satisfaction of all of the following
conditions:

         (a) Approval of Bank Counsel. All legal matters incidental to the
extension of credit by Bank shall be satisfactory to Bank's counsel.

         (b) Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:

         (i) This Agreement and each promissory note or other instrument or
         document required hereby.

         (ii) Certificate of Incumbency.

         (iii) Corporate Resolution: Borrowing.

         (iv) Security Agreement

         (v) UCC Financing Statement.

         (vi) Such other documents as Bank may reasonably require under any
         other Section of this Agreement.

         (c) Financial Condition. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower.

         (d) Insurance. Borrower shall have delivered to Bank evidence of
insurance coverage on all Borrower's property, in form, substance, amounts,
covering risks and issued by companies reasonably satisfactory to Bank, and
where required by Bank, with loss payable endorsements in favor of Bank.

                                       6
<PAGE>

         SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's reasonable satisfaction of each of the
following conditions:

         (a) Compliance. The representations and warranties contained herein and
in each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.

         (b) Documentation. Bank shall have received all additional documents
which may be required in connection with such extension of credit.

                                   ARTICLE IV
                              AFFIRMATIVE COVENANTS

         Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:

         SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein, and immediately upon demand by Bank,
the amount by which the outstanding principal balance of any credit subject
hereto at any time exceeds any limitation on borrowings applicable thereto.

         SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative of Bank, at any reasonable time, to inspect, audit
and examine such books and records, to make copies of the same, and to inspect
the properties of Borrower.

         SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the
following, in form and detail reasonably satisfactory to Bank:

         (a) not later than 120 days after and as of the end of each fiscal
year, an audited financial statement of Borrower, prepared by Certified Public
Accountant, to include balance sheet, income statement, statement of cash flow
and management's discussion and analysis;

         (b) not later than 45 days after and as of the end of each quarter, a
financial statement of Borrower, prepared by Borrower, to include balance sheet
and income statement;

         (c) not later than 45 days after and as of the end of each month in
which the maximum outstanding amount under the Line of Credit exceed
$10,000,00.00, a borrowing base certificate and an inventory collateral report;

                                       7
<PAGE>

         (d) contemporaneously with each annual and quarterly financial
statement of Borrower required hereby, a certificate of the president or chief
financial officer of Borrower that said financial statements are accurate in all
material respects and that there exists no Event of Default nor any condition,
act or event which with the giving of notice or the passage of time or both
would constitute an Event of Default;

         (e) An annual collateral audit will be required if average outstandings
under the line exceeds $10,000,000.00 for a 90 day period during each calendar
year. Borrower will be responsible for reimbursing the Bank for the cost of such
collateral audit;

         (f) from time to time such other information as Bank may reasonably
request.

         SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business, the
non-compliance with which would materially and adversely affect its business or
its financial condition.

         SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the
types and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts reasonably satisfactory to Bank,
and deliver to Bank from time to time at Bank's reasonable request schedules
setting forth all insurance then in effect.

         SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained; provided, however, that
nothing in this Section 4.6 shall prevent Borrower from discontinuing the
operation and maintenance of any of its properties if such discontinuance is, in
its judgment, desirable in the ordinary course of its business.

            SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation federal and state income taxes and state
and local property taxes and assessments, except such (a) as Borrower may in
good faith contest or as to which a bona fide dispute may arise, and (b) for
which Borrower has made provision, to Bank's satisfaction, for eventual payment
thereof in the event Borrower is obligated to make such payment.

         SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
material litigation pending or threatened against Borrower.

         SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows using generally accepted accounting principles consistently
applied and used consistently with prior practices (except to the extent
modified by the definitions herein):

         (a) Current Ratio not at any time less than 1.0 to 1.0, with "Current
Ratio" defined as total current assets divided by total current liabilities.

                                       8
<PAGE>

         (b) Tangible Net Worth not at any time less than $15,000,000.00 as of
August 31, 2003, with such amount to increase by 50% of Borrower's positive net
income for each quarter thereafter, with "Tangible Net Worth" defined as the
aggregate of total stockholders' equity plus subordinated debt less any
intangible assets. The parties expressly acknowledge and agree that prepaid
expenses, including, without limitation, prepaid advertising, shall not be
deemed to be intangible assets.

         (c) Total Liabilities divided by Tangible Net Worth not at any time
greater than 3.50 to 1.0, with "Total Liabilities" defined as the aggregate of
current liabilities and non-current liabilities less subordinated debt, and with
"Tangible Net Worth" as defined above.

         (d) Positive net income as of each June 30, and annual net income after
taxes not less than $1,000,000.00, determined as of each fiscal year end. In the
event Borrower completes an acquisition of another business prior to June 30,
2004, the June 30, 2004 profitability requirement shall be changed to a net loss
not to exceed $500,000.00.

         SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice
to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or
any condition, event or act which with the giving of notice or the passage of
time or both would constitute an Event of Default; (b) any change in the name or
the organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower's property.

                                    ARTICLE V
                               NEGATIVE COVENANTS

         Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:

         SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit
extended hereunder except for the purposes stated in Article I hereof.

         SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in
fixed assets in excess of $1,500,000 in any fiscal year without the prior
written consent of Bank, which consent shall not be unreasonably withheld.

         SECTION 5.3. LEASE EXPENDITURES. Incur operating lease expense in any
fiscal year in excess of $350,000 beyond what has currently been disclosed to
the Bank without the prior written consent of Bank, which consent shall not be
unreasonably withheld.

         SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to
exist any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the

                                       9
<PAGE>

liabilities of Borrower to Bank, and (b) any other liabilities of Borrower
existing as of, and disclosed to Bank prior to, the date hereof; provided,
however that Borrower shall be permitted to grant purchase money security
interests relating to the acquisition of machinery and equipment to the extent
permitted under Section 5.2 above.

         SECTION 5.5. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity for a purchase price in
excess of One Million Dollars; nor sell, lease, transfer or otherwise dispose of
all or a substantial or material portion of Borrower's assets except in the
ordinary course of its business.

         SECTION 5.6. GUARANTIES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments for deposit
or collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except any of the
foregoing in favor of Bank.

         SECTION 5.7. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances
to or investments in any person or entity outside the ordinary course of
business, except any of the foregoing existing as of, and disclosed to Bank
prior to, the date hereof.

         SECTION 5.8. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution either in cash, stock or any other property on Borrower's stock now
or hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire
any shares of any class of Borrower's stock now or hereafter outstanding without
the prior written consent of Bank. Notwithstanding the foregoing, Bank hereby
expressly acknowledges and agrees that Borrower shall be permitted to continue
to repurchase up to 10% of its common stock through May 31, 2004.

         SECTION 5.9. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, all or any portion of Borrower's
assets now owned or hereafter acquired, except any of the foregoing in favor of
Bank or which is existing as of, and disclosed to Bank in writing prior to, the
date hereof and except for purchase money security interests relating to the
acquisition of machinery and equipment to the extent permitted under Section 5.2
above.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

         SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:

         (a) Borrower shall fail to pay when due any principal, interest, fees
or other amounts payable under any of the Loan Documents.

         (b) Any financial statement or certificate furnished to Bank in
connection with, or any representation or warranty made by Borrower or any other
party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.

                                       10
<PAGE>

         (c) Any default in the performance of or compliance with any
obligation, agreement or other provision contained herein or in any other Loan
Document (other than those referred to in subsections (a) and (b) above), and
with respect to any such default which by its nature can be cured, such default
shall continue for a period of twenty (20) days from its occurrence or the
applicable cure period, whichever is longer.

         (d) Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which Borrower has incurred any debt
or other liability to any person or entity, including Bank, which default
continues beyond any applicable cure period.

         (e) The filing of a notice of judgment lien against Borrower; or the
recording of any abstract of judgment against Borrower in any county in which
Borrower has an interest in real property; or the service of a notice of levy
and/or of a writ of attachment or execution, or other like process, against the
assets of Borrower; or the entry of a judgment against Borrower, where the
amount of such lien, levy or writ is in excess of $50,000.

         (f) Borrower shall become insolvent, or shall suffer or consent to or
apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its debts as they
become due, or shall make a general assignment for the benefit of creditors;
Borrower shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower and such proceeding or petition continues undischarged, undismissed or
unstayed for a period of 60 consecutive days, or Borrower shall file an answer
admitting the jurisdiction of the court and the material allegations of any
involuntary petition; or Borrower shall be adjudicated a bankrupt, or an order
for relief shall be entered against Borrower by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors.

         (g) The dissolution or liquidation of Borrower; or Borrower, or any of
its directors, shall take action seeking to effect the dissolution or
liquidation of Borrower.

         SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all indebtedness of Borrower under each of the Loan Documents, any term thereof
to the contrary notwithstanding, shall at Bank's option and without notice
become immediately due and payable without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights,
powers and remedies of Bank may be exercised at any time by Bank and from time
to time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.

                                       11
<PAGE>
                                   ARTICLE VII
                                  MISCELLANEOUS

            SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank
in exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.

            SECTION 7.2. NOTICES. All notices, requests and demands which any
party is required or may desire to give to any other party under any provision
of this Agreement must be in writing delivered to each party at the following
address:

            BORROWER: THE SPORTSMAN'S GUIDE, INC.
            411 Farwell Avenue
            South St. Paul, Minnesota 55075

            BANK: WELLS FARGO BANK, NATIONAL ASSOCIATION
            430 North Wabasha Street, Suite 302
            St. Paul, Minnesota 55101

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

            SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay
to Bank immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys' fees (to include
outside counsel fees and all allocated costs of Bank's in-house counsel),
expended or incurred by Bank in connection with (a) the negotiation and
preparation of this Agreement and the other Loan Documents, Bank's continued
administration hereof and thereof, and the preparation of any amendments and
waivers hereto and thereto, (b) the enforcement of Bank's rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents, and (c) the prosecution or defense of any action in any way related
to any of the Loan Documents, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower.

            SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of, or any interest in, Bank's rights

                                       12
<PAGE>

and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any credit subject hereto, Borrower or its business, or any
collateral required hereunder.

         SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

         SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action-
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.

         SECTION 7.7. TIME. Time is of the essence of each and every provision
of this Agreement and each other of the Loan Documents.

         SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.

         SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which when taken together shall constitute one and the
same Agreement.

         SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.

         SECTION 7.11. ARBITRATION.

(a) Arbitration. The parties hereto agree, upon demand by any party, to submit
to binding arbitration all claims, disputes and controversies between or among
them (and their respective employees, officers, directors, attorneys, and other
agents), whether in tort, contract or otherwise arising out of or relating to in
any way (i) the loan and related Loan Documents which are the subject of this
Agreement and its negotiation, execution, collateralization, administration,
repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination; or (ii) requests for additional credit.

(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location
in Minnesota selected by the American Arbitration Association ("AAA"); (ii) be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA's optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the

                                       13
<PAGE>

"Rules"). If there is any inconsistency between the terms hereof and the Rules,
the terms and procedures set forth herein shall control. Any party who fails or
refuses to submit to arbitration following a demand by any other party shall
bear all costs and expenses incurred by such other party in compelling
arbitration of any dispute. Nothing contained herein shall be deemed to be a
waiver by any party that is a bank of the protections afforded to it under 12
U.S.C. Section 91 or any similar applicable state law.

         (c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

         (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000.00 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000.00. Any dispute in which the amount in
controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel
of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Minnesota or a neutral retired judge of the
state or federal judiciary of Minnesota, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Minnesota and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Minnesota Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

         (e) Discovery. In any arbitration proceeding discovery will be
permitted in accordance with the Rules. All discovery shall be expressly limited
to matters directly relevant to the dispute being arbitrated and must be
completed no later than 20 days before the hearing date and within 180 days of
the filing of the dispute with the AAA. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.

         (f) Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration

                                       14
<PAGE>

proceeding and such dispute shall not be consolidated with other disputes or
included in any class proceeding.

         (g) Payment Of Arbitration Costs And Fees. The arbitrator shall award
all costs and expenses of the arbitration proceeding.

(h) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators
and the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the dispute with the AAA. No
arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first written above.

                                             WELLS FARGO BANK,
THE SPORTSMAN'S GUIDE, INC.                      NATIONAL ASSOCIATION

By: /s/ Charles Lingen                       By: /s/ Thomas Skalitzky
    ---------------------------                  -------------------------------
    Charles Lingen,                              Thomas Skalitzky,
    Chief Financial Officer                      Relationship Manager

                                       15
<PAGE>
                          REVOLVING LINE OF CREDIT NOTE

$15,000,000.00                                               St. Paul, Minnesota
                                                              September 15, 2003

            FOR VALUE RECEIVED, the undersigned THE SPORTSMAN'S GUIDE, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at 430 North Wabasha Street, Suite 302, St.
Paul Minnesota 55101, or at such other place as the holder hereof may designate,
in lawful money of the United States of America and in immediately available
funds, the principal sum of Fifteen Million Dollars ($15,000,000.00), or so much
thereof as may be advanced and be outstanding, with interest thereon, to be
computed on each advance from the date of its disbursement as set forth herein.

DEFINITIONS:

            As used herein, the following terms shall have the meanings set
forth after each, and any other term defined in this Note shall have the meaning
set forth at the place defined:

            (a) "Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in Minnesota are authorized or required by
law to close.

            (b) "Fixed Rate Term" means a period commencing on a Business Day
and continuing for 1 months, as designated by Borrower, during which all or a
portion of the outstanding principal balance of this Note bears interest
determined in relation to LIBOR; provided however, that no Fixed Rate Term may
be selected for a principal amount less than One Hundred Thousand Dollars
($100,000.00); and provided further, that no Fixed Rate Term shall extend beyond
the scheduled maturity date hereof. If any Fixed Rate Term would end on a day,
which is not a Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.

         (c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) and determined pursuant to the following formula:

                   LIBOR =                   Base LIBOR
                          ---------------------------------------------------
                                  100% - LIBOR Reserve Percentage

            (i) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

<PAGE>

            (ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.

            (d) "Prime Rate" means at any time the rate of interest most
recently announced within Bank at its principal office as its Prime Rate, with
the understanding that the Prime Rate is one of Bank's base rates and serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

INTEREST:

            (a) Interest. The outstanding principal balance of this Note shall
bear interest (computed on the basis of a 360-day year, actual days elapsed)
either (i) at a fluctuating rate per annum based on the Prime Rate in effect
from time to time, or (ii) at a fixed rate per annum determined by Bank based on
LIBOR in effect on the first day of the applicable Fixed Rate Term, as set forth
in the Addendum to this Note. When interest is determined in relation to the
Prime Rate, each change in the rate of interest hereunder shall become effective
on the date each Prime Rate change is announced within Bank. With respect to
each LIBOR selection hereunder, Bank is hereby authorized to note the date,
principal amount, interest rate and Fixed Rate Term applicable thereto and any
payments made thereon on Bank's books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.

            (b) Selection of Interest Rate Options. At any time any portion of
this Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone (or such other electronic
method as Bank may permit) so long as, with respect to each LIBOR selection, (A)
if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than three (3) Business Days after such notice is given, and (B) such
notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate
Term, or at a later time during any Business Day if Bank, at it's sole option
but without obligation to do so, accepts Borrower's notice and quotes a fixed
rate to Borrower. If Borrower does not immediately accept a fixed rate when
quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request
from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or
the principal amount to which such Fixed Rate Term applied.

            (c) Taxes and Regulatory Costs. Borrower shall pay to Bank
immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (i)

<PAGE>

withholdings, interest equalization taxes, stamp taxes or other taxes (except
income and franchise taxes) imposed by any domestic or foreign governmental
authority and related in any manner to LIBOR, and (ii) future, supplemental,
emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements or
costs imposed by any domestic or foreign governmental authority or resulting
from compliance by Bank with any request or directive (whether or not having the
force of law) from any central bank or other governmental authority and related
in any manner to LIBOR to the extent they are not included in the calculation of
LIBOR. In determining which of the foregoing are attributable to any LIBOR
option available to Borrower hereunder, any reasonable allocation made by Bank
among its operations shall be conclusive and binding upon Borrower.

         (d) Payment of Interest. Interest accrued on this Note shall be payable
on the last day of each month, commencing September 30, 2003.

         (e) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.

BORROWING AND REPAYMENT:

            (a) Borrowing and Repayment. Borrower may from time to time during
the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with or
governing this Note; provided however, that the total outstanding borrowings
under this Note shall not at any time exceed the principal amount stated above.
The unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for any Borrower, which balance may be endorsed
hereon from time to time by the holder. The outstanding principal balance of
this Note shall be due and payable in full on September 30, 2005.

            (b) Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or written
request of (i) Charles Lingen or Tom Glowaski, any one acting alone, who are
authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at
the office designated above, or (ii) any person, with respect to advances
deposited to the credit of any deposit account of any Borrower, which advances,
when so deposited, shall be conclusively presumed to have been made to or for
the benefit of each Borrower regardless of the fact that persons other than
those authorized to request advances may have authority to draw against such
account. The holder shall have no obligation to determine whether any person
requesting an advance is or has been authorized by any Borrower.

            (c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

<PAGE>

PREPAYMENT:

         (a) Prime Rate. Borrower may prepay principal on any portion of this
Note, which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.

         (b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of One Hundred Thousand Dollars ($100,000.00); provided however,
that if the outstanding principal balance of such portion of this Note is less
than said amount, the minimum prepayment amount shall be the entire outstanding
principal balance thereof. In consideration of Bank providing this prepayment
option to Borrower, or if any such portion of this Note shall become due and
payable at any time prior to the last day of the Fixed Rate Term applicable
thereto by acceleration or otherwise, Borrower shall pay to Bank immediately
upon demand a fee which is the sum of the discounted monthly differences for
each month from the month of prepayment through the month in which such Fixed
Rate Term matures, calculated as follows for each such month:

         (i) Determine the amount of interest, which would have accrued each
month on the amount prepaid at the interest rate applicable to such amount, had
it remained outstanding until the last day of the Fixed Rate Term applicable
thereto.

         (ii) Subtract from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the amount prepaid for
the remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.

         (iii) If the result obtained in (ii) for any month is greater than
zero, discount that difference by LIBOR used in (ii) above.

Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum (2.00%) above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.

EVENTS OF DEFAULT:

            This Note is made pursuant to and is subject to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of September 15, 2003, as amended from time to time (the "Credit Agreement").
Any default in the payment or performance of any obligation under this Note, or
any defined event of default under the Credit Agreement, shall constitute an
"Event of Default" under this Note.

<PAGE>

MISCELLANEOUS:

            (a) Remedies. Upon the occurrence of any Event of Default, the
holder of this Note, at the holder's option, may declare all sums of principal
and interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel), expended
or incurred by the holder in connection with the enforcement of the holder's
rights and/or the collection of any amounts which become due to the holder under
this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.

         (b) Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.

         (c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Minnesota.

         (d) Usury Exemption. The extension of credit evidenced by this Note,
and the rate of interest applicable hereto, shall be governed by Section 334.01,
Subdivision 2 of the Minnesota Statutes.

            IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.

The Sportsman's Guide, Inc.

By: /s/ Charles Lingen
    ---------------------------------------
    Charles Lingen, Chief Financial Officer

tb1542y2

<PAGE>
                          ADDENDUM TO PROMISSORY NOTE
                        (PRIME/LIBOR PRICING ADJUSTMENTS)

         THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by THE SPORTSMAN'S GUIDE, INC. ("Borrower") and payable to WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of August 29,
2003, in the principal amount of Fifteen Million Dollars ($15,000,000.00) (the
"Note").

         The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:

INTEREST RATE ADJUSTMENTS:

         (a) Initial Interest Rates. The initial interest rates applicable to
this Note shall be the rates set forth in the "Interest" paragraph herein.

         (b) Interest Rate Adjustments. In addition to any interest rate
adjustments resulting from changes in the Prime Rate, Bank shall adjust the
Prime Rate and LIBOR margins used to determine the rates of interest applicable
to this Note on a quarterly basis, commencing with Borrower's fiscal quarter
ending September 30, 2003, if required to reflect a change in Borrower's ratio
of Total Liabilities to Tangible Net Worth or Current Ratio (as defined in the
Credit Agreement referenced herein and with the resulting margin to be the
larger applicable margin determined by such ratios), in accordance with the
following grid:

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
     Total Liabilities to                                         Applicable Prime             Applicable LIBOR
      Tangible Net Worth               Current Ratio                 Rate Margin                  Rate Margin

------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                             <C>                          <C>                          <C>
less than 2.00                  1.40 or more                           -0.50%                       +2.15%
------------------------------- ---------------------------- ---------------------------- ----------------------------
at least 2.00 but               at least 1.30 but                      -0.25%                       +2.40%
less than 2.25                  less than 1.40
------------------------------- ---------------------------- ---------------------------- ----------------------------
at least 2.25 but               at least 1.20 but                      -0.00%                       +2.65%
less than 2.50                  less than 1.30
------------------------------- ---------------------------- ---------------------------- ----------------------------
at least 2.50 but               at least 1.10 but                      +0.25%                       +2.90%
less than 2.75                  less than 1.20
------------------------------- ---------------------------- ---------------------------- ----------------------------
at least 2.75 but               at least 1.00 but                      +0.50%                       +3.15%
less than 3.00                  less than 1.10
------------------------------- ---------------------------- ---------------------------- ----------------------------
at least 3.00 but               at least 1.00 but                      +0.625%                      +3.275%
less than 3.25                  less than 1.10
------------------------------- ---------------------------- ---------------------------- ----------------------------
3.25 or more                    at least 1.00 but                      +0.75%                       +3.40%
                                less than 1.10
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

Each such adjustment shall be effective on the first Business Day of Borrower's
fiscal quarter following the quarter during which Bank receives and reviews
Borrower's most current fiscal quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.

                                      -1-

<PAGE>

         IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.

THE SPORTSMAN'S GUIDE, INC.

By: /s/ Charles Lingen
    ---------------------------------------
    Charles Lingen, Chief Financial Officer

                                      -2-

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