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                                                                  Execution Copy

                                                                     EXHIBIT 2.8

                          AGREEMENT AND PLAN OF MERGER
                               AND REORGANIZATION

                                  BY AND AMONG

                              RENT-A-CENTER, INC.,

                                  RAC RR, INC.

                                       AND

                                 RENT RITE, INC.
                         d/b/a RENT RITE RENTAL PURCHASE

                           DATED AS OF APRIL 27, 2004



                                Table of Contents



                                                                                                                Page
                                                                                                                ----
                                                                                                          
ARTICLE I         DESCRIPTION OF TRANSACTION......................................................................1
   Section 1.1    Merger of the Company into Merger Sub...........................................................1
   Section 1.2    Effect of the Merger............................................................................1
   Section 1.3    Closing; Effective Time.........................................................................1
   Section 1.4    Certificate of Incorporation and Bylaws; Directors and Officers.................................2
   Section 1.5    Noncompetition and Nonsolicitation Agreements...................................................2
   Section 1.6    Voting Agreement................................................................................2
   Section 1.7    Tax Consequences................................................................................2
   Section 1.8    Further Action..................................................................................2

ARTICLE II        CANCELLATION AND CONVERSION OF SHARES; MERGER CONSIDERATION.....................................2
   Section 2.1    Cancellation and Conversion of Shares; Merger Consideration.....................................2
   Section 2.2    No Fractional Shares............................................................................3
   Section 2.3    Company Stock Options...........................................................................3
   Section 2.4    Reduction in Merger Consideration...............................................................4
   Section 2.5    Holdback........................................................................................5
   Section 2.6    Exchange of Certificates........................................................................5

ARTICLE III       POST CLOSING AUDIT AND ADJUSTMENT...............................................................7
   Section 3.1    Adjustment Amount Calculation...................................................................7
   Section 3.2    Adjustment Amount Payment.......................................................................8
   Section 3.3    Shareholders' Representative....................................................................8
   Section 3.4    Transitional Personnel..........................................................................8

ARTICLE IV        REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................9
   Section 4.1    Organization and Good Standing..................................................................9
   Section 4.2    Authority; No Conflict..........................................................................9
   Section 4.3    Capitalization.................................................................................10
   Section 4.4    No Subscription Receivables....................................................................11
   Section 4.5    Financial Statements...........................................................................11
   Section 4.6    No Undisclosed Liabilities.....................................................................12
   Section 4.7    Property; Sufficiency of Assets................................................................12
   Section 4.8    Intellectual Property..........................................................................13
   Section 4.9    Rental Merchandise.............................................................................13
   Section 4.10   Motor Vehicles and Equipment...................................................................13
   Section 4.11   Product Warranties.............................................................................13
   Section 4.12   Material Contracts; No Defaults; Rental Purchase Agreements....................................13
   Section 4.13   Major Suppliers................................................................................14
   Section 4.14   Insurance......................................................................................14
   Section 4.15   Taxes..........................................................................................15
   Section 4.16   Employee Benefits..............................................................................17
   Section 4.17   Labor Matters..................................................................................20
   Section 4.18   Compliance With Applicable Legal Requirements; Litigation......................................20
   Section 4.19   Inappropriate Payments.........................................................................21
   Section 4.20   Environmental Matters..........................................................................21
   Section 4.21   Absence of Certain Changes and Events..........................................................21
   Section 4.22   Average Monthly Recurring Revenue-Three Months.................................................23
   Section 4.23   Monthly Revenue-One Month......................................................................23
   Section 4.24   Net Book Value of Inventory....................................................................23
   Section 4.25   No Franchises..................................................................................23
   Section 4.26   Interests of Officers, Directors and Affiliates................................................23
   Section 4.27   Brokers........................................................................................23
   Section 4.28   Amended and Restated Stock Option Plan.........................................................23
   Section 4.29   Liens..........................................................................................23
   Section 4.30   Full Disclosure................................................................................23


                                       i


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                                                                                                               Page
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ARTICLE V         REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB........................................24
   Section 5.1    Organization and Good Standing.................................................................24
   Section 5.2    Authority; No Conflict.........................................................................24
   Section 5.3    Brokers........................................................................................25
   Section 5.4    Financial Capability...........................................................................25
   Section 5.5    Financial Statements and Reports...............................................................25
   Section 5.6    SEC Reports....................................................................................25

ARTICLE VI        CERTAIN PRE-CLOSING COVENANTS..................................................................26
   Section 6.1    Access and Investigation; Confidentiality......................................................26
   Section 6.2    Operation of the Company's Business............................................................26
   Section 6.3    No Solicitation................................................................................30
   Section 6.4    Company Shareholders' Meeting..................................................................31
   Section 6.5    Regulatory Approvals...........................................................................32
   Section 6.6    Public Announcements...........................................................................32
   Section 6.7    Resignation of Officers and Directors..........................................................32
   Section 6.8    Investor and Option Questionnaires and Consents................................................32
   Section 6.9    Outstanding Options and Rights.................................................................33
   Section 6.10   No Buy-Back Obligations........................................................................33
   Section 6.11   Release of Liens...............................................................................33
   Section 6.12   Adoption of Stay Bonus Plan....................................................................33
   Section 6.13   Termination of Shareholders Agreement..........................................................33
   Section 6.14   Good Standing..................................................................................33

ARTICLE VII       ADDITIONAL COVENANTS...........................................................................33
   Section 7.1    Repayment of Liabilities.......................................................................33
   Section 7.2    Employee Benefits..............................................................................33
   Section 7.3    Indemnification of Officers and Directors......................................................33

ARTICLE VIII      CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY..............................................34
   Section 8.1    Shareholder Approval...........................................................................34
   Section 8.2    No Injunctions or Restraints...................................................................34

ARTICLE IX        CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB...................................35
   Section 9.1    Accuracy of Representations and Warranties.....................................................35
   Section 9.2    Performance of Covenants.......................................................................35
   Section 9.3    Consents.......................................................................................35
   Section 9.4    Closing Three Month Recurring Revenue Target...................................................35
   Section 9.5    Closing Month Revenue Target...................................................................35
   Section 9.6    Closing Inventory..............................................................................35
   Section 9.7    No Material Adverse Change.....................................................................35
   Section 9.8    Agreements and Documents.......................................................................35
   Section 9.9    Outstanding Options and Rights.................................................................36
   Section 9.10   Employees......................................................................................36
   Section 9.11   No Dissenting Shares...........................................................................36
   Section 9.12   Voting Agreement...............................................................................36

ARTICLE X         CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY..............................................36
   Section 10.1   Accuracy of Representations....................................................................36
   Section 10.2   Performance of Covenants.......................................................................36
   Section 10.3   No Material Adverse Change.....................................................................36
   Section 10.4   Documents......................................................................................36

ARTICLE XI        POST-CLOSING MATTERS...........................................................................37
   Section 11.1   Survival of Representations and Warranties.....................................................37
   Section 11.2   Indemnification................................................................................37


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   Section 11.3   Holdback Amount; Set-Off.......................................................................39
   Section 11.4   Severance Payments.............................................................................40
   Section 11.5   Registration Statement.........................................................................40
   Section 11.6   Tax Returns....................................................................................41
   Section 11.7   Assistance and Cooperation.....................................................................41
   Section 11.8   Payment of Account Receivables and Other Items.................................................41

ARTICLE XII       TERMINATION....................................................................................42
   Section 12.1   Termination....................................................................................42
   Section 12.2   Effect of Termination..........................................................................43
   Section 12.3   Termination Fees; Expenses.....................................................................43

ARTICLE XIII      MISCELLANEOUS PROVISIONS.......................................................................44
   Section 13.1   Amendment......................................................................................44
   Section 13.2   Assignments and Successors.....................................................................44
   Section 13.3   No Third Party Rights..........................................................................44
   Section 13.4   Notices........................................................................................44
   Section 13.5   Headings.......................................................................................45
   Section 13.6   Severability...................................................................................45
   Section 13.7   Entire Agreement...............................................................................45
   Section 13.8   Governing Law..................................................................................45
   Section 13.9   No Consequential Damages.......................................................................45
   Section 13.10  Counterparts...................................................................................46
   Section 13.11  Cooperation....................................................................................46
   Section 13.12  Construction; Usage............................................................................46
   Section 13.13  Disclosure Schedules...........................................................................47
   Section 13.14  Failure or Indulgence Not Waiver...............................................................47
   Section 13.15  Enforcement of Agreement.......................................................................47
   Section 13.16  Time of Essence................................................................................47


- ----------------------

APPENDIX A  - Certain Definitions
EXHIBIT A - Form of Voting Agreement
EXHIBIT B - Form of Stay Bonus Plan
EXHIBIT C - Form of Investor Questionnaire and Consent
EXHIBIT D - Form of Option Questionnaire and Consent
EXHIBIT E - Form of Legal Opinion - Counsel to Company
EXHIBIT F - Form of Legal Opinion - Counsel to Parent and Merger Sub

                                      iii


                 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

         THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this "AGREEMENT")
is made and entered into as of April 27, 2004, by and among Rent-A-Center, Inc.,
a Delaware corporation ("PARENT"), RAC RR, Inc., a Delaware corporation and an
indirect wholly owned subsidiary of Parent ("MERGER SUB"), and Rent Rite, Inc.
d/b/a Rent Rite Rental Purchase, a Tennessee corporation (the "COMPANY").

                                    RECITALS

         A. Parent, Merger Sub and the Company intend to effect a merger of the
Company with and into Merger Sub in accordance with Title 48 of the Tennessee
Code (the "TENNESSEE CORPORATE STATUTES"), the Delaware General Corporation Law
(the "DGCL") and this Agreement (the "MERGER"). Upon consummation of the Merger,
the separate existence of the Company shall cease.

         B. It is intended that the Merger qualify as a federal income Tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE").

         C. The respective boards of directors of Parent, Merger Sub and the
Company have approved this Agreement and approved the Merger.

         D. Unless the context clearly indicates otherwise, capitalized terms
used in this Agreement are defined in Appendix A to this Agreement, which is
incorporated herein by reference.

                                    AGREEMENT

         In consideration of the foregoing, the representations, warranties and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties to this
Agreement, intending to be legally bound, agree as follows:

                                   ARTICLE I

                           DESCRIPTION OF TRANSACTION

         Section 1.1 Merger of the Company into Merger Sub. Upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time,
the Company shall be merged with and into Merger Sub, and the separate existence
of the Company shall cease. Following the Effective Time, Merger Sub shall
continue as the surviving corporation (the "SURVIVING CORPORATION").

         Section 1.2 Effect of the Merger. The Merger shall have the effects set
forth in this Agreement and in the applicable provisions of the Tennessee
Corporate Statutes and the DGCL.

         Section 1.3 Closing; Effective Time. The consummation of the
transactions contemplated by this Agreement (the "CLOSING") shall take place at
the offices of Winstead Sechrest & Minick P.C., 5400 Renaissance Tower, 1201 Elm
Street, Dallas, Texas 75270, at 10:00 a.m., local time, on a date to be mutually
agreed to by the parties (the "CLOSING DATE"), which shall be no later than the
fifth Business Day after the satisfaction or waiver of the last to be satisfied
or waived of the conditions set forth in ARTICLE VIII, ARTICLE IX, and ARTICLE X
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such conditions). Subject
to the provisions of this Agreement, (i) a certificate of merger (the
"CERTIFICATE OF MERGER") satisfying the applicable requirements of the DGCL; and
(ii) articles of merger ( the "ARTICLES OF MERGER") satisfying the applicable
requirements of the Tennessee Corporate Statutes shall be duly executed by
Merger Sub and/or the Company and, simultaneously with or as soon as practicable
following the Closing, filed with the Secretary of State of Delaware and the
Secretary of State of Tennessee, respectively. The Merger shall become effective
on such date and at such time as specified in each of the Certificate of Merger
and the Articles of Merger, as agreed by the parties hereto (the "EFFECTIVE
TIME").



         Section 1.4 Certificate of Incorporation and Bylaws; Directors and
Officers. At the Effective Time:

                  (a) the Certificate of Incorporation of Merger Sub immediately
         prior to the Effective Time will be the Certificate of Incorporation of
         the Surviving Corporation;

                  (b) the Bylaws of Merger Sub immediately prior to the
         Effective Time will be the Bylaws of the Surviving Corporation; and

                  (c) the directors and officers of Merger Sub immediately prior
         to the Effective Time shall be the directors and officers of the
         Surviving Corporation immediately after the Effective Time.

         Section 1.5 Noncompetition and Nonsolicitation Agreements. Concurrently
with the execution and delivery of this Agreement, Parent, Merger Sub, and the
persons identified in Section 1.5 of the Company Disclosure Schedules shall
execute and deliver Noncompetition and Nonsolicitation Agreements, dated as of
the date hereof and effective as of the Effective Time, in a form reasonably
acceptable to Parent (the "NONCOMPETITION AGREEMENTS"), pursuant to which the
persons listed in Section 1.5 of the Company Disclosure Schedules agree to
refrain from competing or interfering with the business of the Company as
continued by Parent and Merger Sub for the time period specified therein.

         Section 1.6 Voting Agreement. Concurrently with the execution and
delivery of this Agreement, Parent, all of the officers and directors of the
Company, and the persons listed on Section 1.6 of the Company Disclosure
Schedules shall execute and deliver a Voting Agreement, dated as of the date
hereof, in the form attached hereto as Exhibit A (the "VOTING AGREEMENT"),
pursuant to which all of the officers and directors of the Company and the
persons listed in Section 1.6 of the Company Disclosure Schedules agree to vote
the Company Common Stock held by each such Person in favor of the Merger, this
Agreement and the Contemplated Transactions.

         Section 1.7 Tax Consequences. For federal income Tax purposes, the
Merger is intended to constitute a reorganization within the meaning of Section
368 of the Code. The parties to this Agreement hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.

         Section 1.8 Further Action. If, at any time after the Effective Time,
any further action is determined by Parent to be necessary or desirable to carry
out the purposes of this Agreement or to vest the Surviving Corporation with
full right, title and possession of and to all rights and property of Merger Sub
and the Company, the officers and directors of the Surviving Corporation and
Parent shall be fully authorized (in the name of Merger Sub, the Company and
otherwise) to take such action.

                                   ARTICLE II

           CANCELLATION AND CONVERSION OF SHARES; MERGER CONSIDERATION

         Section 2.1 Cancellation and Conversion of Shares; Merger
Consideration. At the Effective Time, by virtue of the Merger and without any
further action on the part of Parent, Merger Sub, the Company or any shareholder
of the Company (each a "SHAREHOLDER" and collectively, the "SHAREHOLDERS"):

                  (a) Cancellation of Company Stock Held by the Company or its
         Subsidiaries. Any shares of Company Common Stock then held by the
         Company or any wholly owned Subsidiary of the Company shall be canceled
         and retired and shall cease to exist, and no consideration shall be
         delivered in exchange therefor.

                  (b) Cancellation of Parent Owned Stock. Any shares of Company
         Common Stock then held by Parent, Merger Sub or any other direct or
         indirect Subsidiary of Parent shall be canceled and retired and shall
         cease to exist, and no consideration shall be delivered in exchange
         therefor.

                  (c) Conversion of Company Common Stock. Except as provided in
         Section 2.1(a) and Section 2.1(b) above and subject to Section 2.2,
         Section 2.4, Section 2.5, and Section 2.6(i), each issued and
         outstanding share of Company Common Stock shall be converted into the
         right to receive a pro rata portion of the Merger Consideration as
         adjusted pursuant to Section 2.3(e).

                                       2


                  (d) Cancellation and Retirement of Company Common Stock. As of
         the Effective Time, all shares of Company Common Stock (other than
         shares to be canceled in accordance with Section 2.1(a) and Section
         2.1(b) above) shall no longer be outstanding and shall automatically be
         canceled and retired and shall cease to exist, and each holder of a
         certificate representing any such shares of Company Common Stock (other
         than Dissenting Shares) shall cease to have any rights with respect
         thereto, except the right to receive the Merger Consideration, as
         adjusted pursuant to Section 2.4 and Section 2.5, without interest,
         upon surrender of such certificate in accordance with Section 2.6.

                  (e) Merger Consideration.

                           (i) Subject to Section 2.4, Section 2.5, and Section
                  2.6(i), the aggregate consideration paid to the Shareholders
                  of the Company in exchange for such Shareholders' Company
                  Common Stock shall be an amount equal to the Enterprise Value,
                  minus the Merger Consideration Reductions (the "MERGER
                  CONSIDERATION"). Subject to Section 2.5, the Merger
                  Consideration shall be paid first in Parent Common Stock (the
                  "STOCK CONSIDERATION") up to an amount ( the "STOCK
                  CONSIDERATION AMOUNT") equal to 50% of the Enterprise Value
                  (not to exceed the Merger Consideration), and the remaining
                  portion of the Merger Consideration, if any, shall be paid in
                  cash (the "CASH CONSIDERATION"). The number of shares of
                  Parent Common Stock included in the Stock Consideration (the
                  "TOTAL PARENT SHARES") shall be the Stock Consideration Amount
                  divided by the average of the last reported sale prices per
                  share of the Parent Common Stock on the Nasdaq National Market
                  for each of the 15 consecutive trading days preceding the date
                  of this Agreement (the "AVERAGE PER SHARE VALUE"); provided,
                  however, that the Total Parent Shares shall not exceed the
                  Stock Consideration Amount divided by $31.00 (the "STOCK
                  CONSIDERATION CAP") and to the extent the Average Per Share
                  Value is less than $31.00 per share of Parent Common Stock,
                  the difference between the Stock Consideration Amount and the
                  product of the Stock Consideration Cap and the Average Per
                  Share Value shall be added to the Cash Consideration. For
                  purposes of this Agreement, "ENTERPRISE VALUE" means 12.75
                  multiplied by the Company's average Monthly Recurring Revenue,
                  calculated for the three full calendar months of January,
                  February and March 2004, so long as the Closing occurs on or
                  before May 7, 2004; provided, however, that if the Closing
                  occurs after May 7, 2004, "ENTERPRISE VALUE" means 12.75
                  multiplied by the Closing Three Month Recurring Revenue.

                           (ii) Notwithstanding Section 2.1(e)(i), for each
                  Shareholder of the Company for which Parent does not receive
                  at least one Business Day prior to the Closing Date an
                  Investor Questionnaire and Consent completed by such
                  Shareholder, and for each Shareholder of the Company for
                  which, upon Parent's review of such Shareholder's completed
                  and executed Investor Questionnaire and Consent, Parent is
                  unable to form a reasonable belief that such Shareholder
                  constitutes an Accredited Investor, Parent shall pay such
                  Shareholder's pro rata portion of the Merger Consideration in
                  cash only and no Stock Consideration shall be issued to such
                  Shareholder.

         Section 2.2 No Fractional Shares. In calculating the Stock
Consideration to which each Shareholder of the Company is entitled to receive
pursuant to Section 2.1(e) above, the shares of Parent Common Stock issuable to
such Shareholder shall be rounded to the next lowest whole number. No fractional
shares of Parent Common Stock shall be issued in connection with the Merger, and
no certificates or scrip for any such fractional shares shall be issued.

         Section 2.3 Company Stock Options. At the Effective Time, each of the
Company Stock Options listed in Section 4.3 of the Company Disclosure Schedules
held by a Person who Parent reasonably believes to be an Accredited Investor and
for which Parent received a completed and executed Option Questionnaire and
Consent shall be assumed by Parent on the terms set forth herein and converted
automatically into an option to purchase shares of Parent Common Stock (each, a
"CONVERTED OPTION") in an amount and at an exercise price determined as provided
below:

                  (a) The number of shares of Parent Common Stock to which a
         Converted Option shall be entitled to purchase shall be equal to the
         number of shares of Company Common Stock to which such Converted Option
         would be entitled to purchase as of the date of this Agreement under
         the original Company Stock Option, as set forth in Section 4.3 of the
         Company Disclosure Schedules; and

                                       3


                  (b) The exercise price per share of Parent Common Stock under
         a Converted Option shall be equal to the (i) Average Per Share Value,
         less (ii) the quotient of the Merger Consideration (assuming, for this
         Section 2.3(b), the General Holdback was paid in full to the
         Shareholders and the Adjustment Holdback was paid in full to Parent)
         divided by the number of shares of Company Common Stock outstanding on
         the Closing Date, plus (iii) the exercise price per share of Company
         Common Stock under the original Company Stock Option immediately prior
         to the Effective Time; provided, however, that such exercise price
         shall be rounded up to the nearest cent.

                  (c) At the Effective Time, Parent shall assume the Stock
         Option Plan in order to effect the provisions of this Section 2.2 and
         shall keep the Stock Option Plan in effect until December 31, 2009 or
         such earlier time as all of the Converted Options are no longer
         exercisable.

                  (d) After the Effective Time, each Converted Option shall be
         exercisable and vested as provided in the original Company Stock Option
         agreement, as amended in accordance with this Agreement. Within 45 days
         after the Closing Date, Parent shall use its commercially reasonable
         efforts to file with the SEC a registration statement to register the
         issuance of the shares of Parent Common Stock issuable upon exercise of
         the Converted Options, and use all reasonable efforts to have such
         registration statement (or a successor or replacement registration
         statement) become effective with respect thereto as promptly as
         practicable thereafter and to remain in effect while any of the
         Converted Options remain exercisable. At or prior to the Effective
         Time, Parent shall take all corporate action necessary to reserve for
         issuance in connection with the exercise of the Converted Options such
         number of shares of Parent Common Stock as shall be required to be
         issued upon exercise.

                  (e) The Option Administration Fee (as defined below) shall be
         borne only by the Shareholders of the Company who also receive
         Converted Options ("CONVERTED OPTION SHAREHOLDERS"). The number of
         shares of Parent Common Stock receivable by a Shareholder of the
         Company pursuant to Section 2.1 shall be adjusted as follows:

                           (i) the number of shares of Parent Common Stock
                  receivable by a Converted Option Shareholder shall be reduced
                  by a number of shares equal to (A) the percentage of the total
                  number of Converted Options which such Converted Option
                  Shareholder shall receive, multiplied by (B) the Option
                  Administration Fee divided by the Average Per Share Value (the
                  "REALLOCATED PARENT SHARES"); and

                           (ii) the number of shares of Parent Common Stock
                  receivable by each Shareholder of the Company (including the
                  Converted Option Shareholders) shall then be increased by
                  their pro rata portion of the Reallocated Parent Shares.

         Section 2.4 Reduction in Merger Consideration. After deducting the
Holdback Amount pursuant to Section 2.5, in calculating the Merger
Consideration, the following shall be subtracted from the Enterprise Value
(each, a "MERGER CONSIDERATION REDUCTION" and together, the "MERGER
CONSIDERATION REDUCTIONS"):

                  (a) with respect to the Company Stock Options, (i) $200,000 to
         cover all reasonable fees, costs and expenses incurred by or on behalf
         of Parent in connection with converting and exchanging the Company
         Stock Options into the Converted Options pursuant to Section 2.3 and
         fulfilling its obligations thereunder (the "OPTION ADMINISTRATION
         FEE"); and (ii) the aggregate in-the-money value for all Converted
         Options;

                  (b) the Severance Payments payable pursuant to Section 11.4;

                  (c) the Existing Liabilities, less cash and specified accounts
         receivable reflected on the Closing Balance Sheet, calculated as set
         forth in Section 2.4(c) of the Parent Disclosure Schedules (the
         "ADJUSTMENT AMOUNT").

                  (d) $100,000 to cover Registration Expenses incurred in
         connection with Parent's obligations under Section 11.5;

                  (e) the insurance premiums paid pursuant to Section 7.3; and

                                       4


                  (f) with respect to the failure to satisfy the condition set
         forth in Section 9.6, the amount equal to $19,500,000 less the Closing
         Inventory; provided, however, that in the event that the Closing
         Inventory shall be equal to or less than $19,000,000 (the "CLOSING
         INVENTORY MINIMUM"), then, at the option of Parent, Parent may
         terminate this Agreement pursuant to Section 12.1(i).

         Section 2.5 Holdback.

                  (a) General Holdback. At the Effective Time, Parent shall
         withhold from the Merger Consideration for payment of claims that may
         be brought pursuant to Section 11.2(b) and Section 11.3, for payment of
         the Company's share of the compensation of certain transitional
         employees of the Company pursuant to Section 3.4, for payment of any
         excess amounts payable by the Surviving Corporation as a result of the
         payments due for Dissenting Shares pursuant to Section 2.6(i), and for
         payment of liabilities, if any, related to the contingent liabilities
         set forth in Section 4.6, Section 4.11, Section 4.12(b), Section 4.17,
         Section 4.18(b), Section 4.18(c), and Section 4.18(d) of the Company
         Disclosure Schedules (the "DISCLOSED CONTINGENT LIABILITIES") for a
         period of 12 months (subject to adjustment with respect to pending
         Claims at the end of such 12-month period as provided in Section 11.2)
         following the Effective Time (the "GENERAL HOLDBACK PERIOD") an amount
         equal to $7,750,000 (the "GENERAL HOLDBACK AMOUNT"), $5,250,000 of
         which will be cash (the "CASH PORTION OF GENERAL HOLDBACK") and
         $2,500,000 of which will be Parent Common Stock (the "STOCK PORTION OF
         GENERAL HOLDBACK"). The number of shares of Parent Common Stock
         included in the Stock Portion of General Holdback shall equal
         $2,500,000 divided by the Average Per Share Value.

                  (b) Adjustment Holdback. At the Effective Time, Parent shall
         withhold from the Merger Consideration for payment of the Adjustment
         Amount, calculated in accordance with Section 2.4(c) of the Parent
         Disclosure Schedules, for a period ending on the second Business Day
         following the final determination of the Adjustment Amount pursuant to
         Section 3.1 (the "ADJUSTMENT HOLDBACK PERIOD") an amount equal to
         $22,000,000, which is an estimated amount necessary to cover any
         Adjustment Amount (the "ADJUSTMENT HOLDBACK AMOUNT," together with the
         General Holdback Amount, the "HOLDBACK AMOUNT").

                  (c) Payment of the Holdback Amount. The Holdback Amount shall
         be paid, distributed or set-off as provided in Section 3.2 and Section
         11.3 of this Agreement.

         Section 2.6 Exchange of Certificates.

                  (a) Exchange Agent. On or prior to the Closing Date, Parent
         shall select a nationally recognized commercial bank to act as exchange
         agent in the Merger (the "EXCHANGE AGENT"). Prior to the Effective
         Time, Parent shall deposit, or cause to be deposited, with the Exchange
         Agent (i) certificates representing the shares of Parent Common Stock
         equal to the Stock Consideration; and (ii) cash equal to the Cash
         Consideration, minus the estimated Merger Consideration Reductions. The
         Merger Consideration deposited with the Exchange Agent is referred to
         as the "EXCHANGE FUND."

                  (b) Exchange Procedures. As soon as reasonably practicable
         after the Effective Time, Parent shall direct the Exchange Agent to
         mail or deliver to record holders of Company Stock Certificates (i) a
         letter of transmittal in customary form and containing such provisions
         as Parent may reasonably specify; and (ii) instructions for use in
         effecting the surrender of the Company Stock Certificates in exchange
         for the Merger Consideration. Upon surrender of a Company Stock
         Certificate to the Exchange Agent for exchange, together with a duly
         executed letter of transmittal and such other documents as may
         reasonably be required by Parent, the Surviving Corporation or the
         Exchange Agent, the holder of such Company Stock Certificate shall be
         entitled to receive in exchange therefor (A) a check or wire transfer
         of immediately available funds representing the amount of Cash
         Consideration that such holder has the right to receive pursuant to the
         provisions of this ARTICLE II; and (B) a certificate representing the
         number of whole shares of Parent Common Stock that such holder has the
         right to receive pursuant to the provisions of this ARTICLE II, and the
         Company Stock Certificate so surrendered shall be canceled. Until
         surrendered as contemplated by this Section 2.6(b), each Company Stock
         Certificate shall be deemed at any time after the Effective Time to
         represent only the right to receive upon such surrender a pro rata
         portion of the Merger Consideration that the holder thereof has the
         right to receive in respect of such Company Stock

                                       5

         Certificate pursuant to the provisions of this ARTICLE II. No interest
         shall be paid or will accrue on any cash payable to holders of Company
         Stock Certificates pursuant to the provisions of this ARTICLE II.

                  (c) No Further Ownership Rights in Company Common Stock. The
         Merger Consideration shall be deemed to have been paid in full
         satisfaction of all rights pertaining to the shares of Company Common
         Stock, theretofore represented by valid certificates representing such
         shares (each, a "COMPANY STOCK CERTIFICATE"), subject, however, to
         Parent's obligation to pay the Merger Consideration and there shall be
         no further registration of transfers on the stock transfer books of the
         Surviving Corporation of the shares of Company Common Stock which were
         outstanding immediately prior to the Effective Time. If, after the
         Effective Time, Company Stock Certificates are presented to Parent or
         the Surviving Corporation or the Exchange Agent for any reason, they
         shall be canceled and exchanged as provided in this ARTICLE II, except
         as otherwise provided by Law.

                  (d) Unregistered Transfers; Lost Certificates. In the event of
         a transfer of ownership of Company Common Stock which is not registered
         in the transfer records of the Company, the proper portion of the
         Merger Consideration may be paid in cash to a Person other than the
         Person in whose name the Company Stock Certificate so surrendered is
         registered if such Company Stock Certificate is properly endorsed or
         otherwise in proper form for transfer and the Person requesting such
         issuance pays any transfer or other Taxes required by reason of the
         payment of the Merger Consideration to a Person other than the
         registered holder of such Company Stock Certificate or establishes to
         the satisfaction of Parent that such Tax has been paid or is not
         applicable. If any Company Stock Certificate shall have been lost,
         stolen or destroyed, upon (i) the making of an affidavit of that fact
         by the Person claiming such Company Stock Certificate to be lost,
         stolen or destroyed; (ii) evidence that such Person is the beneficial
         owner of the Company Stock Certificate claimed by such Person to be
         lost, stolen or destroyed; and (iii) if required by the Surviving
         Corporation, the posting by such Person of a bond in such reasonable
         amount as the Surviving Corporation may direct as indemnity against any
         claim that may be made against it with respect to such Company Stock
         Certificate, the Exchange Agent shall issue in exchange for such lost,
         stolen or destroyed Company Stock Certificate a pro rata portion of the
         Merger Consideration.

                  (e) Investment of Exchange Fund. The Exchange Agent shall
         invest the Exchange Fund, as directed by the Surviving Corporation, and
         any net earnings with respect thereto shall be paid to the Surviving
         Corporation as and when requested by the Surviving Corporation;
         provided, however, that any such investment or any such payment of
         earnings shall not delay the receipt by holders of Company Stock
         Certificates of the Merger Consideration or otherwise impair such
         holders' respective rights hereunder.

                  (f) Termination of Exchange Fund. Any portion of the Exchange
         Fund which remains undistributed (including interest thereon) to the
         holders of Company Stock Certificates as of the one year anniversary of
         the Closing Date shall, to the extent permitted by Law, become the
         property of the Surviving Corporation. Immediately upon the one year
         anniversary of the Closing Date, the Exchange Agent shall deliver any
         remaining portion of the Exchange Fund to the Surviving Corporation as
         designated by the Surviving Corporation. Any holders of Company Common
         Stock who have not theretofore surrendered their Company Stock
         Certificates and otherwise complied with this ARTICLE II shall
         thereafter look only to the Surviving Corporation, and only as a
         general creditor, for payment of their claim for the Merger
         Consideration and any dividends or distributions with respect to Parent
         Common Stock, without interest. If any Company Common Stock shall not
         have been surrendered prior to five years after the Effective Time (or
         immediately prior to such earlier date on which any payment in respect
         thereof would otherwise escheat to or become the property of any
         Governmental Body), the payment in respect of such Company Stock
         Certificates shall, to the extent permitted by applicable Law, become
         the property of the Surviving Corporation, free and clear of all claims
         or interest of any Person previously entitled thereto.

                  (g) Withholding Rights. Each of the Exchange Agent, Parent and
         the Surviving Corporation shall be entitled to deduct and withhold from
         the Merger Consideration payable or otherwise deliverable pursuant to
         this Agreement to any holder or former holder of Company Stock
         Certificates such amounts as may be required to be deducted or withheld
         therefrom under the Code or any provision of state, local or foreign
         Tax Law or under any other applicable Legal Requirement. Any amount
         deducted and withheld shall be paid to the applicable Governmental
         Body. To the extent such amounts are so deducted or withheld, such
         amounts shall be treated for all purposes under this Agreement as
         having been paid to the Person to whom such amounts would otherwise
         have been paid.

                                       6


                  (h) Certain Adjustments. If after the date hereof and on or
         prior to the Effective Time, the outstanding shares of Company Common
         Stock or Parent Common Stock shall be changed into a different number
         of shares by reason of any reclassification, recapitalization,
         split-up, combination or exchange of shares, or any dividend payable in
         stock or other securities shall be declared thereon with a record date
         within such period, or any similar event shall occur, the Merger
         Consideration shall be adjusted accordingly to provide to the holders
         of Company Common Stock the same economic effect as contemplated by
         this Agreement prior to such reclassification, recapitalization,
         split-up, combination, exchange or dividend or similar event.

                  (i) Dissenters' Rights.

                           (i) Notwithstanding any provision of this Agreement
                  to the contrary, any shares of Company Common Stock
                  outstanding immediately prior to the Effective Time and held
                  by Persons who shall have properly demanded payment of the
                  fair cash value of such shares of Company Common Stock in
                  accordance with Chapter 23 of the Tennessee Corporate Statutes
                  (collectively, the "DISSENTING SHARES") shall not be converted
                  into or represent the right to receive the Merger
                  Consideration as provided in Section 2.1(c). Such Persons
                  shall be entitled only to such rights as are granted under
                  Chapter 23 of the Tennessee Corporate Statutes, except that
                  all Dissenting Shares held by Persons who fail to perfect or
                  who effectively withdraw or lose their rights as Dissenting
                  Shareholders in respect of such shares under Chapter 23 of the
                  Tennessee Corporate Statutes shall thereupon be deemed to have
                  been converted into, as of the Effective Time, the right to
                  receive the applicable portion of the Merger Consideration,
                  without interest thereon, upon surrender of the Company Stock
                  Certificate therefor in the manner provided in Section 2.6.

                           (ii) The Company or the Surviving Corporation, as the
                  case may be, shall give Parent (A) prompt written notice of
                  any demands by the holders of Dissenting Shares (the
                  "DISSENTING SHAREHOLDERS") received by the Company or the
                  Surviving Corporation, withdrawals of such demands, any other
                  instruments served on the Company or the Surviving Corporation
                  and any material correspondence received by the Company or the
                  Surviving Corporation in connection with such demands; and (B)
                  the right to direct all negotiations and proceedings with
                  respect to such demands. Neither the Company nor the Surviving
                  Corporation shall, except with the prior written Consent of
                  Parent, make any payment with respect to any demands for
                  appraisal or offer to settle or settle any such demands. Any
                  funds paid to Dissenting Shareholders shall be paid out of the
                  Exchange Fund to the extent such payment is equal to or less
                  than the pro rata portion of the Merger Consideration to which
                  such Person would otherwise be entitled, and, if greater, the
                  excess shall be paid out of the assets of the Surviving
                  Corporation.

                  (j) Dividends and Distributions. No dividends or other
         distributions declared or made with respect to Parent Common Stock with
         a record date after the Effective Time shall be paid to the holder of
         any unsurrendered Common Stock Certificate with respect to the shares
         of Parent Common Stock that such holder has the right to receive in the
         Merger until such holder surrenders such Common Stock Certificate in
         accordance with this Section 2.6 (at which time such holder shall be
         entitled, subject to the effect of applicable escheat or similar Laws,
         to receive all such dividends and distributions, without interest).

                  (k) No Liability. Neither Parent nor the Surviving Corporation
         shall be liable to any holder or former holder of Company Common Stock
         or to any other Person with respect to any shares of Parent Common
         Stock (or dividends or distributions with respect thereto), or for any
         cash amounts, properly delivered to any public official pursuant to any
         applicable abandoned property Law, escheat Law or similar Legal
         Requirement.

                                  ARTICLE III

                        POST CLOSING AUDIT AND ADJUSTMENT

         Section 3.1 Adjustment Amount Calculation. Following the Closing Date,
the Shareholders' Representative and the Surviving Corporation will cause the
Person serving as the Company's Chief Financial Officer immediately prior to the
Closing Date, or a certified public accountant reasonably acceptable to Parent,
to

                                       7


prepare a balance sheet of the Company as of the Closing Date (the "CLOSING
BALANCE SHEET"), and to prepare a computation of the Adjustment Amount as of the
Closing Date. The Shareholders' Representative will deliver the Closing Balance
Sheet to Parent within 45 days after the Closing Date. The Closing Balance Sheet
will be prepared in accordance with GAAP and the Adjustment Amount shall be
calculated in accordance with Section 2.4(c) of the Parent Disclosure Schedules.
If within 15 days following delivery of the Closing Balance Sheet and
calculation of the Adjustment Amount, Parent has not given the Shareholders'
Representative notice of objection to the Closing Balance Sheet and the
Adjustment Amount, then such Adjustment Amount shall be paid as provided in
Section 3.2. If Parent gives such notice of objection, then the parties shall
attempt to resolve the issues raised in the notice among themselves. If they are
unable to reach a resolution within 10 Business Days of such notice, the issues
in dispute will be submitted to KPMG LLP, certified public accountants (the
"ACCOUNTANTS"), for resolution. If issues in dispute are submitted to the
Accountants for resolution, (i) each party will furnish to the Accountants such
workpapers and other documents and information relating to the disputed issues
as the Accountants may request and are available to that party (or its
independent public accountants) and will be afforded the opportunity to present
to the Accountants any material relating to the determination and to discuss the
determination with the Accountants; (ii) the determination by the Accountants,
as set forth in a notice delivered to Parent and the Shareholders'
Representative by the Accountants, will be binding and conclusive on the
parties; and (iii) one-half of the fees of the Accountants for such
determination shall reduce the amount of the Adjustment Amount to be paid to the
Shareholders of the Company, and one-half of the fees shall be paid by Parent.

         Section 3.2 Adjustment Amount Payment. On or before the second Business
Day following the final determination of the Adjustment Amount, if the
Adjustment Amount is less than the amount of the Adjustment Amount Holdback, (i)
Parent will deliver the difference between the Adjustment Amount and the
Adjustment Amount Holdback, as adjusted pursuant to Section 3.1 above, by wire
transfer of immediately available funds to the Designated Account; (ii) Parent
shall be entitled to keep an amount equal to the Adjustment Amount; and (iii)
the Adjustment Holdback Amount will be reduced to zero. On or before the second
Business Day following the final determination of the Adjustment Amount, if the
Adjustment Amount is equal to or greater than the Adjustment Amount Holdback,
(i) the Shareholders shall not be entitled to any portion of the Adjustment
Amount Holdback; (ii) Parent shall be entitled to keep an amount equal to the
Adjustment Amount; and (iii) the Adjustment Amount Holdback shall be reduced to
zero and the General Holdback Amount will be reduced by the amount the
Adjustment Amount exceeds the Adjustment Amount Holdback.

         Section 3.3 Shareholders' Representative. The Shareholders'
Representative shall have the full power and authority to (i) receive any
notices to the Shareholders with respect to any matter arising under this
Agreement; (ii) provide any notice which may be required or allowed on the part
of the Shareholders or the Shareholders' Representative with respect to any
matter arising under this Agreement; (iii) resolve, settle, compromise, or
otherwise deal in any respect with any Claim asserted by or against the
Shareholders, the Company or the Surviving Corporation arising under this
Agreement including, without limitation, any Claim or dispute arising under or
in connection with Section 11.2 and Section 11.3; and (iv) sign any other
agreement, document, closing certificate, or other paper or take any other
action on behalf of the Company or the Shareholders in connection with this
Agreement and the transactions contemplated hereby. Parent, Merger Sub and the
Surviving Corporation shall be entitled to rely upon any action taken or notice
given or received by the Shareholders' Representative in accordance with this
Section 3.3.

         Section 3.4 Transitional Personnel. Upon Closing, the Surviving
Corporation will offer employment to the persons listed in Section 3.4 of the
Company Disclosure Schedules for a period of three weeks following the Closing
Date to assist the Surviving Corporation with various transitional accounting
matters, and to assist the Shareholders' Representative with the preparation of
the Company's closing tax returns and the preparation of the Closing Balance
Sheet. The Surviving Corporation shall pay such employees compensation
commensurate with the compensation such employees received from the Company
immediately prior to the Closing, one-half of which shall reduce the amount of
the General Holdback Amount to be paid to the Shareholders of the Company, and
one-half of which shall be paid by Parent. Upon expiration of the aforementioned
three-week period, such employees shall continue to make themselves available to
the Shareholders' Representative and the Surviving Corporation for a reasonable
period of time and (i) to the extent both the Shareholders' Representative and
the Surviving Corporation continue to require the services of such employees,
one-half of such employees' compensation shall reduce the amount of the General
Holdback Amount to be paid to the Shareholders of the Company, and one-half
shall be paid by Parent; (ii) to the extent the Shareholders' Representative
continues to require the services of such employees but the Surviving
Corporation does not, 100% of the compensation due to such employees shall
reduce the amount of the General Holdback Amount; and (iii) to the extent the
Surviving Corporation continues to require the services of

                                       8


such employees but the Shareholders' Representative does not, 100% of the
compensation due to such employees shall be paid by Parent.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to Parent and Merger Sub as
follows, subject to such exceptions as are specifically contemplated by this
Agreement or as are specifically set forth in the Company Disclosure Schedules:

         Section 4.1 Organization and Good Standing.

                  (a) The Acquired Corporations are corporations duly organized,
         validly existing, and in good standing under the Laws of their
         respective jurisdictions of incorporation, with full corporate power
         and authority to conduct their respective businesses as now being
         conducted, to own or use the respective properties and assets that they
         purport to own or use, and to perform all their respective obligations
         under Acquired Corporation Contracts. Except as set forth in Section
         4.1(b) of the Company Disclosure Schedules, each of the Acquired
         Corporations is duly qualified to do business as a foreign corporation
         and is in good standing under the Laws of each state or other
         jurisdiction in which either the ownership or use of the properties
         owned or used by it, or the nature of the activities conducted by it,
         requires such qualification, except where the failure to be so
         qualified would not reasonably be expected to, individually or in the
         aggregate, result in a Material Adverse Effect on the Acquired
         Corporations.

                  (b) Section 4.1(b) of the Company Disclosure Schedules lists
         all Acquired Corporations and indicates as to each its jurisdiction of
         organization, each jurisdiction in which it is qualified to do
         business, its shareholders, and the number of shares of each class or
         series of capital stock owned by such shareholder. The Company has
         delivered to Parent copies of the charter, certificate or articles of
         incorporation, bylaws and other similar organizational documents
         (collectively, "ORGANIZATIONAL DOCUMENTS") of each of the Acquired
         Corporations, as currently in effect. Neither the Company nor any
         Acquired Corporation is in default under or in violation of any
         provision of their respective Organizational Documents.

         Section 4.2 Authority; No Conflict.

                  (a) The Company has all necessary power and authority to
         execute and deliver this Agreement and the other agreements referred to
         herein to perform its obligations hereunder and thereunder and to
         consummate the Merger and the other transactions contemplated hereby
         and thereby (collectively, the "CONTEMPLATED TRANSACTIONS"). The
         execution and delivery of this Agreement by the Company and the
         consummation by the Company of the Contemplated Transactions have been
         duly and validly authorized by all necessary corporate action and no
         other corporate proceedings on the part of the Company are necessary to
         authorize this Agreement or to consummate the Contemplated Transactions
         (other than, with respect to the Merger, the approval of the Merger,
         this Agreement and the Contemplated Transactions by the holders of a
         majority of the then outstanding shares of Company Common Stock (the
         "REQUIRED COMPANY SHAREHOLDER VOTE") and the filing of appropriate
         merger documents as required by the Tennessee Corporate Statutes. The
         board of directors of the Company has unanimously approved the Merger
         and adopted this Agreement and the Contemplated Transactions and
         resolved to recommend to the Shareholders of the Company that they vote
         in favor of the approval of this Agreement and the consummation of the
         Contemplated Transactions in accordance with the Tennessee Corporate
         Statutes. This Agreement has been duly and validly executed and
         delivered by the Company and constitutes the legal, valid and binding
         obligation of the Company, enforceable against the Company in
         accordance with its terms, subject to bankruptcy, insolvency,
         fraudulent transfer, reorganization, moratorium and similar Laws of
         general applicability relating to or affecting the rights of creditors
         and to general principles of equity.

                  (b) Except as set forth in Section 4.2(b) of the Company
         Disclosure Schedules, neither the execution and delivery of this
         Agreement nor the consummation of any of the Contemplated Transactions
         do or will, directly or indirectly (with or without notice or lapse of
         time or both), (i) contravene, conflict

                                       9


         with, or result in a violation of (A) any provision of the
         Organizational Documents of any of the Acquired Corporations; or (B)
         any resolution adopted by the board of directors or the shareholders of
         any of the Acquired Corporations; (ii) contravene, conflict with, or
         result in a violation of any Legal Requirement or any order to which
         any of the Acquired Corporations, or any of the assets owned or used by
         any of the Acquired Corporations, is subject; (iii) contravene,
         conflict with, or result in a violation of any of the terms or
         requirements of, or give any Governmental Body the right to revoke,
         withdraw, suspend, cancel, terminate, or modify, any Governmental
         Authorization that is held by any of the Acquired Corporations; (iv)
         cause any of the Acquired Corporations to become subject to, or to
         become liable for the payment of, any Tax; (v) to the Knowledge of the
         Company, cause any of the assets owned by any of the Acquired
         Corporations to be reassessed or revalued by any taxing authority or
         other Governmental Body; (vi) contravene, conflict with, or result in a
         violation or breach of any provision of, or give any Person the right
         to declare a default or exercise any remedy under, or to accelerate the
         maturity or performance of, or to cancel, terminate, or modify, any
         Acquired Corporation Contract; or (vii) result in the imposition or
         creation of any Encumbrance upon or with respect to any of the assets
         owned or used by any of the Acquired Corporations, except, in the case
         of clauses (ii), (iii), (v), (vi) and (vii), for any such conflicts,
         violations, breaches, defaults or other occurrences that would not
         prevent or delay consummation of the Merger in any material respect, or
         otherwise prevent the Company from performing its obligations under
         this Agreement in any material respect, or could not reasonably be
         expected to, individually or in the aggregate, result in a Material
         Adverse Effect on the Acquired Corporations taken as a whole.

                  (c) The execution and delivery of this Agreement by the
         Company do not, and the performance of this Agreement and the
         consummation of the Contemplated Transactions by the Company will not,
         require any Consent of, or filing with or notification to, any Person,
         except (i) for (A) applicable requirements, if any, of the Securities
         Act and state securities or "blue sky" Laws ("BLUE SKY LAWS"); (B)
         filing of appropriate merger documents as required by the Tennessee
         Corporate Statutes; (C) the Required Company Shareholder Vote; (ii) as
         set forth in Section 4.2(c) of the Company Disclosure Schedules; and
         (iii) where failure to obtain such Consents, or to make such filings or
         notifications, would not prevent or delay consummation of the Merger in
         any material respect, or otherwise prevent the Company from performing
         its obligations under this Agreement in any material respect, or could
         not reasonably be expected to, individually or in the aggregate, result
         in a Material Adverse Effect on the Acquired Corporations, taken as a
         whole.

         Section 4.3 Capitalization. The authorized capital stock of the Company
consists of 10,000,000 shares of Company Common Stock and 1,000,000 shares of
Company Preferred Stock. As of the date hereof, (a) 2,236,650 shares of Company
Common Stock are issued and outstanding, all of which are duly authorized,
validly issued, fully paid and nonassessable and held by residents of the United
States; (b) 554,101 shares of Company Common Stock are reserved for issuance
upon the exercise of outstanding stock options pursuant to the Company's stock
incentive plans (the "COMPANY STOCK OPTIONS"); and (c) 114,815 shares of Company
Common Stock are reserved for issuance pursuant to the Company Stock Options not
yet granted. No shares of Company Preferred Stock have been issued, and no
shares of the Company Preferred Stock are outstanding. There are not any bonds,
debentures, notes or other indebtedness or securities of the Company having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which Shareholders of the Company may vote.
Except as set forth above, as of the date hereof, no shares of capital stock or
other voting securities of the Company are issued, reserved for issuance or
outstanding and no shares of capital stock or other voting securities of the
Company will be issued or become outstanding after the date hereof other than
upon exercise of the Company Stock Options outstanding as of the date hereof.
Except as set forth in Section 4.3 of the Company Disclosure Schedules, there
are no options, stock appreciation rights, warrants or other rights, contracts,
arrangements or commitments (each, a "RIGHT") to which the Company is a party,
or, to the Company's Knowledge, any of its Shareholders are a party, relating to
the issued or unissued capital stock of any of the Acquired Corporations, or
obligating any of the Acquired Corporations to issue, grant or sell any shares
of capital stock of, or other equity interests in, or securities convertible
into equity interests in, any Acquired Corporation. Section 4.3 of the Company
Disclosure Schedules sets forth the name of each holder of any such Right along
with the name of the Right, the exercise price, the number of shares of Company
Common Stock into which it is convertible or exercisable, the date of grant, its
expiration date, and the name of the Person originally granted such Right, as
applicable. True, correct and complete copies of each agreement evidencing the
Rights listed in Section 4.3 of the Company Disclosure Schedules have been
delivered to Parent or its counsel. Since December 31, 2003, the Company has not
issued or reserved for issuance any shares of its capital stock, except upon the
exercise of the Company Stock Options. All shares of Company Common Stock
subject to issuance as described above will, prior to the Effective Date and
upon

                                       10


issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, be duly authorized, validly issued, fully paid and
nonassessable. As of the Effective Date, the holders of Company Stock Options
will only have the rights as provided in Section 2.3 hereof and will not be
entitled to receive any other securities of the Company or Parent or anything
further in connection with any Company Stock Option. Except as set forth in
Section 4.3 of the Company Disclosure Schedules, none of the Acquired
Corporations has any contract or other obligation to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or any capital stock of any
of the Acquired Corporations, or make any investment (in the form of a loan,
capital contribution or otherwise) in any of the Acquired Corporations or any
other Person. Except as set forth in Section 4.3 of the Company Disclosure
Schedules, each outstanding share of capital stock of each of the Acquired
Corporations is duly authorized, validly issued, fully paid and nonassessable
and each such share owned by any of the Acquired Corporations is free and clear
of all Encumbrances. None of the outstanding equity securities or other
securities of any of the Acquired Corporations was issued in violation of the
Securities Act or any other Legal Requirement. None of the Acquired Corporations
owns, or has any contract or other obligation to acquire, any equity securities
or other securities of any Person (other than Subsidiaries of the Company) or
any direct or indirect equity or ownership interest in any other business. None
of the Acquired Corporations is or has ever been a general partner of any
general or limited partnership.

         Section 4.4 No Subscription Receivables. As of the Closing Date, all
subscription receivables for Company Common Stock shall have been paid in full.

         Section 4.5 Financial Statements.

                  (a) Section 4.5 of the Company Disclosure Schedules sets forth
         true and complete copies of the consolidated audited balance sheet
         (including detailed schedules of all accounts thereon), statements of
         income, changes in shareholders' equity and cash flows for the fiscal
         years ended December 31, 2001, December 31, 2002 and December 31, 2003,
         and the unaudited consolidated balance sheet (including detailed
         schedules of all accounts thereon) and statements of income for the
         three-month period ended March 31, 2004 (collectively, the "COMPANY
         FINANCIAL STATEMENTS"). The Company Financial Statements comply, as of
         their respective dates, in all material respects with applicable
         accounting requirements, have been prepared in accordance with GAAP
         (except, in the case of unaudited statements which are subject to
         normal year end adjustments that are not material and do not contain
         notes required under GAAP) applied on a consistent basis during the
         periods involved (except as may be indicated in the notes thereto) and
         fairly present in all material respects the financial position of the
         Acquired Corporations as of the dates thereof and the consolidated
         statement of income, cash flows and shareholders' equity for the
         periods then ended (subject, in the case of unaudited statements, to
         normal year-end audit adjustments). The Company has no Off-Balance
         Sheet Arrangements.

                  (b) The Company has delivered to Parent profit and loss
         statements for each of the Acquired Corporations' stores reflecting the
         operations of each store for each month from January 31, 2004 through
         March 31, 2004 (each, a "PROFIT AND LOSS STATEMENT" and together, the
         "PROFIT AND LOSS STATEMENTS"). Such Profit and Loss Statements are
         complete and correct in all material respects, represent actual, bona
         fide transactions, have been prepared from and are in accordance with
         the accounting records of each of the Acquired Corporations' stores,
         and present in all material respects the transactions and the
         operations of such stores for the periods referred to in such Profit
         and Loss Statements. The revenues set forth in the Profit and Loss
         Statements represent actual payments received from customers of the
         Acquired Corporations' stores and deposited into bank accounts of such
         stores, are included as so set forth in the consolidated financial
         statements of the Company for the corresponding periods and have been
         reported in a manner consistent with the Company's financial reporting
         accounting principles. The expenses reflected on the Profit and Loss
         Statements are included in the consolidated financial statements of the
         Company for the corresponding periods and are consistent with the
         Company's financial reporting accounting principles, subject to such
         changes due to reclassifications that occur in the Ordinary Course of
         Business and are not material with respect to the operation of the
         Acquired Corporations' stores.

                  (c) There are no significant deficiencies or material
         weaknesses in the Company's internal controls. The Company maintains
         accurate books and records reflecting its consolidated assets and
         liabilities and maintains proper and adequate internal accounting
         controls which provide assurance that (i) transactions are executed
         with management's authorization; (ii) transactions are recorded as
         necessary to permit preparation of the Company Financial Statements and
         to maintain accountability for the Company's

                                       11


         consolidated assets; (iii) access to the Company's consolidated assets
         is permitted only in accordance with management's authorization; (iv)
         the reporting of the Company's consolidated assets is compared with
         existing assets at regular intervals; and (v) accounts and inventory
         are recorded accurately, and proper and adequate procedures are
         implemented to effect the collection thereof on a current and timely
         basis. All financial and operational information submitted by the
         Company to Parent accurately and fairly represent in all material
         respects the financial and operation information they purport to
         represent on and as of the dates for the periods thereof.

         Section 4.6 No Undisclosed Liabilities. Except as set forth in of the
Company Disclosure Schedules, the Acquired Corporations have no liabilities or
obligations of any nature (whether absolute, accrued, contingent, choate or
inchoate or otherwise), except for liabilities or obligations reflected or
reserved against in the Company's balance sheet at March 31, 2004 (the "COMPANY
BALANCE SHEET"), and current liabilities incurred in the Ordinary Course of
Business and not in violation of this Agreement since the date thereof (assuming
for this purpose that this Agreement had been in effect since the date of the
Company Balance Sheet). As of the date of the Company Balance Sheet, the
Company's liabilities or obligations reflected or reserved against in the
Company Balance Sheet totaled $22,314,838. As of the date hereof, the aggregate
outstanding balance on all of the Company's outstanding notes, each of which is
listed in Section 4.6 of the Company Disclosure Schedules, is $18,586,673.

         Section 4.7 Property; Sufficiency of Assets.

                  (a) None of the Acquired Corporations own any real property or
         any interest in real property. Section 4.7(a) of the Company Disclosure
         Schedules contains an accurate and complete list of all the Acquired
         Corporations' real property leases. A true and complete copy of all
         real property leases of the Acquired Corporations have been delivered
         to Parent. With respect to each real property lease of the Acquired
         Corporations, including each store and/or service center lease (each, a
         "LEASE"), (i) each Lease has been validly executed and delivered by the
         appropriate Acquired Corporation and by the other party or parties
         thereto and is a binding agreement; (ii) the Acquired Corporations are
         not, and, to the Company's Knowledge, no other party to the Lease is,
         in material breach or material default, and, no event has occurred on
         the part of the Acquired Corporations or, to the Company's Knowledge,
         on the part of any other party which, with notice or lapse of time,
         would constitute such a breach or default or permit termination,
         modification or acceleration under any Lease; (iii) except as set forth
         on Section 4.7(a) of the Company Disclosure Schedules, each Lease will
         continue to be binding in accordance with its terms following the
         Closing Date; (iv) the Acquired Corporations have not repudiated and,
         to the Company's Knowledge, no other party to any Lease has repudiated
         any provision thereof; (v) there are no material disputes, oral
         agreements or delayed payment programs in effect as to any Lease; and
         (vi) all facilities leased under each Lease are fit for the operation
         of the store and have been reasonably maintained. All heating, cooling,
         lighting, plumbing and electrical systems under each Lease are in
         reasonably good repair and working order.

                  (b) The Acquired Corporations (i) have good and valid title to
         all property used in and material to the business of the Acquired
         Corporations, free and clear of all Encumbrances except (A)
         Encumbrances listed in Section 4.7(b)(i) of the Company Disclosure
         Schedules; (B) statutory Encumbrances securing payments not yet due;
         and (C) such imperfections or irregularities of title or Encumbrances
         as do not affect the use of the properties or assets subject thereto or
         affected thereby or otherwise materially impair business operations at
         such properties, in either case in such a manner as to have a Material
         Adverse Effect on the Acquired Corporations; and (ii) are collectively
         the lessee of all personal property used in and material to the
         business of the Acquired Corporations and are in possession of the
         properties purported to be leased thereunder, and each such lease is
         valid and in full force and effect without default thereunder by the
         Acquired Corporation or, to the Company's Knowledge, the other party
         thereto, other than defaults with respect to leases that are not
         material to the Acquired Corporations or that would not have a Material
         Adverse Effect on the Acquired Corporations.

                  (c) All material items of equipment and other tangible assets
         owned by or leased to the Acquired Corporations are adequate for the
         uses to which they are being put, are in good and safe condition and
         repair (ordinary wear and tear excepted) and are adequate for the
         conduct of the business of the Acquired Corporations in the manner in
         which such business is currently being conducted.

                                       12


         Section 4.8 Intellectual Property. All trademark registrations,
trademark applications, and rights to register domain names of any Acquired
Corporation are set forth in Section 4.8 of the Company Disclosure Schedules.
Except in each case where the failure would not, individually or in the
aggregate, have a Material Adverse Effect on the Acquired Corporations or except
as disclosed in Section 4.8 of the Company Disclosure Schedules, (a) the
Acquired Corporations own all right, title and interest in or have valid and
enforceable rights to use, by license or other agreements, all of the
Intellectual Property that is currently used in the conduct of the business of
the Acquired Corporations, free of all Liens, pledges, charges, options, rights
of first refusal, security interests or other Encumbrances of any kind; (b) no
action, claim, arbitration, proceeding, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or
informal) has commenced, been brought or heard by or before any Governmental
Body or arbitrator or is pending or is threatened in a writing obtained by or
delivered to the Company by any third Person with respect to any Intellectual
Property owned by the Acquired Corporations in connection with the business of
the Acquired Corporations as currently conducted, including any claim or suit
that alleges that any such Intellectual Property infringes, impairs, dilutes or
otherwise violates the rights of others, and the Acquired Corporations are not
subject to any outstanding injunction, judgment, order, decree, ruling, charge,
settlement, or other dispute involving any third party's Intellectual Property;
(c) none of the Acquired Corporations has threatened or initiated any claim or
action against any third party with respect to any Intellectual Property; and
(d) the Acquired Corporations have no Knowledge of any conflict with or
infringements of any Intellectual Property of any third party.

         Section 4.9 Rental Merchandise. All rental merchandise of the Acquired
Corporations was purchased, acquired or ordered in the Ordinary Course of
Business or pursuant to acquisitions and consistent with the regular rental
merchandise practices of the Acquired Corporations. All such rental merchandise,
including, to the Knowledge of the Company, all such rental merchandise
currently out on rent, is of a quality usable and merchantable in the operation
of the business and is in good repair and condition, ordinary wear and tear
excepted, except for obsolete items which have been written off in the Company
Financial Statements or on the accounting records of the Company as of the
Closing Date, as the case may be.

         Section 4.10 Motor Vehicles and Equipment. Except as set forth in
Section 4.10 of the Company Disclosure Schedules, all vehicles and items of
equipment utilized by the Acquired Corporations are (a) mechanically sound and
in a condition to perform in the manner currently conducted by the Acquired
Corporations, ordinary wear and tear excepted; and (b) in material compliance
with all applicable statutes, ordinances and regulations, including without
limitation, those related to safety. Section 4.10 of the Company Disclosure
Schedules lists each motor vehicle lease to which any Acquired Corporation is a
party.

         Section 4.11 Product Warranties. Except as set forth in Section 4.11 of
the Company Disclosure Schedules, none of the Acquired Corporations has given or
made any express warranties to third parties, including without limitation
customers, with respect to any products rented or sold by them, except for the
warranties imposed by the provisions of applicable Law. Except as set forth in
Section 4.11 of the Company Disclosure Schedules, neither the Company nor any
Acquired Corporation has any Knowledge of any fact or event forming the basis of
an actual or threatened claim against the Company or any Acquired Corporation
for product liability on account of any express or implied warranty.

         Section 4.12 Material Contracts; No Defaults; Rental Purchase
Agreements.

                  (a) Section 4.12(a) of the Company Disclosure Schedules lists
         each Material Contract. The Company has delivered to Parent true and
         correct copies of each Material Contract and any other contracts or
         agreements set forth in any section of the Company Disclosure
         Schedules.

                  (b) Except as set forth in Section 4.12(b) of the Company
         Disclosure Schedules: (i) none of the Acquired Corporations has
         violated or breached, or committed any default under, any Acquired
         Corporation Contract, except for violations, breaches and defaults that
         have not had and would not have, individually or in the aggregate, a
         Material Adverse Effect on the Acquired Corporations; and, to the
         Knowledge of the Company, no other Person has violated or breached, or
         committed any default under, any Acquired Corporation Contract, except
         for violations, breaches and defaults that have not had and would not
         have, individually or in the aggregate, a Material Adverse Effect on
         the Acquired Corporations; (ii) to the Knowledge of the Company, no
         event has occurred, and no circumstance or condition exists, that (with
         or without notice or lapse of time) will (A) result in a violation or
         breach of any of the provisions of any Acquired Corporation Contract;
         (B) give any Person the right to declare a default or exercise any
         remedy

                                       13



         under any Acquired Corporation Contract; (C) give any Person the right
         to receive or require a rebate, chargeback, penalty or change in
         delivery schedule under any Acquired Corporation Contract; (D) give any
         Person the right to accelerate the maturity or performance of any
         Acquired Corporation Contract, or (E) give any Person the right to
         cancel, terminate or modify any Acquired Corporation Contract, except
         in each such case for violations, breaches, defaults, acceleration
         rights, termination rights and other rights that have not had and would
         not reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect on the Acquired Corporations; and (iii) none of
         the Acquired Corporations has received any written or, to the Company's
         Knowledge, unwritten notice or other written or, to the Company's
         Knowledge, unwritten communication regarding any actual or possible
         violation or breach of, or default under, any Acquired Corporation
         Contract, except in each such case for defaults, acceleration rights,
         termination rights and other rights that have not had and would not
         reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect on the Acquired Corporations.

                  (c) The Company has delivered to Parent true and correct
         copies of all forms of rental purchase agreements utilized by the
         Acquired Corporations or any of their respective predecessors during
         the previous five years (the "RENTAL PURCHASE AGREEMENTS"). The form of
         each Rental Purchase Agreement utilized by the Acquired Corporations or
         any of their respective predecessors currently and during the previous
         five years is and was, as the case may be, in compliance in all
         material respects with all federal and state Laws. The Rental Purchase
         Agreements were entered into in the Ordinary Course of Business of the
         Acquired Corporations. Except for those matters below which would not,
         individually or in the aggregate, have a Material Adverse Effect on the
         Acquired Corporations, with respect to the Rental Purchase Agreements
         currently utilized by the Acquired Corporations:

                           (i) each Rental Purchase Agreement is in full force
                  and effect and constitutes a valid, legal and binding
                  obligation of the contracting parties, enforceable against the
                  Acquired Corporation and to the Company's Knowledge, the other
                  party thereto, in accordance with its terms;

                           (ii) each of the Acquired Corporations has complied
                  in all material respects with the terms of each Rental
                  Purchase Agreement to which it is a party;

                           (iii) none of the Acquired Corporations is in breach,
                  violation or default under any Rental Purchase Agreement;

                           (iv) no event has occurred which constitutes, or with
                  the lapse of time or the giving of notice, or both would
                  constitute a breach, violation or default under any Rental
                  Purchase Agreement;

                           (v) the enforceability of each Rental Purchase
                  Agreement and the enjoyment of the rights and benefits
                  thereunder will not be affected in any respect by the
                  execution and delivery of this Agreement, the performance by
                  the parties of their obligations hereunder or the consummation
                  of the Contemplated Transactions.

         Section 4.13 Major Suppliers. Section 4.13 of the Company Disclosure
Schedules lists each of the Acquired Corporations' vendors or suppliers, the
dollar value of purchases from each of which constituted greater than 10% of the
Company's revenue for the year ended December 31, 2003 (each, a "MAJOR
SUPPLIER"), and the dollar amount of business done with each Major Supplier in
such period. The Company has furnished Parent with complete and accurate copies
of all current written or summaries of unwritten agreements with such Major
Suppliers. Except as set forth in Section 4.13 of the Company Disclosure
Schedules, (i) no Acquired Corporation has engaged in a material dispute with
any Major Supplier; (ii) there has been no Material Adverse Effect with respect
to the business relationship of any Acquired Corporation and any Major Supplier
since December 31, 2003; and (iii) no Major Supplier has indicated in writing
any material modification or adverse change in the business relationship with
any Acquired Corporation, including but not limited to, a material reduction in
the volume of business transacted by such Major Supplier, as the case may be,
below historical levels.

         Section 4.14 Insurance. The Acquired Corporations are covered by valid
and currently effective insurance policies with reputable insurance carriers
issued in favor of the Company that are customary for companies of similar size
and financial condition including, without limitation, fire and casualty,
general liability,

                                       14


workers compensation and automobile policies. The Company has delivered to
Parent true, correct and complete copies of all such policies and all such
policies are in full force and effect, all premiums due thereon have been paid
and the Acquired Corporations have complied with the provisions of such
policies. The Acquired Corporations have not been advised of any defense to
coverage in connection with any claim to coverage asserted or noticed by the
Acquired Corporations under or in connection with any of their existing
insurance policies. The Acquired Corporations have not received any written
notice from or on behalf of any insurance carrier issuing policies or binders
relating to or covering any of the Acquired Corporations that there will be a
cancellation or non-renewal of existing policies or binders, or that alteration
of any equipment or any improvements to real estate occupied by or leased to or
by the Acquired Corporations, purchase of additional equipment, or material
modification of any of the methods of doing business, will be required.

         Section 4.15 Taxes.

                  (a) Timely Filing of Tax Returns. The Acquired Corporations
         have filed or caused to be filed on a timely basis all material Tax
         Returns that are or were required to be filed by or with respect to any
         of them, either separately or as a member of a group of corporations,
         pursuant to applicable Legal Requirements; provided, however, that any
         and all non-material Tax Returns have been filed on a timely basis
         pursuant to applicable Legal Requirements when the failure to file such
         Tax Returns would have caused a Material Adverse Effect on the Acquired
         Corporations, taken as a whole. All Tax Returns filed by (or that
         include on a consolidated basis) any of the Acquired Corporations were
         (and, as to Tax Returns not filed as of the date hereof, will be) in
         all material respects true, complete and correct and filed on a timely
         basis.

                  (b) Payment of Taxes. The Acquired Corporations have, within
         the time and in the manner prescribed by Law, paid (and until Closing
         will pay within the time and in the manner prescribed by Law) all Taxes
         that are due and payable, unless such Taxes are being disputed in good
         faith as set forth in Section 4.15(b) of the Company Disclosure
         Schedules.

                  (c) Withholding Taxes. Each of the Acquired Corporations has
         complied (and until the Closing will comply) with all applicable Laws,
         rules and regulations relating to the payment and withholding of Taxes
         (including, but not limited to, withholding and reporting requirements
         under the Code or Code Sections 1441 through 1464, 3401 through 3406,
         6041 and 6049 and similar provisions under any other Laws) and have,
         within the times and in the manner prescribed by Law, withheld from
         employee wages and paid over to proper governmental authorities all
         amounts required.

                  (d) Audits. Except as set forth in Section 4.15(d) of the
         Company Disclosure Schedules, no Tax Return of any of the Acquired
         Corporations is under audit or examination by any taxing authority, and
         no written or unwritten notice of such an audit or examination has been
         received by any of the Acquired Corporations and, the Acquired
         Corporations have no Knowledge of any threatened audits, investigations
         or claims for or relating to Taxes, and there are no matters under
         discussion with any taxing authority with respect to Taxes. Except as
         set forth in Section 4.15(d) of the Company Disclosure Schedules, no
         issues relating to Taxes were raised in writing by the relevant taxing
         authority during any presently pending audit or examination, and no
         issues relating to Taxes were raised in writing by the relevant taxing
         authority in any completed audit or examination that can reasonably be
         expected to recur in a later taxable period. Section 4.15(d) of the
         Company Disclosure Schedules lists, and the Company has delivered to
         Parent copies of, all examiner's or auditor's reports, notices of
         proposed adjustments or similar commissions received by any of the
         Acquired Corporations from any taxing authority. Except as set forth
         Section 4.15(d) of the Company Disclosure Schedules, no federal or
         state Tax Returns of the Acquired Corporations have been examined by
         and settled with the Internal Revenue Service or relevant state taxing
         authorities for any year, that is otherwise open under the applicable
         statute of limitations.

                  (e) Tax Reserves. The charges, accruals, and reserves with
         respect to Taxes on the respective books of each of the Acquired
         Corporations are adequate (and until Closing will continue to be
         adequate) to pay all Taxes not yet due and payable and have been
         determined in accordance with GAAP. No differences exist between the
         amounts of the book basis and the Tax basis of assets (net of
         liabilities) that are not accounted for on any accrual on the books of
         the Acquired Corporations for federal income Tax purposes. There exists
         no proposed assessment of Taxes against any of the Acquired
         Corporations except as disclosed in Section 4.15(e) of the Company
         Disclosure Schedules.

                                       15


                  (f) Tax Liens. No Encumbrances for Taxes exist with respect to
         any assets or properties of any of the Acquired Corporations, nor will
         any such Encumbrances exist at Closing except for statutory Liens for
         Taxes not yet due.

                  (g) Tax Sharing Agreements. Section 4.15(g) of the Company
         Disclosure Schedules lists, and the Company has delivered to Parent
         copies of, any Tax sharing agreement, Tax allocation agreement, Tax
         indemnity obligation or similar written or unwritten agreement,
         arrangement, understanding or practice with respect to Taxes (including
         any advance pricing agreement, closing agreement or other agreement
         relating to Taxes with any taxing authority) to which any of the
         Acquired Corporations is a party or by which any of the Acquired
         Corporations is bound. No such agreements shall be modified or
         terminated prior to Closing without the Consent of Parent.

                  (h) Extensions of Time for Filing Tax Returns. Except as set
         forth on Section 4.15(h) of the Company Disclosure Schedules, none of
         the Acquired Corporations has requested any extension of time within
         which to file any Tax Return, which Tax Return has not since been
         filed.

                  (i) Waiver of Statutes of Limitations. None of the Acquired
         Corporations has executed any outstanding waivers or comparable
         Consents regarding the application of the statute of limitations with
         respect to any Taxes or Tax Returns.

                  (j) Powers of Attorney. No power of attorney currently in
         force has been granted by any of the Acquired Corporations concerning
         any Taxes or Tax Return.

                  (k) Tax Rulings. None of the Acquired Corporations has
         received or been the subject of a Tax Ruling or a request for Tax
         Ruling. None of the Acquired Corporations has entered into a Closing
         Agreement with any Governmental Body that would have a continuing
         effect after the Closing Date. "Tax Ruling" shall mean a written ruling
         of a Governmental Body relating to Taxes. "Closing Agreement" shall
         mean a written and legally binding agreement with a Governmental Body
         relating to Taxes.

                  (l) Availability of Tax Returns. Section 4.15(l) of the
         Company Disclosure Schedules lists, and the Company has made available
         to Parent complete and accurate copies of, all Tax Returns, and any
         amendments thereto, filed by or on behalf of, or which include, any of
         the Acquired Corporations, for taxable periods within the past five
         years ending on or prior to the Closing Date.

                  (m) Opinions of Counsel. Section 4.15(m) of the Company
         Disclosure Schedules lists, and Company has provided to Parent true and
         complete copies of, all memoranda and opinions of counsel, whether
         inside or outside counsel, and all memoranda and opinions of
         accountants or other Tax advisors, which have been received by any of
         the Acquired Corporations with respect to Taxes.

                  (n) Section 481 Adjustments. None of the Acquired Corporations
         is required to include in income any adjustment pursuant to Section 481
         of the Code by reason of a voluntary change in accounting method
         initiated by any of the Acquired Corporations, and the Internal Revenue
         Service has not proposed any such change in accounting method.

                  (o) S Corporation. The Company is an S corporation as defined
         in Section 1361 of the Code, and the Company is not subject to the Tax
         on passive income under Section 1375 of the Code nor the Tax on
         built-in gains under Section 1374 of the Code. All of the Subsidiaries
         of the Company are qualified Subchapter S subsidiaries as defined in
         Section 1361(b)(3) of the Code. Section 4.15(o) of the Company
         Disclosure Schedules lists all of the states and localities with
         respect to which the Acquired Corporations are required to file any
         corporate, income or franchise Tax Return and indicates whether the
         Acquired Corporations are treated as the equivalent of an S corporation
         or a qualified Subchapter S subsidiary, as applicable, by or with
         respect to any such state or locality.

                  (p) Real Property Transfer Tax. Except as set forth in Section
         4.15(p) of the Company Disclosure Schedules, none of the Acquired
         Corporations owns any direct or indirect interest in real estate which
         as a result of the Merger or any Contemplated Transaction would be
         subject to any realty transfer Tax or similar Tax.

                                       16


                  (q) Transfer Taxes. The Company shall pay all transfer Taxes
         and other similar Taxes imposed due to the Merger or any Contemplated
         Transaction.

                  (r) Section 6662 Understatement. The Company has disclosed on
         its federal income Tax Returns all positions taken therein that could
         give rise to a substantial understatement of federal income Tax within
         the meaning of Section 6662 of the Code.

                  (s) Affiliated Group. Except as set forth in Section 4.15(s)
         of the Company Disclosure Schedules, none of the Acquired Corporations
         (a) has been a member of an affiliated group within the meaning of
         Section 1504(a) of the Code (or any similar group defined under a
         similar provision of state, local or foreign Law); or (b) has liability
         for Taxes of any other Person under Treasury Regulation Section
         1.1502-6 (or any similar provision of state, local or foreign Law) as a
         transferee or successor by contract or otherwise.

                  (t) Partnerships. Except as set forth in Section 4.15(t) of
         the Company Disclosure Schedules, none of the Acquired Corporations is
         a partner or member of any entity treated as a partnership for federal
         income Tax purposes.

                  (u) Qualification as a Reorganization. None of the Acquired
         Corporations has taken any action, nor is there any fact or
         circumstance applicable to the Acquired Corporations, that could
         reasonably be expected to prevent the Merger from qualifying as a
         reorganization within the meaning of Section 368(a) of the Code.

         Section 4.16 Employee Benefits.

                  (a) Except as set forth in Section 4.16(a) of the Company
         Disclosure Schedules or as required under this Agreement, since
         December 31, 2003, there has not been (i) any adoption or material
         amendment by any of the Acquired Corporations of any collective
         bargaining agreement or any bonus, pension, profit sharing, deferred
         compensation, incentive compensation, stock ownership, stock purchase,
         stock option, phantom stock, stock appreciation right, retirement,
         vacation, severance, disability, death benefit, hospitalization,
         medical, worker's compensation, supplementary unemployment benefits, or
         other plan, arrangement or understanding (whether or not legally
         binding) or any employment agreement providing compensation or benefits
         to any current or former employee, officer, director or independent
         contractor of the Company or any of its Subsidiaries or any beneficiary
         thereof or entered into, maintained or contributed to, as the case may
         be, by any of the Acquired Corporations (collectively, "BENEFIT
         PLANS"), or (ii) any adoption of, or amendment to, or change in
         employee participation or coverage under, any Benefit Plans which would
         increase materially the expense of maintaining such Benefit Plans above
         the level of the expense incurred in respect thereof for the fiscal
         year ended December 31, 2003. Except as expressly contemplated hereby
         or as provided in Section 4.16(a) of the Company Disclosure Schedules,
         neither the execution and delivery of this Agreement nor the
         consummation of the Contemplated Transactions will (either alone or in
         conjunction with any other event) result in, cause the accelerated
         vesting or delivery of, or increase the amount or value of, any payment
         or benefit to any employee of the Acquired Corporations and all Benefit
         Plans permit assumption by Parent upon consummation of the Contemplated
         Transactions without the Consent of any participant. Except as provided
         in Section 4.16(a) of the Company Disclosure Schedule and payable
         pursuant to Section 11.4, the Acquired Corporations have no severance
         arrangements with any officer, director or employee of the Company or
         any other Acquired Corporation.

                  (b) For purposes of this Agreement, the following definitions
         apply: "CONTROLLED GROUP LIABILITY" means any and all liabilities under
         (i) Title IV of ERISA; (ii) Section 302 of ERISA; (iii) Sections 412
         and 4971 of the Code; (iv) the continuation coverage requirements of
         Section 601 et seq. of ERISA and Section 4980B of the Code; and (v)
         corresponding or similar provisions of foreign Laws, other than such
         liabilities that arise solely out of, or relate solely to, the Plans;
         "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended, and the regulations thereunder; "ERISA AFFILIATE" means, with
         respect to any Entity, trade or business, any other Entity, trade or
         business that is a member of a group described in Section 414(b), (c),
         (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the
         first Entity, trade or business, or that is a member of the same
         "controlled group" as the first Entity, trade or business pursuant to
         Section 4001(a)(14) of ERISA.

                                       17


                  (c) Section 4.16(c) of the Company Disclosure Schedules
         includes a complete list of all employee benefit plans, programs,
         policies, practices, and other arrangements providing benefits to any
         current or former employee, officer or director of any of the Acquired
         Corporations or beneficiary or dependent thereof, whether or not
         written, and whether covering one Person or more than one Person,
         sponsored or maintained by any Acquired Corporation or to which any
         Acquired Corporation contributes or is obligated to contribute
         ("PLANS"). Without limiting the generality of the foregoing, the term
         "Plans" includes all employee welfare benefit plans within the meaning
         of Section 3(1) of ERISA, all employee pension benefit plans within the
         meaning of Section 3(2) of ERISA, and all other employee benefit,
         bonus, incentive, deferred compensation, stock purchase, stock option,
         severance, change of control and fringe benefit plans, programs or
         agreements.

                  (d) With respect to each Plan, the Company has delivered to
         Parent a true, correct and complete copy of: (i) each writing
         constituting a part of such Plan, including without limitation all plan
         documents, benefit schedules, trust agreements, and insurance contracts
         and other funding vehicles; (ii) the most recent Annual Report (Form
         5500 Series) and accompanying schedules, if any; (iii) the current
         summary plan description and any material modifications thereto, if
         any; (iv) the most recent annual financial report, if any; (v) the most
         recent actuarial report, if any; and (vi) the most recent determination
         letter from the IRS, if any. Except as specifically provided in the
         foregoing documents delivered to Parent, there are no amendments to any
         Plan or any new Plan that have been adopted or approved nor has the
         Company undertaken to make any such amendments or adopt or approve any
         new Plan.

                  (e) Section 4.16(e) of the Company Disclosure Schedules
         identifies each Plan that is intended to be a "qualified plan" within
         the meaning of Section 401(a) of the Code ("QUALIFIED PLANS"). The
         Internal Revenue Service has issued a favorable determination letter
         with respect to each Qualified Plan that has not been revoked, and, to
         the Knowledge of the Company, there are no existing circumstances nor
         any events that have occurred that could adversely affect the qualified
         status of any Qualified Plan or the related trust.

                  (f) No Plan is intended to meet the requirements of Section
         501(c)(9) of the Code as a "Voluntary Employee Benefits Association."
         No Plan is a "Multiple Employer Welfare Arrangement" as defined in
         Section 3(40) of ERISA.

                  (g) All contributions required to be made to any Plan by
         applicable Law or regulation or by any plan document or other
         contractual undertaking, and all premiums due or payable with respect
         to insurance policies funding any Plan, for any period through the date
         hereof have been timely made or paid in full or, to the extent not
         required to be made or paid on or before the date hereof, have been
         fully reflected on the Company Financial Statements.

                  (h) The Company has complied, and is now in compliance, in all
         material respects with all provisions of ERISA, the Code and all Laws
         and regulations applicable to the Plans (including, without limitation
         (i) with respect to each Plan that is a "group health plan," as defined
         in Section 607(1) of ERISA or Section 5000(b)(1) of the Code (A) the
         provisions of Part 6 and 7 of Title I, Subtitle B of ERISA, Sections
         1171 through 1179 of the Social Security Act (relating generally to
         security and electronic transfer of health information) and Sections
         4980B, 9801 and 9833 of the Code; and (B) the privacy requirements
         described in the regulations issued under sections 262 and 264 of the
         Health Insurance Portability and Accountability Act of 1996; and (ii)
         with respect to each Plan that is a Qualified Plan, the requirements of
         Sections 401(a) and 501(a) of the Code applicable to any such Plan
         maintained by the Company ). There is not now, nor do any circumstances
         exist that could give rise to, any requirement for the posting of
         security with respect to a Plan or the imposition of any Encumbrance on
         the assets of the Company under ERISA or the Code. There is no
         liability with respect to any transaction that relates to a Plan that
         violates Sections 404 or 406 of ERISA or which constitutes a prohibited
         transaction as defined in Section 4975(c)(i) of the Code and for which
         no exemption exists under Section 408 of ERISA or Section 4975(c)(2) of
         the Code.

                  (i) With respect to each Plan that is subject to Title IV or
         Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does
         not exist any accumulated funding deficiency within the meaning of
         Section 412 of the Code or Section 302 of ERISA, whether or not waived;
         (ii) all "required installments" within the meaning of Section 412(m)
         of the Code or Section 302(e) of ERISA have been paid when due; (iii)
         the fair market value of the assets of such Plan equals or exceeds the
         actuarial present value of all

                                       18


         accrued benefits under such Plan (whether or not vested), on a
         termination basis using the interest rate set forth in the Plan or
         otherwise required by ERISA or the Code; (iv) no reportable event
         within the meaning of Section 4043(c) of ERISA has occurred, and the
         consummation of the Contemplated Transactions will not result in the
         occurrence of any such reportable event; (v) no lien under Section
         412(n) of the Code or Sections 302(f) or 4068 of ERISA has been
         imposed; (vi) there is no requirement that security be provided under
         Section 401(a)(29) of the Code; and (vii) all premiums to the Pension
         Benefit Guaranty Corporation have been timely paid in full. All
         liabilities in connection with the termination of any employee pension
         benefit plan that was sponsored, maintained or contributed to by any
         Acquired Corporation at any time within the past three years have been
         fully satisfied.

                  (j) Except as set forth on Section 4.16(j) of the Company
         Disclosure Schedules, no Plan is a "multiemployer plan" within the
         meaning of Section 4001(a)(3) of ERISA (a "MULTIEMPLOYER PLAN") or a
         plan that has two or more contributing sponsors at least two of whom
         are not under common control, within the meaning of Section 4063 of
         ERISA (a "MULTIPLE EMPLOYER PLAN").

                  (k) There does not now exist, nor do any circumstances exist
         that could result in, any Controlled Group Liability that would be a
         liability of any Acquired Corporation following the Closing. Without
         limiting the generality of the foregoing, neither any Acquired
         Corporation nor any ERISA Affiliate of any Acquired Corporation has
         engaged in any transaction described in Section 4069 or Section 4204 of
         ERISA.

                  (l) No Acquired Corporation has any liability for life,
         health, medical or other welfare benefits to former employees, retirees
         or beneficiaries or dependents thereof, except for health continuation
         coverage as required by Section 4980B of the Code or Part 6 of Title I
         of ERISA.

                  (m) All Plans covering foreign employees of the Acquired
         Corporations comply with applicable local Law and are fully funded
         and/or book reserved to the extent applicable.

                  (n) No labor organization or group of employees of the
         Acquired Corporations has made a pending demand for recognition or
         certification, and there are no representation or certification
         proceedings or petitions seeking a representation proceeding presently
         pending or, to the Knowledge of the Company, threatened to be brought
         or filed, with the National Labor Relations Board or any other labor
         relations tribunal or authority. Each of the Acquired Corporations has
         complied with the Worker Adjustment and Retraining Notification Act.

                  (o) There are no pending or, to the Knowledge of the Company,
         threatened claims (other than claims for benefits in the ordinary
         course), lawsuits or arbitrations which have been asserted or
         instituted against the Plans, any fiduciaries thereof with respect to
         their duties to the Plans or the assets of any of the trusts under any
         of the Plans which could reasonably be expected to result in any
         material liability of any Acquired Corporation to the Pension Benefit
         Guaranty Corporation, the Department of Treasury, the Department of
         Labor or any Multiemployer Plan.

                  (p) Section 4.16(p) of the Company Disclosure Schedules
         contains an accurate and complete list as of the date of this Agreement
         of all loans and advances made by any of the Acquired Corporations to
         any employee, officer, director, consultant or independent contractor,
         other than routine travel and expense advances made to employees in the
         Ordinary Course of Business.

                  (q) Except as provided in Section 4.16(q) of the Company
         Disclosure Schedules or Section 11.4, the Contemplated Transactions
         will not result in any payment (whether of separation pay or otherwise)
         becoming due from any Acquired Corporation to any current or former
         employee, director or consultant, or result in the vesting,
         acceleration of payment or increase in the amount of any benefit
         payable to or in respect of any such current or former employee,
         director or consultant of any Acquired Corporation. There is no
         contract, agreement, plan or arrangement covering any current or former
         employee, director, or consultant of any Acquired Corporation that,
         individually or collectively, could give rise to the payment of any
         amount that would not be deductible pursuant to the terms of Sections
         162(a)(1) and/or 280G of the Code or would require the payment of an
         excise Tax imposed by Section 4999 of the Code or of any gross up of
         any such excise Tax.

                                       19


         Section 4.17 Labor Matters. None of the Acquired Corporations has been,
and is not now, a party to any collective bargaining agreement or other labor
contract and there has not been, there is not presently pending (including
matters which are on appeal or have not been fully funded, and administrative
matters that may be closed but with respect to which the applicable statute of
limitations has not run) or existing, and, to the Company's Knowledge, there is
not threatened, any strike, slowdown, picketing, work stoppage or employee
grievance process involving an Acquired Corporation. To the Company's Knowledge,
no event has occurred or circumstance exists that could provide the basis for
any work stoppage or other labor dispute and there is not pending or threatened
against or affecting an Acquired Corporation any proceeding relating to the
alleged violation of any Legal Requirement pertaining to labor relations or
employment matters, including any charge or complaint filed with the National
Labor Relations Board or any comparable Governmental Body, and there is no
organizational activity or other labor dispute against or affecting an Acquired
Corporation. No application or petition for an election of or for certification
of a collective bargaining agent is pending and no grievance or arbitration
proceeding exists that might have an adverse effect upon an Acquired
Corporation. There is no lockout of any employees by an Acquired Corporation,
and no such action is contemplated by any Acquired Corporation. Except as set
forth in Section 4.17 of the Company Disclosure Schedules, there has been no
charge of discrimination filed or, to the Company's Knowledge, threatened
against any Acquired Corporation with the Equal Employment Opportunity
Commission or similar Governmental Body. The Company has provided Parent or its
counsel true, correct and complete copies of all employee hand books currently
in use by any Acquired Corporation and which have been used in the last five
years by any Acquired Corporation. Except as set forth in Section 4.17 of the
Company Disclosure Schedules, to the Company's Knowledge, the Acquired
Corporations have complied in all material respects with the policies and
procedures set forth in such employee hand books. The Acquired Corporations are
in material compliance with all federal and state Laws respecting employment,
including but not limited to, gender, race, disability, national origin or age
discrimination, the Occupational Safety and Health Act of 1970, as amended, the
Family and Medical Leave Act of 1993, as amended, the terms and conditions of
employment of their respective employees and the federal and state Legal
Requirements regarding wages and hours.

         Section 4.18 Compliance With Applicable Legal Requirements; Litigation.

                  (a) The Acquired Corporations hold all permits, licenses,
         variances, exemptions, orders, registrations and approvals of all
         Governmental Entities which are required for the operation of the
         respective businesses of the Acquired Corporations as presently
         conducted (collectively, the "COMPANY PERMITS"), except where the
         failure to have any such Company Permits individually or in the
         aggregate would not have a Material Adverse Effect on the Acquired
         Corporations. Notwithstanding the foregoing, the Acquired Corporations
         are in compliance with the terms of the Company Permits and all
         applicable Legal Requirements, except where the failure so to comply
         individually or in the aggregate would not have a Material Adverse
         Effect on the Acquired Corporations. All of the Company Permits are in
         full force and effect and no suspension or cancellation of any Company
         Permit is threatened.

                  (b) The Company has furnished Parent copies of (i) all
         attorney responses to the request of the independent auditors for the
         Company with respect to loss contingencies as of December 31, 2003,
         2002 and 2001 in connection with the Company's financial statements for
         the years then ended; and (ii) a written list of legal and regulatory
         proceedings filed against the Acquired Corporations which are pending
         (including matters which are on appeal or have not been fully funded,
         and administrative matters that may be closed but with respect to which
         the applicable statute of limitations has not run) as of the date of
         this Agreement. There are no actions, suits, investigations, complaints
         or proceedings (including any proceedings in arbitration) pending
         (including matters which are on appeal or have not been fully funded,
         and administrative matters that may be closed but with respect to which
         the applicable statute of limitations has not run) or, to the Knowledge
         of the Company, threatened against the Acquired Corporations or any of
         their respective officers, directors, employees, agents, at Law or in
         equity, in any court or before any Governmental Body, except actions,
         suits, investigations, complaints or proceedings that are set forth in
         Section 4.18(b) of the Company Disclosure Schedules.

                  (c) Except as set forth in Section 4.18(c) of the Company
         Disclosure Schedules, there are no Legal Proceedings pending or, to the
         Company's Knowledge, threatened against the Acquired Corporations or
         any of their respective officers, directors, employees, agents, at Law
         or in equity, in any court or before any Governmental Body, by Persons
         alleging violations of the provisions of the Rental Purchase
         Agreements, rent-to-own statutes or any other consumer protection Law
         or by Persons alleging violations of federal or state Laws respecting
         employment, including but not limited to, gender, race, disability,

                                       20


         national origin or age discrimination, violations of the Occupational
         Safety and Health Act of 1970, as amended, the Family and Medical Leave
         Act of 1993, as amended, terms and conditions of employment or the
         federal or state Legal Requirements regarding wages and hours.

                  (d) Except as set forth in Section 4.18(d) of the Company
         Disclosure Schedules, there is no pending Legal Proceeding (i) that has
         been commenced by or against any of the Acquired Corporations or that
         otherwise relates to or may affect the business of, or any of the
         assets owned or used by, any of the Acquired Corporations; (ii) that
         challenges, or that may have the effect of preventing, delaying, making
         illegal, or otherwise interfering with, any of the Contemplated
         Transactions; or (iii) against any director or officer of any of the
         Acquired Companies pursuant to Section 8A or 20(b) of the Securities
         Act. The Company and each of Acquired Corporations has conducted their
         respective operations in compliance in all material respects with all
         applicable Laws, including rules, regulations, codes, plans,
         agreements, contracts, injunctions, orders, rulings and charges
         thereunder, and are not in material default with respect to any
         agreement, directive, memorandum of understanding or order applicable
         to the Company or any of the Acquired Corporations.

                  (e) To the Knowledge of the Company, no event has occurred or
         circumstance exists that may give rise to or serve as a basis for the
         commencement of any Legal Proceeding, which, if threatened, would be
         required to be disclosed under Section 4.18(c) or Section 4.18(d).

                  (f) The Acquired Corporations' stores and the operation and
         maintenance thereof, as now operated or maintained, do not contravene
         any zoning ordinance or other administrative Law (whether or not
         permitted because of prior nonconforming use) or violate any existing
         restrictive covenant or any provision of existing and applicable Law,
         the effect of which in any respect would interfere with or prevent the
         continued use of the properties for the purposes for which they are now
         being used or would reduce the value thereof.

         Section 4.19 Inappropriate Payments. Neither the Company, the Acquired
Corporations, nor any Representative of any Acquired Corporation acting on
behalf of an Acquired Corporation, has, directly or indirectly, made any bribes,
kickbacks, illegal payments or illegal political contributions using Company or
any Acquired Corporation funds or made any illegal payments from the Company's
or the Acquired Corporations' funds to obtain or retain business.

         Section 4.20 Environmental Matters. Each of the Acquired Corporations
is, and at all times has been, in material compliance with, and has not been and
is not in material violation of or subject to any liability under, any
Environmental Law. None of the Acquired Corporations has any basis to expect,
nor has any of them or any other Person for whose conduct they are or may be
held to be responsible received, any actual or threatened order, notice, or
other communication from (i) any Governmental Body or private citizen acting in
the public interest; or (ii) the current or prior owner or operator of any
Facilities, of any actual or potential violation of or failure to comply with
any Environmental Law, or of any actual or threatened material obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities.
No Acquired Corporation has any Environmental, Health, and Safety Liabilities
with respect to any Facilities or any other properties or assets (whether real,
personal, or mixed) in which any of the Acquired Corporations has or has had an
interest, or with respect to any property or Facility at or to which Hazardous
Materials were generated, manufactured, refined, transferred, imported, used, or
processed by any of the Acquired Corporations or any other Person for whose
conduct they are or may be held responsible, or from which Hazardous Materials
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received.

         Section 4.21 Absence of Certain Changes and Events. Except as set forth
in Section 4.21 of the Company Disclosure Schedules or as specifically
contemplated by this Agreement, since the date of the Company Balance Sheet, the
Acquired Corporations have conducted their businesses only in the Ordinary
Course of Business and there has not been, individually or in the aggregate, any
Material Adverse Effect on the Acquired Corporations, and no event has occurred
or circumstance exists that may result in:

                  (a) individually or in the aggregate, a Material Adverse
         Effect on the Acquired Corporations;

                  (b) any action or event of the type described in Section 6.3;

                                       21


                  (c) any material loss, damage or destruction to, or any
         material interruption in the use of, any of the assets of any of the
         Acquired Corporations (whether or not covered by insurance) that has
         had or could reasonably be expected to have, individually or in the
         aggregate, a Material Adverse Effect on the Acquired Corporations;

                  (d) (i) any declaration, accrual, set aside or payment of any
         dividend or any other distribution in respect of any shares of capital
         stock of any Acquired Corporation; or (ii) any repurchase, redemption
         or other acquisition by any Acquired Corporation of any shares of
         capital stock or other securities;

                  (e) any sale, issuance or grant, or authorization of the
         issuance of, (i) any capital stock or other security of any Acquired
         Corporation (except for Company Common Stock issued upon the valid
         exercise of outstanding Company Stock Options), (ii) any option,
         warrant or right to acquire any capital stock or any other security of
         any Acquired Corporation (except for Company Stock Options described in
         Section 4.3), or (iii) any instrument convertible into or exchangeable
         for any capital stock or other security of any Acquired Corporation;

                  (f) any amendment or waiver of any of the rights of any
         Acquired Corporation under, or acceleration of vesting under, (i) any
         provision of any of the Company's stock incentive plans; (ii) any
         provision of any contract evidencing any outstanding Company Stock
         Option; or (iii) any restricted stock purchase agreement;

                  (g) any amendment to any Organizational Document of any of the
         Acquired Corporations, or any merger, consolidation, share exchange,
         business combination, recapitalization, reclassification of shares,
         stock split, reverse stock split or similar transaction involving any
         Acquired Corporation;

                  (h) any creation of any Subsidiary of an Acquired Corporation
         or acquisition by any Acquired Corporation of any equity interest or
         other interest in any other Person;

                  (i) any capital expenditure by any Acquired Corporation which,
         when added to all other capital expenditures made on behalf of the
         Acquired Corporations since the date of the Company Balance Sheet,
         exceeds $25,000 in the aggregate;

                  (j) except in the Ordinary Course of Business, any action by
         the Acquired Corporations to (i) enter into or suffer any of the assets
         owned or used by it to become bound by any Material Contract; or (ii)
         amend or terminate, or waive any material right or remedy under, any
         Material Contract;

                  (k) except for rights or other assets acquired, leased,
         licensed or disposed of in the Ordinary Course of Business, any (i)
         acquisition, lease or license by any Acquired Corporation of any right
         or other asset from any other Person; (ii) sale or other disposal or
         lease or license by any Acquired Corporation of any right or other
         asset to any other Person; or (iii) waiver or relinquishment by any
         Acquired Corporation of any right;

                  (l) any pledge of any assets of or sufferance of any of the
         assets of an Acquired Corporation to become subject to any Encumbrance,
         except for statutory pledges of immaterial assets made in the Ordinary
         Course of Business;

                  (m) any revaluation by an Acquired Corporation of any asset
         (including, without limitation, any writing down of the value of rental
         merchandise), other than in the Ordinary Course of Business;

                  (n) any cancellation or compromise by an Acquired Corporation
         of any material debt or claim;

                  (o) any transaction that if taken after the date hereof would
         constitute a violation of Section 6.2 hereof;

                  (p) any (i) loan by an Acquired Corporation to any Person; or
         (ii) incurrence or guarantee by an Acquired Corporation of any
         indebtedness for borrowed money;

                                       22


                  (q) any (i) adoption, establishment, entry into or amendment
         by an Acquired Corporation of any Plan or (ii) payment of any bonus or
         any profit sharing or similar payment to, or material increase in the
         amount of the wages, salary, commissions, fringe benefits or other
         compensation or remuneration payable to, any of the directors, officers
         or employees of any Acquired Corporation;

                  (r) any change of the methods of accounting or accounting
         practices of any Acquired Corporation in any material respect;

                  (s) any material Tax election by any Acquired Corporation;

                  (t) any commencement or settlement of any Legal Proceeding by
         any Acquired Corporation; or

                  (u) any action or failure to take any action that would result
         in the occurrence of any of the foregoing.

         Section 4.22 Average Monthly Recurring Revenue-Three Months. The
Company's average Monthly Recurring Revenue, calculated for the months of
January 2004, February 2004 and March 2004 in a manner consistent with the
accounting principles utilized in the Company Financial Statements (as adjusted
in the definition of Monthly Recurring Revenue), is no less than $4,579,795 per
month.

         Section 4.23 Monthly Revenue-One Month. The Company's Monthly Recurring
Revenue calculated for the month of March 2004 in a manner consistent with the
accounting principles utilized in the Company Financial Statements (as adjusted
in the definition of Monthly Recurring Revenue), is no less than $4,498,892.

         Section 4.24 Net Book Value of Inventory. The net book value of the
Company's inventory, as of the date hereof, is no less than $19,500,000.

         Section 4.25 No Franchises. None of the Acquired Corporations is a
party to any franchise agreement, nor has any Acquired Corporation offered to
any Person or Entity any franchise for the operation of any business.

         Section 4.26 Interests of Officers, Directors and Affiliates. Except as
set forth in Section 4.26 of the Company Disclosure Schedules, none of the
officers or directors of any of the Acquired Corporations or any of their
respective affiliates (other than the Acquired Corporations) has any interest in
(i) any property, real or personal, tangible or intangible, used in or
pertaining to the business of the Acquired Corporations; or (ii) any continuing
liabilities and obligations (absolute, contingent or otherwise) of an Acquired
Corporation; (iii) any supplier, distributor or customer of the Acquired
Corporations, or any other relationship, contract, agreement, arrangement or
understanding with the Acquired Corporations. Each officer, director and
Shareholder beneficially owning 5% or more of the Company Common Stock is set
forth in Section 4.26 of the Company Disclosure Schedules.

         Section 4.27 Brokers. No broker, finder, investment banker or other
Person is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger and the Contemplated Transactions based upon
arrangements made by or on behalf of any Acquired Corporation.

         Section 4.28 Amended and Restated Stock Option Plan. Section 4.28 of
the Company Disclosure Schedules provides a true, correct and complete copy of
the Stock Option Plan.

         Section 4.29 Liens. The security interests, liens and encumbrances
listed in Section 4.29 of the Company Disclosure Schedules do not impose or
create any Encumbrance upon or with respect to any of the assets owned or used
by any of the Acquired Corporations.

         Section 4.30 Full Disclosure. This Agreement (including the Company
Disclosure Schedules) does not (a) contain any representation, warranty or
information that is false or misleading with respect to any material fact; or
(b) omit to state any material fact necessary in order to make the
representations, warranties and information contained and to be contained herein
and therein (in light of the circumstances under which such representations,
warranties and information were or will be made or provided) not false or
misleading.

                                       23


                                   ARTICLE V

             REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

         Parent and Merger Sub, jointly and severally, represent and warrant to
the Company as follows:

         Section 5.1 Organization and Good Standing. Parent and Merger Sub are
corporations duly organized, validly existing, and in good standing under the
Laws of the State of Delaware, with full corporate power and authority to
conduct their respective businesses as now being conducted, to own or use the
respective properties and assets that they purport to own or use, and to perform
all their respective obligations under contracts to which Parent or Merger Sub
is party or by which Parent or Merger Sub or any of their respective assets are
bound. Parent and Merger Sub are duly qualified to do business as foreign
corporations and are in good standing under the Laws of each state or other
jurisdiction in which either the ownership or use of the properties owned or
used by them, or the nature of the activities conducted by them, requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to, individually or in the aggregate, result in a Material Adverse
Effect on Parent and Merger Sub, taken as a whole.

         Section 5.2 Authority; No Conflict.

                  (a) Parent has all necessary power and authority to execute
         and deliver this Agreement and the other agreements referred to herein,
         to perform its obligations hereunder and thereunder and to consummate
         the Merger and the Contemplated Transactions. The execution and
         delivery of this Agreement by Parent and the consummation by Parent of
         the Contemplated Transactions have been duly and validly authorized by
         all necessary corporate action and no other corporate proceedings on
         the part of Parent are necessary to authorize this Agreement or to
         consummate the Contemplated Transactions. The board of directors of
         Parent has unanimously approved this Agreement and declared it to be
         advisable. This Agreement has been duly and validly executed and
         delivered by Parent and constitutes the legal, valid and binding
         obligation of Parent, enforceable against Parent in accordance with its
         terms, subject to bankruptcy, insolvency, fraudulent transfer,
         reorganization, moratorium and similar Laws of general applicability
         relating to or affecting the rights of creditors and to general
         principles of equity.

                  (b) Merger Sub has all necessary power and authority to
         execute and deliver this Agreement and the other agreements referred to
         herein, to perform its obligations hereunder and thereunder and to
         consummate the Merger and the Contemplated Transactions. The execution
         and delivery of this Agreement by Merger Sub and the consummation by
         Merger Sub of the Contemplated Transactions have been duly and validly
         authorized by all necessary corporate action and no other corporate
         proceedings on the part of Merger Sub are necessary to authorize this
         Agreement or to consummate the Contemplated Transactions (other than,
         with respect to the Merger, the filing of appropriate merger documents
         as required by the DGCL). The board of directors of Merger Sub has
         unanimously approved this Agreement, declared it to be advisable and
         resolved to recommend to Parent that it vote in favor of the adoption
         of this Agreement in accordance with the DGCL. This Agreement has been
         duly and validly executed and delivered by Merger Sub and constitutes
         the legal, valid and binding obligations of Merger Sub, enforceable
         against Merger Sub in accordance with its terms, subject to bankruptcy,
         insolvency, fraudulent transfer, reorganization, moratorium and similar
         Laws of general applicability relating to or affecting the rights of
         creditors and to general principles of equity.

                  (c) Except as set forth in Section 5.2(c) of the Parent
         Disclosure Schedules, neither the execution and delivery of this
         Agreement nor the consummation of any of the Contemplated Transactions
         will, directly or indirectly (with or without notice or lapse of time
         or both) (i) contravene, conflict with, or result in a violation of (A)
         any provision of the Organizational Documents of Parent or Merger Sub;
         or (B) any resolution adopted by the board of directors or the
         stockholders of Parent or Merger Sub; (ii) contravene, conflict with,
         or result in a violation of any Legal Requirement or any Order to which
         Parent or Merger Sub, or any of the assets owned or used by Parent or
         Merger Sub, may be subject; (iii) contravene, conflict with, or result
         in a violation of any of the terms or requirements of, or give any
         Governmental Body the right to revoke, withdraw, suspend, cancel,
         terminate, or modify, any Governmental Authorization that is held by
         Parent or Merger Sub, or that otherwise relates to the business of, or
         any of the assets owned or used by, Parent or Merger Sub; or (iv)
         contravene, conflict with, or result in a violation or breach of any
         provision of, or give any Person the right to declare a default or
         exercise any

                                       24


         remedy under, or to accelerate the maturity or performance of, or to
         cancel, terminate, or modify, any contract to which Parent or Merger
         Sub is party or by which Parent or Merger Sub or any of their
         respective assets are bound, except, in the case of clauses (ii),
         (iii), and (iv), for any such conflicts, violations, breaches, defaults
         or other occurrences that would not prevent or delay consummation of
         the Merger in any material respect, or otherwise prevent Parent or
         Merger Sub from performing its obligations under this Agreement in any
         material respect, and could not reasonably be expected to, individually
         or in the aggregate, adversely affect Parent and Merger Sub, taken as a
         whole, in any material respect.

                  (d) The execution and delivery of this Agreement by Parent and
         Merger Sub do not, and the performance of this Agreement and the
         consummation of the Contemplated Transactions by Parent will not,
         require any Consent of, or filing with or notification to, any Person
         which has not already been received, filed or given, except (i) for (A)
         applicable requirements, if any, of the Exchange Act, the Securities
         Act, the Nasdaq Stock Market and Blue Sky Laws; and (B) filing of
         appropriate merger documents as required by the DGCL; (ii) as set forth
         in Section 5.2(c) of the Parent Disclosure Schedules; and (iii) where
         failure to obtain such Consents, or to make such filings or
         notifications, would not prevent or delay consummation of the Merger in
         any material respect, or otherwise prevent Parent or Merger Sub from
         performing its obligations under this Agreement in any material
         respect, and could not reasonably be expected to, individually or in
         the aggregate, result in a Material Adverse Effect on Parent and Merger
         Sub, taken as a whole.

         Section 5.3 Brokers. No broker, finder, investment banker or other
Person is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger and the Contemplated Transactions based upon
arrangements made by or on behalf of Parent or Merger Sub.

         Section 5.4 Financial Capability. Based on existing cash reserves or
availability under existing credit facilities, Parent has the funds necessary to
finance the Cash Consideration contemplated hereby and provide for the ongoing
working capital needs of the Surviving Corporation. Parent has sufficient
authorized shares of Parent Common Stock which are not issued, subscribed for or
otherwise reserved for issuance to issue the Stock Consideration.

         Section 5.5 Financial Statements and Reports. The financial statements
of Parent and its Subsidiaries included in Parent's filings with the SEC for the
last three fiscal years (including the related notes) complied as to form, as of
their respective dates of filing with the SEC in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto (including, without limitation, Regulation S-X),
have been prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Quarterly Report Form 10-Q of the SEC) applied on a
consistent basis during the periods and at the dates involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
condition of Parent and its Subsidiaries at the dates thereof and the
consolidated results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to notes and normal year-end
audit adjustments that were not material in amount or effect).

         Section 5.6 SEC Reports. To Parent's Knowledge, Parent has on a timely
basis filed all forms, reports and documents required to be filed by it with the
SEC since January 1, 2002. Except to the extent available in full without
redaction on the SEC's web site through the Electronic Data Gathering, Analysis
and Retrieval System ("EDGAR") at least two days prior to the date of this
Agreement, Parent has provided to counsel to the Company copies in the form
filed with the SEC of (i) Parent's Annual Reports on Form 10-K for each fiscal
year of Parent beginning since January 1, 2002; (ii) its Quarterly Reports on
Form 10-Q for each of the first three fiscal quarters in each of the fiscal
years of Parent referred to in clause (i) above; (iii) all proxy statements
relating to Parent's meetings of stockholders (whether annual or special) held,
and all information statements relating to stockholder consents since the
beginning of the first fiscal year referred to in clause (i) above; (iv) all
certifications required by (x) Rule 13a-14 or 15d-14 under the Exchange Act, or
(y) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) with
respect to any applicable report referred to in clauses (i) or (ii) above; and
(v) all other forms, reports, registration statements and other schedules (other
than preliminary materials if the corresponding definitive materials have been
provided to counsel to the Company pursuant to this Section 5.6, correspondence
with the SEC, or Form 11-Ks) filed by Parent with the SEC since the beginning of
the first fiscal year referred to in clause (i) above (the forms, reports,
registration statements and other schedules referred to in clauses (i), (ii),
(iii), (iv) and (v) above are, collectively, the "PARENT SEC REPORTS"). To
Parent's Knowledge, the Parent SEC Reports (x) complied as to form in all
material respects with the requirements of the Securities Act and

                                       25


the Exchange Act, as the case may be, and the rules and regulations thereunder
and (y) did not at the time they were filed with the SEC contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Parent
maintains the disclosure controls and procedures required by Rule 13a-15 or
15d-15 under the Exchange Act, except where the failure to maintain such
disclosure controls and procedures would not have a Material Adverse Effect on
Parent and its Subsidiaries taken as a whole.

                                   ARTICLE VI

                          CERTAIN PRE-CLOSING COVENANTS

         Section 6.1 Access and Investigation; Confidentiality.

                  (a) During the period from the date of this Agreement through
         the Effective Time (the "PRE-CLOSING PERIOD"), subject to (i)
         applicable Antitrust Laws relating to the exchange of information; (ii)
         applicable Laws protecting the privacy of employees and personnel
         files; and (iii) the confidentiality of documents or other information
         subject to attorney-client privilege, the Company shall, and shall
         cause the respective Representatives of the Acquired Corporations, to
         provide Parent and Parent's Representatives with access to the Acquired
         Corporations' officers, directors, employees, agents, personnel and
         assets and to all books, records, Tax Returns, work papers and other
         documents, and with such additional financial, operating and other data
         and information regarding the Acquired Corporations as Parent may
         reasonably request. Without limiting the generality of the foregoing,
         during the Pre-Closing Period, the Company shall promptly provide
         Parent with copies of (i) all operating and financial reports prepared
         by the Company and any other Acquired Corporation for the Company's
         senior management, including copies of the unaudited monthly
         consolidated financial statements; (ii) any written materials or
         communications sent by or on behalf of the Company to its Shareholders;
         (iii) any notice, report or other document filed with or sent to any
         Governmental Body in connection with the Merger or any of the
         Contemplated Transactions; and (iv) any material notice of alleged
         violations or legal non-compliance received by any of the Acquired
         Corporations from any Governmental Body.

                  (b) The parties hereto acknowledge that Parent and the Company
         have entered into that certain Confidentiality Agreement dated
         September 30, 2003 between Parent and the Company (the "CONFIDENTIALITY
         AGREEMENT"), which terminates upon execution of this Agreement.

                  (c) Each of the Company, the Acquired Corporations, Parent and
         its Subsidiaries will, and will cause their respective Representatives
         to (i) hold in confidence, unless, and only to the extent, compelled to
         disclose by judicial or administrative process or by other requirements
         of Law, all nonpublic information concerning the other party furnished
         in connection with the transactions contemplated by this Agreement
         until such time as such information becomes publicly available
         (otherwise than through the wrongful act of such Person); and (ii) not
         release or disclose such information to any other Person, except in
         connection with this Agreement to its auditors, attorneys, financial
         advisors or other consultants and advisors who shall be informed of the
         requirement to keep such information confidential. In the event of
         termination of this Agreement for any reason, the parties hereto will
         promptly return or destroy all documents containing nonpublic
         information so obtained from any other party hereto and any copies made
         of such documents and any summaries, analyses or compilations made
         therefrom and will certify that such destruction or return has
         occurred.

         Section 6.2 Operation of the Company's Business.

                  (a) During the Pre-Closing Period (except with the prior
         written Consent of Parent) the Company shall:

                           (i) ensure that each of the Acquired Corporations
                  conducts its business and operations (A) in the Ordinary
                  Course of Business; and (B) in compliance with all applicable
                  Legal Requirements and all Material Contracts (which for the
                  purpose of this Section 6.2 shall include any contract that
                  would be a Material Contract if existing on the date of this
                  Agreement);

                                       26


                           (ii) use its reasonable best efforts to ensure that
                  each of the Acquired Corporations preserves intact its current
                  business organization, maintains its books and records in
                  substantially the same manner as heretofore maintained, keeps
                  available the services of its current officers and employees
                  and maintains its relations and goodwill with all suppliers,
                  customers, landlords, creditors, licensors, licensees,
                  employees and other Persons having business relationships with
                  the respective Acquired Corporations whose loss would have a
                  Material Adverse Effect on the Acquired Corporations, taken as
                  a whole;

                           (iii) keep in full force all insurance policies
                  referred to in Section 4.14;

                           (iv) to the extent reasonably requested by Parent,
                  cause its officers to confer regularly with Parent concerning
                  the status of the Company's business;

                           (v) maintain and keep all of its properties and
                  equipment in good repair, working order and condition,
                  ordinary wear and tear excepted, and perform all of its duties
                  and obligations under all contracts, agreements,
                  understandings and commitments applicable thereto, except in
                  each case where the failure to maintain, comply or perform,
                  individually or in the aggregate, would not have or be
                  reasonably likely to have a Material Adverse Effect on the
                  Acquired Corporations;

                           (vi) (A) cause each of the Acquired Corporations to
                  timely file all Federal, state and local, domestic and
                  foreign, income and franchise Tax Returns and reports and all
                  other material Tax Returns and reports ("POST-SIGNING
                  RETURNS") required to be filed by each such Acquired
                  Corporation (after taking into account any extensions), which
                  it is not contesting in good faith as set forth in Section
                  4.15(b) of the Company Disclosure Schedules, which shall be
                  complete and correct, except for failures to file or be true
                  and correct that individually or in the aggregate are not
                  reasonably likely to result in a material liability for the
                  Company; (B) cause each of the Acquired Corporations to timely
                  pay all Taxes due and payable in respect of such Post-Signing
                  Returns that are so filed; (C) accrue a reserve in its books
                  and records and financial statements in accordance with past
                  practice for Taxes payable by the Acquired Corporations for
                  which no Post-Signing Return is due prior to the Effective
                  Time; and (D) notify Parent of any Legal Proceeding pending
                  against or with respect to the Acquired Corporations in
                  respect of any material Tax.

                  (b) During the Pre-Closing Period (except with the prior
         written Consent of Parent), the Company shall not, and shall not permit
         any other Acquired Corporation to:

                           (i) (A) declare, set aside or pay any dividends on,
                  or make any other distributions (whether in cash, stock or
                  property) in respect of, any of its capital stock or other
                  equity or voting interests, except for dividends by a direct
                  or indirect wholly owned Subsidiary of the Company to its
                  parent; (B) split, combine or reclassify any of its capital
                  stock or other equity or voting interests, or issue or
                  authorize the issuance of any other securities in respect of,
                  in lieu of or in substitution for shares of its capital stock
                  or other equity or voting interests; or (C) purchase, redeem
                  or otherwise acquire any shares of capital stock or any other
                  securities of any Acquired Corporation or any options,
                  warrants, calls or rights to acquire any such shares or other
                  securities (including any Company Stock Options or shares of
                  restricted stock except pursuant to forfeiture conditions of
                  such restricted stock);

                           (ii) issue, deliver, sell, pledge or otherwise
                  encumber any shares of its capital stock, any other equity or
                  voting interests or any securities convertible into, or
                  exchangeable for, or any options, warrants, calls or rights to
                  acquire or receive, any such shares, interests or securities
                  or any stock appreciation rights, phantom stock awards or
                  other rights that are linked in any way to the price of the
                  Company Common Stock or the value of the Company or any part
                  thereof (other than the issuance of shares of Company Common
                  Stock upon the exercise of Company Stock Options outstanding
                  on the date of this Agreement in accordance with their present
                  terms);

                           (iii) amend or propose to amend its Organizational
                  Documents or effect or become a party to any, recapitalization
                  or similar transaction;

                                       27


                           (iv) acquire or agree to acquire, or dispose of or
                  agree to dispose of, any assets other than in the Ordinary
                  Course of Business, any business or any Person, either by
                  purchase, merger or consolidation, or by purchasing a portion
                  of the assets thereof, or by any other manner;

                           (v) enter into any lease or sublease of real property
                  (whether as a lessor, sublessor, lessee or sublessee) or
                  modify, amend, terminate or exercise any right to renew any
                  lease or sublease of real property;

                           (vi) sell, lease, license, mortgage or otherwise
                  encumber or subject to any Lien, abandon or otherwise dispose
                  of any of its properties or assets other than rental
                  merchandise in the Ordinary Course of Business;

                           (vii) permit any purchase of Company Common Stock by
                  the Company;

                           (viii) (A) repurchase, prepay or incur any
                  indebtedness (other than indebtedness with respect to working
                  capital in amounts consistent with past practice) or guarantee
                  any indebtedness of another Person (other than immaterial
                  amounts in the Ordinary Course of Business); (B) materially
                  modify any indebtedness or other liability; (C) issue or sell
                  any debt securities or options, warrants, calls or other
                  rights to acquire any debt securities of any Acquired
                  Corporation; (D) guarantee any debt securities of another
                  Person; (E) enter into any "keep well" or other agreement to
                  maintain any financial statement condition of another Person;
                  or (F) enter into any arrangement having the economic effect
                  of any of the foregoing;

                           (ix) make any loans, advances or capital
                  contributions to, or investments in, any other Person, other
                  than the Company or any direct or indirect wholly owned
                  Subsidiary of the Company, except for customary advances to
                  employees in accordance with past practice;

                           (x) (A) pay, discharge, settle or satisfy any
                  material claims (including claims of Shareholders and any
                  Shareholder litigation relating to this Agreement, the Merger
                  or any Contemplated Transaction or otherwise), liabilities
                  (including any material Tax liability) or obligations (whether
                  absolute, accrued, asserted or unasserted, contingent or
                  otherwise), other than the payment, discharge or satisfaction
                  in the Ordinary Course of Business or as required by their
                  terms as in effect on the date of this Agreement of claims,
                  liabilities or obligations reflected or reserved against in
                  the Company Financial Statements (for amounts not in excess of
                  such reserves) in each case in complete satisfaction, and with
                  a complete release, of such matter with respect to all parties
                  to such matter, of actions, suits, proceedings or claims; (B)
                  waive the benefits of, or agree to modify in any material
                  manner, any confidentiality, standstill or similar agreement
                  to which the Company is a party or otherwise waive, release,
                  grant or transfer any right of material value other than in
                  the Ordinary Course of Business; or (C) commence any Legal
                  Proceeding;

                           (xi) modify, amend or terminate in any material
                  respect, any of its Material Contracts or waive, release or
                  assign any material rights or claims;

                           (xii) enter into any Material Contract or other
                  material commitment or transaction, or take any other material
                  action, outside the Ordinary Course of Business;

                           (xiii) make any payment in excess of $5,000 in the
                  aggregate or incur any liability or obligation for the purpose
                  of obtaining any Consent from any third party to the Merger or
                  the Contemplated Transactions;

                           (xiv) except as required by applicable Law, (A) adopt
                  or enter into any collective bargaining agreement or other
                  labor union contract applicable to the employees of any
                  Acquired Corporation; (B) terminate the employment of any
                  employee of any Acquired Corporation that has an employment,
                  severance or similar agreement or arrangement with any
                  Acquired Corporation, except as otherwise contemplated herein;
                  (C) enter into or modify or amend any employment or severance
                  agreement with any employee of an Acquired Corporation;

                                       28


                           (xv) hire any new employee (other than store level
                  employees with an annual base salary not to exceed the
                  Company's ordinary pay rate for store level employees),
                  promote any employee except in order to fill a position
                  vacated after the date of this Agreement, or engage any
                  consultant or independent contractor for a period exceeding 10
                  days;

                           (xvi) increase in any manner the compensation or
                  benefits of, or pay or agree to pay any bonus to, any
                  employee, officer, director or independent contractor of any
                  Acquired Corporation, except pursuant to the Stay Bonus Plan
                  in the form attached hereto as Exhibit B (the "STAY BONUS
                  PLAN"), to be adopted by the Company simultaneously with the
                  execution of this Agreement, which shall provide for the
                  payment of certain stay bonuses to certain employees as
                  provided therein;

                           (xvii) except as required to comply with applicable
                  Law or any contract or Benefit Plan in effect on the date of
                  this Agreement, (A) pay to any employee, officer, director or
                  independent contractor of any Acquired Corporation any benefit
                  not provided for under any contract or Benefit Plan in effect
                  on the date of this Agreement other than the payment of base
                  compensation in the Ordinary Course of Business; (B) except to
                  the extent expressly permitted under Section 6.2(b)(ii), grant
                  any awards under any Benefit Plan (including the grant of
                  Company Stock Options, stock appreciation rights, stock based
                  or stock related awards, performance units or restricted stock
                  or the removal of existing restrictions in any contract or
                  Benefit Plan or awards made thereunder); (C) take any action
                  to fund or in any other way secure the payment of compensation
                  or benefits under any contract or Benefit Plan; (D) take any
                  action to accelerate the vesting or payment of any
                  compensation or benefit under any contract or Benefit Plan;
                  (E) adopt, enter into or amend any Benefit Plan other than
                  offer letters entered into with new employees in the Ordinary
                  Course of Business that provide, except as required by
                  applicable Law, for "at will employment" with no severance
                  benefits; or (F) make any material determination under any
                  Benefit Plan that is inconsistent with the Ordinary Course of
                  Business;

                           (xviii) except as required by GAAP or applicable Law,
                  change its fiscal year, revalue any of its material assets or
                  make any changes in cash management, financial or Tax
                  accounting methods, principles or practices, including making
                  or revoking any material Tax election (unless required by
                  Law);

                           (xix) introduce any new product lines or engage in
                  any lines of business other than the rent-to-own business;

                           (xx) take any action (or omit to take any action) if
                  such action (or omission) would or is reasonably likely to
                  result in (A) any representation and warranty of the Company
                  set forth in this Agreement that is qualified as to
                  materiality becoming untrue (as so qualified); or (B) any such
                  representation and warranty that is not so qualified becoming
                  untrue in any material respect; or

                           (xxi) authorize any of, announce an intention to do
                  any of, or commit, resolve or agree to take any of, the
                  foregoing actions.

                  (c) During the Pre-Closing Period, the Company shall promptly
         notify Parent in writing of:

                           (i) the discovery by the Company of any event,
                  condition, fact or circumstance that occurred or existed on or
                  prior to the date of this Agreement and that caused or
                  constitutes a material inaccuracy in any representation or
                  warranty made by the Company in this Agreement;

                           (ii) any change in the Company's capital structure,
                  including, without limitation, any change resulting from an
                  exercise of a Company Stock Option outstanding as of the date
                  hereof;

                           (iii) any event, condition, fact or circumstance that
                  occurs, arises or exists after the date of this Agreement and
                  that would cause or constitute a material inaccuracy in any
                  representation or warranty made by the Company in this
                  Agreement if (A) such representation or warranty had been made
                  as of the time of the occurrence, existence or discovery of
                  such event,

                                       29

                  condition, fact or circumstance; or (B) such event, condition,
                  fact or circumstance had occurred, arisen or existed on or
                  prior to the date of this Agreement;

                           (iv) any material breach of any covenant of the
                  Company;

                           (v) any event, condition, fact or circumstance that
                  would make the timely satisfaction of any of the conditions
                  set forth in ARTICLE VIII and ARTICLE IX impossible or
                  unlikely or that has had or could reasonably be expected to
                  have a Material Adverse Effect on the Acquired Corporations;
                  and

                           (vi) (A) any notice or other communication from any
                  Person alleging that the Consent of such Person is or may be
                  required in connection with the transactions contemplated by
                  this Agreement; and (B) any Legal Proceeding or material claim
                  commenced, or to the Company's Knowledge, threatened or
                  asserted against or with respect to any of the Acquired
                  Corporations or the Contemplated Transactions.

         Should the occurrence of any of the facts or conditions pursuant to
this Section 6.2(c) require any change to the Company Disclosure Schedules, the
Company shall promptly deliver to Parent a supplement to the Company Disclosure
Schedules specifying such change. Notwithstanding the foregoing, no notification
given to Parent pursuant to this Section 6.2(c) shall limit or otherwise affect
any of the representations, warranties, covenants or obligations of the Company
contained in this Agreement.

         Section 6.3 No Solicitation.

                  (a) The Company shall not directly or indirectly, and shall
         not authorize or permit any of the other Acquired Corporations or any
         of their respective Representatives directly or indirectly to, (i)
         solicit, initiate, encourage, induce or facilitate the making,
         submission or announcement of any Acquisition Proposal or take any
         action that could reasonably be expected to lead to an Acquisition
         Proposal; (ii) furnish any information or assistance regarding any of
         the Acquired Corporations to any Person in connection with or in
         response to an Acquisition Proposal or an inquiry or indication of
         interest that could reasonably be expected to lead to an Acquisition
         Proposal; (iii) engage in discussions or negotiations with any Person
         with respect to any Acquisition Proposal; (iv) approve, endorse or
         recommend any Acquisition Proposal; or (v) enter into any letter of
         intent or similar document or any contract contemplating or otherwise
         relating to any Acquisition Transaction.

                  (b) Notwithstanding the foregoing, prior to the Effective
         Time, the Company may furnish information concerning the business,
         properties or assets of the Acquired Corporations to any Person
         pursuant to appropriate confidentiality agreements, and may participate
         in negotiations and discussions with any such Person who makes an offer
         to enter into a Acquisition Transaction, provided, however, that the
         Company shall not agree to any exclusive right to negotiate with such
         Person, if (i) such Person, without any of the Acquired Corporations'
         respective Representatives or other Persons retained by or affiliated
         with an Acquired Corporation engaging in any actions prohibited by
         Section 6.3(a) of this Agreement following the date hereof, submits a
         bona fide, unsolicited written proposal to the Company with respect to
         any such transaction that the Company's board of directors determines,
         in good faith, after receiving written advice from a financial advisor
         of a nationally recognized reputation is more favorable (both
         quantitatively and qualitatively) to the Company and its Shareholders
         than the Contemplated Transactions, and for which financing, to the
         extent required, is then committed or which, in the good faith judgment
         of the Company's board of directors, is reasonably capable of being
         obtained by such Person; and (ii) in the reasonable opinion of the
         Company's board of directors in good faith, after consultation with
         outside legal counsel, the failure to provide such information or
         access to engage in such discussions or negotiations would cause the
         Company's board of directors to breach its fiduciary duties to the
         Company's Shareholders under applicable Legal Requirements (an
         Acquisition Proposal which satisfies clauses (i) and (ii) of this
         Section 6.3(b) being hereinafter referred to as a ("SUPERIOR
         PROPOSAL")). The Company shall, within two Business Days following the
         determination that such Acquisition Proposal is a Superior Proposal,
         notify Parent in writing of the receipt of the same (a "PROPOSAL
         NOTICE"). Such Proposal Notice shall indicate the name of the Person
         who made such Superior Proposal, all the terms and conditions of such
         proposal, that the Company's board of directors intends to make a
         Subsequent Determination, contain a certification signed by the Chief
         Executive Officer of the Company to the effect that such proposal is a

                                       30


         Superior Proposal in accordance with the terms thereof, and be
         accompanied by all nonpublic information provided by the Company to
         such Person who made the Superior Proposal of which Parent had not been
         previously furnished. If, after consultation with outside legal
         counsel, the Company's board of directors determines that its fiduciary
         duties to the Company and its Shareholders so require, the Company's
         board of directors may (subject to this and the following sentences of
         this Section 6.3(b)) inform the Company's Shareholders that it no
         longer believes that the transactions contemplated hereby are
         advisable, and that it no longer recommends approval of the Merger (a
         "SUBSEQUENT DETERMINATION"), but only at a time that is after the fifth
         Business Day following Parent's receipt of the relevant Proposal
         Notice. Notwithstanding the foregoing, during the aforementioned
         five-day period following Parent's receipt of the relevant Proposal
         Notice, the Company will keep Parent reasonably informed of the status
         and details (including amendments and proposed amendments) of any
         Acquisition Proposal and the Company may not make a Subsequent
         Determination, nor may it terminate this Agreement, unless it has
         provided Parent (i) at least five Business Days' notice of the exact
         terms of the Acquisition Proposal, including a copy of the proposed
         agreement; and (ii) at least five Business Days' notice of any and each
         amendment to such Acquisition Proposal and proposed agreement.

                  (c) After delivering such Proposal Notice, the exact terms of
         the Acquisition Proposal, including a copy of the proposed agreement or
         any amendment to such Acquisition Proposal and proposed agreement,
         which ever shall occur later, the Company shall provide a reasonable
         opportunity to Parent to make such adjustments to the terms and
         conditions of this Agreement as would enable the Company's board of
         directors to proceed with its recommendation to the Company's
         Shareholders without a Subsequent Determination. At any time after the
         fifth Business Day following Parent's receipt of the Proposal Notice,
         the exact terms of the Acquisition Proposal, including a copy of the
         proposed agreement or any amendment to such Acquisition Proposal and
         proposed agreement, which ever shall occur later, and if the Company
         has otherwise complied with the provisions of this Section 6.3, the
         Company's board of directors may terminate this Agreement pursuant to
         Section 12.1(f) hereof and enter into an agreement with respect to the
         relevant Superior Proposal, provided that the Company shall,
         concurrently with terminating this Agreement pursuant to such section,
         pay or cause to be paid to Parent the Termination Fee.

                  (d) Except as provided in Section 6.3(b) hereof, neither the
         Company's board of directors nor any committee thereof shall (i)
         withdraw or modify, or propose to withdraw or modify, in any manner
         adverse to Parent, the approval or recommendation by the Company's
         board of directors or any committee thereof of this Agreement and the
         transactions contemplated hereby; (ii) approve or recommend, or propose
         to approve or recommend, any Acquisition Proposal; or (iii) enter into
         any agreement, commitment, understanding or other arrangement with
         respect to any Acquisition Transaction.

                  (e) Nothing contained in this Section 6.3 shall prohibit the
         Company from making any disclosure to the Company's Shareholders if, in
         the good faith judgment of the board of directors of the Company, after
         consultation with outside counsel, failure to so disclose would be
         inconsistent with its obligations under applicable Law.

         Section 6.4 Company Shareholders' Meeting.

                  (a) The Company shall take all action necessary under all
         applicable Legal Requirements to call, give notice of and hold a
         meeting of the holders of Company Common Stock to vote on a proposal to
         adopt this Agreement (the "COMPANY SHAREHOLDERS' MEETING"), and shall
         submit such proposal to such holders at the Company Shareholders'
         Meeting. The Company (in consultation with Parent) shall set a record
         date for Persons entitled to notice of, and to vote at, the Company
         Shareholders' Meeting. The Company Shareholders' Meeting shall be held
         on May 7, 2004 or such other date as the Company and Parent may agree.
         The Company shall ensure that all votes and proxies solicited in
         connection with the Company Shareholders' Meeting are solicited in
         compliance with all applicable Legal Requirements applicable to the
         Company and shall take all lawful action necessary to obtain the
         Required Company Shareholder Vote.

                  (b) Subject to Section 6.3(b), (i) the board of directors of
         the Company will unanimously recommend that the Company's Shareholders
         vote to approve this Agreement and the Contemplated Transactions at the
         Company Shareholders' Meeting (the "COMPANY BOARD RECOMMENDATION"); and
         (ii) the Company Board Recommendation shall not be withdrawn or
         modified in a manner adverse to Parent,

                                       31


         and no resolution by the board of directors of the Company or any
         committee thereof to withdraw or modify the Company Board
         Recommendation in a manner adverse to Parent shall be adopted or
         proposed.

                  (c) Prior to the Company Shareholders' Meeting, the Company
         shall furnish each Shareholder of the Company with (i) a detailed
         description of the Merger and the Contemplated Transactions, as
         approved by Parent; (ii) the Investor Questionnaire and Consent; (iii)
         (A) a copy of Parent's Annual Report on Form 10-K/A for the fiscal year
         ended December 31, 2003; (B) a copy of Parent's most recent proxy
         statement filed with the SEC; and (C) each of the reports and
         statements filed by Parent with the SEC since the date such Form 10-K/A
         was filed with the SEC but prior to the date hereof (such reports and
         statements being referred to collectively as the "SEC FILINGS"); and
         (iv) a copy of Chapter 23 of the Tennessee Corporate Statutes.

                  (d) Notwithstanding Section 6.4(a), if this Agreement and the
         transactions contemplated hereby are approved by the Shareholders by a
         written consent in compliance with Section 48-17-104 of the Tennessee
         Corporate Statutes and the Company's Organizational Documents, the
         Company shall not be required to hold the Company's Shareholder
         Meeting.

         Section 6.5 Regulatory Approvals.

                  (a) Subject to Section 6.5(b), Parent and the Company shall
         use all reasonable efforts to take, or cause to be taken, all actions
         necessary to expeditiously consummate the Merger and make effective the
         Contemplated Transactions. Without limiting the generality of the
         foregoing, but subject to Section 6.5(b), Parent and the Company shall
         (i) make all filings (if any) and give all notices (if any) required to
         be made and given by such party in connection with the Merger and the
         Contemplated Transactions, and shall submit promptly any additional
         information requested in connection with such filings and notices; (ii)
         use all reasonable efforts to obtain each Consent (if any) required to
         be obtained as set forth in Section 9.3 of the Company Disclosure
         Schedules by such party in connection with the Merger or any of the
         other transactions contemplated by this Agreement; and (iii) use all
         reasonable efforts to oppose or to lift, as the case may be, any
         restraint, injunction or other legal bar to the Merger. Each party
         shall promptly deliver to the other party a copy of each such filing
         made, each such notice given and each such Consent obtained during the
         Pre-Closing Period.

                  (b) Without limiting the generality of Section 6.5(a), each of
         the Company and Parent shall (i) give the other party prompt notice of
         the commencement or, to the Knowledge of such party, threat of
         commencement of any Legal Proceeding by or before any Governmental Body
         with respect to the Merger or any of the Contemplated Transactions;
         (ii) keep the other party informed as to the status of any such Legal
         Proceeding or threat; and (iii) keep the other party apprised of the
         status of any inquiries made by a Governmental Body.

         Section 6.6 Public Announcements. Parent, Merger Sub, the Company and
the other Acquired Corporations will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press
releases or other public statements with respect to any transactions described
in this Agreement, and shall not issue any such press releases or make any such
public statement prior to such consultation, except as required by Law or the
Nasdaq National Market.

         Section 6.7 Resignation of Officers and Directors. The Company shall
use its best efforts to obtain and deliver to Parent not less than one Business
Day prior to the Closing Date (to be effective as of the Effective Time) the
resignation of each officer and director of each of the Acquired Corporations,
as Parent shall specify.

         Section 6.8 Investor and Option Questionnaires and Consents. The
Company shall use its reasonable best efforts to ensure that Parent receives at
least one Business Day prior to the Closing Date (i) an investor questionnaire
and consent in the form of Exhibit C hereto (each, an "INVESTOR QUESTIONNAIRE
AND CONSENT") completed and executed by each Shareholder of the Company and such
other documentation regarding the Accredited Investor status of each Shareholder
reasonably requested by Parent; and (ii) an option questionnaire and consent in
the form of Exhibit D hereto (each, an "OPTION QUESTIONNAIRE AND CONSENT")
completed and executed by each holder of a Right of the Company and such other
documentation regarding the Accredited Investor status of each such Right holder
reasonably requested by Parent.

                                       32


         Section 6.9 Outstanding Options and Rights. The Company shall
repurchase, cancel or take such other actions as necessary so that at the
Effective time there are no Rights outstanding or held by any Person other than
by a Person that (i) Parent reasonably believes to be an Accredited Investor;
and (ii) who has completed and executed an Option Questionnaire and Consent
which has been delivered to Parent at least one Business Day prior to the
Closing Date.

         Section 6.10 No Buy-Back Obligations. The Company shall take such
actions as necessary so that as of the Closing Date, the Company shall have no
obligations to purchase any shares of Company Common Stock or Company Stock
Options owned by any Shareholders or optionholders of the Company, including
upon the death of any Shareholder or optionholder of the Company.

         Section 6.11 Release of Liens. Prior to the Closing, the Company shall
cause termination statements and instruments of release, in form and substance
satisfactory to counsel for Parent, to be filed in appropriate jurisdictions
releasing and discharging the security interests, liens and encumbrances set
forth in Section 6.11 of the Parent Disclosure Schedules.

         Section 6.12 Adoption of Stay Bonus Plan. Prior to the Closing Date,
Merger Sub shall take such actions as necessary to adopt the Stay Bonus Plan
effective as of the Effective Time.

         Section 6.13 Termination of Shareholders Agreement. Prior to the
Closing, the Company shall take such actions as necessary to cause that certain
Shareholders Agreement, dated as of May 29, 1998, by and among the Company and
the Shareholders of the Company to be terminated.

         Section 6.14 Good Standing. Prior to the Closing, the Company shall
take such actions as necessary to cause each of the Acquired Corporations to be
in good standing under the Laws of their respective jurisdictions of
incorporation and under the Laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.

                                  ARTICLE VII

                              ADDITIONAL COVENANTS

         Section 7.1 Repayment of Liabilities. Parent shall, or shall cause the
Surviving Corporation to, repay the liabilities listed in Section 7.1 of the
Company Disclosure Schedules at Closing or promptly thereafter.

         Section 7.2 Employee Benefits. Except as set forth in Section 7.1 of
the Parent Disclosure Schedules, for purposes of eligibility to participate,
employees of the Acquired Corporations as of the Effective Time that continue
employment with the Surviving Corporation after the Effective Time shall not
receive credit under any Plan, program or arrangement established or maintained
by Parent or the Surviving Corporation and made available to such employees for
service accrued prior to the Effective Time with the Company.

         Section 7.3 Indemnification of Officers and Directors.

                  (a) The Surviving Corporation shall indemnify and hold
         harmless, to the extent required in the Organizational Documents of the
         applicable Acquired Corporation and Tennessee Law, the individuals who
         on or prior to the Effective Time were officers or directors of the
         Acquired Corporations (each an "INDEMNITEE" and collectively, the
         "INDEMNITEES") with respect to all acts or omissions by them in their
         capacities as such or taken at the request of an Acquired Corporation
         at any time prior to the Effective Time. With respect to all acts or
         omissions by them in their capacities as an officer or director or
         taken at the request of an Acquired Corporation at any time prior to
         the Effective Time, the Surviving Corporation agrees that all rights of
         the Indemnitees to indemnification and exculpation from liabilities for
         acts or omissions occurring at or prior to the Effective Time as
         provided in the Organizational Documents of the Acquired Corporations
         as now in effect shall survive the Merger and shall continue in full
         force and effect in accordance with their terms. Such rights shall not
         be amended, or otherwise modified in any manner that would adversely
         affect the rights of the Indemnitees, unless such modification is
         required by Law.

                  (b) If any claim or claims shall, subsequent to the Effective
         Time and within three years thereafter, be made against any present or
         former director or officer of an Acquired Corporation based on or
         arising out of the services of such Person prior to the Effective Time
         in the capacity of such Person as a

                                       33


         director or officer of an Acquired Corporation, the provisions of
         Section 7.3(a) with respect to the Organizational Documents of the
         Acquired Corporations will continue in effect until the final
         disposition of all such claims.

                  (c) Each of Parent, the Surviving Corporation and the
         Indemnitee shall cooperate, and cause their respective affiliates to
         cooperate, in the defense of any action and shall provide access to
         properties and individuals as reasonably requested and furnish or cause
         to be furnished records, information and testimony, and attend such
         conferences, discovery proceedings, hearings, trials or appeals, as may
         be reasonably requested in connection therewith.

                  (d) For the three-year period commencing immediately after the
         Effective Time, the Surviving Corporation shall either (i) maintain in
         effect the Company's current directors' and officers' liability
         insurance policies providing coverage for acts or omissions occurring
         prior to the Effective Time with respect to those Persons who are
         currently covered by the Company's directors' and officers' liability
         insurance policy on terms and at limits no less favorable to the
         Company's directors and officers currently covered by policies in
         effect on the date hereof; or (ii) obtain a directors' and officers'
         insurance policy for the exclusive benefit of those Persons who are
         currently covered by the Company's directors' and officers' liability
         insurance policy from a financially sound and nationally reputable
         carrier which (A) is at least as favorable to the Persons currently
         covered by the Company's directors' and officers' liability insurance
         in effect as of the date hereof; and (B) will at a minimum have the
         same terms and limits as the Company's directors' and officers'
         liability insurance policies in effect as of the date hereof; provided,
         however, that, if the Company's current directors' and officers'
         liability insurance expires, is terminated or is canceled during such
         three-year period, the Surviving Corporation shall obtain directors'
         and officers' liability insurance covering such acts or omissions with
         respect to each such Person on terms and at limits no less favorable to
         the Company's directors and officers currently covered by policies in
         effect immediately prior to the date of such expiration, termination or
         cancellation. The Company and Parent shall cooperate to make any
         arrangements necessary to obtain or continue such directors' and
         officers' liability insurance for such three-year period, including the
         prepayment of any fees or premiums to the applicable insurance
         providers of such amounts as necessary to provide the coverage
         contemplated by this Section 7.3; provided, however, that the Surviving
         Corporation will not be required to expend in any year an amount in
         excess of 125% of the annual aggregate premiums currently paid by the
         Company for such insurance; and provided, further, that if the annual
         premiums of such insurance coverage exceed such amount, the Surviving
         Corporation will be obligated to obtain a policy with the best coverage
         available, in the reasonable judgment of its board of directors, for a
         cost not exceeding such amount. The estimated amount of such premiums
         during such three-year period shall be part of the Merger Consideration
         Reductions.

                                  ARTICLE VIII

                CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY

         The obligation of each party to effect the Merger and otherwise
consummate the Contemplated Transactions is subject to the satisfaction or
waiver by each party, on or before the Closing, of each of the following
conditions:

         Section 8.1 Shareholder Approval. This Agreement, the Merger and the
Contemplated Transactions shall have been duly approved by the Required Company
Shareholder Vote.

         Section 8.2 No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order preventing the
consummation of the Merger shall have been issued by any court of competent
jurisdiction or any other Governmental Body and shall remain in effect, and
there shall not be any Legal Requirement enacted, promulgated, adopted or deemed
applicable to the Merger that makes consummation of the Merger illegal or
otherwise prohibits the consummation of the Merger.

                                       34


                                   ARTICLE IX
          CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB

         The obligation of Parent and Merger Sub to effect the Merger and
otherwise consummate the Contemplated Transactions is subject to the
satisfaction or waiver by Parent and Merger Sub, on or before the Closing, of
each of the following conditions:

         Section 9.1 Accuracy of Representations and Warranties. The
representations and warranties of the Company set forth in this Agreement shall
have been accurate in all material respects as of the date of this Agreement and
shall be accurate in all material respects as of the Closing Date as if made on
and as of the Closing (it being understood that, for purposes of determining the
accuracy of such representations and warranties, for purposes of this Section
9.1 all "Material Adverse Effect" qualifications and other materiality
qualifications contained in such representations and warranties shall be
disregarded).

         Section 9.2 Performance of Covenants. Each of the covenants and
obligations that the Company is required to comply with or perform at or prior
to the Closing Date shall have been complied with or performed in all material
respects.

         Section 9.3 Consents. All of the Consents listed in Section 9.3 of the
Company Disclosure Schedules required to be obtained, made or given in
connection with the Merger and the Contemplated Transactions shall have been
obtained, made or given and shall be in full force and effect.

         Section 9.4 Closing Three Month Recurring Revenue Target. On the
Closing Date, the Company's average Monthly Recurring Revenue, calculated for
the three full calendar months immediately prior to the Closing Date and
calculated in a manner consistent with past practices (as adjusted in the
definition) (the "CLOSING THREE MONTH RECURRING REVENUE"), shall be no less than
$4,400,000 per month.

         Section 9.5 Closing Month Revenue Target. On the Closing Date, the
Company's Monthly Recurring Revenue for the first full month immediately
preceding the Closing Date, calculated in a manner consistent with past
practices (as adjusted in the definition), shall be no less than $4,400,000.

         Section 9.6 Closing Inventory. On the Closing Date, the net book value
of the Company's inventory, in a manner consistent with past practices (the
"CLOSING INVENTORY"), shall be no less than $19,500,000; provided, however, that
Parent's sole remedy in the event that such representation is not true as of the
Closing Date will be the Merger Consideration Reduction provided for in Section
2.4(f), except that if the Closing Inventory is equal to or less than the
Closing Inventory Minimum, then Parent may, at its election, terminate this
Agreement pursuant to the terms set forth in Section 12.1(i).

         Section 9.7 No Material Adverse Change. Since the date of this
Agreement, there shall not have occurred a Material Adverse Change with respect
to the Acquired Corporations taken as a whole and no event shall have occurred
or circumstance shall exist that, in combination with any other events or
circumstances, could reasonably be expected to have a Material Adverse Change
with respect to the Acquired Corporations taken as a whole.

         Section 9.8 Agreements and Documents. The following agreements and
documents shall have been delivered to Parent, and shall be in full force and
effect:

                  (a) a legal opinion from Bass, Berry & Sims PLC, counsel to
         the Company, dated the Closing Date, addressed to Parent, in the form
         of Exhibit E hereto;

                  (b) the written resignations of all officers and directors of
         each of the Acquired Corporations, effective as of the Effective Time;

                  (c) Investor Questionnaire and Consents in the form of Exhibit
         C hereto completed and executed by each Shareholder of the Company;

                  (d) Option Questionnaire and Consents in the form of Exhibit D
         hereto completed and executed by each Right holder of the Company;

                                       35


                  (e) a certificate, executed on behalf of the Company by the
         Company's Chief Executive Officer, confirming that the conditions set
         forth in Section 9.1, Section 9.2, Section 9.3, Section 9.4, Section
         9.5, Section 9.6, Section 9.7, and this Section 9.8 have been duly
         satisfied.

         Section 9.9 Outstanding Options and Rights. No Rights shall be
outstanding or held by any Person other than by a Person that (i) Parent
reasonably believes to be an Accredited Investor; and (ii) who has completed and
executed an Option Questionnaire and Consent, which shall have been delivered to
Parent at least one Business Day prior to the Closing Date.

         Section 9.10 Employees. None of the individuals identified in Section
9.10 of the Parent Disclosure Schedules shall have ceased to be employed by the
Company or, to the Knowledge of the Company, shall have expressed an intention
to terminate his or her employment with the Company or to decline to continue
employment with the Surviving Corporation during the transition period of 90
days following the Effective Time.

         Section 9.11 No Dissenting Shares. As of the Effective Time,
Shareholders holding no more than 5% of the Company Common Stock in the
aggregate shall have delivered to the Company written notice of their intent to
demand payment for their shares of Company Common Stock if the Merger is
consummated pursuant to Chapter 23 of the Tennessee Corporate Statutes.

         Section 9.12 Voting Agreement. The Voting Agreement shall remain in
full force and effect and the Shareholders party thereto shall have complied in
all respects with the Voting Agreement and shall have performed all of their
respective obligations thereunder.

                                   ARTICLE X

                CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY

         The obligation of the Company to effect the Merger and otherwise
consummate the Contemplated Transactions is subject to the satisfaction, or
waiver by the Company, on or before the Closing, of each of the following
conditions:

         Section 10.1 Accuracy of Representations. The representations and
warranties of Parent and Merger Sub set forth in this Agreement shall have been
accurate in all material respects as of the date of this Agreement and shall be
accurate in all material respects as of the Closing Date as if made on and as of
the Closing Date (it being understood that, for purposes of determining the
accuracy of such representations and warranties, for purposes of this Section
10.1 all "Material Adverse Effect" qualifications and other materiality
qualifications contained in such representations and warranties shall be
disregarded).

         Section 10.2 Performance of Covenants. Each of the covenants and
obligations that Parent or Merger Sub, as applicable, is required to comply with
or perform at or prior to the Closing Date shall have been complied with or
performed in all material respects.

         Section 10.3 No Material Adverse Change. Since the date of this
Agreement, there shall not have occurred a Material Adverse Change with respect
to Parent and its Subsidiaries taken as a whole.

         Section 10.4 Documents. The following agreements and documents shall
have been delivered to the Company, and shall be in full force and effect:

                  (a) A certificate, executed on behalf of each of Parent and
         Merger Sub by an executive officer of each of Parent and Merger Sub,
         confirming that the conditions set forth in Section 10.1, Section 10.2
         and Section 10.3 have been duly satisfied; and

                  (b) a legal opinion from Winstead Sechrest & Minick P.C.,
         counsel to Parent and Merger Sub, dated the Closing Date, addressed to
         the Company, in the form of Exhibit F hereto.

                                       36


                                   ARTICLE XI

                              POST-CLOSING MATTERS

         Section 11.1 Survival of Representations and Warranties. All of the
representations and warranties of the Company contained in ARTICLE IV of this
Agreement, the certificates and any other documents delivered pursuant to this
Agreement shall survive the Closing Date and the consummation of the
Contemplated Transactions for a period of one year following the Closing Date;
provided, however, that any claims relating to any of the representations and
warranties of the Company contained in ARTICLE IV of this Agreement that are
pending as of such date shall survive until such claims shall have been
resolved.

         Section 11.2 Indemnification.

                  (a) Indemnification by Parent. From and after the Effective
         Date, Parent shall indemnify and hold the Shareholders of the Company
         and its officers, directors, employees, attorneys and agents harmless
         from, against and in respect of any and all claims, demands, lawsuits,
         proceedings, losses, assessments, Taxes, fines, penalties,
         administrative orders, obligations, costs, expenses, liabilities and
         damages, including interest, penalties, reasonable attorneys' fees and
         costs of investigation (all of the foregoing hereinafter referred to
         collectively as "CLAIMS"), which arise or result from and to the extent
         they are attributable to any breach of the representations, warranties
         or covenants by Parent contained in this Agreement.

                  (b) Indemnification by the Shareholders. From and after the
         Effective Date, the Shareholders shall indemnify and hold Parent, the
         Surviving Corporation and their respective officers, directors,
         employees, attorneys and agents harmless from, against and in respect
         of any and all Claims which arise or result from and to the extent they
         are attributable to (i) any breach of the representations, warranties
         or covenants by the Company contained in this Agreement; (ii) any Taxes
         not accrued on the Closing Balance Sheet; and/or (iii) any fines,
         penalties, obligations, costs, expenses, liabilities and damages,
         including interest and reasonable attorneys' fees, incurred in
         connection with the Disclosed Contingent Liabilities.

                  (c) Limitations of Liability.

                           (i) No indemnifying party shall be required to
                  indemnify an indemnified party under Section 11.2(a) or
                  Section 11.2(b)(i) hereof until the aggregate amount of Claims
                  entitled to indemnification exceeds an aggregate of $100,000
                  and then only for the amount by which such Claims exceed
                  $100,000.

                           (ii) Notwithstanding anything in this Agreement to
                  the contrary, the aggregate liability of any party with
                  respect to Claims for indemnification hereunder shall not
                  exceed and shall be payable out of the General Holdback
                  Amount.

                           (iii) The amount of any Claims otherwise payable to
                  any indemnified party pursuant to this Section 11.2 shall be
                  reduced to the extent that such indemnified party actually
                  realizes, by reason of such Claims, any insurance proceeds
                  that are not offset by any directly corresponding increase in
                  the insurance premiums payable to such indemnified party or
                  any tax benefits. In the event that any such tax benefit or
                  insurance proceeds are actually realized by an indemnified
                  party subsequent to the receipt by such indemnified party of
                  an indemnification payment hereunder in respect of the Claims
                  to which such tax benefit or insurance proceeds relate,
                  appropriate refunds shall be made promptly regarding the
                  amount of such indemnification payment.

                           (iv) The amount of any Claims otherwise payable to
                  any indemnified party pursuant to this Section 11.2 shall be
                  reduced to the extent that such amount was fully and
                  accurately taken into consideration in determining the
                  Adjustment Amount.

                           (v) Any Claim with respect to a matter subject to
                  indemnification under Section 11.2(a) and Section 11.2(b)(i)
                  and (ii) must be made prior to the expiration of 12 months
                  after the Effective Date.

                                       37


                  (d) Each of the parties hereto agrees that its sole recourse
         for any breach or default hereunder raised after the Closing Date, or
         for any other matter as to which indemnification is provided to it in
         this Section 11.2 shall be limited to (i) the indemnification
         provisions set forth herein; and (ii) any equitable relief to which it
         is entitled as contemplated by Section 13.15 hereof. Notwithstanding
         the foregoing, nothing contained in this Section 11.2 shall limit the
         rights of any party under ARTICLE XII hereof.

                  (e) Method of Asserting Claims. All Claims for indemnification
         by any party under this Section 11.2 shall be asserted and resolved as
         follows:

                           (i) in the event that any Claim or demand in respect
                  of which any party would be entitled to indemnification
                  hereunder is asserted against such party by a third party (a
                  "THIRD PARTY CLAIM"), said party shall within 75 days thereof
                  notify the indemnifying party of such Claim or demand,
                  specifying the nature of and specific basis for such Claim or
                  demand and the amount or the estimated amount thereof to the
                  extent then feasible, which estimate shall not be conclusive
                  of the final amount of such Claim or demand (the "INDEMNITY
                  CLAIM NOTICE"); provided, however, that the failure to notify
                  the indemnifying party of the commencement of such indemnity
                  Claim within such 75 day period will not relieve the
                  indemnifying party of any liability that it may have to any
                  indemnified party, except to the extent that the indemnifying
                  party is actually materially prejudiced by the indemnifying
                  party's failure to give such Indemnity Claim Notice. The
                  indemnifying party shall have 30 days from the personal
                  delivery or mailing of the Indemnity Claim Notice (the "NOTICE
                  PERIOD") to notify the indemnified party (A) whether or not it
                  disputes entitlement of the indemnified party to
                  indemnification hereunder with respect to such Claim or
                  demand; and (B) whether or not it desires at no cost or
                  expense to the indemnified party, to defend the indemnified
                  party against such Claim or demand; provided, however, that
                  any indemnified party is hereby authorized prior to and during
                  the Notice Period to file any motion, answer or other pleading
                  which it shall deem necessary or appropriate to protect its
                  interests or those of the indemnifying party and that are not
                  materially prejudicial to the indemnifying party. In the event
                  that the indemnifying party notifies the indemnified party
                  within the Notice Period that it desires to defend the
                  indemnified party against such Claim or demand and except as
                  hereinafter provided, the indemnifying party shall have the
                  right to defend by all appropriate proceedings, which
                  proceedings shall be promptly settled or prosecuted by it to a
                  final conclusion. If the indemnified party desires to
                  participate in, but not control, any such defense or
                  settlement it may do so at its sole cost and expense. If
                  requested by the indemnifying party, the indemnified party
                  agrees to cooperate with the indemnifying party and its
                  counsel in contesting any Claim or demand which the
                  indemnifying party elects to contest, or, if appropriate and
                  related to the Claim in question, in making any counterclaim
                  against the person asserting the cross complaint against any
                  person. No Claim may be settled without the consent of the
                  indemnifying party, which consent shall not be unreasonably
                  withheld. Notwithstanding the foregoing, in connection with a
                  Third Party Claim asserted against both such indemnified party
                  and indemnifying party, if (A) such indemnified party has
                  available to it defenses which are in addition to those
                  available to the indemnifying party; (B) such indemnified
                  party has available to it defenses which are inconsistent with
                  the defenses available to the indemnifying party; or (C) a
                  conflict exists or may reasonably be expected to exist in
                  connection with the representation of both such indemnified
                  party and indemnifying party by the legal counsel chosen by
                  the indemnifying party, such indemnified party shall have the
                  right to select its own legal counsel subject to the approval
                  of such legal counsel by the indemnifying party, such approval
                  not to be unreasonably withheld. If such indemnified party
                  selects its own legal counsel pursuant to the immediately
                  preceding sentence and the underlying Third Party Claim is
                  otherwise subject to the scope of the indemnification
                  obligations of the indemnifying party pursuant to this Section
                  11.2, the reasonable fees and expenses of such legal counsel
                  will be included within the indemnification obligations of the
                  indemnifying party; provided, however, that under no
                  circumstances will the indemnifying party be obligated to
                  indemnify such indemnified party against the fees and expenses
                  of more than one legal counsel selected by such indemnified
                  party in connection with a single Claim (notwithstanding the
                  number of persons against whom the Third Party Claim may be
                  asserted). To the extent a Claim with respect to
                  indemnification of representations and warranties is made
                  within the survival period set forth in Section 11.1, such
                  Claim shall survive until such Claim is resolved pursuant to
                  the provisions of Section 11.2, notwithstanding the expiration
                  of the applicable survival period set forth in Section 11.1.
                  For the avoidance of doubt, any Claim with respect to the
                  Disclosed

                                       38


                  Contingent Liabilities shall survive until such Claim with
                  respect to the Disclosed Contingent Liabilities shall have
                  been settled and paid, either pursuant to a full settlement
                  agreement binding on all parties to such Disclosed Contingent
                  Liability, including a full release of the Surviving
                  Corporation, or a final nonappealable judgment is entered.
                  Notwithstanding the foregoing, Parent shall not be (i)
                  required to give notice of any Claim with respect to any
                  Disclosed Contingent Liability or (ii) entitled to make a
                  Claim for indemnification in excess of the amount listed in
                  Section 11.2(e)(ii) of the Parent Disclosure Schedules with
                  respect to any Disclosed Contingent Liability set forth
                  therein.

                           (ii) In the event any indemnified party should have a
                  Claim hereunder which does not involve a Third Party Claim,
                  the indemnified party shall send an Indemnity Claim Notice
                  with respect to such claim to the indemnifying party and, if
                  applicable, otherwise comply with the provisions of this
                  Section 11.2. In the event the parties cannot reach an
                  agreement regarding such non-Third Party Claim within 30 days,
                  the parties will submit such dispute to final and binding
                  arbitration held in Dallas, Texas. American Arbitration
                  Association ("AAA") rules relating to commercial arbitration
                  will apply. The parties will jointly select a single
                  arbitrator from an AAA panel. If they cannot agree on an
                  arbitrator, they will both select an arbitrator and the two
                  arbitrators so selected will pick the arbitrator who will
                  decide the dispute. The arbitrator will not have the authority
                  to award punitive or consequential damages. Arbitration awards
                  are not appealable and may be enforced through any court of
                  competent jurisdiction. The arbitrator must apply Delaware law
                  and has exclusive authority to resolve any dispute relating to
                  the interpretations, applicability, or formation of this
                  Agreement.

         Section 11.3 Holdback Amount; Set-Off.

                  (a) Pursuant to Section 2.5, at the Effective Time, Parent
         shall withhold from the Merger Consideration that would otherwise be
         paid to the Shareholders of the Company the General Holdback Amount to
         support the payment of (i) Claims for Indemnification under Section
         11.2(b); (ii) the Company's share of the compensation of certain
         transitional employees of the Company pursuant to Section 3.4; (iii)
         any amounts payable by the Surviving Corporation as a result of the
         payments due for Dissenting Shares pursuant to Section 2.6(i) to the
         extent such payments exceed such Dissenting Shareholders' otherwise pro
         rata portion of the Merger Consideration; (iv) the Adjustment Amount to
         the extent it exceeds the Adjustment Holdback Amount; and/or (v) any
         Claims incurred in connection with the Disclosed Contingent
         Liabilities. During the General Holdback Period, Parent may set-off
         against the General Holdback Amount, (x) any of the amounts provided in
         clauses (ii), (iii) and (iv), above except to the extent such amounts
         are in dispute; (y) and the amounts provided in clauses (i) and (v)
         above and clauses (ii), (iii) and (iv), above to the extent such
         amounts are in dispute only after final determination pursuant to
         Section 11.2(e). Subject to the set-off provided in Section 11.3(d) of
         the Parent Disclosure Schedules, Parent shall exercise its right of
         set-off against the Cash Portion of General Holdback until the Cash
         Portion of General Holdback is reduced to zero and then against the
         Stock Portion of General Holdback. To the extent any portion of the
         Stock Portion of General Holdback is set-off against the General
         Holdback Amount, the number of shares of Parent Common Stock to be
         deducted from the Stock Portion of General Holdback shall be calculated
         as set forth in Section 11.3(d) of the Parent Disclosure Schedules. The
         exercise of Parent's right to set-off against the General Holdback
         Amount in accordance with clause (x) above in good faith, whether or
         not ultimately determined to be justified, shall not be deemed a breach
         of Parent's obligation to deliver the General Holdback Amount under
         this Agreement. Neither the exercise nor the failure to exercise such
         right of set-off will constitute an election of remedies or otherwise
         limit Parent in any manner in the enforcement of any other remedies
         that may be available to it.

                  (b) Upon expiration of the Adjustment Holdback Period, the
         Adjustment Amount shall be paid to the Shareholders of the Company, to
         the extent they are entitled to any portion of it, as provided in
         Section 3.2.

                  (c) Upon expiration of the General Holdback Period and the
         execution of all necessary documentation reasonably required by Parent,
         Parent shall promptly (and in any event within five Business Days) pay
         an amount equal to the Cash Portion of General Holdback , minus the sum
         of all amounts for outstanding Claims for indemnification brought
         pursuant to Section 11.2 which are still in dispute, to the Designated
         Account by wire transfer of immediately available funds. With respect
         to any Claims for

                                       39


         indemnification that are subject to dispute at the end of the General
         Holdback Period, to the extent the Shareholders are entitled to any
         additional amount of the General Holdback Amount upon settlement of
         such disputed Claims, Parent shall promptly (and in any event within
         five Business Days) pay such amount to the Designated Account upon
         settlement or final determination of such Claims, by wire transfer of
         immediately available funds. At such time, Parent shall also provide
         the Shareholders' Representative a list describing what it has set-off
         against the General Holdback. Notwithstanding the foregoing, the Stock
         Portion of General Holdback shall not be paid to the Designated
         Account, but shall be disbursed to the Shareholders by the Exchange
         Agent; provided, however, that for each Shareholder of the Company for
         which Parent does not receive at least one Business Day prior to the
         Closing Date an Investor Questionnaire and Consent completed by such
         Shareholder, and for each Shareholder of the Company for which, upon
         Parent's review of such Shareholder's completed and executed Investor
         Questionnaire and Consent, Parent is unable to form a reasonable belief
         that such Shareholder constitutes an Accredited Investor, Parent shall
         pay such Shareholder's pro rata portion of the General Holdback Amount
         in cash only and no Stock Portion of General Holdback shall be issued
         to such Shareholder. Such cash amounts shall be paid to the Designated
         Account.

                  (d) Notwithstanding Section 11.3(c), if, prior to expiration
         of the General Holdback Period, the Claims set forth in Section 11.3(d)
         of the Parent Disclosure Schedules (the "SECTION 11.3(d) CLAIMS") shall
         have been settled and paid, either pursuant to a full settlement
         agreement binding on all parties to the Section 11.3(d) Claims,
         including a full release of the Company or the Surviving Corporation,
         as applicable, or pursuant to a final nonappealable judgment being
         entered, the Shareholders shall be entitled to receive an amount (the
         "SETTLED CLAIMS AMOUNT") calculated as set forth in Section 11.3(d) of
         the Parent Disclosure Schedules. The cash portion of the Settled Claims
         Amount (as set forth in Section 11.3(d) of the Parent Disclosure
         Schedules) shall be paid to the Designated Account within five Business
         Days following the date on which the Section 11.3(d) Claims shall have
         been settled and paid and the Parent Common Stock portion of the
         Settled Claims Amount (as set forth in Section 11.3(d) of the Parent
         Disclosure Schedules) shall be disbursed to the Shareholders within
         such five-day period.

                  (e) The right to receive a portion of the Holdback Amount may
         not be assigned, and is transferable only by operation of Law. Such
         rights are solely consideration for the Merger and will not confer any
         voting or dividend rights or any equity ownership rights in the
         Surviving Corporation or Parent.

                  (f) It shall be the obligation of the Shareholders'
         Representative to pay and distribute to the Shareholders any amounts
         paid into the Designated Account. Neither Parent nor the Surviving
         Corporation shall have any liabilities or obligations of any nature
         with respect to such amounts other than to pay such amounts to the
         Designated Account.

         Section 11.4 Severance Payments. Parent or the Surviving Corporation
shall make severance payments to the employees and directors listed in Section
4.16(a) of the Company Disclosure Schedules in the amount and on the date set
forth next to each such employee's or director's name (collectively, the
"SEVERANCE PAYMENTS").

         Section 11.5 Registration Statement.

                  (a) Within 45 days after the Closing Date, Parent shall use
         commercially reasonable efforts to file a registration statement to
         register all of the Parent Common Stock issued as Stock Consideration
         (the "REGISTRATION SHARES") under the Securities Act for resale (the
         "REGISTRATION") on Form S-3 (the "REGISTRATION STATEMENT"). Parent
         shall use commercially reasonable efforts to cause the Registration
         Statement to become effective and to remain effective for a period (the
         "REGISTRATION PERIOD") (i) ending on the first anniversary of the
         Closing Date; or (ii) in the event any shares of Parent Common Stock
         are distributed to the Shareholders out of the Stock Portion of General
         Holdback, ending on the first anniversary of the last date on which
         such shares are distributed. For a period of one year following the
         Registration Period, Parent shall file with the SEC all reports
         required to be filed under the Exchange Act.

                  (b) Parent hereby agrees to prepare and file with the SEC such
         amendments and supplements to the Registration Statement and the
         prospectus used in connection therewith as may be necessary to keep the
         Registration Statement effective for the Registration Period and to
         comply with the provisions of the

                                       40


         Securities Act with respect to the disposition of all Registration
         Shares covered by such Registration Statement.

                  (c) Nothing herein shall require Parent to cause the
         Registration Statement to remain effective for any period of time
         following the Registration Period. Parent shall have the right to
         deregister with the SEC any Registration Shares that remain unsold at
         the conclusion of the Registration Period.

                  (d) Parent shall furnish to each stockholder selling shares of
         Parent Common Stock under the Registration Statement, a reasonable
         number of copies of the Registration Statement and the prospectus
         included therein as such Persons may reasonably request in order to
         facilitate the resale or other disposition of the Registration Shares
         covered by the Registration Statement.

                  (e) Notwithstanding the foregoing, Parent shall also have the
         obligation to file the registration statement covering the shares of
         Parent Common Stock issuable upon exercise of the Converted Options and
         to keep it effective for the time periods as set forth in Section 2.3.

         Section 11.6 Tax Returns. The Shareholders' Representatives shall cause
to be timely prepared and filed (or provided to Parent who will cause to be
filed, if applicable) when due (taking into account all extensions properly
obtained) all income and franchise Tax Returns that are required to be filed by
or with respect to each of the Acquired Corporations for taxable periods ending
on or before the Closing Date. Such Tax Returns shall be subject to Parent's
final review and approval and shall be prepared and filed in a manner consistent
with past practice and, on such Tax Returns, no position shall be taken,
elections made or method adopted that is inconsistent with positions taken,
elections made or methods used in preparing and filing similar Tax Returns in
prior periods without Parent's written consent. Parent shall have the right to
review any such Tax Return at least 30 days prior to the filing thereof.

         Section 11.7 Assistance and Cooperation. After the Closing Date, the
Shareholders' Representative shall (and shall cause his respective affiliates
to):

                  (a) timely sign and deliver such certificates or forms as may
         be reasonably necessary or appropriate to establish an exemption from
         (or otherwise reduce), or file Tax Returns or other reports with
         respect to sales, transfer and similar Taxes that are required to be
         filed by or with respect to each of the Acquired Corporations for
         taxable periods ending on or before the Closing Date;

                  (b) cooperate fully with Parent and the Surviving Corporation
         in preparing any Tax Returns that Parent or Surviving Corporation may
         be responsible for preparing and filing with respect to the Acquired
         Corporations for periods ending on or before the Closing Date;

                  (c) cooperate fully in preparing for any claim, assessment,
         deficiency, audit, review examination or other proposed change or
         adjustment by any tax authority or any judicial or administrative
         proceeding relating to a taxable period ending on or before the Closing
         Date (each, a "TAX CLAIM");

                  (d) make available to Parent and Surviving Corporation and to
         any tax authority as reasonably requested all information, records, and
         documents relating to Taxes of the Acquired Corporations; and

                  (e) furnish Parent and Surviving Corporation with copies of
         all written correspondence received from any tax authority in
         connection with any Tax Claim or information request relating to the
         Acquired Corporations.

         Section 11.8 Payment of Account Receivables and Other Items. Promptly
after receipt by the Surviving Corporation after the Effective Time of a payment
for an account receivable or other items as set forth in Section 11.8 of the
Company Disclosure Schedules, the Surviving Corporation shall pay such amount
actually received to the Designated Account.

                                       41


                                  ARTICLE XII

                                   TERMINATION

         Section 12.1 Termination. This Agreement may be terminated prior to the
Effective Time (whether before or after approval of this Agreement by the
Company's Shareholders):

                  (a) by mutual written Consent of Parent and the Company;

                  (b) by either Parent or the Company if:

                           (i) the Merger shall not have been consummated by
                  June 30, 2004 (unless the failure to consummate the Merger is
                  attributable to a failure on the part of the party seeking to
                  terminate this Agreement to perform any material obligation
                  required to be performed by such party at or prior to the
                  Effective Time);

                           (ii) a court of competent jurisdiction or other
                  Governmental Body shall have issued a final and nonappealable
                  order, decree or ruling, or shall have taken any other action,
                  having the effect of permanently restraining, enjoining or
                  otherwise prohibiting the Merger; or

                           (iii) (A) the Company Shareholders' Meeting
                  (including any adjournments and postponements thereof) shall
                  have been held and completed and the Company's Shareholders
                  shall have voted on a proposal to approve this Agreement; and
                  (B) this Agreement shall not have been approved at such
                  meeting (and shall not have been adopted at any adjournment or
                  postponement thereof) by the Required Company Shareholder
                  Vote; provided, however, that a party shall not be permitted
                  to terminate this Agreement pursuant to this Section
                  12.1(b)(iii) if the failure to obtain such Shareholder
                  approval is attributable to a failure on the part of such
                  party to perform any material obligation required to be
                  performed by such party at or prior to the Effective Time;

                  (c) by Parent (i) if any of the Company's representations and
         warranties shall have been inaccurate as of the date of this Agreement,
         such that the condition set forth in Section 9.1 would not be
         satisfied; or (ii) if (A) any of the Company's representations and
         warranties become inaccurate as of a date subsequent to the date of
         this Agreement (as if made on such subsequent date), such that the
         condition set forth in Section 9.1 would not be satisfied; and (B) such
         inaccuracy has not been cured by the Company within 10 Business Days
         after its receipt of written notice thereof and remains uncured at the
         time notice of termination is given; or (iii) any of the Company's
         covenants contained in this Agreement shall have been breached, such
         that the condition set forth in Section 9.2 would not be satisfied;

                  (d) by the Company (i) if any of Parent's representations and
         warranties shall have been inaccurate as of the date of this Agreement,
         such that the condition set forth in Section 10.1 would not be
         satisfied; or (ii) if (A) any of Parent's or Merger Sub's
         representations and warranties shall have become inaccurate as of a
         date subsequent to the date of this Agreement (as if made on such
         subsequent date), such that the condition set forth in Section 10.1
         would not be satisfied; and (B) such inaccuracy has not been cured by
         Parent or Merger Sub within 10 Business Days after its receipt of
         written notice thereof and remains uncured at the time notice of
         termination is given; or (iii) if any of Parent's or Merger Sub's
         covenants contained in this Agreement shall have been breached such
         that the condition set forth in Section 10.2 would not be satisfied;

                  (e) by Parent if, since the date of this Agreement, there
         shall have occurred any Material Adverse Change with respect to the
         Acquired Corporations, taken as a whole, or there shall have occurred
         any event or circumstance that, in combination with any other events or
         circumstances, could reasonably be expected to have a Material Adverse
         Change with respect to the Acquired Corporations, taken as a whole;

                  (f) By the Company, upon the Company's execution of a binding
         agreement with a third party with respect to a Superior Proposal;
         provided, however, that for any termination by the Company under this
         Section 12.1(f) to be effective, the Company must have complied with
         all provisions of this Agreement, including, without limitation,
         Section 6.3;

                                       42


                  (g) By Parent, if the Company or the board of directors of the
         Company shall have (i) withdrawn or modified, in a manner adverse to
         Parent or Merger Sub, (a) the approval by the board of directors of the
         Company of this Agreement or the Contemplated Transactions; or (b) the
         recommendation of the Company's board of directors that the
         Shareholders approve this Agreement, the Merger and the Contemplated
         Transactions (an "ADVERSE RECOMMENDATION") (it being understood and
         agreed that any communication by the Company or its board of directors
         to the Shareholders that indicates that the board of directors had
         determined not to withdraw or modify such recommendation, in whole or
         in part, because such action would or might give rise to a right on the
         part of Parent to terminate this Agreement and/or obligate the Company
         to comply with the provisions of Section 12.3 of this Agreement shall
         nevertheless be deemed to be an Adverse Recommendation); or (ii)
         approved or entered into a definitive agreement with respect to a
         Acquisition Proposal with a third party;

                  (h) By Parent, if any of the Shareholders party to the Voting
         Agreement have failed to perform their respective obligations or caused
         a breach of their obligations under the Voting Agreement; or

                  (i) By Parent, if the Closing Inventory is equal to or less
         than the Closing Inventory Minimum.

         Section 12.2 Effect of Termination. In the event of the termination of
this Agreement as provided in Section 12.1, this Agreement shall become void and
of no further force or effect; provided, however, that (i) Section 6.1(c),
ARTICLE XII and ARTICLE XIII shall survive the termination of this Agreement and
shall remain in full force and effect; and (ii) the termination of this
Agreement shall not relieve any party from any liability for any material
inaccuracy in or material breach of any representation or warranty, covenant or
other provision contained in this Agreement.

         Section 12.3 Termination Fees; Expenses.

                  (a) Termination Fee and Expense Reimbursement. If this
         Agreement is terminated pursuant to Section 12.1(b)(iii), Section
         12.1(c)(iii), Section 12.1(f) or Section 12.1(g), then the Company
         shall (i) pay Parent a fee equal to 5% of the Enterprise Value, which
         amount shall be payable by check or wire transfer of immediately
         available funds (the "TERMINATION FEE") simultaneously with such
         termination of this Agreement; and (ii) the Company shall reimburse
         Parent and Merger Sub for all reasonable fees and expenses (including
         all attorneys' fees, accountants' fees, financial advisory fees and
         filing fees) that have been paid or that may become payable by or on
         behalf of Parent or Merger Sub in connection with the preparation and
         negotiation of this Agreement and otherwise in connection with the
         Merger. If this Agreement is terminated pursuant to Section 12.1(c)(i)
         or Section 12.1(c)(ii), the Company shall reimburse Parent and Merger
         Sub for all reasonable fees and expenses (including all attorneys'
         fees, accountants' fees, financial advisory fees and filing fees) that
         have been paid or that may become payable by or on behalf of Parent or
         Merger Sub in connection with the preparation and negotiation of this
         Agreement and otherwise in connection with the Merger. Any required
         reimbursement under this Section 12.3(a) shall take place within two
         Business Days of the later of the termination of this Agreement or
         submission of evidence of such incurred expenses to the Company.

                  (b) Other Expenses. Subject to Section 2.4 and except as
         provided otherwise in Section 12.3(a) above, all reasonable costs and
         expenses incurred in connection with this Agreement, and the
         Contemplated Transactions shall be paid by the party incurring such
         expenses, whether or not the Merger is consummated.

                  (c) If the Company fails to pay when due any amount payable
         under this Section 12.3, then (i) the Company shall reimburse Parent
         for all costs and expenses (including fees and disbursements of
         counsel) incurred in connection with the collection of such overdue
         amount and the enforcement by Parent of its rights under this Section
         12.3; and (ii) the Company shall pay to Parent interest on such overdue
         amount (for the period commencing as of the date such overdue amount
         was originally required to be paid and ending on the date such overdue
         amount is actually paid to Parent in full) at a rate per annum equal to
         3% over the "prime rate" (as published by the Wall Street Journal) in
         effect on the date such overdue amount was originally required to be
         paid.

                                       43


                                  ARTICLE XIII

                            MISCELLANEOUS PROVISIONS

         Section 13.1 Amendment. This Agreement may be amended only by an
instrument in writing signed by the Company, Merger Sub and Parent at any time
(whether before or after adoption of this Agreement by the Shareholders of the
Company); provided, however, that (a) each amendment shall have been duly
authorized by the respective boards of directors of the Company, Parent and
Merger Sub; and (b) after adoption of this Agreement by the Company's
Shareholders, no amendment shall be made which by Law requires further approval
of the Shareholders of the Company without the further approval of such
Shareholders.

         Section 13.2 Assignments and Successors. This Agreement shall be
binding upon, and shall be enforceable by and inure solely to the benefit of,
the parties hereto and their respective successors and assigns; provided,
however, that neither this Agreement nor any of any party's rights hereunder may
be assigned by such party without the prior written Consent of the other party.
Any attempted assignment of this Agreement or of any such rights without such
Consent shall be void and of no effect.

         Section 13.3 No Third Party Rights. Nothing in this Agreement, express
or implied, is intended to or shall confer upon any Person (other than the
parties hereto) any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement; provided, however, that after the Effective Time,
the Indemnitees shall be third party beneficiaries of, and entitled to enforce,
Section 7.3.

         Section 13.4 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and will be deemed to have been duly
given, upon receipt, if delivered personally (including by courier or overnight
courier), mailed by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses, or sent by
electronic transmission to the facsimile number specified below:

                  (a)   if to Parent, Merger Sub, or the Surviving Corporation:

                        Rent-A-Center, Inc.
                        5700 Tennyson Parkway, 4th Floor
                        Plano, Texas  75024
                        Attention: Chief Executive Officer
                        Facsimile: 972-943-0116

                        With a copy, which shall not constitute notice, to:

                        Winstead Sechrest & Minick P.C.
                        5400 Renaissance Tower
                        1201 Elm Street
                        Dallas, Texas  75270
                        Attention: Thomas W. Hughes, Esq.
                        Facsimile: 214-745-5390

                  (b)   if to the Company (prior to the Closing Date):

                        Rent Rite, Inc.
                        7601 North Federal Highway, Suite 260B
                        Boca Raton, Florida  33487
                        Attention: Edward Stanko
                        Facsimile: 561-999-0435

                        With a copy, which shall not constitute notice, to:

                        Bass, Berry & Sims PLC
                        315 Deaderick Street
                        AmSouth Center, Suite 2700
                        Nashville, Tennessee  37238-3001

                                       44


                        Attention: Bob F. Thompson, Esq.
                        Facsimile: 615-742-6293

                  (c)   if to the Shareholders' Representative:

                        Thomas B. Mitchell
                        9436 Spanish Moss Road W.
                        Lake Worth, Florida  33467
                        Facsimile: 561-357-0783

                        With a copy, which shall not constitute notice, to:

                        Bass, Berry & Sims PLC
                        315 Deaderick Street
                        AmSouth Center, Suite 2700
                        Nashville, Tennessee  37238-3001
                        Attention: Bob F. Thompson, Esq.
                        Facsimile: 615-742-6293

or to such other address or facsimile number as any party may, from time to
time, designate in a written notice given in like manner. Notice given by
facsimile will be deemed delivered on the day the sender receives facsimile
confirmation that such notice was reached at the facsimile number of the
addressee. Notices delivered personally shall be deemed delivered as of actual
receipt and mailed notices shall be deemed delivered three days after mailing.

         Section 13.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.

         Section 13.6 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.

         Section 13.7 Entire Agreement. This Agreement (together with all other
documents and instruments referred to herein) constitutes the entire agreement
among the parties, and supersedes all other prior agreements and undertakings,
both written and oral, among the parties with respect to the subject matter
hereof.

         Section 13.8 Governing Law. THIS AGREEMENT AND THE AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (EXCLUSIVE OF CONFLICTS OF
LAW PRINCIPLES). COURTS WITHIN THE STATE OF DELAWARE WILL HAVE EXCLUSIVE
JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN
LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES CONSENT TO AND AGREE
TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES
HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (i) SUCH PARTY IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS; (ii) SUCH PARTY AND SUCH
PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR (iii)
ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM.

         Section 13.9 No Consequential Damages. Notwithstanding anything to the
contrary elsewhere in this Agreement, no party (or its affiliates) shall, in any
event, be liable to any other party (or its affiliates) for any

                                       45


consequential damages, including, but not limited to, loss of revenue or income,
cost of capital, or loss of business reputation or opportunity relating to the
breach or alleged breach of this Agreement.

         Section 13.10 Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed will be deemed to be an original but all of which taken
together will constitute one and the same agreement.

         Section 13.11 Cooperation. The Company agrees to cooperate fully with
Parent and to execute and deliver such further documents, certificates,
agreements and instruments and to take such other actions as may be reasonably
requested by Parent to evidence or reflect the Contemplated Transactions and to
carry out the intent and purposes of this Agreement.

         Section 13.12 Construction; Usage.

                  (a) Interpretation. In this Agreement, unless a clear contrary
         intention appears:

                           (i) the singular number includes the plural number
                  and vice versa;

                           (ii) reference to any Person includes such Person's
                  successors and assigns but, if applicable, only if such
                  successors and assigns are not prohibited by this Agreement,
                  and reference to a Person in a particular capacity excludes
                  such Person in any other capacity or individually;

                           (iii) reference to any gender includes each other
                  gender;

                           (iv) reference to any agreement, document or
                  instrument means such agreement, document or instrument as
                  amended or modified and in effect from time to time in
                  accordance with the terms thereof;

                           (v) reference to any Legal Requirement means such
                  Legal Requirement as amended, modified, codified, replaced or
                  reenacted, in whole or in part, and in effect from time to
                  time, including rules and regulations promulgated thereunder,
                  and reference to any section or other provision of any Legal
                  Requirement means that provision of such Legal Requirement
                  from time to time in effect and constituting the substantive
                  amendment, modification, codification, replacement or
                  reenactment of such section or other provision;

                           (vi) "hereunder," "hereof," "hereto," and words of
                  similar import shall be deemed references to this Agreement as
                  a whole and not to any particular Article, Section or other
                  provision hereof;

                           (vii) "including" (and with correlative meaning
                  "include") means including without limiting the generality of
                  any description preceding such term;

                           (viii) "or" is used in the inclusive sense of
                  "and/or";

                           (ix) with respect to the determination of any period
                  of time, "from" means "from and including" and "to" means "to
                  but excluding"; and

                           (x) references to documents, instruments or
                  agreements shall be deemed to refer as well to all appendices,
                  addenda, exhibits, schedules or amendments thereto.

                  (b) Legal Representation of the Parties. This Agreement was
         negotiated by the parties with the benefit of legal representation and
         any rule of construction or interpretation otherwise requiring this
         Agreement to be construed or interpreted against any party shall not
         apply to any construction or interpretation hereof.

                  (c) Headings. The headings contained in this Agreement are for
         the convenience of reference only, shall not be deemed to be a part of
         this Agreement and shall not be referred to in connection with the
         construction or interpretation of this Agreement.

                                       46


         Section 13.13 Disclosure Schedules. The Company and Parent have set
forth information in the Company Disclosure Schedules and the Parent Disclosure
Schedules, respectively, in the sections thereof that correspond to the section
of this Agreement to which each relates; provided, however, that where the same
item is required to be disclosed by more than one section of this Agreement,
disclosure of the item in one section of the applicable disclosure schedule will
constitute disclosure of the item wherever else required only to the extent that
such applicability is manifestly evident on the face of such disclosures.

         Section 13.14 Failure or Indulgence Not Waiver. No failure or delay on
the part of any party hereto in the exercise of any right hereunder will impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty or agreement herein, nor will any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.

         Section 13.15 Enforcement of Agreement. The parties acknowledge and
agree that they would be irreparably damaged if any of the provisions of this
Agreement are not performed in accordance with their specific terms and that any
breach of this Agreement could not be adequately compensated in all cases by
monetary damages alone. Accordingly, in addition to any other right or remedy to
which a party may be entitled, at Law or in equity, it shall be entitled to
enforce any provision of this Agreement by a decree of specific performance and
temporary, preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.

         Section 13.16 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the essence.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       47


         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.

                                  RENT-A-CENTER, INC.

                                  By: /s/ Mitchell E. Fadel
                                     -------------------------------------------

                                  Name: Mitchell E. Fadel

                                  Title: President

                                  RAC RR, INC.

                                  By: /s/ Mitchell E. Fadel

                                  Name: Mitchell E. Fadel

                                  Title: Vice President

                                  RENT RITE, INC.

                                  By: /s/ Karl Schledwitz
                                     -------------------------------------------

                                  Name: Karl Schledwitz

                                  Title: Chairman

Thomas B. Mitchell joins this Agreement and agrees to be the Shareholders'
Representatives and perform the obligations of the Shareholders' Representative.

                                   /s/ Thomas B. Mitchell
                                  ----------------------------------------------
                                  Thomas B. Mitchell

                                       48


                                   APPENDIX A

                               CERTAIN DEFINITIONS

         For purposes of this Agreement (including this Appendix A):

         ACCOUNTANTS. "Accountants" has the meaning set forth in Section 3.1.

         ACCREDITED INVESTOR. "Accredited Investor" has the meaning set forth in
Rule 501(a) promulgated under the Securities Act.

         ACQUIRED CORPORATION(s). "Acquired Corporation" means the Company or
any of its Subsidiaries, and the "Acquired Corporations" means the Company and
all of its Subsidiaries.

         ACQUIRED CORPORATION CONTRACT. "Acquired Corporation Contract" means
any contract: (a) to which any of the Acquired Corporations is a party; (b) by
which any of the Acquired Corporations or any asset of any of the Acquired
Corporations is or may become bound or under which any of the Acquired
Corporations has, or may become subject to, any obligation; or (c) under which
any of the Acquired Corporations has or may acquire any right or interest.

         ACQUISITION PROPOSAL. "Acquisition Proposal" means any offer, proposal,
inquiry or indication of interest (other than an offer, proposal, inquiry or
indication of interest by Parent) contemplating or otherwise relating to any
Acquisition Transaction.

         ACQUISITION TRANSACTION. "Acquisition Transaction" means any
transaction or series of transactions involving:

                  (a) any merger, consolidation, share exchange, business
         combination, issuance of securities, acquisition of securities, tender
         offer, exchange offer or other similar transaction (i) in which any of
         the Acquired Corporations is a constituent corporation; (ii) in which a
         Person or "group" (as defined in the Exchange Act and the rules
         promulgated thereunder) of Persons directly or indirectly acquires
         beneficial or record ownership of securities representing more than 15%
         of the outstanding securities of any class of voting securities of any
         of the Acquired Corporations; or (iii) in which any of the Acquired
         Corporations issues or sells securities representing more than 20% of
         the outstanding securities of any class of voting securities of any of
         the Acquired Corporations; or

                  (b) any sale (other than sales of rental merchandise in the
         Ordinary Course of Business), lease (other than in the Ordinary Coarse
         of Business), exchange, transfer (other than sales of rental
         merchandise in the Ordinary Course of Business), license (other than
         nonexclusive licenses in the Ordinary Course of Business), acquisition
         or disposition of any business or businesses or assets that constitute
         or account for 20% or more of the consolidated net revenues, net income
         or assets of the Acquired Corporations.

         ADJUSTMENT AMOUNT. "Adjustment Amount" has the meaning set forth in
Section 2.4(c).

         ADJUSTMENT HOLDBACK AMOUNT. "Adjustment Holdback Amount" has the
meaning set forth in Section 2.5(b).

         ADJUSTMENT HOLDBACK PERIOD. "Adjustment Holdback Period" has the
meaning set forth in Section 2.5(b).

         ADVERSE RECOMMENDATION. "Adverse Recommendation" has the meaning set
forth in Section 12.1(g).

         AGREEMENT. "Agreement" means the Agreement and Plan of Merger and
Reorganization to which this Appendix A is attached, as it may be amended from
time to time.

         ANTITRUST LAWS. "Antitrust Laws" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and any other antitrust, unfair
competition, merger or acquisition notification, or merger or acquisition
control Legal Requirements under any applicable jurisdictions, whether federal,
state, local or foreign.

                                      A-1



         ARTICLES OF MERGER. "Articles of Merger" has the meaning set forth in
Section 1.3.

         AVERAGE PER SHARE VALUE. "Average Per Share Value" has the meaning set
forth in Section 2.1(e)(i).

         BENEFIT PLANS. "Benefit Plans" has the meaning set forth in Section
4.16(a).

         BLUE SKY LAWS. "Blue Sky Laws" has the meaning set forth in Section
4.2(c).

         BUSINESS DAY. "Business Day" means any day except Saturday, Sunday and
any day which shall be a legal holiday or a day on which banking institutions in
the State of New York, the State of Texas or the State of Tennessee are
authorized or required by Law or other government actions to close.

         CASH CONSIDERATION. "Cash Consideration" has the meaning set forth in
Section 2.1(e)(i).

         CASH PORTION OF GENERAL HOLDBACK. "Cash Portion of General Holdback"
has the meaning set forth in Section 2.5(a).

         CERTIFICATE OF MERGER. "Certificate of Merger" has the meaning set
forth in Section 1.3.

         CLAIMS. "Claims" has the meaning set forth in Section 11.2(a).

         CLOSING. "Closing" has the meaning set forth in Section 1.3.

         CLOSING AGREEMENT. "Closing Agreement" has the meaning set forth in
Section 4.15(k).

         CLOSING BALANCE SHEET. "Closing Balance Sheet" has the meaning set
forth in Section 3.1.

         CLOSING DATE. "Closing Date" has the meaning set forth in Section 1.3.

         CLOSING INVENTORY. "Closing Inventory" has the meaning set forth in
Section 9.6.

         CLOSING INVENTORY MINIMUM. "Closing Inventory Minimum" has the meaning
set forth in Section 2.4(f).

         CLOSING THREE MONTH RECURRING REVENUE. "Closing Three Month Recurring
Revenue" has the meaning set forth in Section 9.4.

         CODE. "Code" has the meaning set forth in the recitals hereto.

         COMPANY. "Company" has the meaning set forth in the preamble hereto.

         COMPANY BALANCE SHEET. "Company Balance Sheet" has the meaning set
forth in Section 4.6.

         COMPANY BOARD RECOMMENDATION. "Company Board Recombination" has the
meaning set forth in Section 6.4(b).

         COMPANY COMMON STOCK. "Company Common Stock" means the common stock, no
par value per share, of the Company.

         COMPANY DISCLOSURE SCHEDULES. "Company Disclosure Schedules" means the
disclosure schedules that have been prepared by the Company in accordance with
the requirements of Section 13.13 and that have been delivered by the Company to
Parent on the date of this Agreement.

         COMPANY FINANCIAL STATEMENTS. "Company Financial Statements" has the
meaning set forth in Section 4.5(a).

         COMPANY PERMITS. "Company Permits" has the meaning set forth in Section
4.18(a).

                                      A-2


         COMPANY PREFERRED STOCK. "Company Preferred Stock" means the preferred
stock, no par value per share, of the Company.

         COMPANY SHAREHOLDERS' MEETING. "Company Shareholders' Meeting" has the
meaning set forth in Section 6.4(a).

         COMPANY STOCK CERTIFICATE. "Company Stock Certificate" has the meaning
set forth in Section 2.6(c).

         COMPANY STOCK OPTIONS. "Company Stock Options" has the meaning set
forth in Section 4.3.

         CONFIDENTIALITY AGREEMENT. "Confidentiality Agreement" has the meaning
set forth in Section 6.2(b).

         CONSENT. "Consent" means any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).

         CONTEMPLATED TRANSACTIONS. "Contemplated Transactions" has the meaning
set forth in Section 4.2(a).

         CONTROLLED GROUP LIABILITY. "Controlled Group Liability" has the
meaning set forth in Section 4.16(b).

         CONVERTED OPTION. "Converted Option" has the meaning set forth in
Section 2.3.

         CONVERTED OPTION SHAREHOLDERS. "Converted Option Shareholders" has the
meaning set forth Section 2.3(e).

         DESIGNATED ACCOUNT. "Designated Account" means that certain account
designated by the Shareholders' Representative in writing and given to Parent
prior to the Closing Date or such other account designated by the Shareholders'
Representative in writing and given to Parent at least five Business Days in
advance of any payment to such account.

         DGCL. "DGCL" has the meaning set forth in the recitals hereto.

         DISCLOSED CONTINGENT LIABILITIES. "Disclosed Contingent Liabilities"
has the meaning set forth in Section 2.5(a).

         DISSENTING SHAREHOLDER. "Dissenting Shareholder" has the meaning set
forth in Section 2.6(i)(ii).

         DISSENTING SHARES. "Dissenting Shares" has the meaning set forth in
Section 2.6(i)(i).

         EDGAR. "EDGAR" has the meaning set forth in Section 5.5.

         EFFECTIVE TIME. "Effective Time" has the meaning set forth in Section
1.3.

         ENCUMBRANCE. "Encumbrance" means any Lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).

         ENTERPRISE VALUE. "Enterprise Value" has the meaning set forth in
Section 2.1(e)(i).

         ENTITY. "Entity" means any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.

                                      A-3


         ENVIRONMENT. "Environment" means soil, land surface or subsurface
strata, surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins, and wetlands), groundwaters, drinking water supply,
stream sediments, ambient air (including indoor air), plant and animal life, and
any other environmental medium or natural resource.

         ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES. "Environmental, Health,
and Safety Liabilities" means any cost, damages, expense, liability, obligation,
or other responsibility arising from or under any Environmental Law or
Occupational Safety and Health Law and consisting of or relating to:

                  (a) any environmental, health, or safety matters or conditions
         (including on-site or off-site contamination, occupational safety and
         health, and regulation of chemical substances or products);

                  (b) fines, penalties, judgments, awards, settlements, legal or
         administrative Legal Proceedings, damages, losses, claims, demands and
         response, investigative, remedial, or inspection costs and expenses
         arising under Environmental Law or Occupational Safety and Health Law;

                  (c) financial responsibility under Environmental Law or
         Occupational Safety and Health Law for cleanup costs or corrective
         action, including any investigation, cleanup, removal, containment, or
         other remediation or response actions ("CLEANUP") required by
         applicable Environmental Law or Occupational Safety and Health Law
         (whether or not such Cleanup has been required or requested by any
         Governmental Body or any other Person) and for any natural resource
         damages; or

                  (d) any other compliance, corrective, investigative, or
         remedial measures required under Environmental Law or Occupational
         Safety and Health Law.

         ENVIRONMENTAL LAW. "Environmental Law" means any Legal Requirement that
requires or relates to:

                  (a) advising appropriate authorities, employees, and the
         public of intended or actual releases of pollutants or hazardous
         substances or materials, violations of discharge limits, or other
         prohibitions and of the commencements of activities, such as resource
         extraction or construction, that could have significant impact on the
         Environment;

                  (b) preventing or reducing to acceptable levels the release of
         pollutants or hazardous substances or materials into the Environment;

                  (c) reducing the quantities, preventing the release, or
         minimizing the hazardous characteristics of wastes that are generated;

                  (d) assuring that products are designed, formulated, packaged,
         and used so that they do not present unreasonable risks to human health
         or the Environment when used or disposed of;

                  (e) protecting resources, species, or ecological amenities;

                  (f) reducing to acceptable levels the risks inherent in the
         transportation of hazardous substances, pollutants, oil, or other
         potentially harmful substances;

                  (g) cleaning up pollutants that have been released, preventing
         the threat of release, or paying the costs of such clean up or
         prevention; or

                  (h) making responsible parties pay private parties, or groups
         of them, for damages done to their health or the Environment, or
         permitting self-appointed Representatives of the public interest to
         recover for injuries done to public assets.

         ERISA. "ERISA" has the meaning set forth in Section 4.16(b).

         ERISA AFFILIATE. "ERISA Affiliate" has the meaning set forth in Section
4.16(b).

         EXCHANGE ACT. "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

                                      A-4


         EXCHANGE AGENT. "Exchange Agent" has the meaning set forth in Section
2.6(a).

         EXCHANGE FUND. "Exchange Fund" has the meaning set forth in Section
2.6(a).

         EXISTING LIABILITIES. "Existing Liabilities" means the Company's
liabilities or obligations reflected or reserved against in the Closing Balance
Sheet.

         FACILITIES. "Facilities" means any real property, leaseholds, or other
interests currently or formerly owned or operated by any Acquired Corporation
and any buildings, plants, structures, or equipment (including motor vehicles,
tank cars, and rolling stock) currently or formerly owned or operated by any
Acquired Corporation.

         GAAP. "GAAP" means generally accepted accounting principles for
financial reporting in the United States, applied on a basis consistent with the
basis on which the Company Financial Statements were prepared.

         GENERAL HOLDBACK AMOUNT. "General Holdback Amount" has the meaning set
forth in Section 2.5(a).

         GENERAL HOLDBACK PERIOD. "General Holdback Period" has the meaning set
forth in Section 2.5(a).

         GOVERNMENTAL AUTHORIZATION. "Governmental Authorization" means any: (a)
permit, license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any contract with any Governmental
Body.

         GOVERNMENTAL BODY. "Governmental Body" means any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).

         HAZARDOUS MATERIALS. "Hazardous Materials" means any waste or other
substance that is listed, defined, designated, or classified as, or otherwise
determined to be, hazardous, radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any Environmental Law, including any admixture
or solution thereof, and specifically including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials.

         HOLDBACK AMOUNT. "Holdback Amount" has the meaning set forth in Section
2.5(c).

         INDEMNITEE(s). "Indemnitee" or "Indemnitees" have the meanings set
forth in Section 7.3(a).

         INDEMNITY CLAIM NOTICE. "Indemnity Claim Notice" has the meaning set
forth in Section 11.2(c).

         INTELLECTUAL PROPERTY. "Intellectual Property" means all (a)
inventions, discoveries, processes, designs, techniques, developments,
technology, and related improvements, whether or not patentable; (b) United
States patents and applications therefor and all divisionals, reissues,
renewals, registrations, confirmations, re-examinations, certificates of
inventorship, extensions, continuations and continuations-in-part thereof; (c)
United States, state and foreign trademarks, trade dress, service marks, service
names, trade names, brand names, insignias, designs, logos or business symbols,
whether registered or unregistered, and pending applications to register the
foregoing, including all extensions and renewals thereof and all goodwill
associated therewith; (d) United States and foreign copyrights in writings,
designs, software, mask works or other works, whether registered or
unregistered, and pending applications to register the same; (e) technical,
scientific, and other know-how, trade secrets, methods, processes, practices,
formulas and techniques, computer software programs and software systems,
including all databases, compilations, tool sets, compilers, higher level or
"proprietary" languages, related documentation and materials, whether in
interpretive code, source code, object code or human readable form; (f) rights
of publicity and privacy, "name and likeness" rights and other similar rights;
(g) books and records kept in the Ordinary Course of Business describing or used
in connection with any of the foregoing; and (h) claims or causes of action
arising out of or related to past, present or future infringement or
misappropriation of any of the foregoing.

                                      A-5


         INVESTOR QUESTIONNAIRE AND CONSENT. "Investor Questionnaire and
Consent" has the meaning set forth in Section 6.8.

         KNOWLEDGE. "Knowledge" means (a) with respect to the Company or any
other Acquired Corporation, the actual knowledge, after due inquiry, of the
Company's or the Acquired Corporation's directors or officers; and (b) with
respect to Parent, the actual knowledge, after due inquiry, of its Chief
Executive Officer, Chief Operating Officer or Chief Financial Officer.

         LAW(s). "Law" or "Laws" means any statute, law, ordinance, regulation,
rule, order, writ, injunction or decree of any state, commonwealth, federal,
foreign, territorial or other court or Governmental Body, subdivision, agency,
department, commission, board, bureau or instrumentality of a Governmental Body.

         LEASE. "Lease" has the meaning set forth in Section 4.7(a).

         LEGAL PROCEEDING. "Legal Proceeding" means any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.

         LEGAL REQUIREMENT. "Legal Requirement" means any federal, state, local,
municipal, foreign or other Law, statute, constitution, principle of common Law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body (or under the
authority of the Nasdaq National Market).

         LIEN. "Lien" means any security interest, mortgage, deed of trust,
pledge, lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including the interest of each lessor under any
capitalized lease and the interest of any bondsman under any payment or
performance bond, in, of or on any assets or properties of a Person, whether now
owned or hereafter acquired and whether arising by agreement or operation of
Law.

         MAJOR SUPPLIER. "Major Supplier" has the meaning set forth in Section
4.13.

         MATERIAL ADVERSE CHANGE. "Material Adverse Change" means any Material
Adverse Effect and, specifically including:

                  (a) The commencement of any actions, suits, investigations,
         complaints or proceedings, at Law or in equity, in any court or before
         any Governmental Body, by a Person or Persons seeking class action
         status and alleging violation of the provisions of the Rental Purchase
         Agreements, rent-to-own statutes or any other consumer protection law;
         provided that such action involves five or more stores; and

                  (b) The commencement of any actions, suits, investigations,
         complaints, or proceedings, at law or in equity, in any court or before
         any Governmental Body, by a Person or Persons seeking class action
         status and alleging violations of federal or state laws respecting
         employment, including, but not limited to, gender, race, disability,
         national origin or age discrimination, violations of the Occupational
         Safety and Health Act of 1970, as amended, the Family and Medical Leave
         Act of 1993, as amended, terms and conditions of employment or the
         federal or state Legal Requirements regarding wages and hours;
         provided, however, that the commencement of any such actions, suits,
         investigations, complaints or proceedings shall not constitute a
         Material Advance Change in the event the Company can demonstrate to the
         reasonable satisfaction of Parent that the potential size of the
         purported class does not exceed 25 persons.

         MATERIAL ADVERSE EFFECT. An event, violation, inaccuracy, circumstance
or other matter will be deemed to have a "Material Adverse Effect" on the
Acquired Corporations if such event, violation, inaccuracy, circumstance or
other matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement but
for the presence of "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, in such representations and
warranties) had or would reasonably be expected to have a material adverse
effect on (a) the business, condition, capitalization, assets, liabilities,
operations or financial performance of the Acquired Corporations taken as a
whole; (b) the ability of the Company to consummate the Merger or any of the
Contemplated Transactions or to perform any of its obligations under the

                                      A-6


Agreement; or (c) Parent's ability to vote, receive dividends with respect to or
otherwise exercise ownership rights with respect to the stock of the Surviving
Corporation.

         An event, violation, inaccuracy, circumstance or other matter will be
deemed to have a "Material Adverse Effect" on Parent if such event, violation,
inaccuracy, circumstance or other matter (considered together with all other
matters that would constitute exceptions to the representations and warranties
set forth in the Agreement but for the presence of "Material Adverse Effect" or
other materiality qualifications, or any similar qualifications, in such
representations and warranties) had or would reasonably be expected to have a
material adverse effect on (a) the business, condition, capitalization, assets,
liabilities, operations or financial performance of Parent and its Subsidiaries
taken as a whole; provided, however, that a decline in Parent's stock price
shall not, in and of itself, be deemed to constitute a Material Adverse Effect
on Parent; or (b) the ability of Parent to consummate the Merger or any of the
other transactions contemplated by the Agreement or to perform any of its
obligations under the Agreement.

         MATERIAL CONTRACT.  "Material Contract" means:

                  (a) any contract upon which the Acquired Corporations'
         business as a whole is substantially dependent;

                  (b) any management contract or compensatory plan, contract or
         arrangement, including but not limited to plans relating to options,
         warrants or rights, pension, retirement or deferred compensation or
         bonus, incentive or profit sharing (or if not set forth in any formal
         document, a written description thereof) in which any director, officer
         or employee participates;

                  (c) any noncompetition agreement or other agreement that
         limits or will limit an Acquired Corporation from engaging in any line
         of business;

                  (d) any agreement, contract or commitment not in the Ordinary
         Course of Business involving in excess of $50,000;

                  (e) the scheduled Severance Payments, the Stay Bonus Plan and
         any change of control agreements;

                  (f) any franchise agreement;

                  (g) any contract or agreement relating to the acquisition or
         disposition of assets having a value in excess of $50,000 other than
         the purchase or sale of rental merchandise in the Ordinary Course of
         Business;

                  (h) any material licenses, registrations or memberships
         required by a Governmental Body;

                  (i) any shareholder, voting trust or similar contract or
         agreement relating to the voting of shares of Company Common Stock;

                  (j) joint venture agreements, partnership agreements and other
         similar contracts involving a sharing of profits and expenses;

                  (k) any material agreement or commitment relating to the
         borrowing of money or a guaranty thereof in excess of $50,000,
         including any security agreement relating thereto;

                  (l) the Leases;

                  (m) contracts and agreements for the purchase of inventories,
         goods or other materials, by or for the furnishing of services to any
         Acquired Corporation that (i) requires payments in excess of $50,000;
         or (ii) are not terminable by the Company on notice of 90 days or less
         without penalty; and

                  (n) all employment agreements.

                                      A-7


         MERGER. "Merger" has the meaning set forth in the recitals hereto.

         MERGER CONSIDERATION. "Merger Consideration" has the meaning set forth
in Section 2.1(e)(i).

         MERGER CONSIDERATION REDUCTION(s). "Merger Consideration Reduction" or
"Merger Consideration Reductions" have the meanings set forth in Section 2.4.

         MERGER SUB. "Merger Sub" has the meaning set forth in the preamble
hereto.

         MERGER SUB COMMON STOCK. "Merger Sub Common Stock" means the common
Stock, $1.00 par value per share, of Merger Sub.

         MONTHLY RECURRING REVENUE. "Monthly Recurring Revenue" means monthly
revenue of the Company calculated in accordance with GAAP, less revenues from
product sales and early purchase options, plus $293,000.

         MULTIEMPLOYER PLAN. "Multiemployer Plan" has the meaning set forth in
Section 4.16(j).

         MULTIPLE EMPLOYER PLAN. "Multiple Employer Plan" has the meaning set
forth in Section 4.16(j).

         NOTICE PERIOD. "Notice Period" has the meaning set forth in Section
11.2(c).

         OCCUPATIONAL SAFETY AND HEALTH LAW. "Occupational Safety and Health
Law" means any Legal Requirement designed to provide safe and healthful working
conditions and to reduce occupational safety and health hazards, and any
program, whether governmental or private (including those promulgated or
sponsored by industry associations and insurance companies), designed to provide
safe and healthful working conditions.

         OFF-BALANCE SHEET ARRANGEMENT. "Off-Balance Sheet Arrangement" means
with respect to any Person, any securitization transaction to which that Person
or its Subsidiaries is a party and any other transaction, agreement or other
contractual arrangement to which an Entity unconsolidated with that Person is a
party, under which that Person or its Subsidiaries, whether or not a party to
the arrangement, has, or in the future may have:

                  (a) any obligation under a direct or indirect guarantee or
         similar arrangement;

                  (b) a retained or contingent interest in assets transferred to
         an unconsolidated Entity or similar arrangement;

                  (c) derivatives to the extent that the fair value thereof is
         not fully reflected as a liability or asset in the financial
         statements; or

                  (d) any obligation or liability, including a contingent
         obligation or liability, to the extent that it is not fully reflected
         in the financial statements (excluding the footnotes thereto) (for this
         purpose, obligations or liabilities that are not fully reflected in the
         financial statements (excluding the footnotes thereto) including,
         without limitation: obligations that are not classified as a liability
         according to GAAP; contingent liabilities as to which, as of the date
         of the financial statements, it is not probable that a loss has been
         incurred or, if probable, is not reasonably estimable; or liabilities
         as to which the amount recognized in the financial statements is less
         than the reasonably possible maximum exposure to loss under the
         obligation as of the date of the financial statements, but excluding
         contingent liabilities arising out of litigation, arbitration or
         regulatory actions (not otherwise related to off-balance sheet
         arrangements)).

         OPTION ADMINISTRATION FEE. "Option Administration Fee" has the meaning
set forth in Section 2.4(a).

         OPTION QUESTIONNAIRE AND CONSENT. "Option Questionnaire and Consent"
has the meaning set forth in Section 6.8.

         OPTION REGISTRATION SHARES. "Option Registration Shares" has the
meaning set forth in Section 2.3(d).

         ORDINARY COURSE OF BUSINESS. "Ordinary Course of Business" means
ordinary course of business consistent with past business practices.

                                      A-8


         ORGANIZATIONAL DOCUMENTS. "Organizational Documents" has the meaning
set forth in Section 4.1(b).

         PARENT. "Parent" has the meaning set forth in the preamble hereto.

         PARENT COMMON STOCK. "Parent Common Stock" means the common stock,
$0.01 par value per share, of Parent.

         PARENT DISCLOSURE SCHEDULES. "Parent Disclosure Schedules" means the
disclosure schedules that have been prepared by Parent in accordance with the
requirements of Section 13.13 and that have been delivered by Parent to the
Company on the date of this Agreement.

         PARENT SEC REPORTS. "Parent SEC Reports" has the meaning set forth in
Section 5.5.

         PERSON. "Person" means any individual, Entity or Governmental Body.

         PLANS. "Plans" has the meaning set forth in Section 4.16(c).

         POST-SIGNING RETURNS. "Post-Signing Returns" has the meaning set forth
in Section 6.2(a)(vi).

         PRE-CLOSING PERIOD. "Pre-Closing Period" has the meaning set forth in
Section 6.1(a).

         PROFIT AND LOSS STATEMENT(s). "Profit and Loss Statement" and "Profit
and Loss Statements" have the meanings set forth in Section 4.5(b).

         PROPOSAL NOTICE. "Proposal Notice" has the meaning set forth in Section
6.3(b).

         QUALIFIED PLANS. "Qualified Plans" has the meaning set forth in Section
4.16(e).

         REALLOCATED PARENT SHARES. "Reallocated Parent Shares" has the meaning
set forth in Section 2.3(e)(i).

         REGISTRATION. "Registration" has the meaning set forth in Section 11.6.

         REGISTRATION EXPENSES. "Registration Expenses" means all reasonable,
out-of-pocket expenses incurred by Parent in connection with the Registration,
including, without limitation, all registration and filing fees, printing
expenses, reasonable, out-of-pocket fees and disbursements of counsel and
independent public accountants for Parent, transfer Taxes, fees of transfer
agents and registrars.

         REGISTRATION PERIOD. "Registration Period" has the meaning set forth in
Section 11.6.

         REGISTRATION SHARES. "Registration Shares" has the meaning set forth in
Section 11.6.

         REGISTRATION STATEMENT. "Registration Statement" has the meaning set
forth in Section 11.6.

         RENTAL PURCHASE AGREEMENTS. "Rental Purchase Agreements" has the
meaning set forth in Section 4.12(c).

         REPRESENTATIVES. "Representatives" means officers, directors,
employees, agents, attorneys, accountants, advisors and other representatives.

         REQUIRED COMPANY SHAREHOLDER VOTE. "Required Company Shareholder Vote"
has the meaning set forth in Section 4.2(a).

         RIGHT. "Right" has the meaning set forth in Section 4.3.

         SEC. "SEC" means the United States Securities and Exchange Commission.

         SEC FILINGS. "SEC Filings" has the meaning set forth in Section 6.4(c).

                                      A-9


         SECTION 11.3(d) CLAIMS. "Section 11.3(d) Claims" has the meaning set
forth in Section 11.3(d).

         SECURITIES ACT. "Securities Act" means the Securities Act of 1933, as
amended.

         SEVERANCE PAYMENTS. "Severance Payments" has the meaning set forth in
Section 11.4.

         SHAREHOLDER(s). "Shareholder" or "Shareholders" has the meaning set
forth in Section 2.1.

         SHAREHOLDERS' REPRESENTATIVE. "Shareholders' Representative" means
Thomas B. Mitchell, or in the event of his death, incapacity, or unwillingness
to serve as such, such successor as shall be appointed by written notice to
Parent by a majority of the individuals who were members of the board of
directors of the Company immediately prior to the Effective Time and shall
become a Shareholder Representative upon such Person's written acceptance to act
as a Shareholders' Representative and of the obligations of the Shareholders'
Representative under the Agreement.

         STAY BONUS PLAN. "Stay Bonus Plan" has the meaning set forth in Section
6.2(b)(xvi).

         STOCK CONSIDERATION. "Stock Consideration" has the meaning set forth in
Section 2.1(e)(i).

         STOCK CONSIDERATION AMOUNT. "Stock Consideration Amount" has the
meaning set forth in Section 2.1(e)(i).

         STOCK CONSIDERATION CAP. "Stock Consideration Cap" has the meaning set
forth in Section 2.1(e)(i).

         STOCK OPTION PLAN. "Stock Option Plan" means the Company's Amended and
Restated RR 2001 Incentive Compensation Plan.

         STOCK PORTION OF GENERAL HOLDBACK. "Stock Portion of General Holdback"
has the meaning set forth in Section 2.5(a).

         SUBSEQUENT DETERMINATION. "Subsequent Determination" has the meaning
set forth in Section 6.3(b).

         SUBSIDIARY. An Entity is deemed to be a "Subsidiary" of another Person
if such Person directly or indirectly owns, beneficially or of record, (a) an
amount of voting securities of other interests in such Entity that is sufficient
to enable such Person to elect at least a majority of the members of such
Entity's board of directors or other governing body; or (b) at least 50% of the
outstanding equity or financial interests of such Entity.

         SUPERIOR PROPOSAL. "Superior Proposal" has the meaning set forth in
Section 6.3(b).

         SURVIVING CORPORATION. "Surviving Corporation" has the meaning set
forth in Section 1.1.

         TAX "Tax" means any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.

         TAX CLAIM. "Tax Claim" has the meaning set forth in Section 11.7.

         TAX RETURN. "Tax Return" means any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.

         TAX RULING. "Tax Ruling" has the meaning set forth in Section 4.15(k).

                                      A-10


         TENNESSEE CORPORATE STATUTES. "Tennessee Corporate Statutes" has the
meaning set forth in the recitals hereto.

         TERMINATION FEE. "Termination Fee" has the meaning set forth in Section
12.3(a).

         THIRD PARTY CLAIM. "Third Party Claim" has the meaning set forth in
Section 11.2(c).

         TOTAL PARENT SHARES. "Total Parent Shares" has the meaning set forth in
Section 2.1(e)(i).

         VOTING AGREEMENT. "Voting Agreement" has the meaning set forth in
Section 1.5.

                                      A-11

                                                                     EXHIBIT 4.7

                              RENT-A-CENTER, INC.,
                                   as Issuer,

                          the GUARANTORS named herein,
                                 as Guarantors,

                                       and

                              THE BANK OF NEW YORK,
                                   as Trustee

                          SECOND SUPPLEMENTAL INDENTURE

                           Dated as of April 26, 2004

                                       to

                                    INDENTURE

                             Dated as of May 6, 2003

                                     between

                         RENT-A-CENTER, INC., as Issuer,

                  the GUARANTORS named therein, as Guarantors,

                                       and

                        THE BANK OF NEW YORK, as Trustee

                                  $300,000,000
                                    SERIES B
                    7 1/2% SENIOR SUBORDINATED NOTES DUE 2010



         This SECOND SUPPLEMENTAL INDENTURE, dated as of April 23, 2004, is
entered into by and among Rent-A-Center, Inc., a Delaware corporation (the
"COMPANY"), Rent-A-Center East, Inc., a Delaware corporation ("RAC EAST"),
ColorTyme, Inc., a Texas corporation ("COLORTYME"), Rent-A-Center West, Inc., a
Delaware corporation ("RAC WEST"), Get It Now, LLC, a Delaware limited liability
company ("GET IT NOW"), Rent-A-Center Texas, L.P., a Texas limited partnership
("RAC TEXAS, LP"), Rent-A-Center Texas, L.L.C., a Nevada limited liability
company ("RAC TEXAS, LLC"), Rent-A-Center International, Inc., a Delaware
corporation ("RAC INTERNATIONAL"), Rent-A-Center Addison, L.L.C., a Delaware
limited liability company ("RAC ADDISON"), RAC National Product Service, LLC, a
Delaware limited liability company ("RAC NATIONAL"), and The Bank of New York, a
New York banking corporation, as Trustee (the "TRUSTEE").

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Indenture, dated as of May 6, 2003, as supplemented by the First
Supplemental Indenture, dated December 4, 2003, by and among the Company, RAC
East, ColorTyme, RAC West, Get It Now, RAC Texas, LP, RAC Texas, LLC, RAC
International, RAC Addison and the Trustee (the "INDENTURE"), providing for the
issuance of its 7 1/2% Series B Senior Subordinated Notes due 2010 (the
"NOTES"); and

         WHEREAS, RAC East, ColorTyme, RAC West, Get It Now, RAC Texas, LP, RAC
Texas, LLC, RAC International and RAC Addison are currently Guarantors under the
Indenture; and

         WHEREAS, RAC East has formed RAC National as a wholly-owned subsidiary;
and

         WHEREAS, in connection with the formation of RAC National, certain
assets previously held by RAC East, RAC West and RAC Texas, LP will be
transferred to RAC National (the "TRANSFER"); and

         WHEREAS, the Company has designated RAC National as a Restricted
Subsidiary under the Indenture to be effective immediately upon the Transfer;
and

         WHEREAS, pursuant to Section 1009, 1012 and 1017 of the Indenture, the
Transfer is permitted under the Indenture; and

         WHEREAS, pursuant to Section 1020 of the Indenture, the addition of RAC
National as a Guarantor is required under the Indenture; and

         WHEREAS, in consideration, in part, for the Transfer, RAC National has
agreed to become a Guarantor by guaranteeing the obligations of the Company
under the Indenture in accordance with the terms thereof; and

         WHEREAS, RAC National has been duly authorized to enter into, execute
and deliver this Second Supplemental Indenture.

         NOW, THEREFORE, for and in consideration of the premises and covenants
and agreements contained herein and other good and valuable consideration, the
receipt and

                                     - 2 -


sufficiency of which are hereby acknowledged, the Company, RAC East, ColorTyme,
RAC West, Get It Now, RAC Texas, LP, RAC Texas, LLC, RAC International, RAC
Addison, RAC National and the Trustee agree as follows:

SECTION 1. Capitalized terms used herein but not defined herein shall have the
meaning provided in the Indenture.

SECTION 2. The Trustee hereby consents to the Transfer and to the addition of
RAC National as an additional Guarantor under the Indenture. Simultaneously with
the Transfer (the "EFFECTIVE TIME"), RAC National shall become, and each of RAC
East, ColorTyme, RAC West, Get It Now, RAC Texas, LP, RAC Texas, LLC, RAC
International and RAC Addison shall continue to be, a "Guarantor" under and as
defined in the Indenture, and at the Effective Time, RAC National shall assume
all the obligations of a Guarantor under the Notes and the Indenture as
described in the Indenture. RAC National hereby unconditionally guarantees the
full and prompt payment of the principal of, premium, if any, and interest on
the Notes and all other obligations of the Issuer and the Guarantors under the
Indenture in accordance with the terms of the Notes and the Indenture.

SECTION 3. Except as expressly supplemented by this Second Supplemental
Indenture, the Indenture and the Notes issued thereunder are in all respects
ratified and confirmed and all of the rights, remedies, terms, conditions,
covenants and agreements of the Indenture and Notes issued thereunder shall
remain in full force and effect.

SECTION 4. This Second Supplemental Indenture is executed and shall constitute
an indenture supplemental to the Indenture and shall be construed in connection
with and as part of the Indenture. This Second Supplemental Indenture shall be
governed by and construed in accordance with the laws of the jurisdiction that
governs the Indenture and its construction.

SECTION 5. This Second Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original for all purposes,
but such counterparts shall together be deemed to constitute but one and the
same instrument.

SECTION 6. Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Second
Supplemental Indenture may refer to the Indenture without making specific
reference to this Second Supplemental Indenture, but nevertheless all such
references shall include this Second Supplemental Indenture unless the context
otherwise requires.

SECTION 7. This Second Supplemental Indenture shall be deemed to have become
effective upon the date first above written.

SECTION 8. In the event of a conflict between the terms of this Second
Supplemental Indenture and the Indenture, this Second Supplemental Indenture
shall control.

SECTION 9. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Second Supplemental Indenture
or for or in respect of the recitals contained herein, all of which recitals are
made solely by the Company, RAC East,

                                     - 3 -


ColorTyme, RAC West, Get It Now, RAC Texas, LP, RAC Texas, LLC, RAC
International, RAC Addison and RAC National.

                                     - 4 -


         IN WITNESS WHEREOF, the parties have caused this Second Supplemental
Indenture to be duly executed as of the day and year first above written.

THE BANK OF NEW YORK,
as Trustee

By:    /s/ Van K. Brown
   ----------------------
Name:  Van K. Brown
Title: Vice President

                                     RENT-A-CENTER, INC.

                                     By:    /s/ Mitchell E. Fadel
                                        --------------------------------------
                                        Mitchell E. Fadel
                                        President and Chief Operating Officer

                                     RENT-A-CENTER EAST, INC.

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

                                     COLORTYME, INC.

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

                                     RENT-A-CENTER WEST, INC.

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

                                     - 5 -


                                     GET IT NOW, LLC

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

                                     RENT-A-CENTER TEXAS, L.P.

                                     By:    Rent-A-Center East, Inc,
                                            its general partner

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

                                     RENT-A-CENTER TEXAS, L.L.C.

                                     By:    /s/ James Ashworth
                                        ----------------------------------
                                        James Ashworth
                                        President and Secretary

                                     RENT-A-CENTER INTERNATIONAL, INC.

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

                                     RENT-A-CENTER ADDISON, L.L.C.

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

                                     - 6 -


                                     RAC NATIONAL PRODUCT SERVICE, LLC

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

                                     - 7 -

                                                                   EXHIBIT 10.24

                         SECOND AMENDMENT TO AMENDED AND
                     RESTATED FRANCHISEE FINANCING AGREEMENT

         This Second Amendment to Amended and Restated Franchisee Financing
Agreement ("Amendment") is made and entered into by and among Wells Fargo
Foothill, Inc., a California corporation ("Lender"), ColorTyme, Inc., a Texas
corporation ("ColorTyme"), and Rent-A-Center East, Inc., a Delaware corporation
(the "RAC").

                                    RECITALS

         A. Lender, ColorTyme and RAC entered into that certain Amended and
Restated Franchisee Financing Agreement dated October 1, 2003, as amended by
that certain First Amendment to Amended and Restated Franchisee Financing
Agreement dated December 15, 2003 (as amended, the "Agreement").

         B. Lender, ColorTyme and RAC desire to amend the Agreement in
accordance with the terms of this Amendment.

                                    AGREEMENT

         For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

         1.       Definitions. All capitalized terms not defined herein shall be
construed to have the meaning and definition set forth in the Agreement.

         2.       Amendment. Section 2.2(g) of the Agreement is hereby amended
in its entirety to read as follows:

                  Section 2.2 (g) Financial Statements and Reports. RAC shall
         provide to Lender a copy of each Form 10-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; and (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. ColorTyme shall provide to Lender copies
         of royalty reports for any Franchisee upon the request of Lender and
         will assist Lender in requesting financial statements from each
         Franchisee. RAC and ColorTyme shall provide to Lender a quarterly
         compliance certificate in the form of Exhibit A attached hereto within
         five (5) business days following the filing of a Form 10-Q or Form
         10-K, as applicable, of Rent-A-Center, Inc. with the U.S. Securities
         and Exchange Commission.

         3.       Effect of Amendment. Except as amended hereby, the Agreement
shall remain in full force and effect.

SECOND AMENDMENT TO AMENDED AND
RESTATED FRANCHISEE FINANCING AGREEMENT



         4.       Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA.

         5.       Counterparts. This Amendment may be executed in counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Signatures hereby transmitted by facsimile or other electronic means
shall be effective as originals.

      [Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

SECOND AMENDMENT TO AMENDED AND
RESTATED FRANCHISEE FINANCING AGREEMENT - PAGE 2



         IN WITNESS WHEREOF, the parties have executed this Amendment on this
1st day of March, 2004.

                                     COLORTYME, INC.

                                     By:   /s/ Steven M. Arendt
                                          ------------------------
                                          Steven M. Arendt
                                          President and Chief Executive Officer

SECOND AMENDMENT TO AMENDED AND
RESTATED FRANCHISEE FINANCING AGREEMENT - SIGNATURE PAGE



                                     RENT-A-CENTER EAST, INC.

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

SECOND AMENDMENT TO AMENDED AND
RESTATED FRANCHISEE FINANCING AGREEMENT - SIGNATURE PAGE



                                     WELLS FARGO FOOTHILL, INC.

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

SECOND AMENDMENT TO AMENDED AND
RESTATED FRANCHISEE FINANCING AGREEMENT - SIGNATURE PAGE

                                                                    EXHIBIT 21.1

                                  SUBSIDIARIES

ColorTyme, Inc., a Texas corporation

Eagle Acquisition Sub, Inc., an Ohio corporation

Get It Now, LLC, a Delaware limited liability company

RAC Canada Finance LP, a Canadian limited partnership

RAC Canada Holdings, a Canadian partnership

RAC National Product Service, LLC, a Delaware limited liability company

RAC RR, Inc., a Delaware corporation

Remco America, Inc., a Delaware corporation

Rent-A-Center Addison, L.L.C., a Delaware limited liability company

Rent-A-Center East, Inc., a Delaware corporation

Rent-A-Center International, Inc., a Delaware corporation

Rent-A-Center Texas, L.P., a Texas limited partnership

Rent-A-Center Texas, L.L.C., a Nevada limited liability company

Rent-A-Center West, Inc., a Delaware corporation

Rent-A-Centre Canada, Ltd., a Canadian corporation

                                                                    EXHIBIT 31.1

I, Mark E. Speese, certify that:

         1.       I have reviewed this quarterly report on Form 10-Q of
Rent-A-Center, Inc.;

         2.       Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

         3.       Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

         4.       The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         (b)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         (c)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

         5.       The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date: May 3, 2004

                                     /s/ Mark E. Speese
                                     ------------------------------
                                     Mark E. Speese
                                     Chairman of the Board
                                     and Chief Executive Officer

                                                                    EXHIBIT 31.2

I, Robert D. Davis, certify that:

         1.       I have reviewed this quarterly report on Form 10-Q of
Rent-A-Center, Inc.;

         2.       Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

         3.       Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

         4.       The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         (b)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         (c)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

         5.       The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date: May 3, 2004

                                     /s/ Robert D. Davis
                                     -------------------------------------------
                                     Robert D. Davis
                                     Senior Vice President-Finance, Treasurer
                                     and Chief Financial Officer

                                                                    EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of Rent-A-Center, Inc. (the
"COMPANY") on Form 10-Q for the period ended March 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "REPORT"), I, Mark E.
Speese, Chairman of the Board and Chief Executive Officer of the Company, hereby
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge,:

(1)      The Report fully complies with the requirements of Section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.

                                     /s/ Mark E. Speese
                                     -------------------------------------
                                     Mark E. Speese
                                     Chairman of the Board and
                                     Chief Executive Officer

Dated: May 3, 2004

A signed original of this written statement required by Section 906 has been
provided to Rent-A-Center, Inc. and will be retained by Rent-A-Center, Inc. and
furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.

                                                                    EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Quarterly Report of Rent-A-Center, Inc. (the
"COMPANY") on Form 10-Q for the period ended March 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "REPORT"), I, Robert
D. Davis, Senior Vice President - Finance, Treasurer and Chief Financial Officer
of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of
my knowledge,:

(1)      The Report fully complies with the requirements of Section 13(a) or
         15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.

                                     /s/ Robert D. Davis
                                     -------------------------------------
                                     Robert D. Davis
                                     Senior Vice President -Finance,
                                     Treasurer and Chief Financial Officer

Dated: May 3, 2004

A signed original of this written statement required by Section 906 has been
provided to Rent-A-Center, Inc. and will be retained by Rent-A-Center, Inc. and
furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document.