Exhibit 10.12

EMPLOYMENT AGREEMENT

        THIS AGREEMENT is made as of the 23rd day of April, 2001, by and between
RENT-WAY, INC., a Pennsylvania corporation, with offices at One RentWay Place,
Erie, Pennsylvania 16505 (the “Company”) and John A. Lombardi, an individual
residing at 7 Treetop Court, Burlington, MA 01803 (the “Employee”).

        WHEREAS, the Company desires to employ the Employee and the Employee
desires to accept such employment upon the terms and conditions contained in
this Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein the Company and the Employee agree as follows:

1.     Term. Subject to the terms and conditions set forth in this Agreement,
the Company hereby agrees to employ the Employee, and the Employee hereby
accepts such employment, as Vice President and Chief Accounting Officer of the
Company for the period beginning on the date of this Agreement and continuing
until April 23, 2004, or until earlier terminated as provided herein; provided,
however, that commencing on April 23, 2004, and on each anniversary of such date
(such date and the date of each anniversary thereof being a “Renewal Date”), the
term of Employee’s employment hereunder (such term of employment being the
“Term”) shall be automatically extended so as to terminate one (1) year from
such Renewal Date, unless at least sixty (60) days prior to any such Renewal
Date either party hereto shall give notice to the other that the Term shall not
be automatically extended in which case the Term shall terminate on the
applicable Renewal Date.

2.     Office; Duties. During the Term, the Employee shall serve as Vice
President and Chief Accounting Officer of the Company and in such capacity
Employee shall perform such duties and discharge such responsibilities as the
Chief Executive Officer and Chief Financial Officer of the Company shall from
time to time reasonably direct.

        The Employee agrees to perform such duties and discharge such
responsibilities in a faithful manner and to the best of his ability. The
Employee agrees to devote his full business time and attention to the business
and affairs of the Company and to use his best efforts to promote the interests
of the Company. The Employee further agrees that he will engage in no outside
business concerns or activities that conflict with his duties to the Company, or
are directly or indirectly competitive with the Company, without the Company’s
prior written consent.

        The Chief Executive Officer or Chief Financial Officer of the Company
may from time to time assign to the Employee additional duties and
responsibilities and delegate to other employees of the Company duties and
responsibilities normally discharged by the Employee. All such assignments and
delegations of duties and responsibilities shall be made by the Chief Executive
Officer of Chief Financial Officer of the Company in good faith and shall not
materially affect the general character of the work to be performed by the
Employee.

    3.        Compensation. During the Term, the Company agrees that:

3.1  

The Employee shall receive annual base salary of One Hundred Sixty-Five Thousand
Dollars ($165,000.00) payable in installments in accordance with the regular
payroll practices of the Company. The Company shall deduct or withhold from
payments of base salary, and from all other payments made to the Employee
pursuant to this Agreement, all amounts which may be required to be deducted or
withheld under any applicable law now in effect or which may become effective
during the term of this Agreement (including but not limited to Social Security
contributions and income tax withholdings). The Employee’s base salary shall be
reviewed annually by the Chief Executive Officer of the Company and may be
increased on the basis of individual and corporate performance, in accordance
with criteria and standards established by the Chief Executive Officer of the
Company. Any increase in base salary or other compensation shall in no way limit
or reduce any other obligation of the Company to the Employee. Any increased
base salary once established shall not thereafter be reduced.

3.2  

Incentive Compensation; Bonuses. In addition to base salary, the Employee shall
be entitled to (i) participate in such incentive plans (including the right to
defer bonuses) made available by the Company to its executives and key employees
and (ii) receive such additional bonus or discretionary compensation payments
(up to 20% of the Employee’s base salary) as the Chief Executive Officer of the
Company may determine from time to time. The Employee’s eligibility for
incentive plan participation and additional bonus or discretionary compensation
payments shall be reviewed annually by the Chief Executive Officer of the
Company and shall be awarded on the basis of individual and corporate
performance and in accordance with criteria and standards established in the
sole discretion of Chief Executive Officer of the Company. However, the Employee
shall receive an initial annual bonus of $33,000 on April 1, 2002.

3.3  

Expenses. During the Term, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred in connection with the
performance of his duties in accordance with the policies and procedures of the
Company as may be in effect from time to time.

3.4  

Benefits. During the Term, the Employee shall be entitled to receive a package
of benefits that includes all of the programs, plans and perquisites currently
provided by the Company to its employees, for so long as such programs, plans
and perquisites are continued by the Company and are available to employees of
the Company.

3.5  

Vacation. The Employee shall be entitled to ten (10) days vacation benefits to
be used prior to December 31, 2001. In accordance with the Company’s Employee
Guidebook, from January 1, 2002, forward the Employee shall (for the sole
purpose of determining “Paid Vacation Time Earned”) be considered to have
completed ten (10) years of service with the Company.

4.           Option Grant. Immediately following the execution of this
Agreement, the Company shall grant to the Employee incentive stock options to
purchase 30,000 shares of the Company’s Common Stock, no par value per share,
pursuant to and in accordance with the Company’s 1999 Stock Option Plan. The
options shall vest and become exercisable as to 10,000 shares on the one (1)
year anniversary of the date of grant, as to 10,000 shares on the two (2) year
anniversary of the date of grant, and as to 10,000 shares on the three (3) year
anniversary of the date of the grant. Following vesting, the options may be
exercised in whole or in part at any time or from time to time within a five (5)
year period from the date of grant. If the Employee’s employment with the
Company terminates for any reason other than death, disability or termination
for cause, the Employee shall have three (3) months following such termination
to exercise the options, to the extent such options were exercisable as of the
date of termination, and any options unexercised following such three (3) month
period shall expire. If the Employee’s employment with the Company terminates by
reason of death or disability, the options exercisable as of the date of
termination of employment shall remain exercisable for a period of one (1) year,
following which period all unexercised options shall expire. In the event the
Employee’s employment with the Company terminates by reason of termination for
cause, all options shall automatically expire and shall not be exercisable,
whether or not exercisable prior to such termination.

5.           Termination of Employment by Reason of Death. If the Employee dies
during the Term this Agreement shall terminate automatically as of the date of
his death and the Company shall pay to the Employee’s legal representatives (i)
the compensation which would otherwise be payable to the Employee up to and
including the date of death, (ii) a lump sum payment equivalent to six months’
base salary and (iii) such other benefits determined in accordance with any then
existing Company-sponsored plans or programs providing benefits at death.

6.           Termination of Employment by Reason of Disability. In the event
that the Employee shall sustain a disability which in the opinion of medical
authority satisfactory to the Company would substantially prevent him from
rendering the services required under this Agreement for a period of six (6)
consecutive months or 180 days in any 360-day period, the Company shall have the
right to terminate this Agreement upon thirty (30) days’ prior written notice to
the Employee.

7.           Termination of Employment at Employee’s Election. If the Employee
elects to terminate this Agreement and the Employee gives thirty (30) days prior
written notice of such termination, the Employee shall be entitled to receive
his salary then in effect for the thirty (30) day notice period regardless of
whether the Company desires the Employee to continue his employment during that
period.

8.           Termination of Employment for Cause. The Company shall have the
right to terminate the Employee’s employment immediately in the event the
Employee shall do or cause to be done any act which constitutes “cause” (as
hereinafter defined) for termination. For purposes of this Agreement, “cause”
shall be deemed to mean a material breach of his obligations under this
Agreement (any breach of Sections 9, 10 or 11 hereof being an example of such a
material breach), gross negligence or willful misconduct in the performance of
his duties to the Company, dishonesty to the Company, conviction of any crime
which could have the effect of causing the termination or suspension of any
license or permit which the Company holds, conviction of any felony, conviction
of a misdemeanor which substantially impairs the Employee’s ability to perform
his duties to the Company, or excessive absenteeism not related to disability.
Should the Employee’s employment be terminated by the Company for cause, the
Company’s only obligation shall be to pay the Employee his base salary through
the date of termination. Nothing contained in this Article 7 shall in any way
waive, restrict or prejudice the Company’s rights and remedies in equity and at
law against the Employee with respect to the matter for which the Employee’s
employment under this Agreement is terminated for cause.

9.           Confidentiality.

9.1  

During the course of his employment with the Company, the Employee has had and
will have access to and will gain knowledge with respect to all aspects of the
business of the Company, including financial information, business and marketing
practices and other proprietary information relating to the business of Company
(“Confidential Information”). The parties agree that certain covenants by the
Employee are essential to the growth and stability of the business of the
Company. Among these covenants are the Employee’s promises not to make
unauthorized disclosures of the Confidential Information nor to use the
Confidential Information, after the Employee’s employment with the Company
terminates, in a business that competes with the Company. Accordingly, Employee
agrees that, except as required by his duties under this Agreement, he shall not
use nor disclose to anyone at anytime during or after the Term any Confidential
Information obtained by him in the course of his employment with the Company.
The Employee agrees to enter into any further agreement regarding
confidentiality that the Company may request. The Employee shall use his best
efforts to prevent the removal of any Confidential Information from the premises
of the Company, except as required in his normal course of employment by the
Company. The Employee shall use his best efforts to cause all persons or
entities to whom any Confidential Information shall be disclosed by him
hereunder to observe the terms and conditions set forth herein as though each
such person or entity was bound hereby.

9.2  

Employee agrees to hold as the Company’s property all memoranda, books, papers,
letters, customer lists, processes, computer software, records, financial
information, policy and procedure manuals, training and recruiting procedures
and other data, and all copies thereof and therefrom in any way relating to the
Company’s business and affairs, whether made by him or otherwise coming into his
possession, and on termination of his employment, or on demand of the Company at
any time, to deliver the same to the Company.

10.           Non-Competition; Non-Solicitation.

10.1  

During the Term of this Agreement the Employee agrees that he shall not directly
or indirectly, for his own account or as agent, employee, officer, director,
trustee, consultant or shareholder of any corporation or other entity [except
for a two percent (2%) interest or less in any publicly traded corporation or
other entity] or a member of any firm or otherwise, anywhere in North America
engage or attempt to engage in any business activity which is the same as,
substantially similar to or directly competitive with the business of the
Company, or any subsidiary of the Company, as now or in the future conducted by
the Company.

10.2  

During the Term of this Agreement and for a period continuing after the date of
its termination [with such period being equal to the remaining Term of this
Agreement but in no event exceeding twelve (12) months], the Employee agrees
that he shall not, directly or indirectly, for his own account or as agent,
employee, officer, director, trustee, consultant or shareholder of any
corporation, or member of any firm or otherwise, (i) employ or solicit the
employment of any employee of the Company, any employee of a subsidiary of the
Company, or any former employee of the Company whose employment with the Company
terminated within the preceding six (6) months, or (ii) induce or attempt to
induce any employee of the Company, or any employee of an affiliate of the
Company, to terminate his or her employment with the Company or any affiliate of
the Company.

10.3  

The Employee acknowledges and agrees that the foregoing territorial and time
limitations and restrictive covenants are reasonable and properly required for
the adequate protection of the business and affairs of the Company, and in the
event any such territorial or time limitation is found to be unreasonable by a
court of competent jurisdiction, the Employee agrees and submits to the
reduction of either said territorial or time limitation or both, to such an area
or period as the court may determine to be reasonable.

11.           Rights to Discoveries. The Employee agrees that all ideas,
inventions, trademarks and other techniques, procedures, developments or
improvements conceived, developed or acquired by the Employee, whether or not
during working hours, at the premises of the Company or elsewhere, alone or with
others, that are within the scope of the Company’s business operations or that
relate to any work or projects of the Company shall be the sole and exclusive
property of the Company. The Employee agrees to disclose promptly and fully to
the Company all such ideas, inventions, trademarks or other techniques,
procedures, developments or improvements and, at the request of the Company, the
Employee shall submit to the Company a full written report thereof regardless of
whether the request for a written report is made after the termination of this
Agreement. The Employee agrees that during the Term and thereafter, upon the
request of the Company and at its expense, he shall execute and deliver any and
all applications, assignments and other instruments which the Company shall deem
necessary or advisable to transfer to and vest in the Company the Employee’s
entire right, title and interest in and to all such ideas, inventions,
trademarks or other techniques, procedures, developments or improvements and
shall assist the Company in applying for and obtaining patent, trademark or
copyright protection for any such protectible ideas, inventions, trademarks and
other techniques, procedures, developments and improvements.

12.           Notices. All notices and other communications given pursuant to
this Agreement shall be deemed to have been properly given or delivered if
mailed, by certified mail, postage prepaid, addressed to the appropriate party,
at the address for such party set forth at the beginning of this Agreement. Any
party may from time to time designate by written notice given pursuant to this
Article 12 any other address or party to which any such notice or communication
or copies thereof shall be sent.

13.           Equitable Relief. The Employee acknowledges that the Company will
suffer damages incapable of ascertainment in the event that any of the
provisions of Section 9, 10 or 11 hereof are breached and that the Company will
be irreparably damaged in the event that the provisions of Sections 9, 10 or 11
are not enforced. Therefore, should any dispute arise with respect to the breach
or threatened breach of any such Articles, the Employee agrees and consents,
that in addition to any and all other remedies available to the Company, an
injunction or restraining order or other equitable relief may be issued or
ordered by a court of competent jurisdiction restraining any breach or
threatened breach of such Articles. The Employee agrees not to urge in any such
action that an adequate remedy exists at law. All expenses, including, without
limitation, attorney’s fees and expenses incurred in connection with any legal
proceeding arising as a result of a breach or threatened breach of Sections 9,
10 or 11 of this Agreement shall be borne by the losing party to the fullest
extent permitted by law and the losing party hereby agrees to indemnify and hold
the other party harmless from and against all such expenses. The Employee
consents to jurisdiction in Pennsylvania and venue in Erie County for purposes
of all claims arising under this Agreement.

14.           Successors. The Company will require any successor (whether direct
or indirect by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. As used in this Agreement, the “Company” shall mean both the
Company as defined above and any successor to its business and/or assets (by
merger, purchase or otherwise) which executes and delivers the agreement
provided for in this Article or otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law or otherwise. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall constitute a breach of this Agreement and shall
entitle the Employee to compensation from the Company in the form of damages for
such breach.

15.           Miscellaneous. This Agreement shall be governed by the internal
domestic laws of the Commonwealth of Pennsylvania without reference to conflict
of laws principles. All headings and subheadings are for convenience only and
are not of substantive effect. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior negotiations, understandings and writings (or any part
thereof) whether oral or written between the parties hereto relating to the
subject matter hereof. There are no oral agreements in connection with this
Agreement. Neither this Agreement nor any provision of this Agreement may be
waived, modified or amended orally or by any course of conduct but only by an
agreement in writing duly executed by both of the parties hereto. If any
article, section, portion, subsection or subportion of this Agreement shall be
determined to be unenforceable or invalid, then such article, section, portion,
subsection or subportion shall be modified in the letter and spirit of this
Agreement to the extent permitted by applicable law so as to be rendered valid
and any such determination shall not affect the remainder of this Agreement,
which shall be and remain binding and effective as against all parties hereto.
The term “Agreement” as used herein shall be deemed to include any and all
renewals of this Agreement.

        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.

EMPLOYEE:

/s/ John A. Lombardi
John A. Lombardi
Date: 04/23/2001

COMPANY:

RENT-WAY, INC.

By: /s/ William Morgenstern
William E. Morgenstern, CEO
Date: 3/20/2001