exv10w7



 





Exhibit 10.7




FIRST AMENDMENT TO CREDIT AGREEMENT

AND

GUARANTEE AND COLLATERAL AGREEMENT




THIS FIRST AMENDMENT (this “Amendment”) is made as of May 28, 2003 among
RENT-A-CENTER, INC. (the “Borrower”), RENT-A-CENTER EAST, INC. (“RAC East”),
COLORTYME, INC. (“Colortyme”), RENT-A-CENTER WEST, INC. (“RAC West”), REMCO
AMERICA, INC. (“Remco”), GET IT NOW, LLC (“Get It Now”), RENT-A-CENTER TEXAS,
L.P. (“RAC Texas LP”), RENT-A-CENTER TEXAS, L.L.C. (“RAC Texas LLC”, and
together with the Borrower, RAC East, Colortyme, RAC West, Remco, Get It Now
and RAC Texas LP, the “Grantors”) and LEHMAN COMMERCIAL PAPER, INC., as
administrative agent (the “Administrative Agent”).



WHEREAS




     A. The Borrower, the several banks and other financial institutions or
entities from time to time party thereto (the “Lenders”), the Administrative
Agent, Morgan Stanley Senior Funding Inc., as documentation agent, JPMorgan
Chase Bank and Bear Stearns & Co. Inc., as syndication agents and Wachovia
Bank, National Association, UBS Warburg LLC, United Overseas Bank and Credit
Lyonnais, as managing agents, are party to a Credit Agreement dated as of May
28, 2003 (the “Credit Agreement”). Unless otherwise defined herein, all
capitalized terms used in this Amendment that are defined in the Credit
Agreement shall have the respective meanings assigned to them in the Credit
Agreement.



     B. The Grantors and the Administrative Agent are party to a Guarantee and
Collateral Agreement dated as of May 28, 2003 (the “Guarantee and Collateral
Agreement”).



     C. The Grantors and Administrative Agent, which has received the consent
of the Required Lenders, desire to enter into this Amendment in order to modify
the Credit Agreement and the Guarantee and Collateral Agreement as set forth
herein.



NOW THEREFORE




     In consideration of the foregoing and the mutual promises contained
herein, the parties hereby agree as follows:



     1. Amendments to the Credit Agreement.



          a. The definition of “Asset Sale” in Section 1.1 of the Credit Agreement
shall be amended by deleting the word “or” after “(i)” in the second line
thereof and inserting a comma in lieu thereof, and by inserting “or (k)” after
"(j)” in the second line thereof.



 









 





          b. Section 1.1 of the Credit Agreement shall be amended by inserting
therein the following defined term and in its correct alphabetical order:




	 	 	“Margin Capital Stock”: Capital Stock issued by the Borrower that
(i) constitutes “margin stock” within the meaning of such term
under Regulation U as now or from time to time hereafter in effect
and (ii) would, taking into account all other “margin stock”
(within the meaning of such term under Regulation U as now or from
time to time hereafter in effect) held by the Borrower or any of
its Subsidiaries, cause the value of all such “margin stock” to
exceed 25% of the value of all assets of the Borrower and its
Subsidiaries that directly or indirectly secure (within the meaning
of Regulation U) the Obligations.





          c. Section 4.11 of the Credit Agreement shall be amended by deleting the
phrase “or for any purpose that violates” that appears after the words “from
time to time hereafter in effect”, and by inserting in lieu thereof the phrase
“except in compliance with” such that Section 4.11 of the Credit Agreement
shall read in its entirety as follows:




	 	 	No part of the proceeds of any Loans will be used for “buying” or
“carrying” any “margin stock” within the respective meanings of
each of the quoted terms under Regulation U as now and from time to
time hereafter in effect except in compliance with the provisions
of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G-3 or FR
Form U-1, as applicable, referred to in Regulation U.





          d. Section 6.9(a) of the Credit Agreement shall be amended by adding the
phrase “(v) all capital stock issued by the Borrower,” after the phrase “other
than” in the second line of Section 6.9(a).



          e. Clause (i) of Section 6.11 of the Credit Agreement shall be amended by
adding the phrase “(as amended or supplemented with the consent of the
Administrative Agent)” after the phrase “April 28, 2003”.



          f. Section 6 of the Credit Agreement shall be amended by adding the
following new Section 6.13 at the end of such Section:




	 	 	
“Section 6.13. Equity Sales. Ensure that any sale or other
Disposition by the Borrower or any of its Subsidiaries (other than
by or to Legacy Trust and the Insurance Subsidiary or as otherwise
permitted by Sections 7.5(c), 7.5(d), 7.8(e) and 7.8(g)) of Capital
Stock for cash proceeds shall be a new issuance of such Capital
Stock at any time when the Consolidated Leverage Ratio (determined
as at the end of the most recent period of four consecutive fiscal
quarters ended prior to the required date of prepayment set forth
in Section 2.11(a) for which the relevant financial information is
available on a pro forma basis as if such issuance had occurred on
the first day of such period) is greater than or equal to 1.5 to
1.0.”




 









 





          g. Section 7.3 of the Credit Agreement shall be amended by deleting the
word “and” from the end of Section 7.3(k), redesignating Section 7.3(l) as
Section 7.3(m) and inserting the following new Section 7.3(l) after Section
7.3(k):




	 	 	"(l) Liens on Margin Capital Stock that is held by the Borrower as
treasury stock or that is held by any of its Subsidiaries;” and





          h. Section 7.5 of the Credit Agreement shall be amended by deleting the
word “and” at the end of Section 7.5(i), deleting the period in Section 7.5(j)
and inserting a semicolon in its place, adding the word “and” after the
semicolon in Section 7.5(j) and inserting the following new Section 7.5(k)
after Section 7.5(j):




	 	 	"(k) Dispositions of Margin Capital Stock that is held as treasury
stock by the Borrower or that is held by any of its Subsidiaries.”





          i. Section 7.13 of the Credit Agreement shall be amended by adding the
phrase “(other than Margin Capital Stock that is held by the Borrower as
treasury stock or that is held by any of its Subsidiaries)” after the phrase
“suffer to exist any Lien upon any of its property” in the third and fourth
lines of Section 7.13.



     2. Amendment to the Guarantee and Collateral Agreement. The definition of
the term “Excluded Assets” in Section 1.1(b) of the Guarantee and Collateral
Agreement shall be amended by inserting “(i)” between the colon and the word
“any” at the beginning of the definition, and by inserting the phrase “and (ii)
all capital stock issued by the Borrower held by any Grantor” between the word
“above” and the period at the end of the definition.



     3. Representations and Warranties. Each Grantor represents and warrants
that upon execution of this Amendment by each Grantor and upon the
effectiveness hereof (a) all representations and warranties contained in the
Credit Agreement and the Guarantee and Collateral Agreement are true and
correct, (b) no Default or Event of Default has occurred and is continuing, (c)
all consents, approvals and authorizations for each Grantor’s execution,
delivery and performance of this Amendment have been obtained or made and (d)
this Amendment has been duly executed and delivered by each Grantor and
constitutes a legal, valid and binding obligation of each Grantor, enforceable
against such Grantor in accordance with its terms.



     4. Limited Purpose. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement, the Guarantee and Collateral Agreement or any other Loan
Document, each of which shall otherwise remain unmodified and in full force and
effect.



     5. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which counterparts when executed and delivered shall be an original, but all of
which together shall constitute one and the



 









 





same instrument, and any telecopy or other facsimile transmission of any
signature shall be deemed an original signature and shall bind such party.



     6. Governing Law. This Amendment shall be governed by and construed in
accordance with the law of the State of New York.



 









 





IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective authorized officers as of the date first above
written.



	 	 	 	 	 
	 	 	RENT-A-CENTER, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Mark E. Speese
	

	 	 	 	
 
	

	 	 	 	Name: Mark E. Speese
	

	 	 	 	Title: Chairman of the Board and Chief
	

	 	 	 	          Executive Officer
	 
	 	 	 	 
	 	 	RENT-A-CENTER EAST, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Mark E. Speese
	

	 	 	 	
 
	

	 	 	 	Name: Mark E. Speese
	

	 	 	 	Title: Chairman of the Board and Chief
	

	 	 	 	          Executive Officer
	 
	 	 	 	 
	 	 	COLORTYME, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Mitchell E. Fadel
	

	 	 	 	
 
	

	 	 	 	Name: Mitchell E. Fadel
	

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	RENT-A-CENTER WEST, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Mitchell E. Fadel
	

	 	 	 	
 
	

	 	 	 	Name: Mitchell E. Fadel
	

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	REMCO AMERICA, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Mitchell E. Fadel
	

	 	 	 	
 
	

	 	 	 	Name: Mitchell E. Fadel
	

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	GET IT NOW, LLC
	 
	 	 	 	 
	

	 	By:	 	/s/ Mitchell E. Fadel
	

	 	 	 	
 
	

	 	 	 	Name: Mitchell E. Fadel
	

	 	 	 	Title: Vice President







 









 






	 	 	 	 	 
	 	 	RENT-A-CENTER TEXAS, L.P.
	 
	 	 	 	 
	

	 	By:	 	/s/ Mitchell E. Fadel
	

	 	 	 	
 
	

	 	 	 	Name: Mitchell E. Fadel
	

	 	 	 	Title: President and Chief Operating Officer
	 
	 	 	 	 
	 	 	RENT-A-CENTER TEXAS, L.L.C.
	 
	 	 	 	 
	

	 	By:	 	/s/ James Ashworth
	

	 	 	 	
 
	

	 	 	 	Name: James Ashworth
	

	 	 	 	Title: President







[Signatures continued on the next page]




 









 








	 	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER
INC.,

as Administrative Agent
	 
	 	 	 	 
	

	 	By:	 	/s/ Francis Chang
	

	 	 	 	
 
	

	 	 	 	Name: Francis Chang
	

	 	 	 	Title: Vice President