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.
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|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.
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|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.
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|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.
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|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.
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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.
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|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.
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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.
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|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.
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|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.
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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. LombardiJohn
A. Lombardi Date:  04/23/2001

COMPANY:

RENT-WAY, INC.

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