Document:

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                                                                    Exhibit 10.2
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                                CREDIT AGREEMENT

                            DATED AS OF JUNE 2, 2003

                                      AMONG

                                 RENT-WAY, INC.,

                THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,

                  THE LENDERS FROM TIME TO TIME PARTIES HERETO,

                                       AND

                         HARRIS TRUST AND SAVINGS BANK,
                            as Administrative Agent,

                                       AND

                       NATIONAL CITY BANK OF PENNSYLVANIA,
                              as Syndication Agent,

                                       AND

                               BMO NESBITT BURNS,
                                as Lead Arranger

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                                HEADING                                                     PAGE
<S>                                                                                                                <C>
SECTION 1.                 THE CREDIT FACILITIES.................................................................    1

       Section 1.1.        Revolving Credit Commitments..........................................................    1
       Section 1.2.        Letters of Credit.....................................................................    1
       Section 1.3.        Applicable Interest Rates.............................................................    4
       Section 1.4.        Minimum Borrowing Amounts; Maximum Eurodollar Loans...................................    6
       Section 1.5.        Manner of Borrowing Loans and Designating Applicable Interest Rates...................    6
       Section 1.6.        Interest Periods......................................................................    8
       Section 1.7.        Maturity of Loans.....................................................................    9
       Section 1.8.        Prepayments...........................................................................    9
       Section 1.9.        Default Rate..........................................................................   11
       Section 1.10.       The Notes.............................................................................   11
       Section 1.11.       Funding Indemnity.....................................................................   11
       Section 1.12.       Commitment Terminations...............................................................   12
       Section 1.13.       Substitution of Lenders...............................................................   12
       Section 1.14.       Swing Loans...........................................................................   13

SECTION 2.                 FEES..................................................................................   14

       Section 2.1.        Fees................ .................................................................   14

SECTION 3.                 PLACE AND APPLICATION OF PAYMENTS.....................................................   15

       Section 3.1.        Place and Application of Payments.....................................................   15

SECTION 4.                 THE COLLATERAL AND GUARANTIES.........................................................   17

       Section 4.1.        Collateral............................................................................   17
       Section 4.2.        Liens on Real Property................................................................   18
       Section 4.3.        Guaranties............................................................................   18
       Section 4.4.        Further Assurances....................................................................   18
       Section 4.5.        Excess Cash Flow Escrow Account.......................................................   18

SECTION 5.                 DEFINITIONS; INTERPRETATION...........................................................   19

       Section 5.1.        Definitions...........................................................................   19
       Section 5.2.        Interpretation........................................................................   34
       Section 5.3.        Change in Accounting Principles.......................................................   34

SECTION 6.                 REPRESENTATIONS AND WARRANTIES........................................................   35

       Section 6.1.        Organization and Qualification........................................................   35
       Section 6.2.        Subsidiaries..........................................................................   35
       Section 6.3.        Authority and Validity of Obligations.................................................   35
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                                <C>
       Section 6.4.        Use of Proceeds; Margin Stock.........................................................   36
       Section 6.5.        Financial Reports.....................................................................   36
       Section 6.6.        No Material Adverse Change............................................................   37
       Section 6.7.        Full Disclosure.......................................................................   37
       Section 6.8.        Trademarks, Franchises, and Licenses..................................................   37
       Section 6.9.        Governmental Authority and Licensing..................................................   37
       Section 6.10.       Good Title............................................................................   37
       Section 6.11.       Litigation and Other Controversies....................................................   37
       Section 6.12.       Taxes.................................................................................   37
       Section 6.13.       Approvals.............................................................................   38
       Section 6.14.       Affiliate Transactions................................................................   38
       Section 6.15.       Investment Company; Public Utility Holding Company....................................   38
       Section 6.16.       ERISA.................................................................................   38
       Section 6.17.       Compliance with Laws..................................................................   38
       Section 6.18.       Other Agreements......................................................................   39
       Section 6.19.       Solvency..............................................................................   39
       Section 6.20.       No Default............................................................................   39
       Section 6.21.       Credit Agreement Obligations..........................................................   39

SECTION 7.                 CONDITIONS PRECEDENT..................................................................   40

       Section 7.1.        All Credit Events.....................................................................   40
       Section 7.2.        Initial Credit Event..................................................................   40

SECTION 8.                 COVENANTS.............................................................................   43

       Section 8.1.        Maintenance of Business...............................................................   43
       Section 8.2.        Maintenance of Properties.............................................................   43
       Section 8.3.        Taxes and Assessments.................................................................   43
       Section 8.4.        Insurance.............................................................................   43
       Section 8.5.        Financial Reports.....................................................................   44
       Section 8.6.        Inspection............................................................................   46
       Section 8.7.        Borrowings and Guaranties.............................................................   46
       Section 8.8.        Liens.................................................................................   47
       Section 8.9.        Investments, Acquisitions, Loans and Advances.........................................   48
       Section 8.10.       Mergers, Consolidations and Sales.....................................................   50
       Section 8.11.       Maintenance of Subsidiaries...........................................................   50
       Section 8.12.       Dividends and Certain Other Restricted Payments.......................................   51
       Section 8.13.       ERISA.................................................................................   51
       Section 8.14.       Compliance with Laws..................................................................   51
       Section 8.15.       Burdensome Contracts With Affiliates..................................................   52
       Section 8.16.       No Changes in Fiscal Year.............................................................   52
       Section 8.17.       Formation of Subsidiaries.............................................................   52
       Section 8.18.       Change in the Nature of Business......................................................   52
       Section 8.19.       Use of Loan Proceeds..................................................................   52
       Section 8.20.       No Restrictions.......................................................................   53
       Section 8.21.       Senior Notes..........................................................................   53
</TABLE>

                                      -ii-

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<TABLE>
<S>                                                                                                                <C>
       Section 8.22        Capital Expenditures..................................................................   53
       Section 8.23.       Fixed Charge Coverage Ratio...........................................................   54
       Section 8.24.       Leverage Ratio........................................................................   54
       Section 8.25.       Net Worth.............................................................................   54
       Section 8.26.       Minimum Rental Merchandise Usage......................................................   55
       Section 8.27.       Monthly Minimum EBITDA................................................................   55
       Section 8.28.       Preferred Stock.......................................................................   57

SECTION 9.                 EVENTS OF DEFAULT AND REMEDIES........................................................   57

       Section 9.1.        Events of Default.....................................................................   57
       Section 9.2.        Non-Bankruptcy Defaults...............................................................   59
       Section 9.3.        Bankruptcy Defaults...................................................................   59
       Section 9.4.        Collateral for Undrawn Letters of Credit..............................................   60
       Section 9.5.        Notice of Default.....................................................................   60
       Section 9.6.        Expenses..............................................................................   60

SECTION 10.                CHANGE IN CIRCUMSTANCES...............................................................   61

       Section 10.1.       Change of Law.........................................................................   61
       Section 10.2.       Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.........   61
       Section 10.3.       Increased Cost and Reduced Return.....................................................   61
       Section 10.4.       Lending Offices.......................................................................   63
       Section 10.5.       Discretion of Lender as to Manner of Funding..........................................   63

SECTION 11.                THE ADMINISTRATIVE AGENT..............................................................   63

       Section 11.1.       Appointment and Authorization of Administrative Agent.................................   63
       Section 11.2.       Administrative Agent and its Affiliates...............................................   64
       Section 11.3.       Action by Administrative Agent........................................................   64
       Section 11.4.       Consultation with Experts.............................................................   64
       Section 11.5.       Liability of Administrative Agent; Credit Decision....................................   64
       Section 11.6.       Indemnity.............................................................................   65
       Section 11.7.       Resignation of Administrative Agent and Successor Administrative Agent................   65
       Section 11.8.       L/C Issuer............................................................................   66
       Section 11.9.       Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements.......   66
       Section 11.10.      Authorization to Release or Subordinate or Limit Liens................................   67
       Section 11.11.      Syndication Agent and Lead Arranger...................................................   67
       Section 11.12.      Designation of Additional Agents......................................................   67
       Section 11.13.      Authorization to Enter into Intercreditor Agreements..................................   67

SECTION 12.                THE GUARANTEES........................................................................   68

       Section 12.1.       The Guarantees........................................................................   68
       Section 12.2.       Guarantee Unconditional...............................................................   68
</TABLE>

                                      -iii-

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<TABLE>
<S>                                                                                                                <C>
       Section 12.3.       Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances...........   69
       Section 12.4.       Subrogation...........................................................................   69
       Section 12.5.       Waivers...............................................................................   69
       Section 12.6.       Limit on Recovery.....................................................................   70
       Section 12.7.       Stay of Acceleration..................................................................   70
       Section 12.8.       Benefit to Guarantors.................................................................   70
       Section 12.9.       Guarantor Covenants...................................................................   70

SECTION 13.                MISCELLANEOUS.........................................................................   70

       Section 13.1.       Withholding Taxes.....................................................................   70
       Section 13.2.       No Waiver, Cumulative Remedies........................................................   71
       Section 13.3.       Non-Business Days.....................................................................   72
       Section 13.4.       Documentary Taxes.....................................................................   72
       Section 13.5.       Survival of Representations...........................................................   72
       Section 13.6.       Survival of Indemnities...............................................................   72
       Section 13.7.       Sharing of Set-Off....................................................................   72
       Section 13.8.       Notices...............................................................................   72
       Section 13.9.       Counterparts..........................................................................   73
       Section 13.10.      Successors and Assigns................................................................   73
       Section 13.11.      Participants..........................................................................   73
       Section 13.12.      Assignments...........................................................................   74
       Section 13.13.      Amendments............................................................................   75
       Section 13.14.      Headings..............................................................................   75
       Section 13.15.      Costs and Expenses; Indemnification...................................................   76
       Section 13.16.      Set-off...............................................................................   77
       Section 13.17.      Entire Agreement......................................................................   77
       Section 13.18.      Governing Law.........................................................................   77
       Section 13.19.      Severability of Provisions............................................................   77
       Section 13.20.      Excess Interest.......................................................................   77
       Section 13.21.      Construction..........................................................................   78
       Section 13.22.      Lender's Obligations Several..........................................................   78
       Section 13.23.      Submission to Jurisdiction; Waiver of Jury Trial......................................   78

Signature Page...................................................................................................  S-1
</TABLE>

EXHIBIT A            --        Notice of Payment Request
EXHIBIT B            --        Notice of Borrowing
EXHIBIT C            --        Notice of Continuation/Conversion
EXHIBIT D-1          --        Revolving Note
EXHIBIT D-2          --        Swing Note
EXHIBIT E            --        Compliance Certificate
EXHIBIT F            --        Additional Guarantor Supplement
EXHIBIT G            --        Assignment and Acceptance
EXHIBIT H            --        Existing Swaps
SCHEDULE 1           --        Commitments
SCHEDULE 1.2         --        Existing Letters of Credit

                                      -iv-

<PAGE>

SCHEDULE 6.2         --        Subsidiaries
SCHEDULE 8.8         --        Existing Liens

                                       -v-

<PAGE>

                                CREDIT AGREEMENT

         This Credit Agreement is entered into as of June 2, 2003, by and among
RENT-WAY, INC., a Pennsylvania corporation (the "Borrower"), the direct and
indirect Subsidiaries of the Borrower from time to time party to this Agreement,
as Guarantors, the several financial institutions from time to time party to
this Agreement, as Lenders, National City Bank of Pennsylvania, as syndication
agent (the "Syndication Agent"), and Harris Trust and Savings Bank, as
Administrative Agent as provided herein and BMO Nesbitt Burns as Lead Arranger
as provided herein (the "Lead Arranger"). All capitalized terms used herein
without definition shall have the same meanings herein as such terms are defined
in Section 5.1 hereof.

                              PRELIMINARY STATEMENT

           The Borrower has requested, and the Lenders have agreed to extend,
certain credit facilities on the terms and conditions of this Agreement.

           NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.        THE CREDIT FACILITIES.

         Section 1.1. Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to
make a loan or loans (individually a "Revolving Loan" and collectively the
"Revolving Loans") in U.S. Dollars to the Borrower from time to time on a
revolving basis up to the amount of such Lender's Revolving Credit Commitment,
subject to any reductions thereof pursuant to the terms hereof, before the
Revolving Credit Termination Date. The sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations at any time outstanding shall
not exceed the Revolving Credit Commitments in effect at such time. Each
Borrowing of Revolving Loans shall be made ratably by the Lenders in proportion
to their respective Revolver Percentages. As provided in Section 1.4(a) hereof,
the Borrower may elect that each Borrowing of Revolving Loans be either Base
Rate Loans or Eurodollar Loans. Revolving Loans may be repaid and the principal
amount thereof reborrowed before the Revolving Credit Termination Date, subject
to the terms and conditions hereof.

         Section 1.2. Letters of Credit. (a) General Terms. Subject to the terms
and conditions hereof, as part of the Revolving Credit, the L/C Issuer shall
issue standby and commercial letters of credit (each a "Letter of Credit") for
the Borrower's account or for the account of the Borrower and one or more of its
Subsidiaries in an aggregate undrawn face amount up to the L/C Sublimit. Each
Letter of Credit shall be issued by the L/C Issuer, but each Lender shall be
obligated to reimburse the L/C Issuer for such Lender's Revolver Percentage of
the amount of each drawing thereunder and, accordingly, each Letter of Credit
shall constitute usage of the Revolving Credit Commitment of each Lender pro
rata in an amount equal to its Revolver Percentage of the L/C Obligations then
outstanding.

<PAGE>

            (b) Applications. At any time before the Revolving Credit
Termination Date, the L/C Issuer shall, at the request of the Borrower, issue
one or more Letters of Credit in U.S. Dollars, in a form satisfactory to the L/C
Issuer, with expiration dates no later than the earlier of 12 months from the
date of issuance (or which are cancelable not later than 12 months from the date
of issuance and each renewal) or 30 days prior to the Revolving Credit
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of an application duly executed by the Borrower and, if such Letter of
Credit is for the account of one of its Subsidiaries, such Subsidiary for the
relevant Letter of Credit in the form then customarily prescribed by the L/C
Issuer for the Letter of Credit requested (each an "Application").
Notwithstanding anything contained in any Application to the contrary: (i) the
Borrower shall pay fees in connection with each Letter of Credit as set forth in
Section 2.1 hereof, (ii) except as otherwise provided in Section 1.8 hereof,
before the occurrence of a Default or an Event of Default, the L/C Issuer will
not call for the funding by the Borrower of any amount under a Letter of Credit
before being presented with a drawing thereunder, and (iii) if the L/C Issuer is
not timely reimbursed for the amount of any drawing under a Letter of Credit on
the date such drawing is paid, the Borrower's obligation to reimburse the L/C
Issuer for the amount of such drawing shall bear interest (which the Borrower
hereby promises to pay) from and after the date such drawing is paid at a rate
per annum equal to the sum of 2.0% plus the Applicable Margin plus the Base Rate
from time to time in effect (computed on the basis of a year of 365 or 366 days,
as the case may be, and the actual number of days elapsed). If the L/C Issuer
issues any Letter of Credit with an expiration date that is automatically
extended unless the L/C Issuer gives notice that the expiration date will not so
extend beyond its then scheduled expiration date, unless the Required Lenders
instruct the L/C Issuer otherwise, the L/C Issuer will give such notice of
non-renewal before the time necessary to prevent such automatic extension if
before such required notice date: (i) the expiration date of such Letter of
Credit if so extended would be after the Revolving Credit Termination Date, (ii)
the Revolving Credit Commitments have been terminated, or (iii) a Default or an
Event of Default exists and the Administrative Agent, at the request or with the
consent of the Required Lenders, has given the L/C Issuer instructions not to so
permit the extension of the expiration date of such Letter of Credit. The L/C
Issuer agrees to issue amendments to the Letter(s) of Credit increasing the
amount, or extending the expiration date, thereof at the request of the Borrower
subject to the conditions of Section 7 hereof and the other terms of this
Section 1.2.

            (c) The Reimbursement Obligations. Subject to Section 1.2(b) hereof,
the obligation of the Borrower to reimburse the L/C Issuer for all drawings
under a Letter of Credit (a "Reimbursement Obligation") shall be governed by the
Application related to such Letter of Credit, except that reimbursement shall be
made by no later than 12:00 Noon (Chicago time) on the date when each drawing is
to be paid if the Borrower has been informed of such drawing by the L/C Issuer
on or before 11:30 a.m. (Chicago time) on the date when such drawing is to be
paid or, if notice of such drawing is given to the Borrower after 11:30 a.m.
(Chicago time) on the date when such drawing is to be paid, by the end of such
day, in immediately available funds at the Administrative Agent's principal
office in Chicago, Illinois or such other office as the Administrative Agent may
designate in writing to the Borrower (who shall thereafter cause to be
distributed to the L/C Issuer such amount(s) in like funds). If the Borrower
does not make any such reimbursement payment on the date due and the
Participating Lenders fund their participations therein in the manner set forth
in Section 1.2(d) below, then all payments thereafter

                                      -2-

<PAGE>

received by the Administrative Agent in discharge of any of the relevant
Reimbursement Obligations shall be distributed in accordance with Section 1.2(d)
below.

            (d) The Participating Interests. Each Lender (other than the Lender
acting as L/C Issuer in issuing the relevant Letter of Credit), by its
acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C
Issuer hereby agrees to sell to each such Lender (a "Participating Lender"), an
undivided percentage participating interest (a "Participating Interest"), to the
extent of its Revolver Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by the
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is to be paid, as set forth in Section 1.2(c) above, or if
the L/C Issuer is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit A
hereto from the L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
certificate is received after such time, pay to the Administrative Agent for the
account of the L/C Issuer an amount equal to such Participating Lender's
Revolver Percentage of such unpaid or recaptured Reimbursement Obligation
together with interest on such amount accrued from the date the related payment
was made by the L/C Issuer to the date of such payment by such Participating
Lender at a rate per annum equal to: (i) from the date the related payment was
made by the L/C Issuer to the date 2 Business Days after payment by such
Participating Lender is due hereunder, the Federal Funds Rate for each such day
and (ii) from the date 2 Business Days after the date such payment is due from
such Participating Lender to the date such payment is made by such Participating
Lender, the Base Rate in effect for each such day. Each such Participating
Lender shall thereafter be entitled to receive its Revolver Percentage of each
payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the L/C Issuer retaining its Revolver Percentage
thereof as a Lender hereunder.

            The several obligations of the Participating Lenders to the L/C
Issuer under this Section 1.2 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Participating Lender may
have or have had against the Borrower, the L/C Issuer, the Administrative
Agent, any Lender or any other Person whatsoever. Without limiting the
generality of the foregoing, such obligations shall not be affected by any
Default or Event of Default or by any reduction or termination of any
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever.

            (e) Indemnification. The Participating Lenders shall, to the extent
of their respective Revolver Percentages, indemnify the L/C Issuer (to the
extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the L/C Issuer's gross negligence or
willful misconduct) that the L/C Issuer may suffer or incur in connection with
any Letter of Credit issued by it. The obligations of the Participating Lenders
under this Section 1.2(e) and all other parts of

                                      -3-

<PAGE>

this Section 1.2 shall survive termination of this Agreement and of all
Applications, Letters of Credit, and all drafts and other documents presented in
connection with drawings thereunder.

            (f) Manner of Requesting a Letter of Credit. The Borrower shall
provide at least five (5) Business Days' advance written notice to the
Administrative Agent of each request for the issuance of a Letter of Credit,
such notice in each case to be accompanied by an Application for such Letter of
Credit properly completed and executed by the Borrower and, in the case of an
extension or an increase in the amount of a Letter of Credit, a written request
therefor, in a form acceptable to the Administrative Agent and the L/C Issuer,
in each case, together with the fees called for by this Agreement. The
Administrative Agent shall promptly notify the L/C Issuer of the Administrative
Agent's receipt of each such notice and the L/C Issuer shall promptly notify the
Administrative Agent and the Lenders of the issuance of the Letter of Credit so
requested.

            (g) Existing letters of credit. Notwithstanding anything herein to
the contrary, the letters of credit described on Schedule 1.2 hereof issued by
National City Bank of Pennsylvania prior to the date hereof for the account of
the Borrower shall be deemed to be a "Letter of Credit" for all purposes of this
Agreement to the same extent and with the same force and effect as if such
letters of credit had been issued at the request of the Borrower pursuant to
this Agreement.

         Section 1.3. Applicable Interest Rates. (a) Base Rate Loans. Each Base
Rate Loan made or maintained by a Lender shall bear interest during each
Interest Period it is outstanding (computed on the basis of a year of 365 or 366
days, as the case may be, and the actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Eurodollar Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Base Rate from time to time in effect, payable on the last day of its
Interest Period and at maturity (whether by acceleration or otherwise).

         "Base Rate" means for any day the greater of: (i) the rate of interest
announced or otherwise established by the Administrative Agent from time to time
as its prime commercial rate as in effect on such day, with any change in the
Base Rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Administrative Agent's
best or lowest rate) and (ii) the sum of (x) the rate determined by the
Administrative Agent to be the average (rounded upward, if necessary, to the
next higher 1/100 of 1%) of the rates per annum quoted to the Administrative
Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by the Administrative Agent for sale to the Administrative Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount owed to the Administrative Agent for which
such rate is being determined, plus (y) 1/2 of 1%.

            (b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is

                                      -4-

<PAGE>

advanced, continued or created by conversion from a Base Rate Loan until
maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin plus the Adjusted LIBOR applicable for such
Interest Period, payable on the last day of the Interest Period and at maturity
(whether by acceleration or otherwise), and, if the applicable Interest Period
is longer than three months, on each day occurring every three months after the
commencement of such Interest Period.

         "Adjusted LIBOR" means, for any Borrowing of Eurodollar Loans, a rate
per annum determined in accordance with the following formula:

              Adjusted LIBOR      =               LIBOR
                                     ---------------------------------
                                     1 - Eurodollar Reserve Percentage

         "Eurodollar Reserve Percentage" means, for any Borrowing of Eurodollar
Loans, the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal, and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on "eurocurrency liabilities", as defined in such Board's Regulation
D (or in respect of any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets that include loans by
non-United States offices of any Lender to United States residents), subject to
any amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto. For purposes of this
definition, the Eurodollar Loans shall be deemed to be "eurocurrency
liabilities" as defined in Regulation D without benefit or credit for any
prorations, exemptions or offsets under Regulation D.

         "LIBOR" means, for an Interest Period for a Borrowing of Eurodollar
Loans, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately
available funds are offered to the Administrative Agent at 11:00 a.m. (London,
England time) 2 Business Days before the beginning of such Interest Period by 3
or more major banks in the interbank eurodollar market selected by the
Administrative Agent for delivery on the first day of and for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made by the Administrative Agent
as part of such Borrowing.

         "LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day 2 Business Days before the commencement of
such Interest Period.

         "Telerate Page 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as

                                      -5-

<PAGE>

may be nominated by the British Bankers' Association as the information vendor
for the purpose of displaying British Bankers' Association Interest Settlement
Rates for U.S. Dollar deposits).

            (c) Rate Determinations. The Administrative Agent shall determine
each interest rate applicable to the Loans and the Reimbursement Obligations
hereunder, and its determination thereof shall be conclusive and binding except
in the case of manifest error.

         Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans. Each
Borrowing of Base Rate Loans advanced under a Credit shall be in an amount not
less than $1,000,000. Each Borrowing of Eurodollar Loans advanced, continued or
converted under a Credit shall be in an amount equal to $1,000,000 or such
greater amount which is an integral multiple of $1,000,000. Without the
Administrative Agent's consent, there shall not be more than seven (7)
Borrowings of Eurodollar Loans outstanding under a Credit at any one time.

         Section 1.5. Manner of Borrowing Loans and Designating Applicable
Interest Rates. (a) Notice to the Administrative Agent. The Borrower shall give
notice to the Administrative Agent by no later than 10:00 a.m. (Chicago time):
(i) at least 3 Business Days before the date on which the Borrower requests the
Lenders to advance a Borrowing of Eurodollar Loans and (ii) on the date the
Borrower requests the Lenders to advance a Borrowing of Base Rate Loans. The
Loans included in each Borrowing shall bear interest initially at the type of
rate specified in such notice of a new Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Borrowing or, subject to Section 1.4's minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is
of Eurodollar Loans, on the last day of the Interest Period applicable thereto,
the Borrower may continue part or all of such Borrowing as Eurodollar Loans or
convert part or all of such Borrowing into Base Rate Loans or (ii) if such
Borrowing is of Base Rate Loans, on any Business Day, the Borrower may convert
all or part of such Borrowing into Eurodollar Loans for an Interest Period or
Interest Periods specified by the Borrower. The Borrower shall give all such
notices requesting the advance, continuation or conversion of a Borrowing to the
Administrative Agent by telephone or telecopy (which notice shall be irrevocable
once given and, if by telephone, shall be promptly confirmed in writing),
substantially in the form attached hereto as Exhibit B (Notice of Borrowing) or
Exhibit C (Notice of Continuation/Conversion), as applicable, or in such other
form acceptable to the Administrative Agent. Notice of the continuation of a
Borrowing of Eurodollar Loans for an additional Interest Period or of the
conversion of part or all of a Borrowing of Base Rate Loans into Eurodollar
Loans must be given by no later than 10:00 a.m. (Chicago time) at least 3
Business Days before the date of the requested continuation or conversion. All
such notices concerning the advance, continuation or conversion of a Borrowing
shall specify the date of the requested advance, continuation or conversion of a
Borrowing (which shall be a Business Day), the amount of the requested Borrowing
to be advanced, continued or converted, the type of Loans to comprise such new,
continued or converted Borrowing and, if such Borrowing is to be comprised of
Eurodollar Loans, the Interest Period applicable thereto. The Borrower agrees
that the Administrative Agent may rely on any such telephonic or telecopy notice
given by any person the Administrative Agent in good faith believes is an
Authorized Representative without the necessity of independent investigation
and, in the event any such notice by telephone conflicts with any written

                                      -6-

<PAGE>

confirmation, such telephonic notice shall govern if the Administrative Agent
has acted in reliance thereon.

            (b) Notice to the Lenders. The Administrative Agent shall give
prompt telephonic or telecopy notice to each Lender of any notice from the
Borrower received pursuant to Section 1.5(a) above and, if such notice requests
the Lenders to make Eurodollar Loans, the Administrative Agent shall give notice
to the Borrower and each Lender by like means of the interest rate applicable
thereto promptly after the Administrative Agent has made such determination.

            (c) Borrower's Failure to Notify; Automatic Continuations and
Conversions. Any outstanding Borrowing of Base Rate Loans shall automatically be
continued for an additional Interest Period on the last day of its then current
Interest Period unless the Borrower has notified the Administrative Agent within
the period required by Section 1.5(a) that the Borrower intends to convert such
Borrowing, subject to Section 7.1 hereof, into a Borrowing of Eurodollar Loans
or such Borrowing is prepaid in accordance with Section 1.8(a). If the Borrower
fails to give notice pursuant to Section 1.5(a) above of the continuation or
conversion of any outstanding principal amount of a Borrowing of Eurodollar
Loans before the last day of its then current Interest Period within the period
required by Section 1.5(a) or, whether or not such notice has been given, one or
more of the conditions set forth in Section 7.1 for the continuation or
conversion of a Borrowing of Eurodollar Loans would not be satisfied, and such
Borrowing is not prepaid in accordance with Section 1.8(a), such Borrowing shall
automatically be converted into a Borrowing of Base Rate Loans. In the event the
Borrower fails to give notice pursuant to Section 1.5(a) above of a Borrowing
equal to the amount of a Reimbursement Obligation and has not notified the
Administrative Agent by 1:00 p.m. (Chicago time) on the day such Reimbursement
Obligation becomes due that it intends to repay such Reimbursement Obligation
through funds not borrowed under this Agreement, the Borrower shall be deemed to
have requested a Borrowing of Base Rate Loans under the Revolving Credit (or, at
the option of the Administrative Agent, under the Swing Line) on such day in the
amount of the Reimbursement Obligation then due, which Borrowing shall be
applied to pay the Reimbursement Obligation then due.

            (d) Disbursement of Loans. Not later than 1:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing, subject to Section 7
hereof, each Lender shall make available its Loan comprising part of such
Borrowing in funds immediately available at the principal office of the
Administrative Agent in Chicago, Illinois. The Administrative Agent shall make
the proceeds of each new Borrowing available to the Borrower at the
Administrative Agent's principal office in Chicago, Illinois.

            (e) Administrative Agent Reliance on Lender Funding. Unless the
Administrative Agent shall have been notified by a Lender prior to (or, in the
case of a Borrowing of Base Rate Loans, by 1:00 p.m. (Chicago time) on) the date
on which such Lender is scheduled to make payment to the Administrative Agent of
the proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume
that such Lender has made such payment when due and the Administrative Agent may
in reliance upon such assumption (but shall not be required to) make available
to the

                                      -7-

<PAGE>

Borrower the proceeds of the Loan to be made by such Lender and, if any Lender
has not in fact made such payment to the Administrative Agent, such Lender
shall, on demand, pay to the Administrative Agent the amount made available to
the Borrower attributable to such Lender together with interest thereon in
respect of each day during the period commencing on the date such amount was
made available to the Borrower and ending on (but excluding) the date such
Lender pays such amount to the Administrative Agent at a rate per annum equal
to: (i) from the date the related advance was made by the Administrative Agent
to the date 2 Business Days after payment by such Lender is due hereunder, the
Federal Funds Rate for each such day and (ii) from the date 2 Business Days
after the date such payment is due from such Lender to the date such payment is
made by such Lender, the Base Rate in effect for each such day. If such amount
is not received from such Lender by the Administrative Agent immediately upon
demand, the Borrower will, on demand, repay to the Administrative Agent the
proceeds of the Loan attributable to such Lender with interest thereon at a rate
per annum equal to the interest rate applicable to the relevant Loan, but
without such payment being considered a payment or prepayment of a Loan under
Section 1.11 hereof so that the Borrower will have no liability under such
Section with respect to such payment.

         Section 1.6. Interest Periods. As provided in Section 1.5(a) and 1.14
hereof, at the time of each request to advance, continue or create by conversion
a Borrowing of Eurodollar Loans or Swing Loans, the Borrower shall select an
Interest Period applicable to such Loans from among the available options. The
term "Interest Period" means the period commencing on the date a Borrowing of
Loans is advanced, continued or created by conversion and ending: (a) in the
case of Base Rate Loans, on the last day of the calendar month in which such
Borrowing is advanced, continued or created by conversion (or on the last day of
the following calendar month if such Loan is advanced, continued or created by
conversion on the last day of a calendar month), (b) in the case of a Eurodollar
Loan, 1, 2, 3 or 6 months thereafter, and (c) in the case of a Swing Loan, on
the date 1 to 7 days thereafter as mutually agreed to by the Borrower and the
Administrative Agent; provided, however, that:

                  (a) any Interest Period for a Borrowing of Revolving Loans or
         Swing Loans consisting of Base Rate Loans that otherwise would end
         after the Revolving Credit Termination Date shall end on the Revolving
         Credit Termination Date;

                  (b) no Interest Period with respect to any portion of the
         Revolving Loans or Swing Loans shall extend beyond the Revolving Credit
         Termination Date;

                  (c) whenever the last day of any Interest Period would
         otherwise be a day that is not a Business Day, the last day of such
         Interest Period shall be extended to the next succeeding Business Day,
         provided that, if such extension would cause the last day of an
         Interest Period for a Borrowing of Eurodollar Loans to occur in the
         following calendar month, the last day of such Interest Period shall be
         the immediately preceding Business Day; and

                  (d) for purposes of determining an Interest Period for a
         Borrowing of Eurodollar Loans, a month means a period starting on one
         day in a calendar month and ending on the numerically corresponding day
         in the next calendar month; provided,

                                      -8-

<PAGE>

         however, that if there is no numerically corresponding day in the month
         in which such an Interest Period is to end or if such an Interest
         Period begins on the last Business Day of a calendar month, then such
         Interest Period shall end on the last Business Day of the calendar
         month in which such Interest Period is to end.

         Section 1.7. Maturity of Loans. Each Revolving Loan and Swing Loan,
both for principal and interest not sooner paid, shall mature and become due and
payable by the Borrower on the Revolving Credit Termination Date.

         Section 1.8. Prepayments. (a) Optional. The Borrower shall have the
privilege of prepaying without premium or penalty (except as set forth in
Section 1.11 below) and in whole or in part (but, if in part, then: (i) if such
Borrowing is of Base Rate Loans, in an amount not less than $1,000,000, (ii) if
such Borrowing is of Eurodollar Loans, in an amount not less than $1,000,000,
and (iii) in each case, in an amount such that the minimum amount required for a
Borrowing pursuant to Section 1.4 and 1.14 hereof remains outstanding) any
Borrowing of Eurodollar Loans at any time upon 3 Business Days prior notice by
the Borrower to the Administrative Agent or, in the case of a Borrowing of Base
Rate Loans, notice delivered by the Borrower to the Administrative Agent no
later than 10:00 a.m. (Chicago time) on the date of prepayment, such prepayment
to be made by the payment of the principal amount to be prepaid and, in the case
of any Eurodollar Loans or Swing Loans, accrued interest thereon to the date
fixed for prepayment plus any amounts due the Lenders under Section 1.11 hereof.

            (b) Mandatory. (i) If the Borrower or any Subsidiary shall at any
time or from time to time make or agree to make a Disposition or shall suffer an
Event of Loss resulting in Net Cash Proceeds in excess of $1,000,000
individually or on a cumulative basis in any fiscal year of the Borrower, then
(x) the Borrower shall promptly notify the Administrative Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated Net Cash
Proceeds to be received by the Borrower or such Subsidiary in respect thereof)
and (y) promptly upon receipt by the Borrower or the Subsidiary of the Net Cash
Proceeds of such Disposition or Event of Loss, the Borrower shall prepay the
outstanding Loans and L/C Obligations in an aggregate amount equal to 100% of
the amount of all such Net Cash Proceeds; provided that in the case of each
Disposition and Event of Loss, if the Borrower states in its notice of such
event that the Borrower or the applicable Subsidiary intends to reinvest, within
180 days of the applicable Disposition or receipt of Net Cash Proceeds from an
Event of Loss, the Net Cash Proceeds thereof in assets similar to the assets
which were subject to such Disposition or Event of Loss, then so long as no
Default or Event of Default then exists, the Borrower shall not be required to
make a mandatory prepayment under this Section in respect of such Net Cash
Proceeds to the extent such Net Cash Proceeds are actually reinvested in such
similar assets with such 180-day period. Promptly after the end of such 180-day
period, the Borrower shall notify the Administrative Agent whether the Borrower
or such Subsidiary has reinvested such Net Cash Proceeds in such similar assets,
and to the extent such Net Cash Proceeds have not been so reinvested, the
Borrower shall promptly prepay the outstanding Loans and L/C Obligations in the
amount of such Net Cash Proceeds not so reinvested. The amount of each such
prepayment shall be applied on a ratable basis among the relevant outstanding
Obligations based on the principal amounts thereof.

                                      -9-

<PAGE>

            (ii)     If after the Closing Date the Borrower or any Subsidiary
shall issue new equity securities (whether common or preferred stock or
otherwise), other than equity securities issued in connection with the exercise
of employee stock options, common stock issued to fund the prepayment,
redemption or purchase of Senior Notes, and capital stock issued to the seller
of an Acquired Business in connection with an Acquisition permitted hereby, the
Borrower shall promptly notify the Administrative Agent of the estimated Net
Cash Proceeds of such issuance to be received by or for the account of the
Borrower or such Subsidiary in respect thereof. Promptly upon receipt by the
Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower
shall prepay the outstanding Loans and L/C Obligations in an aggregate amount
equal to 100% of the amount of such Net Cash Proceeds. The amount of each such
prepayment shall be applied on a ratable basis among the relevant outstanding
Obligations based on the principal amounts thereof. The Borrower acknowledges
that its performance hereunder shall not limit the rights and remedies of the
Lenders for any breach of Section 8.11 (Maintenance of Subsidiaries) or Section
9.1(i) (Change of Control) hereof or any other terms of the Loan Documents.

            (iii)    If after the Closing Date the Borrower or any Subsidiary
shall issue any Indebtedness for Borrowed Money, other than Indebtedness for
Borrowed Money permitted by Section 8.7(a)-(e) hereof, the Borrower shall
promptly notify the Administrative Agent of the estimated Net Cash Proceeds of
such issuance to be received by or for the account of the Borrower or such
Subsidiary in respect thereof. Promptly upon receipt by the Borrower or such
Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay the
outstanding Loans and L/C Obligations in an aggregate amount equal to 100% of
the amount of such Net Cash Proceeds. The amount of each such prepayment shall
be applied on a ratable basis among the relevant outstanding Obligations based
on the principal amounts thereof. The Borrower acknowledges that its performance
hereunder shall not limit the rights and remedies of the Lenders for any breach
of Section 8.7 hereof or any other terms of the Loan Documents.

            (iv)     The Borrower shall, on each date the Revolving Credit
Commitments are reduced pursuant to Section 1.12 hereof, prepay the Revolving
Loans, Swing Loans, and, if necessary, prefund the L/C Obligations by the
amount, if any, necessary to reduce the sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations then outstanding to the amount
to which the Revolving Credit Commitments have been so reduced.

            (v)      Unless the Borrower otherwise directs, prepayments of Loans
under this Section 1.8(b) shall be applied first to Borrowings of Base Rate
Loans until payment in full thereof with any balance applied to Borrowings of
Eurodollar Loans in the order in which their Interest Periods expire. Each
prepayment of Loans under this Section 1.8(b) shall be made by the payment of
the principal amount to be prepaid and, in the case of any Eurodollar Loans or
Swing Loans, accrued interest thereon to the date of prepayment together with
any amounts due the Lenders under Section 1.11 hereof. Each prefunding of L/C
Obligations shall be made in accordance with Section 9.4 hereof.

            (c)      The Administrative Agent will promptly advise each Lender
of any notice of prepayment it receives from the Borrower. Any amount of
Revolving Loans and Swing Loans paid or prepaid before the Revolving Credit
Termination Date may, subject to the terms and conditions of this Agreement, be
borrowed, repaid and borrowed again.

                                      -10-

<PAGE>

         Section 1.9. Default Rate. Notwithstanding anything to the contrary
contained in Section 1.3 hereof, while any Event of Default exists or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Loans owing by it at a rate per annum equal to:

                  (a) for any Base Rate Loan or any Swing Loan bearing interest
         based on the Base Rate, the sum of 2.0% plus the Applicable Margin plus
         the Base Rate from time to time in effect; and

                  (b) for any Eurodollar Loan or any Swing Loan bearing interest
         at the Administrative Agent's Quoted Rate, the sum of 2.0% plus the
         rate of interest in effect thereon at the time of such default until
         the end of the Interest Period applicable thereto and, thereafter, at a
         rate per annum equal to the sum of 2.0% plus the Applicable Margin for
         Base Rate Loans plus the Base Rate from time to time in effect;

provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the Borrower. While any Event of Default exists or after acceleration,
interest shall be paid on demand of the Administrative Agent at the request or
with the consent of the Required Lenders.

         Section 1.10. The Notes. (a) The Revolving Loans made to the Borrower
by a Lender shall be evidenced by a single promissory note of the Borrower
issued to such Lender in the form of Exhibit D-1 hereto. Each such promissory
note is hereinafter referred to as a "Revolving Note" and collectively such
promissory notes are referred to as the "Revolving Notes."

            (b) The Swing Loans made to the Borrower by the Administrative Agent
shall be evidenced by a single promissory note of the Borrower issued to the
Administrative Agent in the form of Exhibit D-2 hereto. Such promissory note is
hereinafter referred to as the "Swing Note."

            (c) Each Lender shall record on its books and records or on a
schedule to its appropriate Note the amount of each Loan advanced, continued or
converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurodollar Loan or Swing Loan, the Interest Period and the interest rate
applicable thereto. The record thereof, whether shown on such books and records
of a Lender or on a schedule to the relevant Note, shall be prima facie evidence
as to all such matters; provided, however, that the failure of any Lender to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Loans made to it
hereunder together with accrued interest thereon. At the request of any Lender
and upon such Lender tendering to the Borrower the appropriate Note to be
replaced, the Borrower shall furnish a new Note to such Lender to replace any
outstanding Note, and at such time the first notation appearing on a schedule on
the reverse side of, or attached to, such Note shall set forth the aggregate
unpaid principal amount of all Loans, if any, then outstanding thereon.

         Section 1.11. Funding Indemnity. If any Lender shall incur any loss,
cost or expense (including, without limitation, any loss of profit, and any
loss, cost or expense incurred by reason

                                      -11-

<PAGE>

of the liquidation or re-employment of deposits or other funds acquired by such
Lender to fund or maintain any Eurodollar Loan or Swing Loan or the relending or
reinvesting of such deposits or amounts paid or prepaid to such Lender) as a
result of:

                  (a) any payment, prepayment or conversion of a Eurodollar Loan
         or Swing Loan on a date other than the last day of its Interest Period,

                  (b) any failure (because of a failure to meet the conditions
         of Section 7 or otherwise) by the Borrower to borrow or continue a
         Eurodollar Loan or Swing Loan, or to convert a Base Rate Loan into a
         Eurodollar Loan or Swing Loan, on the date specified in a notice given
         pursuant to Section 1.5(a) or 1.14 hereof,

                  (c) any failure by the Borrower to make any payment of
         principal on any Eurodollar Loan or Swing Loan when due (whether by
         acceleration or otherwise), or

                  (d) any acceleration of the maturity of a Eurodollar Loan or
         Swing Loan as a result of the occurrence of any Event of Default
         hereunder,

then, upon the demand of such Lender, the Borrower shall pay to such Lender such
amount as will reimburse such Lender for such loss, cost or expense. If any
Lender makes such a claim for compensation, it shall provide to the Borrower,
with a copy to the Administrative Agent, a certificate setting forth the amount
of such loss, cost or expense in reasonable detail and the amounts shown on such
certificate shall be conclusive if reasonably determined.

         Section 1.12. Commitment Terminations. (a) Optional Revolving Credit
Terminations. The Borrower shall have the right at any time and from time to
time, upon 5 Business Days prior written notice to the Administrative Agent (or
such shorter time period agreed to by the Administrative Agent), to terminate
the Revolving Credit Commitments without premium or penalty and in whole or in
part, any partial termination to be (i) in an amount not less than $5,000,000
and (ii) allocated ratably among the Lenders in proportion to their respective
Revolver Percentages, provided that the Revolving Credit Commitments may not be
reduced to an amount less than the sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations then outstanding. Any
termination of the Revolving Credit Commitments below the L/C Sublimit or Swing
Line Sublimit then in effect shall reduce the L/C Sublimit and Swing Line
Sublimit, as applicable, by a like amount. The Administrative Agent shall give
prompt notice to each Lender of any such termination of the Revolving Credit
Commitments.

            (b) Any termination of the Commitments pursuant to this Section 1.12
may not be reinstated.

         Section 1.13. Substitution of Lenders. Upon the receipt by the Borrower
of (a) a claim from any Lender for compensation under Section 10.3 or 13.1
hereof, (b) notice by any Lender to the Borrower of any illegality pursuant to
Section 10.1 hereof, (c) in the event any Lender is in default in any material
respect with respect to its obligations under the Loan Documents or (d) as and
to the extent provided in Section 13.13(b) (any such Lender referred to in
clause (a), (b), (c)

                                      -12-

<PAGE>

or (d) above being hereinafter referred to as an "Affected Lender"), the
Borrower may, in addition to any other rights the Borrower may have hereunder or
under applicable law, require, at its expense, any such Affected Lender to
assign, at par plus accrued interest and fees, without recourse, all of its
interest, rights, and obligations hereunder (including all of its Commitments
and the Loans and participation interests in Letters of Credit and other amounts
at any time owing to it hereunder and the other Loan Documents) to a bank or
other institutional lender specified by the Borrower (collectively, the
"Replacement Lenders"), provided that (i) such assignment shall not conflict
with or violate any law, rule or regulation or order of any court or other
governmental authority, (ii) the Borrower shall have received the written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, to such assignment, (iii) the Borrower shall have paid to the Affected
Lender all monies (together with amounts due such Affected Lender under Section
1.11 hereof as if the Loans owing to it were prepaid rather than assigned) other
than such principal, interest, and fees accrued and owing to it hereunder, and
(iv) the assignment is entered into in accordance with the other requirements of
Section 13.12 hereof.

         Section 1.14. Swing Loans. (a) Generally. Subject to the terms and
conditions hereof, as part of the Revolving Credit, the Administrative Agent
agrees to make loans to the Borrower under the Swing Line (individually a "Swing
Loan" and collectively the "Swing Loans") which shall not in the aggregate at
any time outstanding exceed the Swing Line Sublimit. The Swing Loans may be
availed of the Borrower from time to time and borrowings thereunder may be
repaid and used again during the period ending on the Revolving Credit
Termination Date; provided that each Swing Loan must be repaid on the last day
of the Interest Period applicable thereto. Each Swing Loan shall be in a minimum
amount of $250,000 or such greater amount which is an integral multiple of
$100,000.

            (b) Interest on Swing Loans. Each Swing Loan shall bear interest
until maturity (whether by acceleration or otherwise) at a rate per annum equal
to (i) the sum of the Base Rate plus the Applicable Margin for Base Rate Loans
under the Revolving Credit as from time to time in effect (computed on the basis
of a year of 365 or 366 days, as the case may be, for the actual number of days
elapsed) or (ii) the Administrative Agent's Quoted Rate (computed on the basis
of a year of 360 days for the actual number of days elapsed). Interest on each
Swing Loan shall be due and payable prior to such maturity on the last day of
each Interest Period applicable thereto.

            (c) Requests for Swing Loans. The Borrower shall give the
Administrative Agent prior notice (which may be written or oral) no later than
12:00 Noon (Chicago time) on the date upon which a Borrower requests that any
Swing Loan be made, of the amount and date of such Swing Loan, and the Interest
Period requested therefor. Within 30 minutes after receiving such notice, the
Administrative Agent shall in its discretion quote an interest rate to the
Borrower at which the Administrative Agent would be willing to make such Swing
Loan available to the Borrower for the Interest Period so requested (the rate so
quoted for a given Interest Period being herein referred to as "Administrative
Agent's Quoted Rate"). The Borrower acknowledges and agrees that the interest
rate quote is given for immediate and irrevocable acceptance. If the Borrower
does not so immediately accept the Administrative Agent's Quoted Rate for the
full amount requested by the Borrower for such Swing Loan, the Administrative
Agent's Quoted Rate shall

                                      -13-

<PAGE>

be deemed immediately withdrawn and such Swing Loan shall bear interest at the
rate per annum determined by adding the Applicable Margin for Base Rate Loans
under the Revolving Credit to the Base Rate as from time to time in effect.
Subject to the terms and conditions hereof, the proceeds of such Swing Loan
shall be made available to the Borrower on the date so requested at the offices
of the Administrative Agent in Chicago, Illinois. Anything contained in the
foregoing to the contrary notwithstanding (i) the obligation of the
Administrative Agent to make Swing Loans shall be subject to all of the terms
and conditions of this Agreement and (ii) the Administrative Agent shall not be
obligated to make more than one Swing Loan during any one day.

            (d) Refunding Loans. In its sole and absolute discretion, the
Administrative Agent may at any time, on behalf of the Borrower (which hereby
irrevocably authorizes the Administrative Agent to act on its behalf for such
purpose) and with notice to the Borrower, request each Lender to make a
Revolving Loan in the form of a Base Rate Loan in an amount equal to such
Lender's Revolver Percentage of the amount of the Swing Loans outstanding on the
date such notice is given. Unless an Event of Default described in Section
9.1(j) or 9.1(k) exists with respect to the Borrower, regardless of the
existence of any other Event of Default, each Lender shall make the proceeds of
its requested Revolving Loan available to the Administrative Agent, in
immediately available funds, at the Administrative Agent's principal office in
Chicago, Illinois, before 12:00 Noon (Chicago time) on the Business Day
following the day such notice is given. The proceeds of such Borrowing of
Revolving Loans shall be immediately applied to repay the outstanding Swing
Loans.

            (e) Participations. If any Lender refuses or otherwise fails to make
a Revolving Loan when requested by the Administrative Agent pursuant to Section
1.14(d) above (because an Event of Default described in Section 9.1(j) or 9.1(k)
exists with respect to the Borrower or otherwise), such Lender will, by the time
and in the manner such Revolving Loan was to have been funded to the
Administrative Agent, purchase from the Administrative Agent an undivided
participating interest in the outstanding Swing Loans in an amount equal to its
Revolver Percentage of the aggregate principal amount of Swing Loans that were
to have been repaid with such Revolving Loans. Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Revolver Percentage of each payment of principal received on the Swing Loan and
of interest received thereon accruing from the date such Lender funded to the
Administrative Agent its participation in such Loan. The several obligations of
the Lenders under this Section shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Lender may have or have
had against the Borrower, any other Lender or any other Person whatever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of the
Commitments of any Lender, and each payment made by a Lender under this Section
shall be made without any offset, abatement, withholding or reduction
whatsoever.

SECTION 2.        FEES.

         Section 2.1. Fees. (a) Revolving Credit Commitment Fee. The Borrower
shall pay to the Administrative Agent for the ratable account of the Lenders in
accordance with their Revolver

                                      -14-

<PAGE>

Percentages a commitment fee at the rate per annum equal to the Applicable
Margin (computed on the basis of a year of 365/366 days, as the case may be, and
the actual number of days elapsed) on the average daily Unused Revolving Credit
Commitments. Such commitment fee shall be payable quarter-annually in arrears on
the last day of each fiscal quarter in each year (commencing on the first such
date occurring after the date hereof) and on the Revolving Credit Termination
Date, unless the Revolving Credit Commitments are terminated in whole on an
earlier date, in which event the commitment fee for the period to the date of
such termination in whole shall be paid on the date of such termination.

            (b) Letter of Credit Fees. On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.2 hereof,
the Borrower shall pay to the L/C Issuer for its own account a fronting fee
equal to 0.125% of the face amount of (or of the increase in the face amount of)
such Letter of Credit. Quarterly in arrears, on the last day of each fiscal
quarter, commencing on the first such date occurring after the date hereof, the
Borrower shall pay to the Administrative Agent, for the ratable benefit of the
Lenders in accordance with their Revolver Percentages, a letter of credit fee at
a rate per annum equal to the Applicable Margin (computed on the basis of a year
of 360 days and the actual number of days elapsed) in effect during each day of
such quarter applied to the daily average face amount of Letters of Credit
outstanding during such quarter. In addition, the Borrower shall pay to the L/C
Issuer for its own account the L/C Issuer's standard issuance, drawing,
negotiation, amendment, and other administrative fees for each Letter of Credit.
Such standard fees referred to in the preceding sentence may be established by
the L/C Issuer from time to time.

            (c) Administrative Agent Fees. The Borrower shall pay to the
Administrative Agent, for its own use and benefit, the fees agreed to between
the Administrative Agent and the Borrower in a fee letter dated May 6, 2003 or
as otherwise agreed to in writing between them.

            (d) Audit Fees. The Borrower shall pay to the Administrative Agent
for its own use and benefit charges for audits of the Collateral performed by
the Administrative Agent or its agents or representatives (which may include any
of the Lenders) in such amounts as the Administrative Agent may from time to
time request (the Administrative Agent acknowledging and agreeing that such
charges shall be computed in the same manner as it at the time customarily uses
for the assessment of charges for similar collateral audits); provided, however,
that in the absence of any Default and Event of Default, the Borrower shall not
be required to pay the Administrative Agent for more than two (2) such audits
per calendar year.

SECTION 3.        PLACE AND APPLICATION OF PAYMENTS.

         Section 3.1. Place and Application of Payments. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and of
all other Obligations payable by the Borrower under this Agreement and the other
Loan Documents, shall be made by the Borrower to the Administrative Agent by no
later than 12:00 Noon (Chicago time) on the due date thereof at the office of
the Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrower) for the benefit of the
Lender or Lenders entitled thereto. Any payments received after such time shall
be deemed to have been received by the Administrative Agent on the next Business
Day. All such payments shall be

                                      -15-

<PAGE>

made in U.S. Dollars, in immediately available funds at the place of payment, in
each case without set-off or counterclaim. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest on Loans and on Reimbursement Obligations in which the
Lenders have purchased Participating Interests ratably to the Lenders and like
funds relating to the payment of any other amount payable to any Lender to such
Lender, in each case to be applied in accordance with the terms of this
Agreement.

         Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Administrative Agent or any of the
Lenders after the occurrence and during the continuation of an Event of Default
shall be remitted to the Administrative Agent and distributed as follows:

                  (a) first, to the payment of any outstanding costs and
         expenses incurred by the Administrative Agent, and any security trustee
         therefor, in monitoring, verifying, protecting, preserving or enforcing
         the Liens on the Collateral, in protecting, preserving or enforcing
         rights under the Loan Documents, and in any event all costs and
         expenses of a character which the Borrower has agreed to pay the
         Administrative Agent under Section 13.15 hereof (such funds to be
         retained by the Administrative Agent for its own account unless it has
         previously been reimbursed for such costs and expenses by the Lenders,
         in which event such amounts shall be remitted to the Lenders to
         reimburse them for payments theretofore made to the Administrative
         Agent);

                  (b) second, to the payment of principal and interest on the
         Swing Note until paid in full;

                  (c) third, to the payment of any outstanding interest and fees
         due under the Loan Documents to be allocated pro rata in accordance
         with the aggregate unpaid amounts owing to each holder thereof;

                  (d) fourth, to the payment of principal on the Notes, unpaid
         Reimbursement Obligations, together with amounts to be held by the
         Administrative Agent as collateral security for any outstanding L/C
         Obligations pursuant to Section 9.4 hereof (until the Administrative
         Agent is holding an amount of cash equal to the then outstanding amount
         of all such L/C Obligations), Hedging Liability owed to the Existing
         Swap Providers with regard to the Existing Swaps and Hedging Liability
         owed to any Lender under any interest rate protection arrangement
         entered into after the Closing Date if the Required Lenders have agreed
         that such Hedging Liability shall be entitled to distributions pursuant
         to this subsection (d), the aggregate amount paid to, or held as
         collateral security for, the Lenders and, in the case of such Hedging
         Liability, their Affiliates and the Existing Swaps Providers with
         respect only to the Existing Swaps to be allocated pro rata in
         accordance with the aggregate unpaid amounts owing to each holder
         thereof;

                  (e) fifth, to the payment of all other unpaid Obligations and
         all other indebtedness, obligations, and liabilities of the Borrower
         and its Subsidiaries secured by the Collateral Documents (including,
         without limitation, Funds Transfer and Deposit

                                      -16-

<PAGE>

         Account Liability and Hedging Liability owed to the Lenders under
         interest rate protection arrangements entered into after the Closing
         Date which are not entitled to distributions pursuant to subsection (d)
         above and any Hedging Liability owed to the Existing Swap Providers
         with respect only to the Existing Swaps) to be allocated pro rata in
         accordance with the aggregate unpaid amounts owing to each holder
         thereof;

                  (f) sixth, to the Trustee under the Intercreditor Agreement;
         and

                  (g) seventh, to the Borrower or whoever else may be lawfully
         entitled thereto.

SECTION 4.        THE COLLATERAL AND GUARANTIES.

         Section 4.1. Collateral. The Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall be secured by (a) valid, perfected
and enforceable Liens on all right, title, and interest of the Borrower and each
Subsidiary in all capital stock and other equity interests held by such Person
in each of its Subsidiaries, whether now owned or hereafter formed or acquired,
and all proceeds thereof, and (b) valid, perfected, and enforceable Liens on all
right, title, and interest of the Borrower and each Subsidiary in all personal
property, fixtures, and real estate (other than leases of retail stores),
whether now owned or hereafter acquired or arising, and all proceeds thereof;
provided, however, that: (i) until a Default or Event of Default has occurred
and is continuing and thereafter until otherwise required by the Administrative
Agent or the Required Lenders, (x) Liens on local deposit accounts maintained by
the Borrower and its Subsidiaries in proximity to their operations need not be
perfected provided that any funds held in such deposit accounts are transferred
to an account maintained by the Borrower with the Administrative Agent by the
close of each Business Day and (y) Liens on payroll accounts maintained by the
Borrower and its Subsidiaries need not be perfected provided the total amount on
deposit at any time does not exceed the current amount of their payroll
obligations, (ii) until a Default or Event of Default has occurred and is
continuing and thereafter until otherwise required by the Administrative Agent
or the Required Lenders, Liens on vehicles which are subject to a certificate of
title law need not be perfected provided that the total value of such property
at any one time not so perfected shall not exceed $500,000 in the aggregate,
(iii) unless otherwise required by the Administrative Agent or the Required
Lenders during the existence of any Event of Default, Liens on the capital stock
or other equity interests of a Foreign Subsidiary which, if granted, would cause
a material adverse effect on the Borrower's federal income tax liability shall
be limited to 66% of the total outstanding Voting Stock of such Foreign
Subsidiary, and (iv) unless otherwise required by the Administrative Agent or
the Required Lenders during the existence of any Event of Default, Liens need
not be granted on the assets of a Foreign Subsidiary which, if granted, would
cause a material adverse effect on the Borrower's federal income tax liability.
The Borrower acknowledges and agrees that the Liens on the Collateral shall be
granted to the Administrative Agent for the benefit of the holder of the
Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account
Liability and shall be valid and perfected first priority Liens subject only to
Liens permitted by Section 8.8 hereof, in each case pursuant to one or more
Collateral Documents from such Persons, each in form and substance satisfactory
to the Administrative Agent.

                                      -17-

<PAGE>

         Section 4.2. Liens on Real Property. In the event that the Borrower or
any Subsidiary owns or hereafter acquires a fee ownership interest in any real
property, the Borrower shall, or shall cause such Subsidiary to, execute and
deliver to the Administrative Agent (or a security trustee therefor) a mortgage
or deed of trust acceptable in form and substance to the Administrative Agent
for the purpose of granting to the Administrative Agent a Lien on such fee
ownership interest in real property to secure the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability, shall pay all
taxes, costs, and expenses incurred by the Administrative Agent in recording
such mortgage or deed of trust, and shall supply to the Administrative Agent at
the Borrower's cost and expense a survey, environmental report, hazard insurance
policy, appraisal report, and a mortgagee's policy of title insurance from a
title insurer acceptable to the Administrative Agent insuring the validity of
such mortgage or deed of trust and its status as a first Lien (subject to Liens
permitted by this Agreement) on the real property encumbered thereby and such
other instrument, documents, certificates, and opinions reasonably required by
the Administrative Agent in connection therewith.

         Section 4.3. Guaranties. The payment and performance of the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability
shall at all times be guaranteed by each direct and indirect Subsidiary of the
Borrower pursuant to Section 12 hereof or pursuant to one or more guaranty
agreements in form and substance acceptable to the Administrative Agent, as the
same may be amended, modified or supplemented from time to time; provided,
however, that (a) unless otherwise required by the Administrative Agent or the
Required Lenders during the existence of any Event of Default, a Foreign
Subsidiary shall not be required to be a guarantor hereunder if providing such
Guaranty would cause a material adverse effect on the Borrower's federal income
tax liability and (b) dPi Teleconnect, L.L.C. shall not be required to comply
with this Section 4.3 until it has delivered audited financial statements
acceptable to the Administrative Agent. The guarantees to be provided pursuant
to this Section 4.3 shall be hereinafter referred to individually as a
"Guaranty" and collectively as the "Guaranties".

         Section 4.4. Further Assurances. The Borrower agrees that it shall, and
shall cause each Subsidiary to, from time to time at the request of the
Administrative Agent or the Required Lenders, execute and deliver such documents
and do such acts and things as the Administrative Agent or the Required Lenders
may reasonably request in order to provide for or perfect or protect such Liens
on the Collateral. In the event the Borrower or any Subsidiary forms or acquires
any other Subsidiary after the date hereof, the Borrower shall promptly upon
such formation or acquisition cause such newly formed or acquired Subsidiary to
execute a Guaranty and such Collateral Documents as the Administrative Agent may
then require, and the Borrower shall also deliver to the Administrative Agent,
or cause such Subsidiary to deliver to the Administrative Agent, at the
Borrower's cost and expense, such other instruments, documents, certificates,
and opinions reasonably required by the Administrative Agent in connection
therewith.

         Section 4.5. Excess Cash Flow Escrow Account. The Borrower shall
establish with an Acceptable Intermediary a separate securities account (such
account, and the credit balances, properties (including all investment property
and securities entitlements), and any other investments from time to time held
therein, and any substitutions for such account, any certificate of deposit or
other instrument evidencing any of the foregoing and all proceeds of and
earnings

                                      -18-

<PAGE>

on any of the foregoing being collectively called the "Excess Cash Flow Escrow
Account"), which shall be held in the name of the Borrower (or in the
Administrative Agent's name if the Administrative Agent so elects) subject to
the exclusive dominion and control of the Administrative Agent for the benefit
of the Administrative Agent, the Lenders and the L/C Issuer and, on a
subordinate basis, the Trustee for the benefit of the holders of the Senior
Notes. The Borrower shall deposit into the Excess Cash Flow Escrow Account the
portion of Excess Cash Flow as required under Section 4.19 of the Senior Note
Indenture. At the written request of the Borrower, the Acceptable Intermediary
shall remit to the Borrower any funds held in the Excess Cash Flow Escrow
Account for the sole purpose of enabling the Borrower to comply with Section
4.19 of the Senior Note Indenture, but the Borrower shall not make such a
request unless the conditions specified in Section 8.21(b) of this Agreement are
then satisfied unless such funds are used to repay Obligations outstanding under
this Agreement. The Borrower shall invest all funds in the Excess Cash Flow
Escrow Account in Cash Equivalents. Notwithstanding anything to the contrary
contained in this section upon the occurrence of an Event of Default, all
amounts held in the Excess Cash Flow Escrow Account shall be applied in
accordance with the Intercreditor Agreement.

SECTION 5.        DEFINITIONS; INTERPRETATION.

         Section 5.1. Definitions. The following terms when used herein shall
have the following meanings:

          "Acceptable Intermediary" means any securities intermediary selected
by the Administrative Agent having a combined capital and surplus of at least
$250.0 million and having a long-term debt rating of at least "A" by Moody's and
at least "A" by S&P.

          "Acquired Business" means the entity or assets acquired by the
Borrower or a Subsidiary in an Acquisition, whether before or after the date
hereof.

          "Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person
(other than a Person that is a Subsidiary), or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) provided that the
Borrower or the Subsidiary is the surviving entity.

          "Adjusted LIBOR" is defined in Section 1.3(b) hereof.

          "Administrative Agent" means Harris Trust and Savings Bank and any
successor pursuant to Section 11.7 hereof.

          "Administrative Agent's Quoted Rate" is defined in Section 1.14(c)
hereof.

          "Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control

                                      -19-

<PAGE>

another Person for the purposes of this definition if such Person possesses,
directly or indirectly, the power to direct, or cause the direction of, the
management and policies of the other Person, whether through the ownership of
voting securities, common directors, trustees or officers, by contract or
otherwise; provided that, in any event for purposes of this definition, any
Person that owns, directly or indirectly, 5% or more of the securities having
the ordinary voting power for the election of directors or governing body of a
corporation or 5% or more of the partnership or other ownership interest of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person.

          "Agreement" means this Credit Agreement, as the same may be amended,
modified, restated or supplemented from time to time pursuant to the terms
hereof.

          "Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees and letter of credit fees payable under
Section 2.1 hereof until the first Pricing Date, the rates per annum shown
opposite Level IV below, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:

<TABLE>
<CAPTION>
                                        APPLICABLE MARGIN             APPLICABLE MARGIN
                                       FOR BASE RATE LOANS              FOR EURODOLLAR
                                         UNDER REVOLVING                  LOANS UNDER             APPLICABLE
             LEVERAGE RATIO                CREDIT AND                  REVOLVING CREDIT           MARGIN FOR
            FOR SUCH PRICING              REIMBURSEMENT              AND LETTER OF CREDIT         COMMITMENT
LEVEL             DATE                OBLIGATIONS SHALL BE:              FEE SHALL BE:           FEE SHALL BE:
<S>      <C>                          <C>                            <C>                         <C>
 IV      Greater than 4.0 to 1.0              1.75%                         3.50%                    0.50%

 III     Less than or equal to                1.50%                         3.25%                    0.50%
         4.0 to 1.0, but greater
         than 3.5 to 1.0

 II      Less than or equal to                 1.0%                         2.75%                    0.50%
         3.5 to 1.0, but greater
         than 3.0 to 1.0

  I      Less than or equal to                0.50%                         2.25%                    0.50%
         3.0 to 1.0
</TABLE>

For purposes hereof, the term "Pricing Date" means, for any fiscal quarter of
the Borrower ending on or after September 30, 2003, the date on which the
Administrative Agent is in receipt of the Borrower's most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof. The
Applicable Margin shall be established based on the Leverage Ratio for the most
recently completed fiscal quarter and the Applicable Margin established on a
Pricing Date shall remain in effect until the next Pricing Date. If the Borrower
has not delivered its financial statements by the date such financial statements
(and, in the case of the year-end financial statements, audit report) are
required to be delivered under Section 8.5 hereof, from such date until such
financial statements and audit report are delivered, the Applicable Margin shall
be the highest Applicable Margin (i.e., the Leverage Ratio shall be deemed to be
greater than 4.0 to 1.0). If the Borrower

                                      -20-

<PAGE>

subsequently delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date. In all
other circumstances, the Applicable Margin established by such financial
statements shall be in effect from the Pricing Date that occurs immediately
after the end of the fiscal quarter covered by such financial statements until
the next Pricing Date. Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be conclusive and
binding on the Borrower and the Lenders if reasonably determined.

         "Application" is defined in Section 1.2(b) hereof.

         "Authorized Representative" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 7.2 hereof or on any
update of any such list provided by the Borrower to the Administrative Agent, or
any further or different officers of the Borrower so named by any Authorized
Representative of the Borrower in a written notice to the Administrative Agent.

         "Base Rate" is defined in Section 1.3(a) hereof.

         "Base Rate Loan" means a Loan bearing interest at a rate specified in
Section 1.3(a) hereof.

         "BMO Nesbitt Burns" means Bank of Montreal, Chicago Branch.

         "Borrower" is defined in the introductory paragraph of this Agreement.

         "Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type by the Lenders under a Credit on a single date and, in the case
of Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made
and maintained ratably from each of the Lenders under a Credit according to
their Percentages of such Credit. A Borrowing is "advanced" on the day Lenders
advance funds comprising such Borrowing to the Borrower, is "continued" on the
date a new Interest Period for the same type of Loans commences for such
Borrowing, and is "converted" when such Borrowing is changed from one type of
Loans to the other, all as requested by the Borrower pursuant to Section 1.5(a)
hereof. Borrowings of Swing Loans are made by the Administrative Agent in
accordance with the procedures set forth in Section 1.14 hereof.

         "Business Day" means any day (other than a Saturday or Sunday) on which
banks are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the advance or continuation of, or conversion
into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar
deposits in the interbank eurodollar market in London, England and Nassau,
Bahamas.

         "Capital Expenditures" means, with respect to any Person for any
period, the aggregate amount of all expenditures (whether paid in cash or
accrued as a liability) by such Person during that period for the acquisition or
leasing (pursuant to a Capital Lease) of fixed or capital assets or

                                      -21-

<PAGE>

additions to property, plant, or equipment (including replacements, capitalized
repairs, and improvements) which should be capitalized on the balance sheet of
such Person in accordance with GAAP.

         "Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.

         "Capitalized Lease Obligation" means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.

         "Cash Equivalents" means:

                  (a) securities issued or directly and fully guaranteed or
         insured by the United States Government or any agency or
         instrumentality thereof (provided that the full faith and credit of the
         United States is pledged in support thereof), having maturities of not
         more than one year from the date of acquisition;

                  (b) marketable general obligations issued by any state of the
         United States of America or any political subdivision of any such state
         or any public instrumentality thereof maturing within one year from the
         date of acquisition thereof (provided that the full faith and credit of
         such state is pledged in support thereof) and, at the time of
         acquisition thereof, having one of the two highest credit ratings
         obtainable from both S&P's and Moody's;

                  (c) certificates of deposit, time deposits, eurodollar time
         deposits, overnight bank deposits or bankers' acceptances having
         maturities of not more than one year from the date of acquisition
         thereof issued by any commercial bank organized in the United States of
         America, the long-term debt of which is rated at the time of
         acquisition thereof in one of the two highest categories obtainable
         from both S&P's and Moody's, and having combined capital and surplus in
         excess of $500.0 million;

                  (d) repurchase obligations with a term of not more than seven
         days for underlying securities of the types described in clause (a),
         (b) and (c) entered into with any bank meeting the qualifications
         specified in clause (c) above;

                  (e) commercial paper rated at the time of acquisition thereof
         in one of the two highest categories obtainable from both S&P's and
         Moody's or carrying an equivalent rating by a nationally recognized
         rating agency, if both of the two named rating agencies cease
         publishing ratings of investments, and in any case maturing within one
         year after the date of acquisition thereof; and

                  (f) interests in any investment company or money market fund
         which invests at least 95% of its assets in instruments of the type
         specified in clauses (a) through (e) above.

                                      -22-

<PAGE>

         "CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C.Sections 9601 et seq., and any future
amendments.

         "Change of Control" means any of (a) the acquisition by any "person" or
"group" (as such terms are used in sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) at any time of beneficial ownership of 50% or
more of the outstanding capital stock or other equity interest of the Borrower
on a fully-diluted basis, (b) the failure of individuals who are members of the
board of directors (or similar governing body) of the Borrower on the Closing
Date (together with any new or replacement directors whose initial nomination
for election was approved by a majority of the directors who were either
directors on the Closing Date or previously so approved) to constitute a
majority of the board of directors (or similar governing body) of the Borrower,
or (c) any "Change of Control" (or words of like import), as defined in any
agreement or indenture relating to any issue of Indebtedness for Borrowed Money
or any equity securities of the Borrower shall occur.

         "Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Section 7.2 shall be satisfied or
waived in a manner acceptable to the Administrative Agent in its discretion.

         "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.

         "Collateral" means all properties, rights, interests, and privileges
from time to time subject to the Liens granted to the Administrative Agent, or
any security trustee therefor, by the Collateral Documents.

         "Collateral Account" is defined in Section 9.4 hereof.

         "Collateral Documents" means the Mortgages, the Security Agreement, and
all other mortgages, deeds of trust, security agreements, pledge agreements,
assignments, financing statements and other documents as shall from time to time
secure or relate to the Obligations, the Hedging Liability, and the Funds
Transfer and Deposit Account Liability or any part thereof.

         "Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.

         "Credit" means any of the Revolving Credit or the Swing Line.

         "Credit Event" means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.

         "Damages" means all damages including, without limitation, punitive
damages, liabilities, costs, expenses, losses, diminutions in value, fines,
penalties, demands, claims, cost

                                      -23-

<PAGE>

recovery actions, lawsuits, administrative proceedings, orders, response action,
removal and remedial costs, compliance costs, investigation expenses, consultant
fees, attorneys' and paralegals' fees and litigation expenses.

         "Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.

         "Disposition" means the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
Sections 8.10(a)-(d) hereof.

         "EBITDA" means, with reference to any period, Net Income of the
Borrower and the Guarantors for such period plus the sum of all amounts deducted
in arriving at such Net Income amount in respect of (a) Interest Expense for
such period, (b) federal, state, and local income taxes for such period, (c)
depreciation of fixed assets and amortization of intangible assets for such
period (other than depreciation of Rental Merchandise) and (d) any fees, costs
and expenses paid in connection with the execution and delivery of this
Agreement and the other Loan Documents and the issuance and sale of the Senior
Notes and Preferred Shares to the extent such fees, costs and expenses are not
capitalized; provided, however, EBITDA shall be: (i) for the fiscal quarter
ending June 30, 2002, $14,194,000, (ii) for the fiscal quarter ending September
30, 2002, $14,393,000, (iii) for the fiscal quarter ending December 31, 2002,
$13,605,000, and (iv) for the fiscal quarter ending March 31, 2003, $18,342,000;
provided, further, however, for any four fiscal quarter rolling period ending on
or after June 30, 2003, adjustments shall be made to (x) EBITDA with respect to
one-time non-cash charges not related to store closures in amounts which are
reasonable and acceptable to (A) the Required Lenders if such non-cash charges
might become cash charges in any subsequent accounting period, or (B) the
Administrative Agent in all other cases, (y) EBITDA with respect to non-cash
restructuring charges resulting from store closures occurring on or before
September 30, 2004 in an aggregate amount not to exceed $2,500,000 which are
reasonable and acceptable to the Administrative Agent and (z) EBITDA with
respect to cash or non-cash charges resulting from discontinued operations
associated with store closures occurring on or before September 30, 2004 in an
aggregate amount not to exceed $3,000,000 which are reasonable and acceptable to
the Administrative Agent.

         "Eligible Line of Business" means any business engaged in as of the
date of this Agreement by the Borrower or any of its Subsidiaries, and any
related or complementary line of business with respect thereto which is
consistent with such Person's market demographic acceptable to the
Administrative Agent.

         "Environmental Claim" means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding or claim (whether administrative, judicial or
private in nature) arising (a) pursuant to, or in connection with an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material, (c) from any abatement, removal, remedial, corrective or
response action in connection with a Hazardous Material, Environmental Law or
order of a governmental authority or (d) from any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.

                                      -24-

<PAGE>

         "Environmental Law" means any current or future Legal Requirement
pertaining to (a) the protection of health, safety and the indoor or outdoor
environment, (b) the conservation, management or use of natural resources and
wildlife, (c) the protection or use of surface water or groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or (e)
pollution (including any Release to air, land, surface water or groundwater),
and any amendment, rule, regulation, order or directive issued thereunder.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.

         "Eurodollar Loan" means a Loan bearing interest at the rate specified
in Section 1.3(b) hereof.

         "Eurodollar Reserve Percentage" is defined in Section 1.3(b) hereof.

         "Event of Default" means any event or condition identified as such in
Section 9.1 hereof.

         "Event of Loss" means, with respect to any Property, any of the
following: (a) any loss, destruction or damage of such Property or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.

         "Excess Cash Flow Escrow Account" is defined in Section 4.5 hereof.

         "Existing Letters of Credit" mean those letters of credit identified
and described on Schedule 1.2 hereof.

         "Existing Swap Providers" shall mean the financial institutions listed
on Exhibit H.

         "Existing Swaps" mean the interest rate hedging agreements described on
Exhibit H.

          "Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate appearing in
Section 1.3(a) hereof.

         "Fixed Charges" means, with reference to any period, the sum of (a) all
payments of principal made or to be made during such period with respect to
Indebtedness for Borrowed Money of the Borrower and each Guarantor, but
excluding payments of Obligations owed under the Revolving Credit and the
repayment of the Borrower's Indebtedness for Borrowed Money under the Prior
Credit Agreement, plus (b) Interest Expense for such period paid in cash, plus
(c) all Restricted Payments made during such period, plus (d) all prepayments
(whether voluntary or mandatory) on the Senior Notes made during such period,
plus (e) federal, state, and local income taxes paid in cash or payable by the
Borrower and each Guarantor during such period.

                                      -25-

<PAGE>

         "Foreign Subsidiary" means each Subsidiary which (a) is organized under
the laws of a jurisdiction other than the United States of America or any state
thereof, (b) conducts substantially all of its business outside of the United
States of America, and (c) has substantially all of its assets outside of the
United States of America.

         "Funds Transfer and Deposit Account Liability" means the liability of
the Borrower or any of its Subsidiaries owing to any of the Lenders, or any
Affiliates of such Lenders, arising out of (a) the execution or processing of
electronic transfers of funds by automatic clearing house transfer, wire
transfer or otherwise to or from the deposit accounts of the Borrower and/or any
Subsidiary now or hereafter maintained with any of the Lenders or their
Affiliates, (b) the acceptance for deposit or the honoring for payment of any
check, draft or other item with respect to any such deposit accounts, and (c)
any other deposit, disbursement, and cash management services afforded to the
Borrower or any such Subsidiary by any of such Lenders or their Affiliates.

         "GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

         "Guarantor" and "Guarantors" each is defined in Section 12.1 hereof.

         "Guaranty" and "Guaranties" each is defined in Section 4.3 hereof.

         "Hazardous Material" means any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which
is hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as "hazardous" or "toxic"
or words of like import pursuant to an Environmental Law.

         "Hazardous Material Activity" means any activity, event or occurrence
involving a Hazardous Material, including, without limitation, the manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation, handling
of or corrective or response action to any Hazardous Material.

         "Hedging Liability" means the liability of the Borrower or any
Subsidiary to any of the Lenders, any Affiliates of such Lenders, or any
Existing Swap Provider in respect of any interest rate swap, exchange, cap,
collar, floor, forward, future or option agreement, or any other similar
interest rate hedging arrangement, as the Borrower or such Subsidiary, as the
case may be, may from time to time enter into with any one or more of the
Lenders party to this Agreement, their Affiliates or the Existing Swap
Providers.

         "Hostile Acquisition" means the acquisition of the capital stock or
other equity interests of a Person through a tender offer or similar
solicitation of the owners of such capital stock or

                                      -26-

<PAGE>

other equity interests which has not been approved (prior to such acquisition)
by resolutions of the Board of Directors of such Person or by similar action if
such Person is not a corporation, and as to which such approval has not been
withdrawn.

         "Indebtedness for Borrowed Money" means for any Person (without
duplication) (a) all indebtedness of such Person for borrowed money, whether
current or funded, or secured or unsecured, (b) all indebtedness for the
deferred purchase price of Property or services, (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of a default are
limited to repossession or sale of such Property), (d) all indebtedness secured
by a purchase money mortgage or other Lien to secure all or part of the purchase
price of Property subject to such mortgage or Lien, (e) all obligations under
leases which shall have been or must be, in accordance with GAAP, recorded as
Capital Leases in respect of which such Person is liable as lessee, (f) any
liability in respect of banker's acceptances or letters of credit, (g) any
indebtedness, whether or not assumed, secured by Liens on Property acquired by
such Person at the time of acquisition thereof, it being understood that the
term "Indebtedness for Borrowed Money" shall not include trade payables arising
in the ordinary course of business and (h) the Preferred Shares.

         "Intercreditor Agreement" means the Intercreditor Agreement dated as of
June 2, 2003, among the Borrower, the Administrative Agent and Manufacturers and
Traders Trust Company, as Trustee for the Senior Notes.

         "Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Borrower and the Guarantors minus the sum of all interest income of the Borrower
and the Guarantors, in each case for such period determined on a consolidated
basis in accordance with GAAP.

         "Interest Period" is defined in Section 1.6 hereof.

         "L/C Issuer" means (i) with respect to each Letter of Credit other the
Letters of Credit identified on Schedule 1.2 hereto, Harris Trust and Savings
Bank and (ii) with respect to each Letter of Credit identified on Schedule 1.2
hereto, National City Bank of Pennsylvania.

         "L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.

         "L/C Sublimit" means $15,000,000, as reduced pursuant to the terms
hereof.

         "Lead Arranger" shall have the meaning set forth in the introductory
paragraph hereto.

         "Legal Requirement" means any treaty, convention, statute, law,
regulation, ordinance, license, permit, governmental approval, injunction,
judgment, order, consent decree or other requirement of any governmental
authority, whether federal, state, or local.

                                      -27-

<PAGE>

         "Lenders" means and includes Harris Trust and Savings Bank and the
other financial institutions from time to time party to this Agreement,
including each assignee Lender pursuant to Section 13.12 hereof.

         "Lending Office" is defined in Section 10.4 hereof.

         "Letter of Credit" is defined in Section 1.2(a) hereof.

         "Leverage Ratio" means, as of the last day of any fiscal quarter of the
Borrower, the ratio of (x) Total Funded Debt of the Borrower and each Guarantor
as of the last day of such fiscal quarter minus the amount on deposit in the
Excess Cash Flow Escrow Account as of such date to (y) EBITDA of the Borrower
and each Guarantor for the period of four fiscal quarters then ended.

         "LIBOR" is defined in Section 1.3(b) hereof.

         "Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.

         "Loan" means any Revolving Loan or Swing Loan, whether outstanding as a
Base Rate Loan or Eurodollar Loan or otherwise, each of which is a "type" of
Loan hereunder.

         "Loan Documents" means this Agreement, the Notes, the Applications, the
Collateral Documents, the Guaranties, and each other instrument or document to
be delivered hereunder or thereunder or otherwise in connection therewith.

         "Material Adverse Effect" means (a) a material adverse change in, or
material adverse effect upon, the operations, business, Property, condition
(financial or otherwise) or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole, (b) a material impairment of the ability of the
Borrower or any Subsidiary to perform its material obligations under any Loan
Document or (c) a material adverse effect upon (i) the legality, validity,
binding effect or enforceability against the Borrower or any Subsidiary of any
Loan Document or the rights and remedies of the Administrative Agent and the
Lenders thereunder or (ii) the perfection or priority of any Lien granted under
any Collateral Document.

         "Moody's" means Moody's Investors Service, Inc.

         "Mortgages" means, collectively, the Mortgage and Security Agreement
with Assignment of Rents between the Borrower or the relevant Subsidiary and the
Administrative Agent relating to such Person's real property owned as of the
Closing Date and located in the state of Pennsylvania and any other mortgages or
deeds of trust delivered to the Administrative Agent pursuant to Section 4.2
hereof, as the same may be amended, modified, supplemented or restated from time
to time.

                                      -28-

<PAGE>

         "Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition and (ii) sale, use or other transactional taxes paid or payable by
such Person as a direct result of such Disposition, (b) with respect to any
Event of Loss of a Person, cash and cash equivalent proceeds received by or for
such Person's account (whether as a result of payments made under any applicable
insurance policy therefor or in connection with condemnation proceedings or
otherwise), net of reasonable direct costs incurred in connection with the
collection of such proceeds, awards or other payments, and (c) with respect to
any offering of equity securities of a Person or the issuance of any
Indebtedness for Borrowed Money by a Person, cash and cash equivalent proceeds
received by or for such Person's account, net of reasonable legal, underwriting,
and other fees and expenses incurred as a direct result thereof.

         "Net Income" means, with reference to any period, the net income (or
net loss) of the Borrower and each Guarantor for such period computed on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Guarantor, or has merged into or consolidated
with the Borrower or another Guarantor, and (b) the net income (or net loss) of
any Person (other than a Guarantor) in which the Borrower or any of the
Guarantors has a equity interest in, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of the
Guarantors during such period.

         "Net Worth" means, for any Person and at any time the same is to be
determined, total shareholder's equity (including capital stock, additional
paid-in capital, and retained earnings after deducting treasury stock) which
would appear on the balance sheet of such Person in accordance with GAAP.

         "Notes" means and includes the Revolving Notes and the Swing Note.

         "Obligations" means all obligations of the Borrower to pay principal
and interest on the Loans, all Reimbursement Obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment
obligations of the Borrower or any of its Subsidiaries arising under or in
relation to any Loan Document, in each case whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired.

         "Participating Interest" is defined in Section 1.2(d) hereof.

         "Participating Lender" is defined in Section 1.2(d) hereof.

         "PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.

         "Percentage" means for any Lender its Revolver Percentage.

                                      -29-

<PAGE>

         "Permitted Acquisition" means any Acquisition with respect to which all
of the following conditions shall have been satisfied:

                  (a) the Acquired Business is in an Eligible Line of Business
         and has its primary operations within the United States of America;

                  (b) the Acquisition shall not be a Hostile Acquisition;

                  (c) promptly upon the request of the Administrative Agent, the
         financial statements of the Acquired Business shall have been audited
         by one of the "Big Four" accounting firms or by another independent
         accounting firm of national or regional repute or otherwise reasonably
         satisfactory to the Administrative Agent, or if such financial
         statements have not been audited by such an accounting firm, (i) such
         financial statements shall have been approved by the Administrative
         Agent and (ii) the Acquired Business has undergone a successful
         so-called businessman's review by one of the "Big Four" accounting
         firms as part of the Borrowers' due diligence on the Acquisition;

                  (d) the Total Consideration for the Acquired Business, when
         taken together with the Total Consideration for all Acquired Businesses
         acquired during the immediately preceding 12-month period, does not
         exceed $3,000,000 in the aggregate;

                  (e) the Borrowers shall have notified the Administrative Agent
         and Lenders not less than 30 days prior to any such Acquisition and,
         promptly upon the request of the Administrative Agent, furnished to the
         Administrative Agent and Lenders at such time reasonable details as to
         such Acquisition (including sources and uses of funds therefor), and
         3-year historical financial information and 3-year pro forma financial
         forecasts of the Acquired Business on a stand alone basis as well as of
         the Borrower on a consolidated basis after giving effect to the
         Acquisition and covenant compliance calculations reasonably
         satisfactory to the Administrative Agent;

                  (f) if a new Subsidiary is formed or acquired as a result of
         or in connection with the Acquisition, the Borrower shall have complied
         with the requirements of Section 4 hereof in connection therewith; and

                  (g) after giving effect to the Acquisition, no Default or
         Event of Default shall exist, including with respect to the covenants
         contained in Sections 8.22, 8.23, 8.24, 8.25 and 8.26 on a pro forma
         basis.

         "Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.

         "Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (a) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (b) is maintained pursuant to a
collective bargaining agreement or any other

                                      -30-

<PAGE>

arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.

         "Preferred Stock" means the Series A Convertible Preferred Stock of the
Borrower issued pursuant to that certain Securities Purchase Agreement, dated as
of June 2, 2003, between the Borrower and the buyers party thereto in the
aggregate amount of $15,000,000 in form and substance acceptable to the
Administrative Agent.

         "Premises" means the real property owned or leased by the Borrower or
any Subsidiary, including without limitation the real property and improvements
thereon owned by the Borrower or any Subsidiary subject to the Lien of the
Mortgages or any other Collateral Documents.

         "Prior Credit Agreement" means that certain Credit Agreement, dated as
of September 23, 1999, as amended, by and among the Borrower, Rent-Way of TTIG,
L.P., the guarantors party thereto, the banks and other financial services
companies party thereto, Bank of America, as documentation agent for the lenders
party thereto, Harris Trust and Savings Bank, as syndication agent for the
lenders party thereto, and National City Bank of Pennsylvania, as administrative
agent and collateral agent for the lenders party thereto.

         "Property" means, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.

         "RCRA" means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. Sections 6901 et seq., and any future amendments.

         "Reimbursement Obligation" is defined in Section 1.2(c) hereof.

         "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migration, dumping, or
disposing into the indoor or outdoor environment, including, without limitation,
the abandonment or discarding of barrels, drums, containers, tanks or other
receptacles containing or previously containing any Hazardous Material.

         "Rental Contracts" shall mean all rental and rental-purchase contracts
of the Borrower and the Guarantors made in the ordinary course of business
providing for the rental to customers of Rental Merchandise.

         "Rental Merchandise" shall mean the furniture, appliances, electronic
equipment and other personal property of the Borrower and the Guarantors
acquired for the purpose of lease or sale under the Rental Contracts.

         "Replacement Lenders" is defined in Section 1.13.

                                      -31-

<PAGE>

         "Required Lenders" means, as of the date of determination thereof,
Lenders whose outstanding Loans and interests in Letters of Credit and Unused
Revolving Credit Commitments constitute more than 66 2/3% of the sum of the
total outstanding Loans, interests in Letters of Credit, and Unused Revolving
Credit Commitments of the Lenders.

         "Restricted Payments" is defined in Section 8.12.

         "Revolver Percentage" means, for each Lender, the percentage of the
Revolving Credit Commitments represented by such Lender's Revolving Credit
Commitment or, if the Revolving Credit Commitments have been terminated, the
percentage held by such Lender (including through participation interests in
Reimbursement Obligations) of the aggregate principal amount of all Revolving
Loans and L/C Obligations then outstanding.

         "Revolving Credit" means the credit facility for making Revolving Loans
and issuing Letters of Credit described in Sections 1.1 and 1.2 hereof.

         "Revolving Credit Commitment" means, as to any Lender, the obligation
of such Lender to make Revolving Loans and to participate in Letters of Credit
issued for the account of the Borrower hereunder in an aggregate principal or
face amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 1 attached hereto and made a part
hereof, as the same may be reduced or modified at any time or from time to time
pursuant to the terms hereof. The Borrower and the Lenders acknowledge and agree
that the Revolving Credit Commitments of the Lenders aggregate $60,000,000 on
the date hereof.

         "Revolving Credit Termination Date" means June 2, 2008, or such earlier
date on which the Revolving Credit Commitments are terminated in whole pursuant
to Section 1.12, 9.2 or 9.3 hereof.

         "Revolving Loan" is defined in Section 1.1 hereof and, as so defined,
includes a Base Rate Loan or a Eurodollar Loan, each of which is a "type" of
Revolving Loan hereunder.

         "Revolving Note" is defined in Section 1.10 hereof.

         "S&P" means Standard & Poor's Ratings Services Group, a division of The
McGraw-Hill Companies, Inc.

         "Security Agreement" means that certain Security Agreement dated the
date of this Agreement among the Borrower and its Subsidiaries and the
Administrative Agent, as the same may be amended, modified, supplemented or
restated from time to time.

         "Senior Note Indentures" means the Indenture dated as of June 2, 2003,
between the Borrower and Manufacturers and Traders Trust Company, as trustee for
the Senior Notes.

         "Senior Notes" means the Borrower's 11 7/8% Senior Secured Notes due
June 15, 2010 in the aggregate principal amount of $205,000,000, in form and
substance satisfactory to the Administrative Agent.

                                      -32-

<PAGE>

         "Subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
Unless otherwise expressly noted herein, the term "Subsidiary" means a
Subsidiary of the Borrower or of any of its direct or indirect Subsidiaries.

         "Swing Line" means the credit facility for making one or more Swing
Loans described in Section 1.14 hereof.

         "Swing Line Sublimit" means $5,000,000, as reduced pursuant to the
terms hereof.

         "Swing Loan" and "Swing Loans" each is defined in Section 1.14 hereof.

         "Swing Note" is defined in Section 1.10 hereof.

         "Syndication Agent" shall have the meaning set forth in the
introductory paragraph hereto.

         "Total Consideration" means the total amount (but without duplication)
of (a) cash paid in connection with any Acquisition, plus (b) indebtedness
payable to the seller in connection with such Acquisition, plus (c) the fair
market value of any equity securities, including any warrants or options
therefor, delivered in connection with any Acquisition, plus (d) the present
value of covenants not to compete entered into in connection with such
Acquisition or other future payments which are required to be made over a period
of time and are not contingent upon the Borrower or its Subsidiary meeting
financial performance objectives (exclusive of salaries paid in the ordinary
course of business) (discounted at the Base Rate), but only to the extent not
included in clause (a), (b) or (c) above, plus (e) the amount of indebtedness
assumed in connection with such Acquisition.

         "Total Funded Debt" means, at any time the same is to be determined,
the sum (but without duplication) of (a) all Indebtedness for Borrowed Money of
the Borrower and each Guarantor at such time, plus (b) all Indebtedness for
Borrowed Money of any other Person which is directly or indirectly guaranteed by
the Borrower or any of the Guarantors or which the Borrower or any of the
Guarantors has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which the Borrower or any of the Guarantors has
otherwise assured a creditor against loss.

         "Trustee" shall have the meaning set forth in the Intercreditor
Agreement.

         "Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.

                                      -33-

<PAGE>

         "Unused Revolving Credit Commitments" means, at any time, the
difference between the Revolving Credit Commitments then in effect and the
aggregate outstanding principal amount of Revolving Loans and L/C Obligations,
provided that Swing Loans outstanding from time to time shall be deemed to
reduce the Unused Revolving Credit Commitment of the Administrative Agent for
purposes of computing the commitment fee under Section 2.1(a) hereof.

         "U.S. Dollars" and "$" each means the lawful currency of the United
States of America.

         "Voting Stock" of any Person means capital stock or other equity
interests of any class or classes (however designated) having ordinary power for
the election of directors or other similar governing body of such Person, other
than stock or other equity interests having such power only by reason of the
happening of a contingency.

         "Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.

         "Wholly-owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Borrower and/or
one or more Wholly-owned Subsidiaries within the meaning of this definition.

         Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois, time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.

         Section 5.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
Borrower or the Required Lenders may by notice to the Lenders and the Borrower,
respectively, require that the Lenders and the Borrower negotiate in good faith
to amend such covenants, standards, and term so as equitably to reflect such
change in accounting principles, with the desired result being that the criteria
for evaluating the financial condition of the Borrower and its Subsidiaries
shall be the same as if such change had not been made. No delay by the Borrower
or the Required Lenders in requiring such negotiation shall limit their right to
so require such a negotiation at any time after such a change in accounting
principles. Until any such covenant, standard, or term is amended in accordance
with this Section 5.3, financial covenants shall be computed and determined in
accordance with GAAP in effect prior to such change in accounting principles.
Without limiting the generality of the foregoing, the Borrower shall neither be
deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may

                                      -34-

<PAGE>

be, would not exist but for the occurrence of a change in accounting principles
after the date hereof.

SECTION 6.        REPRESENTATIONS AND WARRANTIES.

         The Borrower represents and warrants to the Administrative Agent and
the Lenders as follows:

         Section 6.1. Organization and Qualification. The Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Pennsylvania, has full and adequate power to own its Property
and conduct its business as now conducted, and is duly licensed or qualified and
in good standing in each jurisdiction in which the nature of the business
conducted by it or the nature of the Property owned or leased by it requires
such licensing or qualifying, except where the failure to do so would not have a
Material Adverse Effect.

         Section 6.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect. Schedule 6.2 hereto identifies each
Subsidiary, the jurisdiction of its incorporation or organization, as the case
may be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by the Borrower and the other
Subsidiaries and, if such percentage is not 100% (excluding directors'
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by the Borrower or another
Subsidiary are owned, beneficially and of record, by the Borrower or such
Subsidiary free and clear of all Liens other than the Liens granted in favor of
the Administrative Agent pursuant to the Collateral Documents. There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary.

         Section 6.3. Authority and Validity of Obligations. The Borrower has
full right and authority to enter into this Agreement and the other Loan
Documents executed by it, to make the borrowings herein provided for, to issue
its Notes in evidence thereof, to grant to the Administrative Agent the Liens
described in the Collateral Documents executed by the Borrower, and to perform
all of its obligations hereunder and under the other Loan Documents executed by
it. Each Subsidiary has full right and authority to enter into the Loan
Documents executed by it, to guarantee the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability, to grant to the Administrative
Agent the Liens described in the Collateral Documents executed by such Person,
and to perform all of its obligations under the Loan Documents

                                      -35-

<PAGE>

executed by it. The Loan Documents delivered by the Borrower and by each
Subsidiary have been duly authorized, executed, and delivered by such Person and
constitute valid and binding obligations of such Person enforceable against it
in accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law); and this Agreement and the other Loan Documents do not, nor
does the performance or observance by the Borrower or any Subsidiary of any of
the matters and things herein or therein provided for, (a) contravene or
constitute a default under any provision of law or any judgment, injunction,
order or decree binding upon the Borrower or any Subsidiary or any provision of
the organizational documents (e.g., charter, articles of incorporation or
by-laws, articles of association or operating agreement, partnership agreement
or other similar document) of the Borrower or any Subsidiary, (b) contravene or
constitute a default under any covenant, indenture or agreement of or affecting
the Borrower or any Subsidiary or any of its Property, in each case where such
contravention or default, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or (c) result in the creation or
imposition of any Lien on any Property of the Borrower or any Subsidiary other
than the Liens granted in favor of the Administrative Agent pursuant to the
Collateral Documents.

         Section 6.4. Use of Proceeds; Margin Stock. The Borrower shall use the
proceeds of the Revolving Credit to refinance existing indebtedness, for its
general working capital purposes and for such other legal and proper purposes as
are consistent with all applicable laws. Neither the Borrower nor any Subsidiary
is engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan or any other extension of credit made hereunder will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock. Margin stock (as hereinabove
defined) constitutes less than 25% of the assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge or other
restriction hereunder.

         Section 6.5. Financial Reports. The consolidated balance sheet of the
Borrower and its Subsidiaries as at September 30, 2002, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
PricewaterhouseCoopers LLP, independent public accountants, and the unaudited
interim consolidated balance sheet of the Borrower and its Subsidiaries as at
March 31, 2003, and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the six (6)
months then ended, heretofore furnished to the Administrative Agent and the
Lenders, fairly present the consolidated financial condition of the Borrower and
its Subsidiaries as at said dates and the consolidated results of their
operations and cash flows for the periods then ended in conformity with GAAP
applied on a consistent basis. Neither the Borrower nor any Subsidiary has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 8.5 hereof.

                                      -36-

<PAGE>

         Section 6.6. No Material Adverse Change. Since September 30, 2002,
there has been no change in the condition (financial or otherwise) or business
prospects of the Borrower or any Subsidiary except those occurring in the
ordinary course of business, none of which individually or in the aggregate have
been materially adverse.

         Section 6.7. Full Disclosure. The statements and information furnished
to the Administrative Agent and the Lenders in connection with the negotiation
of this Agreement and the other Loan Documents and the commitments by the
Lenders to provide all or part of the financing contemplated hereby do not
contain any untrue statements of a material fact or omit a material fact
necessary to make the material statements contained herein or therein not
misleading, the Administrative Agent and the Lenders acknowledging that as to
any projections furnished to the Administrative Agent and the Lenders, the
Borrower only represents that the same were prepared on the basis of information
and estimates the Borrower believed to be reasonable.

         Section 6.8. Trademarks, Franchises, and Licenses. The Borrower and its
Subsidiaries own, possess, or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how, and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person.

         Section 6.9. Governmental Authority and Licensing. The Borrower and its
Subsidiaries have received all licenses, permits, and approvals of all federal,
state, and local governmental authorities, if any, necessary to conduct their
businesses, in each case where the failure to obtain or maintain the same could
reasonably be expected to have a Material Adverse Effect. No investigation or
proceeding which, if adversely determined, could reasonably be expected to
result in revocation or denial of any material license, permit or approval is
pending or, to the knowledge of the Borrower, threatened.

         Section 6.10. Good Title. The Borrower and its Subsidiaries have good
and defensible title (or valid leasehold interests) to their assets as reflected
on the most recent consolidated balance sheet of the Borrower and its
Subsidiaries furnished to the Administrative Agent and the Lenders (except for
sales of assets in the ordinary course of business), subject to no Liens other
than such thereof as are permitted by Section 8.8 hereof.

         Section 6.11. Litigation and Other Controversies. There is no
litigation or governmental or arbitration proceeding or labor controversy
pending, nor to the knowledge of the Borrower threatened, against the Borrower
or any Subsidiary, except as disclosed in the Borrower's public filings with the
SEC.

         Section 6.12. Taxes. All tax returns required to be filed by the
Borrower or any Subsidiary in any jurisdiction have, in fact, been filed, and
all taxes, assessments, fees, and other governmental charges upon the Borrower
or any Subsidiary or upon any of its Property, income or franchises, which are
shown to be due and payable in such returns, have been paid, except such taxes,
assessments, fees and governmental charges, if any, as are being contested in
good

                                      -37-

<PAGE>

faith and by appropriate proceedings which prevent enforcement of the matter
under contest and as to which adequate reserves established in accordance with
GAAP have been provided. The Borrower does not know of any proposed additional
tax assessment against it or its Subsidiaries for which adequate provisions in
accordance with GAAP have not been made on their accounts. Adequate provisions
in accordance with GAAP for taxes on the books of the Borrower and each
Subsidiary have been made for all open years, and for its current fiscal period.

         Section 6.13. Approvals. No authorization, consent, license or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of any other
Person, is or will be necessary to the valid execution, delivery or performance
by the Borrower or any Subsidiary of any Loan Document, except for such
approvals which have been obtained prior to the date of this Agreement and
remain in full force and effect.

         Section 6.14. Affiliate Transactions. Neither the Borrower nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-owned Subsidiaries) on terms and conditions which are
less favorable to the Borrower or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.

         Section 6.15. Investment Company; Public Utility Holding Company.
Neither the Borrower nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

         Section 6.16. ERISA. The Borrower and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither the Borrower nor any Subsidiary
has any contingent liabilities with respect to any post-retirement benefits
under a Welfare Plan, other than liability for continuation coverage described
in article 6 of Title I of ERISA.

         Section 6.17. Compliance with Laws. (a) The Borrower and its
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their Property
or business operations (including, without limitation, the Occupational Safety
and Health Act of 1970, the Americans with Disabilities Act of 1990, and laws
and regulations establishing quality criteria and standards for air, water, land
and toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

            (b) Without limiting the representations and warranties set forth in
Section 6.17(a) above, except for such matters, individually or in the
aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, the Borrower represents and warrants that: (i) the Borrower and
its Subsidiaries, and each of the Premises, comply in all material respects

                                      -38-

<PAGE>

with all applicable Environmental Laws; (ii) the Borrower and its Subsidiaries
have obtained all governmental approvals required for their operations and each
of the Premises by any applicable Environmental Law; (iii) the Borrower and its
Subsidiaries have not, and the Borrower has no knowledge of any other Person who
has, caused any Release, threatened Release or disposal of any Hazardous
Material at, on, about, or off any of the Premises in any material quantity and,
to the knowledge of the Borrower, none of the Premises are adversely affected by
any Release, threatened Release or disposal of a Hazardous Material originating
or emanating from any other property; (iv) none of the Premises contain and have
contained any: (1) underground storage tank, (2) material amounts of asbestos
containing building material, (3) landfills or dumps, (4) hazardous waste
management facility as defined pursuant to RCRA or any comparable state law, or
(5) site on or nominated for the National Priority List promulgated pursuant to
CERCLA or any state remedial priority list promulgated or published pursuant to
any comparable state law; (v) the Borrower and its Subsidiaries have not used a
material quantity of any Hazardous Material and have conducted no Hazardous
Material Activity at any of the Premises; (vi) the Borrower and its Subsidiaries
have no material liability for response or corrective action, natural resource
damage or other harm pursuant to CERCLA, RCRA or any comparable state law; (vii)
the Borrower and its Subsidiaries are not subject to, have no notice or
knowledge of and are not required to give any notice of any Environmental Claim
involving the Borrower or any Subsidiary or any of the Premises, and there are
no conditions or occurrences at any of the Premises which could reasonably be
anticipated to form the basis for an Environmental Claim against the Borrower or
any Subsidiary or such Premises; (viii) none of the Premises are subject to any,
and the Borrower has no knowledge of any imminent, restriction on the ownership,
occupancy, use or transferability of the Premises in connection with any (1)
Environmental Law or (2) Release, threatened Release or disposal of a Hazardous
Material; and (ix) there are no conditions or circumstances at any of the
Premises which pose an unreasonable risk to the environment or the health or
safety of Persons.

         Section 6.18. Other Agreements. Neither the Borrower nor any Subsidiary
is in default under the terms of any covenant, indenture or agreement of or
affecting such Person or any of its Property, which default if uncured could
reasonably be expected to have a Material Adverse Effect.

         Section 6.19. Solvency. The Borrower and its Subsidiaries are solvent,
able to pay their debts as they become due, and have sufficient capital to carry
on their business and all businesses in which they are about to engage.

         Section 6.20. No Default. No Default or Event of Default has occurred
and is continuing.

         Section 6.21. Credit Agreement Obligations. The Obligations, Hedging
Liabilities owed to the Lenders, their Affiliates and the Existing Swap
Providers, and the Funds Transfer and Deposit Account Liabilities owed to the
Lenders and their Affiliates constitute "Senior Debt" (as defined in the Senior
Note Indenture) and as "Permitted Debt" (as defined in the Senior Note
Indenture), and the Borrower hereby designates them as such.

                                      -39-

<PAGE>

SECTION 7.        CONDITIONS PRECEDENT.

         The obligation of each Lender to advance, continue or convert any Loan
(other than the continuation of, or conversion into, a Base Rate Loan) or of the
L/C Issuer to issue, extend the expiration date (including by not giving notice
of non-renewal) of or increase the amount of any Letter of Credit under this
Agreement, shall be subject to the following conditions precedent:

         Section 7.1. All Credit Events. At the time of each Credit Event
hereunder:

                  (a) each of the representations and warranties set forth
         herein and in the other Loan Documents shall be and remain true and
         correct as of said time, except to the extent the same expressly relate
         to an earlier date;

                  (b) the Borrower and each Subsidiary shall be in compliance
         with all of the terms and conditions hereof and of the other Loan
         Documents, and no Default or Event of Default shall have occurred and
         be continuing or would occur as a result of such Credit Event;

                  (c) in the case of a Borrowing the Administrative Agent shall
         have received the notice required by Section 1.5 hereof, in the case of
         the issuance of any Letter of Credit the L/C Issuer shall have received
         a duly completed Application for such Letter of Credit together with
         any fees called for by Section 2.1 hereof, and, in the case of an
         extension or increase in the amount of a Letter of Credit, a written
         request therefor in a form acceptable to the L/C Issuer together with
         fees called for by Section 2.1 hereof; and

                  (d) such Credit Event shall not violate any order, judgment or
         decree of any court or other authority or any provision of law or
         regulation applicable to the Administrative Agent or any Lender
         (including, without limitation, Regulation U of the Board of Governors
         of the Federal Reserve System) as then in effect.

         Each request for a Borrowing hereunder and each request for the
issuance of, increase in the amount of, or extension of the expiration date of,
a Letter of Credit shall be deemed to be a representation and warranty by the
Borrower on the date on such Credit Event as to the facts specified in
subsections (a) through (c), both inclusive, of this Section.

         Section 7.2. Initial Credit Event. Before or concurrently with the
initial Credit Event:

                  (a) the Administrative Agent shall have received for each
         Lender this Agreement duly executed by the Borrower and the Lenders;

                  (b) the Administrative Agent shall have received for each
         Lender such Lender's duly executed Notes of the Borrower dated the date
         hereof and otherwise in compliance with the provisions of Section 1.10
         hereof;

                  (c) the Administrative Agent shall have received the Mortgages
         and Security Agreement duly executed by the Borrower and its
         Subsidiaries, together with (i) original

                                      -40-

<PAGE>

         stock certificates or other similar instruments or securities
         representing all of the issued and outstanding shares of capital stock
         or other equity interests in each Subsidiary (66% of such capital stock
         in the case of any Foreign Subsidiary as provided in Section 4.1
         hereof) as of the Closing Date, (ii) stock powers for the Collateral
         consisting of the stock or other equity interest in each Subsidiary
         executed in blank and undated, (iii) patent, trademark, and copyright
         collateral assignments to the extent requested by the Administrative
         Agent and (iv) deposit account, securities account, and commodity
         account control agreements to the extent requested by the
         Administrative Agent

                  (d) the Administrative Agent shall have received evidence of
         insurance required to be maintained under the Loan Documents, naming
         the Administrative Agent as mortgagee and loss payee;

                  (e) the Administrative Agent shall have received for each
         Lender copies of the Borrower's and each Subsidiary's articles of
         incorporation and bylaws (or comparable organizational documents) and
         any amendments thereto, certified in each instance by its Secretary or
         Assistant Secretary;

                  (f) the Administrative Agent shall have received for each
         Lender copies of resolutions of the Borrower's and each Subsidiary's
         Board of Directors (or similar governing body) authorizing the
         execution, delivery and performance of this Agreement and the other
         Loan Documents to which it is a party and the consummation of the
         transactions contemplated hereby and thereby, together with specimen
         signatures of the persons authorized to execute such documents on the
         Borrower's and each Subsidiary's behalf, all certified in each instance
         by its Secretary or Assistant Secretary;

                  (g) the Administrative Agent shall have received for each
         Lender copies of the certificates of good standing for the Borrower and
         each Subsidiary (dated no earlier than 30 days prior to the date
         hereof) from the office of the secretary of the state of its
         incorporation or organization and of each state in which it is
         qualified to do business as a foreign corporation or organization;

                  (h) the Administrative Agent shall have received for each
         Lender a list of the Borrower's Authorized Representatives;

                  (i) the Administrative Agent shall have received for itself
         and for the Lenders the initial fees called for by Section 2.1 hereof;

                  (j) the Administrative Agent shall have received a mortgagee's
         title insurance policy (or a prepaid binding commitment therefor) in
         form and substance acceptable to the Administrative Agent from a title
         insurance company acceptable to the Administrative Agent in the
         aggregate amount equal to 105% of the fair-market value of the
         Collateral subject thereto insuring the Lien of the Mortgages to be
         valid first priority Liens subject to no defects or objections which
         are unacceptable to the Administrative Agent, together with such
         endorsements as the Administrative Agent may require;

                                      -41-

<PAGE>

                  (k) each Lender shall have received such evaluations,
         certifications and financial information as it may reasonably require
         (including a compliance certificate in the form attached hereto as
         Exhibit E containing compliance calculations of the financial covenants
         as of the date of this Agreement) in order to satisfy itself as to (i)
         the value of the Collateral, (ii) the financial condition of the
         Borrower and its Subsidiaries (including, without limitation, (1) five
         years of audited consolidated financial information with respect to the
         Borrower and its Subsidiaries, (2) interim consolidated statements with
         respect to the Borrower and its Subsidiaries as of March 31, 2003, (3)
         five years of projected consolidated financial statements of the
         Borrower and its Subsidiaries and (4) quarterly consolidating financial
         projections for the four quarterly periods ending September 30, 2004),
         and (iii) the lack of material contingent liabilities of the Borrower
         and its Subsidiaries;

                  (l) the Administrative Agent shall have received financing
         statement, tax, and judgment lien search results against the Property
         of the Borrower and each Subsidiary evidencing the absence of Liens on
         its Property except as permitted by Section 8.8 hereof;

                  (m) the Administrative Agent shall have received pay-off and
         lien release letters from secured creditors of the Borrower and each
         Subsidiary setting forth, among other things, the total amount of
         indebtedness outstanding and owing to them (or outstanding letters of
         credit issued for the account of the Borrower or any Subsidiary) and
         containing an undertaking to cause to be delivered to the
         Administrative Agent UCC termination statements and any other lien
         release instruments necessary to release their Liens on the assets of
         the Borrower and each Subsidiary, which pay-off and lien release
         letters shall be in form and substance acceptable to the Administrative
         Agent;

                  (n) the Administrative Agent shall have received for each
         Lender the favorable written opinion of counsel to the Borrower and
         each Subsidiary, in form and substance satisfactory to the
         Administrative Agent;

                  (o) the Administrative Agent shall have received evidence
         satisfactory to the Administrative Agent that the EBITDA of the
         Borrower and its Subsidiaries for the twelve calendar months ending
         March 31, 2003 is not less than $58,000,000;

                  (p) the Administrative Agent shall have received evidence of
         the Borrower's receipt of (i) not less than $201,000,000 in gross
         proceeds from the Senior Notes and (ii) not less than $15,000,000 in
         gross proceeds of the Preferred Stock;

                  (q) the Administrative Agent shall be in receipt of a fully
         executed Intercreditor Agreement in a form acceptable thereto;

                  (r) the shareholder lawsuits pertaining to the Borrower shall
         have been reasonably resolved in a manner acceptable to the
         Administrative Agent; and

                                      -42-

<PAGE>

                  (s) the Administrative Agent shall have received for the
         account of the Lenders such other agreements, material contracts,
         instruments, documents, certificates, and opinions as the
         Administrative Agent may reasonably request.

SECTION 8.        COVENANTS.

         The Borrower agrees that, so long as any credit is available to or in
use by the Borrower hereunder, except to the extent compliance in any case or
cases is waived in writing pursuant to the terms of Section 13.13 hereof:

         Section 8.1. Maintenance of Business. The Borrower shall, and shall
cause each Subsidiary to, preserve and maintain its existence, except as
otherwise provided in Section 8.10(c) hereof. The Borrower shall, and shall
cause each Subsidiary to, preserve and keep in force and effect all licenses,
permits, franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights, and other proprietary rights necessary to the proper conduct of its
business where the failure to do so could reasonably be expected to have a
Material Adverse Effect.

         Section 8.2. Maintenance of Properties. The Borrower shall, and shall
cause each Subsidiary to, maintain, preserve, and keep its property, plant, and
equipment in good repair, working order and condition (ordinary wear and tear
excepted), and shall from time to time make all needful and proper repairs,
renewals, replacements, additions, and betterments thereto so that at all times
the efficiency thereof shall be fully preserved and maintained, except to the
extent that, in the reasonable business judgment of such Person, any such
Property is no longer necessary for the proper conduct of the business of such
Person.

         Section 8.3. Taxes and Assessments. The Borrower shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees, and governmental charges upon or against it or its
Property, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.

         Section 8.4. Insurance. The Borrower shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including, without limitation, employers'
and public liability risks) with good and responsible insurance companies as and
to the extent usually insured by Persons similarly situated and conducting
similar businesses. The Borrower shall in any event maintain, and cause each
Subsidiary to maintain, insurance on the Collateral to the extent required by
the Collateral Documents. The Borrower shall, upon the request of the
Administrative Agent, furnish to the Administrative Agent and the Lenders a
certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section.

                                      -43-

<PAGE>

         Section 8.5. Financial Reports. The Borrower shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP and shall furnish to the Administrative Agent, each Lender and each of
their duly authorized representatives such information respecting the business
and financial condition of the Borrower and each Subsidiary as the
Administrative Agent or such Lender may reasonably request; and without any
request, shall furnish to the Administrative Agent and the Lenders:

                  (a) as soon as available, and in any event within 30 days
         after the last day of each calendar month, a copy of the consolidated
         balance sheet of the Borrower and its Subsidiaries (other than dPi
         Teleconnect, L.L.C.) as of the last day of such month and the
         consolidated statements of income, retained earnings, and cash flows of
         the Borrower and its Subsidiaries (other than dPi Teleconnect, L.L.C.)
         for the month and for the fiscal year-to-date period then ended, each
         in reasonable detail showing in comparative form the figures for the
         corresponding date and period in the previous fiscal year, prepared by
         the Borrower in accordance with GAAP (subject to the absence of
         footnote disclosures and year-end audit adjustments) and certified to
         by its chief financial officer or another officer of the Borrower
         acceptable to the Administrative Agent;

                  (b) as soon as available, and in any event within 45 days
         after the close of each fiscal quarter of each fiscal year of the
         Borrower, a copy of the consolidated and consolidating balance sheet of
         the Borrower and its Subsidiaries as of the last day of such fiscal
         quarter and the consolidated and consolidating statements of income,
         retained earnings, and cash flows of the Borrower and its Subsidiaries
         for the fiscal quarter and for the fiscal year-to-date period then
         ended, each in reasonable detail showing in comparative form the
         figures for the corresponding date and period in the previous fiscal
         year, prepared by the Borrower in accordance with GAAP (subject to the
         absence of footnote disclosures and year-end audit adjustments) and
         certified to by its chief financial officer or another officer of the
         Borrower acceptable to the Administrative Agent;

                  (c) as soon as available, and in any event within 90 days
         after the close of each fiscal year of the Borrower, a copy of the
         consolidated and consolidating balance sheet of the Borrower and its
         Subsidiaries as of the last day of the fiscal year then ended and the
         consolidated and consolidating statements of income, retained earnings,
         and cash flows of the Borrower and its Subsidiaries for the fiscal year
         then ended, and accompanying notes thereto, each in reasonable detail
         showing in comparative form the figures for the previous fiscal year,
         accompanied in the case of the consolidated financial statements by an
         unqualified opinion of PricewaterhouseCoopers LLP or another firm of
         independent public accountants of recognized national standing,
         selected by the Borrower and reasonably satisfactory to the
         Administrative Agent and the Required Lenders, to the effect that the
         consolidated financial statements have been prepared in accordance with
         GAAP and present fairly in accordance with GAAP the consolidated
         financial condition of the Borrower and its Subsidiaries as of the
         close of such fiscal year and the results of their operations and cash
         flows for the fiscal year then ended and that an examination of such
         accounts in connection with such financial statements has been made in
         accordance with generally accepted auditing standards and, accordingly,
         such examination included

                                      -44-

<PAGE>

         such tests of the accounting records and such other auditing procedures
         as were considered necessary in the circumstances;

                  (d) within the period provided in subsection (c) above, the
         written statement of the accountants who certified the audit report
         thereby required that in the course of their audit they have obtained
         no knowledge of any Default or Event of Default, or, if such
         accountants have obtained knowledge of any such Default or Event of
         Default, they shall disclose in such statement the nature and period of
         the existence thereof;

                  (e) promptly after receipt thereof, any additional written
         reports, management letters or other detailed information contained in
         writing concerning significant aspects of the Borrower's or any
         Subsidiary's operations and financial affairs given to it by its
         independent public accountants;

                  (f) promptly after the sending or filing thereof, copies of
         each financial statement, report, notice or proxy statement sent by the
         Borrower or any Subsidiary to its stockholders or other equity holders,
         and copies of each regular, periodic or special report, registration
         statement or prospectus (including all Form 10-K, Form 10-Q and Form
         8-K reports) filed by the Borrower or any Subsidiary with any
         securities exchange or the Securities and Exchange Commission or any
         successor agency;

                  (g) as soon as available, and in any event within 15 days
         prior to the end of each fiscal year of the Borrower, a copy of the
         Borrower's consolidated and consolidating business plan for the
         following fiscal year, such business plan to show the Borrower's
         projected consolidated and consolidating revenues, expenses and balance
         sheet on a quarter-by-quarter basis, such business plan to be in
         reasonable detail prepared by the Borrower and in form satisfactory to
         the Administrative Agent and the Required Lenders (which shall include
         a summary of all assumptions made in preparing such business plan);

                  (h) notice of any Change in Control;

                  (i) promptly after knowledge thereof shall have come to the
         attention of any responsible officer of the Borrower, written notice of
         any threatened or pending litigation or governmental or arbitration
         proceeding or labor controversy against the Borrower or any Subsidiary
         which, if adversely determined, could reasonably be expected to have a
         Material Adverse Effect or of the occurrence of any Default or Event of
         Default hereunder;

                  (j) with each of the financial statements furnished to the
         Lenders pursuant to subsections (a) and (b) above, a written
         certificate in the form attached hereto as Exhibit E signed by the
         chief financial officer of the Borrower or another officer of the
         Borrower acceptable to the Administrative Agent to the effect that to
         the best of such officer's knowledge and belief no Default or Event of
         Default has occurred during the period covered by such statements or,
         if any such Default or Event of Default has occurred during such
         period, setting forth a description of such Default or Event of

                                      -45-

<PAGE>

         Default and specifying the action, if any, taken by the Borrower or any
         Subsidiary to remedy the same. Such certificate shall also set forth
         the calculations supporting such statements in respect of Sections
         8.22, 8.23, 8.24, 8.25, 8.26 and 8.27 hereof; provided, however, with
         respect to the calculations supporting Section 8.27 hereof for any
         month ending March 31, June 30, September 30 or December 31, the
         calculations supporting Section 8.27 for such month end shall be
         furnished to the Lenders along with the financial statements delivered
         pursuant to subsection (b) above; and

                  (k) notwithstanding anything herein to the contrary, each
         report and financial statement furnished to the Lenders pursuant to
         this Section 8.5 shall be in a form and scope reasonably acceptable to
         the Administrative Agent and the Required Lenders.

         Section 8.6. Inspection. The Borrower shall, and shall cause each
Subsidiary to, permit the Administrative Agent, each Lender, and each of their
duly authorized representatives and agents to visit and inspect any of its
Property, corporate books, and financial records, to examine and make copies of
its books of accounts and other financial records, and to discuss its affairs,
finances, and accounts with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision the Borrower
hereby authorizes such accountants to discuss with the Administrative Agent and
such Lenders the finances and affairs of the Borrower and its Subsidiaries) at
such reasonable times and intervals as the Administrative Agent or any such
Lender may designate and, so long as no Default or Event of Default exists, with
reasonable prior notice to the Borrower.

         Section 8.7. Borrowings and Guaranties. The Borrower shall not, nor
shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing shall not restrict nor operate to
prevent:

                  (a) the Obligations, Hedging Liability, and Funds Transfer and
         Deposit Account Liability of the Borrower and its Subsidiaries owing to
         the Administrative Agent and the Lenders (and their Affiliates);

                  (b) purchase money indebtedness and Capitalized Lease
         Obligations of the Borrower and its Subsidiaries in an amount not to
         exceed $20,000,000 in the aggregate at any one time outstanding;

                  (c) obligations of the Borrower arising out of interest rate
         and foreign currency hedging agreements entered into with financial
         institutions in the ordinary course of business;

                                      -46-

<PAGE>

                  (d) endorsement of items for deposit or collection of
         commercial paper received in the ordinary course of business;

                  (e) indebtedness from time to time owing by any Subsidiary to
         the Borrower;

                  (f) indebtedness and guaranties with respect to the Senior
         Notes;

                  (g) indebtedness of the Borrower and its Subsidiaries not
         otherwise permitted by this Section in an amount not to exceed
         $10,000,000 in the aggregate at any one time outstanding; and

                  (h) the Preferred Shares.

         Section 8.8. Liens. The Borrower shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:

                  (a) Liens arising by statute in connection with worker's
         compensation, unemployment insurance, old age benefits, social security
         obligations, taxes, assessments, statutory obligations or other similar
         charges (other than Liens arising under ERISA), good faith cash
         deposits in connection with tenders, contracts or leases to which the
         Borrower or any Subsidiary is a party or other cash deposits required
         to be made in the ordinary course of business, provided in each case
         that the obligation is not for borrowed money and that the obligation
         secured is not overdue or, if overdue, is being contested in good faith
         by appropriate proceedings which prevent enforcement of the matter
         under contest and adequate reserves have been established therefor;

                  (b) mechanics', workmen's, materialmen's, landlords',
         carriers' or other similar Liens arising in the ordinary course of
         business with respect to obligations which are not due or which are
         being contested in good faith by appropriate proceedings which prevent
         enforcement of the matter under contest;

                  (c) judgment liens and judicial attachment liens not
         constituting an Event of Default under Section 9.1(g) hereof and the
         pledge of assets for the purpose of securing an appeal, stay or
         discharge in the course of any legal proceeding, provided that the
         aggregate amount of such judgment liens and attachments and liabilities
         of the Borrower and its Subsidiaries secured by a pledge of assets
         permitted under this subsection, including interest and penalties
         thereon, if any, shall not be in excess of $500,000 at any one time
         outstanding;

                  (d) Liens on property of the Borrower or any Subsidiary
         created solely for the purpose of securing indebtedness permitted by
         Section 8.7(b) hereof, representing or incurred to finance the purchase
         price of Property, provided that no such Lien shall extend to or cover
         other Property of the Borrower or such Subsidiary other than the
         respective Property so acquired, and the principal amount of
         indebtedness secured by any

                                      -47-

<PAGE>

         such Lien shall at no time exceed the purchase price of such Property,
         as reduced by repayments of principal thereon;

                  (e) any interest or title of a lessor under any operating
         lease;

                  (f) easements, rights-of-way, restrictions, and other similar
         encumbrances against real property incurred in the ordinary course of
         business which, in the aggregate, are not substantial in amount and
         which do not materially detract from the value of the Property subject
         thereto or materially interfere with the ordinary conduct of the
         business of the Borrower or any Subsidiary; and

                  (g) the Liens evidenced by the financing statements and other
         items identified on Schedule 8.8 hereto;

                  (h) the Liens granted in favor of the Administrative Agent
         pursuant to the Collateral Documents;

                  (i) Liens securing the indebtedness and guaranties with
         respect to the Senior Notes; and

                  (j) other Liens not otherwise permitted pursuant to this
         Section 8.8 in an aggregate amount not to exceed $5,000,000 at any
         point in time.

         Section 8.9. Investments, Acquisitions, Loans and Advances. The
Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other Person, or acquire all or any substantial part of the assets or business
of any other Person or division thereof; provided, however, that the foregoing
shall not apply to nor operate to prevent:

                  (a) investments in direct obligations of the United States of
         America or of any agency or instrumentality thereof whose obligations
         constitute full faith and credit obligations of the United States of
         America, provided that any such obligations shall mature within one
         year of the date of issuance thereof;

                  (b) investments in commercial paper rated at least P-1 by
         Moody's and at least A-1 by S&P maturing within one year of the date of
         issuance thereof;

                  (c) investments in certificates of deposit issued by any
         Lender or by any United States commercial bank having capital and
         surplus of not less than $100,000,000 which have a maturity of one year
         or less;

                  (d) investments in repurchase obligations with a term of not
         more than 7 days for underlying securities of the types described in
         subsection (a) above entered into with any bank meeting the
         qualifications specified in subsection (c) above, provided all such

                                      -48-

<PAGE>

         agreements require physical delivery of the securities securing such
         repurchase agreement, except those delivered through the Federal
         Reserve Book Entry System;

                  (e) investments in money market funds that invest solely, and
         which are restricted by their respective charters to invest solely, in
         investments of the type described in the immediately preceding
         subsections (a), (b), (c), and (d) above;

                  (f) the Borrower's investments from time to time in its
         Subsidiaries, and investments made from time to time by a Subsidiary in
         or more of its Subsidiaries;

                  (g) intercompany advances made from time to time from the
         Borrower to any one or more Guarantors in the ordinary course of
         business to finance working capital needs;

                  (h) Permitted Acquisitions;

                  (i) the existing investment of $7,500,000 for the seventy
         percent (70%) ownership interest of the Borrower in dPi Teleconnect,
         L.L.C., a Delaware limited liability company ("dPi"), and the existing
         loans and advances not in excess of $4,500,000 to dPi, provided,
         however, that the Borrower and the Guarantors ownership interests in
         dPi and the note obligations of dPi to the Borrower and the Guarantors
         shall continue to be pledged to the Administrative Agent for the
         benefit of the Lenders (for purposes of this Credit Agreement, the
         financial results of dPi shall be included in the consolidated
         financial statements of the Borrower, as determined and consolidated in
         accordance with GAAP, but dPi shall not otherwise constitute a
         Subsidiary subject to the terms and conditions of this Credit Agreement
         and the Loan Documents which relate to the Subsidiaries of the Borrower
         and the Guarantors until such time as it becomes a Guarantor);

                  (j) the acquisition of Property in exchange for Property sold,
         transferred, leased or otherwise disposed of pursuant to Section
         8.10(g) hereof; provided that such acquired assets are subject to a
         valid and perfected first priority Lien in favor of the Administrative
         Agent pursuant to one or more of the Collateral Documents;

                  (k) investments in Cash Equivalents of amounts on deposit in
         the Excess Cash Flow Escrow Account; and

                  (l) other investments, loans, and advances in addition to
         those otherwise permitted by this Section in an amount not to exceed
         $500,000 in the aggregate at any one time outstanding.

In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.

                                      -49-

<PAGE>

         Section 8.10. Mergers, Consolidations and Sales. The Borrower shall
not, nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any part
of its Property, including any disposition of Property as part of a sale and
leaseback transaction, or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however, that so
long as no Default or Event of Default exists this Section shall not apply to
nor operate to prevent:

                  (a) the sale or lease of inventory in the ordinary course of
         business;

                  (b) the sale, transfer, lease or other disposition of Property
         of the Borrower and its Subsidiaries to one another in the ordinary
         course of its business;

                  (c) the merger of any Subsidiary with and into the Borrower or
         any other Subsidiary, provided that, in the case of any merger
         involving the Borrower, the Borrower is the corporation surviving the
         merger;

                  (d) the sale of delinquent notes or accounts receivable in the
         ordinary course of business for purposes of collection only (and not
         for the purpose of any bulk sale or securitization transaction);

                  (e) the sale, transfer or other disposition of any tangible
         personal property that, in the reasonable business judgment of the
         Borrower or its Subsidiary, has become obsolete or worn out, and which
         is disposed of in the ordinary course of business;

                  (f) the sale, transfer, lease or other disposition of Property
         of the Borrower or any Subsidiary (including any disposition of
         Property as part of a sale and leaseback transaction) aggregating for
         the Borrower and its Subsidiaries not more than $2,500,000 during any
         fiscal year of the Borrower; and

                  (g) the sale, transfer, lease or other disposition of Property
         of the Borrower or any Subsidiary with respect to an exchange of assets
         or retail store sites of the Borrower and its Subsidiaries for assets
         of retail store sites of Persons in the same Eligible Line of Business
         as the Borrower and its Subsidiaries, provided that such substitute
         assets are subject to a valid and perfected first priority Lien
         pursuant to one or more of the Collateral Documents.

         Section 8.11. Maintenance of Subsidiaries. The Borrower shall not
assign, sell or transfer, nor shall it permit any Subsidiary to issue, assign,
sell or transfer, any shares of capital stock or other equity interests of a
Subsidiary; provided, however, that the foregoing shall not operate to prevent
(a) Liens on the capital stock or other equity interests of Subsidiaries granted
to the Administrative Agent pursuant to the Collateral Documents and the
documents securing the Senior Notes, (b) the issuance, sale, and transfer to any
person of any shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person as a
director of such Subsidiary, and (c) any transaction permitted by Section
8.10(c) above.

                                      -50-

<PAGE>

         Section 8.12. Dividends and Certain Other Restricted Payments. The
Borrower shall not, nor shall it permit any Subsidiary to, (a) declare or pay
any dividends on or make any other distributions in respect of any class or
series of its capital stock or other equity interests or (b) directly or
indirectly purchase, redeem, or otherwise acquire or retire any of its capital
stock or other equity interests or any warrants, options, or similar instruments
to acquire the same (collectively, "Restricted Payments"); provided, however,
that the foregoing shall not operate to prevent the making of dividends or
distributions by any Wholly-owned Subsidiary of the Borrower to its parent
corporation; provided, further, however, that the foregoing shall not operate to
prevent (i) the redemption by the Borrower of any of its capital stock or other
equity interest so long as (x) no Revolving Loans are outstanding immediately
prior to and for ten consecutive days immediately after such redemption, (y) the
Borrower's Leverage Ratio after giving effect to such redemption shall be less
than 2.5 to 1.0 and (z) no Default or Event of Default shall exist before and
after giving effect thereto or (ii) the declaration or payment of dividends with
respect to the Preferred Stock so long as no Default or Event of Default shall
exist before and after giving effect thereto.

         Section 8.13. ERISA. The Borrower shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against any of its
Property. The Borrower shall, and shall cause each Subsidiary to, promptly
notify the Administrative Agent and each Lender of: (a) the occurrence of any
reportable event (as defined in ERISA) with respect to a Plan, (b) receipt of
any notice from the PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (c) its intention to terminate or withdraw
from any Plan, and (d) the occurrence of any event with respect to any Plan
which would result in the incurrence by the Borrower or any Subsidiary of any
material liability, fine or penalty, or any material increase in the contingent
liability of the Borrower or any Subsidiary with respect to any post-retirement
Welfare Plan benefit.

         Section 8.14. Compliance with Laws. (a) The Borrower shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state, and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its
Property.

            (b) Without limiting the agreements set forth in Section 8.14(a)
above, the Borrower shall, and shall cause each Subsidiary to, at all times, do
the following to the extent the failure to do so, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect: (i)
comply in all material respects with, and maintain each of the Premises in
compliance in all material respects with, all applicable Environmental Laws;
(ii) require that each tenant and subtenant, if any, of any of the Premises or
any part thereof comply in all material respects with all applicable
Environmental Laws; (iii) obtain and maintain in full force and effect all
material governmental approvals required by any applicable Environmental Law for
operations at each of the Premises; (iv) cure any material violation by it or at
any of the Premises of applicable Environmental Laws; (v) not allow the presence
or operation at any of the Premises of any (1) landfill or dump or (2) hazardous
waste management facility or solid waste disposal facility as defined pursuant
to RCRA or any comparable state law; (vi) not manufacture, use, generate,

                                      -51-

<PAGE>

transport, treat, store, release, dispose or handle any Hazardous Material at
any of the Premises except in the ordinary course of its business and in de
minimis amounts; (vii) within 10 Business Days notify the Administrative Agent
in writing of and provide any reasonably requested documents upon learning of
any of the following in connection with the Borrower or any Subsidiary or any of
the Premises: (1) any material liability for response or corrective action,
natural resource damage or other harm pursuant to CERCLA, RCRA or any comparable
state law; (2) any material Environmental Claim; (3) any material violation of
an Environmental Law or material Release, threatened Release or disposal of a
Hazardous Material; (4) any restriction on the ownership, occupancy, use or
transferability arising pursuant to any (x) Release, threatened Release or
disposal of a Hazardous Substance or (y) Environmental Law; or (5) any
environmental, natural resource, health or safety condition, which could
reasonably be expected to have a Material Adverse Effect; (viii) conduct at its
expense any investigation, study, sampling, testing, abatement, cleanup,
removal, remediation or other response action necessary to remove, remediate,
clean up or abate any material Release, threatened Release or disposal of a
Hazardous Material as required by any applicable Environmental Law, (ix) abide
by and observe any restrictions on the use of the Premises imposed by any
governmental authority as set forth in a deed or other instrument affecting the
Borrower's or any Subsidiary's interest therein; (x) promptly provide or
otherwise make available to the Administrative Agent any reasonably requested
environmental record concerning the Premises which the Borrower or any
Subsidiary possesses or can reasonably obtain; and (xi) perform, satisfy, and
implement any operation or maintenance actions required by any governmental
authority or Environmental Law, or included in any no further action letter or
covenant not to sue issued by any governmental authority under any Environmental
Law.

         Section 8.15. Burdensome Contracts With Affiliates. The Borrower shall
not, nor shall it permit any Subsidiary to, enter into any contract, agreement
or business arrangement with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to the Borrower
or such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.

         Section 8.16. No Changes in Fiscal Year. The fiscal year of the
Borrower and its Subsidiaries ends on September 30 of each year; and the
Borrower shall not, nor shall it permit any Subsidiary to, change its fiscal
year from its present basis.

         Section 8.17. Formation of Subsidiaries. Promptly upon the formation or
acquisition of any Subsidiary, the Borrower shall provide the Administrative
Agent and the Lenders notice thereof and timely comply with the requirements of
Section 4 hereof (at which time Schedule 6.2 shall be deemed amended to include
reference to such Subsidiary).

         Section 8.18. Change in the Nature of Business. The Borrower shall not,
nor shall it permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of the Borrower or any Subsidiary
would be changed in any material respect from the general nature of the business
engaged in by it as of the Closing Date.

         Section 8.19. Use of Loan Proceeds. The Borrower shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 6.4 hereof.

                                      -52-

<PAGE>

         Section 8.20. No Restrictions. Except as provided herein, the Borrower
shall not, nor shall it permit any Subsidiary to, directly or indirectly create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to: (a) pay dividends or make any other distribution on any
Subsidiary's capital stock or other equity interests owned by the Borrower or
any other Subsidiary, (b) pay any indebtedness owed to the Borrower or any other
Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary,
(d) transfer any of its Property to the Borrower or any other Subsidiary or (e)
guarantee the Obligations and/or grant Liens on its assets to the Administrative
Agent as required by the Loan Documents.

         Section 8.21. Senior Notes. (a) The Borrower shall not, nor shall it
permit any Subsidiary to, (i) amend or modify any of the terms or conditions
relating to Senior Notes (other than amendments and modifications that (A) would
extend the maturity or reduce the amount of any payment of principal or reduce
the rate or extend any date for payment of interest, (B) adds collateral that
conforms to collateral covered by the Collateral Documents, or (C) releases
collateral) or (ii) directly or indirectly make any voluntary prepayment of any
Senior Notes, purchase any Senior Notes, or effect any voluntary redemption of
any Senior Notes; provided, however, the foregoing shall not prohibit the
Borrower from prepaying, purchasing and redeeming Senior Notes (x) with the
proceeds of the issuance and sale of common stock of the Borrower so long as no
Default or Event of Default shall exist before or after giving effect thereto
and (y) after the Borrower's obligations under Section 4.19 of the Senior Note
Indenture have terminated pursuant to Section 4.19(d) of the Senior Note
Indenture so long as (I) no Revolving Loans are outstanding immediately prior to
and for 10 consecutive days immediately after such prepayment, purchase or
redemption, and (II) no Default or Event of Default shall exist before and after
giving effect thereto

            (b) The Borrower shall not, nor shall it permit any Subsidiary to,
prepay, purchase or redeem any Senior Notes with any Excess Cash Flow or any
amounts held in the Excess Cash Flow Escrow Account, pursuant to Section 4.19 of
the Senior Note Indenture unless (i) no Revolving Loans are outstanding
immediately prior to and for 10 consecutive days immediately after such
prepayment, purchase or redemption, and (ii) no Default or Event of Default
shall exist before and after giving effect thereto.

            (c) Any Senior Notes repurchased by the Borrower as permitted hereby
and not cancelled may not be resold by the Borrower.

         Section 8.22. Capital Expenditures. The Borrower shall not, nor shall
it permit any of the Guarantors to, incur Capital Expenditures in an amount in
excess of $20,000,000 in the aggregate during any fiscal year (the "Annual CapEx
Permitted Amount"); provided, however, that the Annual CapEx Permitted Amount
shall be increased by the amount, if any, by which the Annual CapEx Permitted
Amount for the immediately preceding fiscal year, computed without giving effect
to this proviso, exceeds the actual Capital Expenditures extended by the
Borrower and the Guarantors for such preceding fiscal year (the "CapEx
Adjustment"); provided, further, however, that the CapEx Adjustment shall in no
event exceed $2,500,000 for any fiscal year period.

                                      -53-

<PAGE>

         Section 8.23. Fixed Charge Coverage Ratio. As of the last day of each
fiscal quarter of the Borrower ending during each of the periods specified
below, the Borrower shall maintain a ratio of (a) EBITDA for the four fiscal
quarters of the Borrower then ENDED less Capital Expenditures not financed by
Capitalized Leases to (b) Fixed Charges for the same four fiscal quarters then
ended of not less:

<TABLE>
<CAPTION>
                                                          FIXED CHARGE COVERAGE
                                                          RATIO SHALL NOT BE LESS
FROM AND INCLUDING            TO AND INCLUDING                     THAN:
<S>                     <C>                               <C>
  The date hereof               June 30, 2003                   1.05 to 1.0

   July 1, 2003              September 30, 2003                 1.15 to 1.0

  October 1, 2003              March 31, 2004                   1.20 to 1.0

   April 1, 2004        Revolving Credit Termination            1.25 to 1.0
                                      Date
</TABLE>

         Section 8.24. Leverage Ratio. As of the last day of each fiscal quarter
of the Borrower ending during each of the periods specified below, the Borrower
shall not permit the Leverage Ratio at such time to be greater than:

<TABLE>
<CAPTION>
                                                          LEVERAGE RATIO SHALL NOT BE
FROM AND INCLUDING            TO AND INCLUDING                     MORE THAN:
<S>                     <C>                               <C>
  The date hereof              March 31, 2004                      5.0 to 1.0

   April 1, 2004               June 30, 2004                       4.75 to 1.0

   July 1, 2004             September 30, 2004                     4.5 to 1.0

  October 1, 2004           September 30, 2005                     4.0 to 1.0

  October 1, 2005           September 30, 2006                     3.75 to 1.0

  October 1, 2006           September 30, 2007                     3.25 to 1.0

  October 1, 2007       Revolving Credit Termination               2.75 to 1.0
                                  Date
</TABLE>

         Section 8.25. Net Worth. The Borrower shall, at all times during the
periods set forth below, maintain Net Worth of the Borrower and each Guarantor
determined on a consolidated basis in an amount not less than the sum of (a)
$85,000,000, (b) 75% of positive Net Income for each quarter of each fiscal year
of the Borrower ending on or after September 30, 2003 (without deduction for
losses) and (c) 90% of any subsequent incremental issuance of new equity
securities (whether common or preferred stock or otherwise), other than equities
issues in connection with the exercise of employee stock options and capital
stock issued to the seller of an acquired business in connection with an
acquisition permitted hereby.

                                      -54-

<PAGE>

         Section 8.26. Minimum Rental Merchandise Usage. The Borrower and the
Guarantors shall not permit the value of the Rental Merchandise under lease
pursuant to Rental Contracts as of the date of determination to be less than (i)
74% for each calendar month ending September 30, October 31 and November 30 in
each fiscal year and (ii) 77% as of the last day of all other calendar month in
each fiscal year, of the total value of Rental Merchandise held for rental under
rental contracts, as measured at the end of each calendar month of the Borrower
commencing June 30, 2003. For purposes of this Section 8.26, the value of the
Rental Merchandise shall be as it is recorded on the books and records of the
Borrower and the Guarantors, determined in accordance with GAAP and the value of
any jewelry shall be excluded from all calculations made. The Borrower and the
Guarantors shall not permit the value of idle jewelry to exceed 7.5% of the
total value of Rental Merchandise, as measured at the end of each calendar month
of the Borrower commencing June 30, 2003.

         Section 8.27. Monthly Minimum EBITDA. As of the last day of each
calendar month specified below, the Borrower shall not permit EBITDA for the
twelve (12) consecutive calendar months then ended to be less than:

<TABLE>
<CAPTION>
FOR THE MONTH ENDING                    MINIMUM EBITDA
<S>                                     <C>
June 2003                                $57,500,000

July 2003                                $56,000,000

August 2003                              $55,000,000

September 2003                           $53,000,000

October 2003                             $51,000,000

November 2003                            $51,000,000

December 2003                            $51,000,000

January 2004                             $50,000,000

February 2004                            $48,000,000

March 2004                               $48,000,000

April 2004                               $49,000,000

May 2004                                 $50,000,000

June 2004                                $52,000,000

July 2004                                $53,000,000

August 2004                              $54,000,000

September 2004                           $55,500,000

October 2004                             $56,500,000

November 2004                            $57,000,000

December 2004                            $58,000,000

January 2005                             $58,000,000

February 2005                            $59,000,000
</TABLE>

                                      -55-

<PAGE>

<TABLE>
<CAPTION>
FOR THE MONTH ENDING                  MINIMUM EBITDA
<S>                                   <C>
March 2005                             $59,000,000

April 2005                             $60,000,000

May 2005                               $60,000,000

June 2005                              $60,000,000

July 2005                              $60,000,000

August 2005                            $60,000,000

September 2005                         $60,000,000

October 2005                           $60,000,000

November 2005                          $60,000,000

December 2005                          $60,000,000

January 2006                           $60,000,000

February 2006                          $60,000,000

March 2006                             $62,500,000

April 2006                             $62,500,000

May 2006                               $62,500,000

June 2006                              $62,500,000

July 2006                              $62,500,000

August 2006                            $62,500,000

September 2006                         $62,500,000

October 2006                           $62,500,000

November 2006                          $62,500,000

December 2006                          $62,500,000

January 2007                           $65,000,000

February 2007                          $65,000,000

March 2007                             $65,000,000

April 2007                             $65,000,000

May 2007                               $65,000,000

June 2007                              $65,000,000

July 2007                              $65,000,000

August 2007                            $65,000,000

September 2007 and thereafter          $65,000,000
</TABLE>

                                      -56-

<PAGE>

         Section 8.28. Preferred Stock. The Borrower shall not, nor shall it
permit any Subsidiary to, amend or modify its articles of incorporation,
charter, by-laws, certificate of limited partnership, limited partnership
agreement, certificate of organization, organizational agreement or any other
agreement under which such Person is organized with respect to any terms or
conditions relating to the Preferred Stock.

SECTION 9.        EVENTS OF DEFAULT AND REMEDIES.

         Section 9.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:

                  (a) (i) default in the payment when due of all or any part of
         the principal of any Note (whether at the stated maturity thereof or at
         any other time provided for in this Agreement) or of any Reimbursement
         Obligation or (ii) default for a period of 5 Business Days in the
         payment of any interest or any fee or other Obligation payable
         hereunder or under any other Loan Document;

                  (b) default in the observance or performance of any covenant
         set forth in Sections 8.1, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.17,
         8.18, 8.21, 8.22, 8.23, 8.24, 8.25, 8.26, 8.27, or 8.28 hereof or of
         any provision in any Loan Document dealing with the use, disposition or
         remittance of the proceeds of Collateral or requiring the maintenance
         of insurance thereon;

                  (c) default in the observance or performance of any other
         provision hereof or of any other Loan Document which is not remedied
         within 30 days after the earlier of (i) the date on which such failure
         shall first become known to any officer of the Borrower or (ii) written
         notice thereof is given to the Borrower by the Administrative Agent;

                  (d) any representation or warranty made herein or in any other
         Loan Document or in any certificate furnished to the Administrative
         Agent or the Lenders pursuant hereto or thereto or in connection with
         any transaction contemplated hereby or thereby proves untrue in any
         material respect as of the date of the issuance or making or deemed
         making thereof;

                  (e) any event occurs or condition exists (other than those
         described in subsections (a) through (d) above) which is specified as
         an event of default under any of the other Loan Documents, or any of
         the Loan Documents shall for any reason not be or shall cease to be in
         full force and effect or is declared to be null and void, or any of the
         Collateral Documents shall for any reason fail to create a valid and
         perfected first priority Lien in favor of the Administrative Agent in
         any Collateral purported to be covered thereby except as expressly
         permitted by the terms thereof, or any Subsidiary takes any action for
         the purpose of terminating, repudiating or rescinding any Loan Document
         executed by it or any of its obligations thereunder;

                  (f) default shall occur under any Indebtedness for Borrowed
         Money issued, assumed or guaranteed by the Borrower or any Subsidiary
         aggregating in excess of

                                      -57-

<PAGE>

$1,000,000, or under any indenture, agreement or other instrument under which
the same may be issued, and such default shall continue for a period of time
sufficient to permit the acceleration of the maturity of any such Indebtedness
for Borrowed Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due (whether by
demand, lapse of time, acceleration or otherwise);

                  (g) any judgment or judgments, writ or writs or warrant or
         warrants of attachment, or any similar process or processes, shall be
         entered or filed against the Borrower or any Subsidiary, or against any
         of its Property, in an aggregate amount in excess of $1,000,000 (except
         to the extent fully covered by insurance pursuant to which the insurer
         has accepted liability therefor in writing), and which remains
         undischarged, unvacated, unbonded or unstayed for a period of 30 days;

                  (h) the Borrower or any Subsidiary, or any member of its
         Controlled Group, shall fail to pay when due an amount or amounts
         aggregating in excess of $1,000,000 which it shall have become liable
         to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
         intent to terminate a Plan or Plans having aggregate Unfunded Vested
         Liabilities in excess of $1,000,000 (collectively, a "Material Plan")
         shall be filed under Title IV of ERISA by the Borrower or any
         Subsidiary, or any other member of its Controlled Group, any plan
         administrator or any combination of the foregoing; or the PBGC shall
         institute proceedings under Title IV of ERISA to terminate or to cause
         a trustee to be appointed to administer any Material Plan or a
         proceeding shall be instituted by a fiduciary of any Material Plan
         against the Borrower or any Subsidiary, or any member of its Controlled
         Group, to enforce Section 515 or 4219(c)(5) of ERISA and such
         proceeding shall not have been dismissed within 30 days thereafter; or
         a condition shall exist by reason of which the PBGC would be entitled
         to obtain a decree adjudicating that any Material Plan must be
         terminated;

                  (i) any Change of Control shall occur;

                  (j) the Borrower or any Subsidiary shall (i) have entered
         involuntarily against it an order for relief under the United States
         Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
         inability to pay, its debts generally as they become due, (iii) make an
         assignment for the benefit of creditors, (iv) apply for, seek, consent
         to or acquiesce in, the appointment of a receiver, custodian, trustee,
         examiner, liquidator or similar official for it or any substantial part
         of its Property, (v) institute any proceeding seeking to have entered
         against it an order for relief under the United States Bankruptcy Code,
         as amended, to adjudicate it insolvent, or seeking dissolution, winding
         up, liquidation, reorganization, arrangement, adjustment or composition
         of it or its debts under any law relating to bankruptcy, insolvency or
         reorganization or relief of debtors or fail to file an answer or other
         pleading denying the material allegations of any such proceeding filed
         against it, (vi) take any action in furtherance of any matter described
         in parts (i) through (v) above, or (vii) fail to contest in good faith
         any appointment or proceeding described in Section 9.1(k) hereof;

                                      -58-

<PAGE>

                  (k) a custodian, receiver, trustee, examiner, liquidator or
         similar official shall be appointed for the Borrower or any Subsidiary,
         or any substantial part of any of its Property, or a proceeding
         described in Section 9.1(j)(v) shall be instituted against the Borrower
         or any Subsidiary, and such appointment continues undischarged or such
         proceeding continues undismissed or unstayed for a period of 60 days;
         or

                  (l) the Intercreditor Agreement shall for any reason not be or
         shall cease to be in full force and effect or is declared to be null
         and void, or any holder of any Senior Note (or security agent or
         trustee therefor) takes any action for the purpose of terminating,
         repudiating or rescinding the Intercreditor Agreement executed by it or
         any of its obligations thereunder; or

                  (m) any event occurs or condition exists which would require,
         or create an obligation of, the Borrower to redeem, prepay, purchase or
         otherwise retire any portion of the Preferred Stock; or

                  (n) any termination event, default or event of default shall
         occur under any agreement entered into with respect to any Hedging
         Liability in excess of $1,000,000, and such termination event, default
         or event of default shall continue for a period of time sufficient to
         permit the acceleration of the maturity of any such Hedging Liability
         (whether or not such maturity is in fact accelerated), or any such
         Hedging Liability shall not be paid when due (whether by demand, lapse
         of time, acceleration or otherwise).

         Section 9.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsection (j) or (k) of Section 9.1 hereof has occurred
and is continuing, the Administrative Agent shall, by written notice to the
Borrower: (a) if so directed by the Required Lenders, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which may be the date thereof); (b) if so directed by the
Required Lenders, declare the principal of and the accrued interest on all
outstanding Notes to be forthwith due and payable and thereupon all outstanding
Notes, including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable under the
Loan Documents without further demand, presentment, protest or notice of any
kind; and (c) if so directed by the Required Lenders, demand that the Borrower
immediately pay to the Administrative Agent the full amount then available for
drawing under each or any Letter of Credit, and the Borrower agrees to
immediately make such payment and acknowledges and agrees that the Lenders would
not have an adequate remedy at law for failure by the Borrower to honor any such
demand and that the Administrative Agent, for the benefit of the Lenders, shall
have the right to require the Borrower to specifically perform such undertaking
whether or not any drawings or other demands for payment have been made under
any Letter of Credit. The Administrative Agent, after giving notice to the
Borrower pursuant to Section 9.1(c) or this Section 9.2, shall also promptly
send a copy of such notice to the other Lenders, but the failure to do so shall
not impair or annul the effect of such notice.

         Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under

                                      -59-

<PAGE>

the Loan Documents without presentment, demand, protest or notice of any kind,
the obligation of the Lenders to extend further credit pursuant to any of the
terms hereof shall immediately terminate and the Borrower shall immediately pay
to the Administrative Agent the full amount then available for drawing under all
outstanding Letters of Credit, the Borrower acknowledging and agreeing that the
Lenders would not have an adequate remedy at law for failure by the Borrower to
honor any such demand and that the Lenders, and the Administrative Agent on
their behalf, shall have the right to require the Borrower to specifically
perform such undertaking whether or not any draws or other demands for payment
have been made under any of the Letters of Credit.

         Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.8(b) or under Section 9.2 or 9.3
above, the Borrower shall forthwith pay the amount required to be so prepaid, to
be held by the Administrative Agent as provided in subsection (b) below.

            (b) All amounts prepaid pursuant to subsection (a) above shall be
held by the Administrative Agent in one or more separate collateral accounts
(each such account, and the credit balances, properties, and any investments
from time to time held therein, and any substitutions for such account, any
certificate of deposit or other instrument evidencing any of the foregoing and
all proceeds of and earnings on any of the foregoing being collectively called
the "Collateral Account") as security for, and for application by the
Administrative Agent (to the extent available) to, the reimbursement of any
payment under any Letter of Credit then or thereafter made by the Administrative
Agent, and to the payment of the unpaid balance of any other Obligations. The
Collateral Account shall be held in the name of and subject to the exclusive
dominion and control of the Administrative Agent for the benefit of the
Administrative Agent, the Lenders, and the L/C Issuer. If and when requested by
the Borrower, the Administrative Agent shall invest funds held in the Collateral
Account from time to time in direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the
Administrative Agent is irrevocably authorized to sell investments held in the
Collateral Account when and as required to make payments out of the Collateral
Account for application to amounts due and owing from the Borrower to the L/C
Issuer, the Administrative Agent or the Lenders; provided, however, that if (i)
the Borrower shall have made payment of all such obligations referred to in
subsection (a) above, (ii) all relevant preference or other disgorgement periods
relating to the receipt of such payments have passed, and (iii) no Letters of
Credit, Commitments, Loans or other Obligations remain outstanding hereunder,
then the Administrative Agent shall release to the Borrower any remaining
amounts held in the Collateral Account.

         Section 9.5. Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 9.1(c) hereof promptly upon being requested
to do so by any Lender and shall thereupon notify all the Lenders thereof.

         Section 9.6. Expenses. The Borrower agrees to pay to the Administrative
Agent and each Lender, and any other holder of any Note outstanding hereunder,
all costs and expenses

                                      -60-

<PAGE>

reasonably incurred or paid by the Administrative Agent and such Lender or any
such holder, including reasonable attorneys' fees and court costs, in connection
with any Default or Event of Default by the Borrower hereunder or in connection
with the enforcement of any of the Loan Documents (including all such costs and
expenses incurred in connection with any proceeding under the United States
Bankruptcy Code involving the Borrower or any Subsidiary as a debtor
thereunder).

SECTION 10.       CHANGE IN CIRCUMSTANCES.

         Section 10.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any Lender to
make or continue to maintain any Eurodollar Loans or to perform its obligations
as contemplated hereby, such Lender shall promptly give notice thereof to the
Borrower and such Lender's obligations to make or maintain Eurodollar Loans
under this Agreement shall be suspended until it is no longer unlawful for such
Lender to make or maintain Eurodollar Loans. The Borrower shall prepay on demand
the outstanding principal amount of any such affected Eurodollar Loans, together
with all interest accrued thereon and all other amounts then due and payable to
such Lender under this Agreement; provided, however, subject to all of the terms
and conditions of this Agreement, the Borrower may then elect to borrow the
principal amount of the affected Eurodollar Loans from such Lender by means of
Base Rate Loans from such Lender, which Base Rate Loans shall not be made
ratably by the Lenders but only from such affected Lender.

         Section 10.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurodollar Loans:

                  (a) the Administrative Agent determines that deposits in U.S.
         Dollars (in the applicable amounts) are not being offered to it in the
         interbank eurodollar market for such Interest Period, or that by reason
         of circumstances affecting the interbank eurodollar market adequate and
         reasonable means do not exist for ascertaining the applicable LIBOR, or

                  (b) the Required Lenders advise the Administrative Agent that
         (i) LIBOR as determined by the Administrative Agent will not adequately
         and fairly reflect the cost to such Lenders of funding their Eurodollar
         Loans for such Interest Period or (ii) that the making or funding of
         Eurodollar Loans become impracticable,

then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make Eurodollar Loans shall be suspended.

         Section 10.3. Increased Cost and Reduced Return. (a) If, on or after
the date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or

                                      -61-

<PAGE>

comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:

                  (i)      shall subject any Lender (or its Lending Office) to
         any tax, duty or other charge with respect to its Eurodollar Loans, its
         Notes, its Letter(s) of Credit, or its participation in any thereof,
         any Reimbursement Obligations owed to it or its obligation to make
         Eurodollar Loans, issue a Letter of Credit, or to participate therein,
         or shall change the basis of taxation of payments to any Lender (or its
         Lending Office) of the principal of or interest on its Eurodollar
         Loans, Letter(s) of Credit, or participations therein or any other
         amounts due under this Agreement or any other Loan Document in respect
         of its Eurodollar Loans, Letter(s) of Credit, any participation
         therein, any Reimbursement Obligations owed to it, or its obligation to
         make Eurodollar Loans, or issue a Letter of Credit, or acquire
         participations therein (except for changes in the rate of tax on the
         overall net income of such Lender or its Lending Office imposed by the
         jurisdiction in which such Lender's principal executive office or
         Lending Office is located); or

                  (ii)     shall impose, modify or deem applicable any reserve,
         special deposit or similar requirement (including, without limitation,
         any such requirement imposed by the Board of Governors of the Federal
         Reserve System, but excluding with respect to any Eurodollar Loans any
         such requirement included in an applicable Eurodollar Reserve
         Percentage) against assets of, deposits with or for the account of, or
         credit extended by, any Lender (or its Lending Office) or shall impose
         on any Lender (or its Lending Office) or on the interbank market any
         other condition affecting its Eurodollar Loans, its Notes, its
         Letter(s) of Credit, or its participation in any thereof, any
         Reimbursement Obligation owed to it, or its obligation to make
         Eurodollar Loans, or to issue a Letter of Credit, or to participate
         therein;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall be obligated to pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction.

            (b) If, after the date hereof, any Lender or the Administrative
Agent shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has had the effect of reducing the rate of
return on such Lender's or such corporation's capital as a

                                      -62-

<PAGE>

consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within 15 days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.

            (c) A certificate of a Lender claiming compensation under this
Section 10.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive if reasonably determined. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.

         Section 10.4. Lending Offices. Each Lender may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Administrative Agent. To the extent reasonably possible, a
Lender shall designate an alternative branch or funding office with respect to
its Eurodollar Loans to reduce any liability of the Borrower to such Lender
under Section 10.3 hereof or to avoid the unavailability of Eurodollar Loans
under Section 10.2 hereof, so long as such designation is not otherwise
disadvantageous to the Lender.

         Section 10.5. Discretion of Lender as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder with respect to Eurodollar Loans shall be
made as if each Lender had actually funded and maintained each Eurodollar Loan
through the purchase of deposits in the interbank eurodollar market having a
maturity corresponding to such Loan's Interest Period, and bearing an interest
rate equal to LIBOR for such Interest Period.

SECTION 11.       THE ADMINISTRATIVE AGENT.

         Section 11.1. Appointment and Authorization of Administrative Agent.
Each Lender hereby appoints Harris Trust and Savings Bank as the Administrative
Agent under the Loan Documents and hereby authorizes the Administrative Agent to
take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. Without limiting the foregoing, the Administrative Agent is hereby
authorized to execute and deliver on behalf of the Lenders the Collateral
Documents. The Lenders expressly agree that the Administrative Agent is not
acting as a fiduciary of the Lenders in respect of the Loan Documents, the
Borrower or otherwise, and nothing herein or in any of the other Loan Documents
shall result in any duties or obligations on the Administrative Agent or any of
the Lenders except as expressly set forth herein.

                                      -63-

<PAGE>

         Section 11.2. Administrative Agent and its Affiliates. The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Affiliate of the Borrower as if it were not the Administrative Agent under
the Loan Documents. The term "Lender" as used herein and in all other Loan
Documents, unless the context otherwise clearly requires, includes the
Administrative Agent in its individual capacity as a Lender. References in
Section 1 hereof to the Administrative Agent's Loans, or to the amount owing to
the Administrative Agent for which an interest rate is being determined, refer
to the Administrative Agent in its individual capacity as a Lender.

         Section 11.3. Action by Administrative Agent. If the Administrative
Agent receives from the Borrower a written notice of an Event of Default
pursuant to Section 8.5 hereof, the Administrative Agent shall promptly give
each of the Lenders written notice thereof. The obligations of the
Administrative Agent under the Loan Documents are only those expressly set forth
therein. Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided in Sections 9.2 and
9.5. Upon the occurrence of an Event of Default, the Administrative Agent shall
take such action to enforce its Lien on the Collateral and to preserve and
protect the Collateral as may be directed by the Required Lenders. Unless and
until the Required Lenders give such direction, the Administrative Agent may
(but shall not be obligated to) take or refrain from taking such actions as it
deems appropriate and in the best interest of all the Lenders. In no event,
however, shall the Administrative Agent be required to take any action in
violation of applicable law or of any provision of any Loan Document, and the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder or under any other Loan Document unless it first
receives any further assurances of its indemnification from the Lenders that it
may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall be entitled to assume that no Default or Event of
Default exists unless notified in writing to the contrary by a Lender or the
Borrower. In all cases in which the Loan Documents do not require the
Administrative Agent to take specific action, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action thereunder. Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Loan Documents,
shall be binding upon all the Lenders and the holders of the Obligations.

         Section 11.4. Consultation with Experts. The Administrative Agent may
consult with legal counsel, independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.

         Section 11.5. Liability of Administrative Agent; Credit Decision.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with the Loan Documents: (i) with the consent or at

                                      -64-

<PAGE>

the request of the Required Lenders or (ii) in the absence of its own gross
negligence or willful misconduct. Neither the Administrative Agent nor any of
its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Borrower or any Subsidiary contained herein or in any other
Loan Document; (iii) the satisfaction of any condition specified in Section 7
hereof, except receipt of items required to be delivered to the Administrative
Agent; or (iv) the validity, effectiveness, genuineness, enforceability,
perfection, value, worth or collectibility hereof or of any other Loan Document
or of any other documents or writing furnished in connection with any Loan
Document or of any Collateral; and the Administrative Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence. The Administrative Agent may execute any of its
duties under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the Borrower, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Administrative Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties. In particular and
without limiting any of the foregoing, the Administrative Agent shall have no
responsibility for confirming the accuracy of any compliance certificate or
other document or instrument received by it under the Loan Documents. The
Administrative Agent may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with the Administrative Agent
signed by such payee in form satisfactory to the Administrative Agent. Each
Lender acknowledges that it has independently and without reliance on the
Administrative Agent or any other Lender, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Borrower in the manner set forth
in the Loan Documents. It shall be the responsibility of each Lender to keep
itself informed as to the creditworthiness of the Borrower and its Subsidiaries,
and the Administrative Agent shall have no liability to any Lender with respect
thereto.

         Section 11.6. Indemnity. The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrower and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. The obligations of the
Lenders under this Section shall survive termination of this Agreement. The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.

         Section 11.7. Resignation of Administrative Agent and Successor
Administrative Agent. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders

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<PAGE>

and the Borrower. Upon any such resignation of the Administrative Agent, the
Required Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent's giving of notice of resignation then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which may be any Lender hereunder or any commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $200,000,000. Upon the
acceptance of its appointment as the Administrative Agent hereunder, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights and duties of the retiring Administrative Agent under the Loan
Documents, and the retiring Administrative Agent shall be discharged from its
duties and obligations thereunder. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 11
and all protective provisions of the other Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent, but no successor Administrative Agent shall in any event
be liable or responsible for any actions of its predecessor. If the
Administrative Agent resigns and no successor is appointed, the rights and
obligations of such Administrative Agent shall be automatically assumed by the
Required Lenders and (i) the Borrower shall be directed to make all payments due
each Lender hereunder directly to such Lender and (ii) the Administrative
Agent's rights in the Collateral Documents shall be assigned without
representation, recourse or warranty to the Lenders as their interests may
appear.

         Section 11.8. L/C Issuer. The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith. The L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Section 11 with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
Applications pertaining to such Letters of Credit as fully as if the term
"Administrative Agent", as used in this Section 11, included the L/C Issuer with
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to such L/C Issuer.

         Section 11.9. Hedging Liability and Funds Transfer and Deposit Account
Liability Arrangements. By virtue of a Lender's execution of this Agreement or
an assignment agreement pursuant to Section 13.12 hereof, as the case may be,
any Affiliate of such Lender with whom the Borrower or any Subsidiary has
entered into an agreement creating Hedging Liability or Funds Transfer and
Deposit Account Liability shall be deemed a Lender party hereto for purposes of
any reference in a Loan Document to the parties for whom the Administrative
Agent is acting, it being understood and agreed that the rights and benefits of
such Affiliate under the Loan Documents consist exclusively of such Affiliate's
right to share in payments and collections out of the Collateral and the
Guaranties as more fully set forth in Section 3.1 hereof. In connection with any
such distribution of payments and collections, the Administrative Agent shall be
entitled to assume no amounts are due to any Lender or its Affiliate with
respect to Hedging Liability or Funds Transfer and Deposit Account Liability
unless such Lender has notified the Agent in writing of the amount of any such
liability owed to it or its Affiliate prior to such distribution.

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<PAGE>

         Section 11.10. Authorization to Release or Subordinate or Limit Liens.
The Administrative Agent is hereby irrevocably authorized by each of the Lenders
to (a) release any Lien covering any Collateral that is sold, transferred, or
otherwise disposed of in accordance with the terms and conditions of this
Agreement and the relevant Collateral Documents (including a sale, transfer, or
disposition permitted by the terms of Section 8.10 hereof or which has otherwise
been consented to in accordance with Section 12.13 hereof), (b) release or
subordinate any Lien on Collateral consisting of goods financed with purchase
money indebtedness or under a Capital Lease to the extent such purchase money
indebtedness or Capitalized Lease Obligation, and the Lien securing the same,
are permitted by Sections 8.7(b) and 8.8(d) hereof, and (c) to reduce or limit
the amount of the indebtedness secured by any particular item of Collateral to
an amount not less than the estimated value thereof to the extent necessary to
reduce mortgage registry, filing and similar tax.

         Section 11.11. Syndication Agent and Lead Arranger. (a) In acting under
or by virtue of this Agreement, the Syndication Agent shall be entitled to all
the rights, authority, privileges and immunities provided to Administrative
Agent in this Section 11, all of which such provisions are incorporated by
reference herein with the same force and effect as if set forth herein. The
Syndication Agent hereby disclaims any representation or warranty to the Lenders
concerning the perfection of the security interest granted hereunder or the
value of the Collateral.

            (b) In acting under or by virtue of this Agreement, the Lead
Arranger shall be entitled to all the rights, authority, privileges and
immunities provided to Administrative Agent in this Section 11, all of which
such provisions are incorporated by reference herein with the same force and
effect as if set forth herein. The Lead Arranger hereby disclaims any
representation or warranty to the Lenders concerning the perfection of the
security interest granted hereunder or the value of the Collateral.

         Section 11.12. Designation of Additional Agents. The Administrative
Agent shall have the continuing right, for purposes hereof, at any time and from
time to time to designate one or more of the Lenders (and/or its or their
Affiliates) as "syndication agents," "documentation agents," "arrangers," or
other designations for purposes hereto, but such designation shall have no
substantive effect, and such Lenders and their Affiliates shall have no
additional powers, duties or responsibilities as a result thereof.

         Section 11.13. Authorization to Enter into Intercreditor Agreement.
The Administrative Agent is hereby irrevocably authorized by each of the Lenders
to execute and deliver the Intercreditor Agreement on behalf of each of the
Lenders and to take such action and exercise such powers under the Intercreditor
Agreement as the Administrative Agent considers appropriate, provided, that the
Administrative Agent shall not amend the Intercreditor Agreement, or consent to
a waiver of any provision of the Intercreditor Agreement, unless such amendment
or waiver is agreed to in writing by the Required Lenders. Each Lender
acknowledges and agrees that it will be bound by the terms and conditions of the
Intercreditor Agreement upon the execution and delivery thereof by the
Administrative Agent.

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<PAGE>

SECTION 12.       THE GUARANTEES.

         Section 12.1. The Guarantees. To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
the Borrower by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Subsidiary
(individually a "Guarantor" and collectively the "Guarantors," including
Subsidiaries formed or acquired after the Closing Date executing an Additional
Guarantor Supplement in the form attached hereto as Exhibit F or such other form
acceptable to the Administrative Agent) hereby unconditionally and irrevocably
guarantee jointly and severally to the Administrative Agent, the Lenders, and
their Affiliates, the due and punctual payment of all present and future
Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, including, but not limited to, the due and punctual payment of
principal of and interest on the Notes, the Reimbursement Obligations, and the
due and punctual payment of all other Obligations now or hereafter owed by the
Borrower under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, according to
the terms hereof and thereof. In case of failure by the Borrower punctually to
pay any Obligations, Hedging Liability, or Funds Transfer and Deposit Account
Liability guaranteed hereby, each Guarantor hereby unconditionally agrees to
make such payment or to cause such payment to be made punctually as and when the
same shall become due and payable, whether at stated maturity, by acceleration,
or otherwise, and as if such payment were made by the Borrower.

         Section 12.2. Guarantee Unconditional. The obligations of each
Guarantor under this Section 12 shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged, or
otherwise affected by:

                  (a) any extension, renewal, settlement, compromise, waiver,
         or release in respect of any obligation of the Borrower or of any other
         guarantor under this Agreement or any other Loan Document or by
         operation of law or otherwise;

                  (b) any modification or amendment of or supplement to this
         Agreement or any other Loan Document;

                  (c) any change in the corporate existence, structure, or
         ownership of, or any insolvency, bankruptcy, reorganization, or other
         similar proceeding affecting, the Borrower, any other guarantor, or any
         of their respective assets, or any resulting release or discharge of
         any obligation of the Borrower or of any other guarantor contained in
         any Loan Document;

                  (d) the existence of any claim, set-off, or other rights which
         the Borrower or any other guarantor may have at any time against the
         Administrative Agent, any Lender, or any other Person, whether or not
         arising in connection herewith;

                  (e) any failure to assert, or any assertion of, any claim or
         demand or any exercise of, or failure to exercise, any rights or
         remedies against the Borrower, any other guarantor, or any other Person
         or Property;

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<PAGE>

                  (f) any application of any sums by whomsoever paid or
         howsoever realized to any obligation of the Borrower, regardless of
         what obligations of the Borrower remain unpaid;

                  (g) any invalidity or unenforceability relating to or against
         the Borrower or any other guarantor for any reason of this Agreement or
         of any other Loan Document or any provision of applicable law or
         regulation purporting to prohibit the payment by the Borrower or any
         other guarantor of the principal of or interest on any Note or any
         Reimbursement Obligation or any other amount payable under the Loan
         Documents; or

                  (h) any other act or omission to act or delay of any kind by
         the Administrative Agent, any Lender, or any other Person or any other
         circumstance whatsoever that might, but for the provisions of this
         paragraph, constitute a legal or equitable discharge of the obligations
         of any Guarantor under this Section 12.

         Section 12.3. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 12 shall
remain in full force and effect until the Commitments are terminated, all
Letters of Credit have expired, and the principal of and interest on the Notes
and all other amounts payable by the Borrower and the Guarantors under this
Agreement and all other Loan Documents and, if then outstanding and unpaid, all
Hedging Liability and Funds Transfer and Deposit Account Liability shall have
been paid in full. If at any time any payment of the principal of or interest on
any Note or any Reimbursement Obligation or any other amount payable by the
Borrower or any Guarantor under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of the Borrower or of any guarantor, or otherwise, each
Guarantor's obligations under this Section 12 with respect to such payment shall
be reinstated at such time as though such payment had become due but had not
been made at such time.

         Section 12.4. Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall have been paid in full subsequent
to the termination of all the Commitments and expiration of all Letters of
Credit. If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time prior to the later of (x) the payment in full of
the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability and all other amounts payable by the Borrower hereunder and the other
Loan Documents and (y) the termination of the Commitments and expiration of all
Letters of Credit, such amount shall be held in trust for the benefit of the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent for the benefit of the Lenders or be credited and applied
upon the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability, whether matured or unmatured, in accordance with the terms of this
Agreement.

         Section 12.5. Waivers. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender, or any other Person against the Borrower,
another guarantor, or any other Person.

                                      -69-

<PAGE>

         Section 12.6. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 12 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor's
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.

         Section 12.7. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or any other
Loan Document, or under any agreement establishing Hedging Liability or Funds
Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement or the other Loan Documents,
or under any agreement establishing Hedging Liability or Funds Transfer and
Deposit Account Liability, shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by the Administrative Agent made at the request of
the Required Lenders.

         Section 12.8. Benefit to Guarantors. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extension of credit hereunder.

         Section 12.9. Guarantor Covenants. Each Guarantor shall take such
action as the Borrower is required by this Agreement to cause such Guarantor to
take, and shall refrain from taking such action as the Borrower is required by
this Agreement to prohibit such Guarantor from taking.

SECTION 13.       MISCELLANEOUS.

         Section 13.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 13.1(b) hereof, each
payment by the Borrower under this Agreement or the other Loan Documents shall
be made without withholding for or on account of any present or future taxes
(other than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which the Borrower is domiciled, any jurisdiction from which the
Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required, the
Borrower shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Lender and the Administrative
Agent free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender or the Administrative Agent (as
the case may be) would have received had such withholding not been made. If the
Administrative Agent or any Lender pays any amount in respect of any such taxes,
penalties or interest, the Borrower shall reimburse the Administrative Agent or
such Lender for that payment on demand in the currency in which such payment was
made. If the Borrower pays any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified copies
thereof to the Lender or Administrative Agent on whose account such withholding
was made (with a copy to the Administrative Agent if not the recipient of the
original) on or before the thirtieth day after payment.

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<PAGE>

            (b) U.S. Withholding Tax Exemptions. Each Lender that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the Administrative Agent on or before the
date the initial Credit Event is made hereunder or, if later, the date such
financial institution becomes a Lender hereunder, two duly completed and signed
copies of (i) either Form W-8 BEN (relating to such Lender and entitling it to a
complete exemption from withholding under the Code on all amounts to be received
by such Lender, including fees, pursuant to the Loan Documents and the
Obligations) or Form W-8 ECI (relating to all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Obligations) of
the United States Internal Revenue Service or (ii) solely if such Lender is
claiming exemption from United States withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a Form W-8
BEN, or any successor form prescribed by the Internal Revenue Service, and a
certificate representing that such Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code). Thereafter and from time to time, each Lender shall
submit to the Borrower and the Administrative Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) and such other certificates as may be (i) requested by the Borrower
in a written notice, directly or through the Administrative Agent, to such
Lender and (ii) required under then-current United States law or regulations to
avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents or the Obligations. Upon the request of the Borrower or the
Administrative Agent, each Lender that is a United States person (as such term
is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower and
the Administrative Agent a certificate to the effect that it is such a United
States person.

            (c) Inability of Lender to Submit Forms. If any Lender determines,
as a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrower or the Administrative Agent any form or certificate that such
Lender is obligated to submit pursuant to subsection (b) of this Section 13.1 or
that such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrower and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.

         Section 13.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Administrative Agent or any Lender or on the part of the holder
or holders of any of the Obligations in the exercise of any power or right under
any Loan Document shall operate as a waiver thereof or as an acquiescence in any
default, nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The rights and remedies hereunder of the Administrative Agent, the
Lenders and of the holder or holders of any of the Obligations are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.

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<PAGE>

         Section 13.3. Non-Business Days. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.

         Section 13.4. Documentary Taxes. The Borrower agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.

         Section 13.5. Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.

         Section 13.6. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.11, 10.3, and 13.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.

         Section 13.7. Sharing of Set-Off. Each Lender agrees with each other
Lender a party hereto that if such Lender shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise, on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such Obligations then outstanding to the Lenders, then such
Lender shall purchase for cash at face value, but without recourse, ratably from
each of the other Lenders such amount of the Loans or Reimbursement Obligations,
or participations therein, held by each such other Lenders (or interest therein)
as shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest. For purposes
of this Section, amounts owed to or recovered by the L/C Issuer in connection
with Reimbursement Obligations in which Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the L/C Issuer
as a Lender hereunder.

         Section 13.8. Notices. Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth below, or such
other address or telecopier number as such party may hereafter specify by notice

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<PAGE>

to the Administrative Agent and the Borrower given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrower to:

                           Rent-Way, Inc.
                           One Rent-Way Place
                           Erie, Pennsylvania 16505
                           Attention:    Chief Financial Officer
                           Telephone:    (814) 455-5378
                           Telecopy:     (814) 461-5401

Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.

         Section 13.9. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together shall be
deemed to constitute one and the same instrument.

         Section 13.10. Successors and Assigns. This Agreement shall be binding
upon the Borrower and the Guarantors and their successors and assigns, and shall
inure to the benefit of the Administrative Agent and each of the Lenders and the
benefit of their respective successors and assigns, including any subsequent
holder of any of the Obligations. The Borrower and the Guarantors may not assign
any of their rights or obligations under any Loan Document without the written
consent of all of the Lenders.

         Section 13.11. Participants. Each Lender shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Lender at any time and from time to time to one
or more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant. Any agreement pursuant to which such
participation is granted shall provide that the granting Lender shall retain the
sole right and responsibility to enforce the obligations of the Borrower under
this Agreement and the other Loan Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Loan Documents, except that such agreement may provide that such Lender will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation in
which such participant has an interest.

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<PAGE>

Any party to which such a participation has been granted shall have the benefits
of Section 1.11 and Section 10.3 hereof. The Borrower authorizes each Lender to
disclose to any participant or prospective participant under this Section any
financial or other information pertaining to the Borrower or any Subsidiary.

         Section 13.12. Assignments. (a) Each Lender shall have the right at any
time, with the prior consent of the Administrative Agent and, so long as no
Event of Default then exists, the Borrower (which consent of the Borrower shall
not be unreasonably withheld) to sell, assign, transfer or negotiate all or any
part of its rights and obligations under the Loan Documents (including, without
limitation, the indebtedness evidenced by the Notes then held by such assigning
Lender, together with an equivalent percentage of its obligation to make Loans
and participate in Letters of Credit) to one or more commercial banks or other
financial institutions or investors, provided that, unless otherwise agreed to
by the Administrative Agent, such assignment shall be of a fixed percentage (and
not by its terms of varying percentage) of the assigning Lender's rights and
obligations under the Loan Documents; provided, however, that in order to make
any such assignment (i) unless the assigning Lender is assigning all of its
Commitments, outstanding Loans and interests in Letters of Credit Obligations,
the assigning Lender shall retain at least $5,000,000 in unused Commitments,
outstanding Loans and interests in Letters of Credit, (ii) the assignee Lender
shall have Commitments, outstanding Loans and interests in Letters of Credit of
at least $5,000,000, (iii) each such assignment shall be evidenced by a written
agreement (substantially in the form attached hereto as Exhibit G or in such
other form acceptable to the Administrative Agent) executed by such assigning
Lender, such assignee Lender or Lenders, the Administrative Agent and, if
required as provided above, the Borrower, which agreement shall specify in each
instance the portion of the Obligations which are to be assigned to the assignee
Lender and the portion of the Commitments of the assigning Lender to be assumed
by the assignee Lender, and (iv) the assigning Lender shall pay to the
Administrative Agent a processing fee of $3,500 and any out-of-pocket attorneys'
fees and expenses incurred by the Administrative Agent in connection with any
such assignment agreement. Any such assignee shall become a Lender for all
purposes hereunder to the extent of the rights and obligations under the Loan
Documents it assumes and the assigning Lender shall be released from its
obligations, and will have released its rights, under the Loan Documents to the
extent of such assignment. Each Lender that hereafter becomes a party to this
Agreement acknowledges and agrees that it (x) has received a complete and
accurate copy of the Intercreditor Agreement, (y) will be bound by the terms and
conditions of the Intercreditor Agreement and (z) appoints and authorizes the
Administrative Agent to take such action and exercise such powers under the
Intercreditor Agreement as the Administrative Agent considers appropriate. The
address for notices to such assignee Lender shall be as specified in the
assignment agreement executed by it. Promptly upon the effectiveness of any such
assignment agreement, the Borrower shall execute and deliver replacement Notes
to the assignee Lender and the assigning Lender in the respective amounts of
their Commitments (or assigned principal amounts, as applicable) after giving
effect to the reduction occasioned by such assignment (all such Notes to
constitute "Notes" for all purposes of the Loan Documents), and the assignee
Lender shall thereafter surrender to the Borrower its old Notes. The Borrower
authorizes each Lender to disclose to any purchaser or prospective purchaser of
an interest in the Loans and interest in Letters of Credit owed to it or its
Commitments under this Section any financial or other information pertaining to
the Borrower or any Subsidiary.

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<PAGE>

            (b) Any Lender may at any time pledge or grant a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any such pledge or grant to a Federal Reserve Bank,
and this Section shall not apply to any such pledge or grant of a security
interest; provided that no such pledge or grant of a security interest shall
release a Lender from any of its obligations hereunder or substitute any such
pledgee or secured party for such Lender as a party hereto; provided further,
however, the right of any such pledgee or grantee (other than any Federal
Reserve Bank) to further transfer all or any portion of the rights pledged or
granted to it, whether by means of foreclosure or otherwise, shall be at all
times subject to the terms of this Agreement.

         Section 13.13. Amendments. (a) Any provision of this Agreement or the
other Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (1) the Borrower, (2) the Required
Lenders, and (3) if the rights or duties of the Administrative Agent are
affected thereby, the Administrative Agent; provided that:

                  (i)   no amendment or waiver pursuant to this Section 13.13
            shall (A) increase any Commitment of any Lender without the consent
            of such Lender or (B) reduce the amount of or postpone the date for
            any scheduled payment of any principal of or interest on any Loan or
            of any Reimbursement Obligation (for the sake of clarity, the
            reference to "scheduled payment" in this Section 13.13(i)(B) shall
            not be deemed to include any mandatory prepayment pursuant to
            Section 1.8 hereof) or of any fee payable hereunder without the
            consent of the Lender to which such payment is owing or which has
            committed to make such Loan or Letter of Credit (or participate
            therein) hereunder; and

                  (ii)  no amendment or waiver pursuant to this Section 13.13
            shall, unless signed by each Lender, increase the aggregate
            Commitments of the Lenders, change the definitions of Revolving
            Credit Termination Date or Required Lenders, change the provisions
            of this Section 13.13, release any material guarantor or any
            substantial part of the Collateral (except as otherwise provided for
            in the Loan Documents), or affect the number of Lenders required to
            take any action hereunder or under any other Loan Document.

            (b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement which is
subject to a vote by the Required Lenders pursuant to Section 13.13(a), the
consent of the Required Lenders is obtained but the consent of one or more of
such other Lenders whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described below, to replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to Section 1.13 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided, that in any event, the Borrower shall not have the right
to replace a Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
proviso to Section 13.12(a).

         Section 13.14. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.

                                      -75-

<PAGE>

         Section 13.15. Costs and Expenses; Indemnification. (a) The Borrower
agrees to pay all costs and expenses of the Administrative Agent in connection
with the preparation, negotiation, syndication, and administration of the Loan
Documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent, in connection with the preparation and
execution of the Loan Documents, and any amendment, waiver or consent related
thereto, whether or not the transactions contemplated herein are consummated,
together with any fees and charges suffered or incurred by the Administrative
Agent in connection with periodic environmental audits, fixed asset appraisals,
title insurance policies, collateral filing fees and lien searches. The Borrower
further agrees to indemnify the Administrative Agent, each Lender, and their
respective directors, officers, employees, agents, financial advisors, and
consultants against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all reasonable expenses
of litigation or preparation therefor, whether or not the indemnified Person is
a party thereto, or any settlement arrangement arising from or relating to any
such litigation) which any of them may pay or incur arising out of or relating
to any Loan Document or any of the transactions contemplated thereby or the
direct or indirect application or proposed application of the proceeds of any
Loan or Letter of Credit, other than those which arise from the gross negligence
or willful misconduct of the party claiming indemnification. The Borrower, upon
demand by the Administrative Agent or a Lender at any time, shall reimburse the
Administrative Agent or such Lender for any legal or other expenses incurred in
connection with investigating or defending against any of the foregoing
(including any settlement costs relating to the foregoing) except if the same is
directly due to the gross negligence or willful misconduct of the party to be
indemnified. The obligations of the Borrower under this Section shall survive
the termination of this Agreement.

            (b) The Borrower unconditionally agrees to forever indemnify, defend
and hold harmless, and covenants not to sue for any claim for contribution
against, the Administrative Agent and the Lenders for any damages, costs, loss
or expense, including without limitation, response, remedial or removal costs,
arising out of any of the following: (i) any presence, release, threatened
release or disposal of any hazardous or toxic substance or petroleum by the
Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (ii) the operation or violation of any
environmental law, whether federal, state, or local, and any regulations
promulgated thereunder, by the Borrower or any Subsidiary or otherwise occurring
on or with respect to its Property (whether owned or leased), (iii) any claim
for personal injury or property damage in connection with the Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), and (iv) the inaccuracy or breach of any environmental
representation, warranty or covenant by the Borrower or any Subsidiary made
herein or in any other Loan Document evidencing or securing any Obligations or
setting forth terms and conditions applicable thereto or otherwise relating
thereto, except for damages arising from the willful misconduct or gross
negligence of the party claiming indemnification. This indemnification shall
survive the payment and satisfaction of all Obligations and the termination of
this Agreement, and shall remain in force beyond the expiration of any
applicable statute of limitations and payment or satisfaction in full of any
single claim under this indemnification. This indemnification shall be binding
upon the successors and assigns of the Borrower and shall inure to the benefit
of Administrative Agent and the Lenders directors, officers, employees, agents,
and collateral trustees, and their successors and assigns.

                                      -76-

<PAGE>

         Section 13.16. Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender and each subsequent
holder of any Obligation is hereby authorized by the Borrower and each Guarantor
at any time or from time to time, without notice to the Borrower or such
Guarantor or to any other Person, any such notice being hereby expressly waived,
to set-off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts, and
in whatever currency denominated) and any other indebtedness at any time held or
owing by that Lender or that subsequent holder to or for the credit or the
account of the Borrower or such Guarantor, whether or not matured, against and
on account of the Obligations of the Borrower or such Guarantor to that Lender
or that subsequent holder under the Loan Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with the
Loan Documents, irrespective of whether or not (a) that Lender or that
subsequent holder shall have made any demand hereunder or (b) the principal of
or the interest on the Loans or Notes and other amounts due hereunder shall have
become due and payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.

         Section 13.17. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior agreements, whether written or oral, with respect thereto
are superseded hereby.

         Section 13.18. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois.

         Section 13.19. Severability of Provisions. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and the other Loan Documents may be
exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.

         Section 13.20. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document ("Excess Interest"). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) neither the Borrower nor any guarantor or endorser shall be obligated to pay
any Excess Interest, (c) any Excess Interest that the Administrative Agent or
any

                                      -77-

<PAGE>

Lender may have received hereunder shall, at the option of the Administrative
Agent, be (i) applied as a credit against the then outstanding principal amount
of Obligations hereunder and accrued and unpaid interest thereon (not to exceed
the maximum amount permitted by applicable law), (ii) refunded to the Borrower,
or (iii) any combination of the foregoing, (d) the interest rate payable
hereunder or under any other Loan Document shall be automatically subject to
reduction to the maximum lawful contract rate allowed under applicable usury
laws (the "Maximum Rate"), and this Agreement and the other Loan Documents shall
be deemed to have been, and shall be, reformed and modified to reflect such
reduction in the relevant interest rate, and (e) neither the Borrower nor any
guarantor or endorser shall have any action against the Administrative Agent or
any Lender for any damages whatsoever arising out of the payment or collection
of any Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any of Borrower's Obligations is calculated at the Maximum Rate
rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on the Borrower's Obligations shall remain at the Maximum Rate until the Lenders
have received the amount of interest which such Lenders would have received
during such period on the Borrower's Obligations had the rate of interest not
been limited to the Maximum Rate during such period.

         Section 13.21. Construction. Nothing contained herein shall be deemed
or construed to permit any act or omission which is prohibited by the terms of
any Collateral Document, the covenants and agreements contained herein being in
addition to and not in substitution for the covenants and agreements contained
in the Collateral Documents.

         Section 13.22. Lender's Obligations Several. The obligations of the
Lenders hereunder are several and not joint. Nothing contained in this Agreement
and no action taken by the Lenders pursuant hereto shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.

         Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial. The
Borrower and the Guarantors hereby submit to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby. The Borrower and
the Guarantors irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. THE BORROWER,
THE GUARANTORS, THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

                           [SIGNATURE PAGES TO FOLLOW]

                                      -78-

<PAGE>

         This Agreement is entered into between us for the uses and purposes
hereinabove set forth as of the date first above written.

                                        "BORROWER"

                                        RENT-WAY, INC.

                                        By /s/ William E. Morgenstern

                                           Name   William E. Morgenstern
                                                _______________________________
                                           Title  Chief Executive Officer
                                                _______________________________

                                        "GUARANTORS"

                                        RENT-WAY OF TOMORROW, INC.

                                        By /s/ William E. Morgenstern

                                           Name   William E. Morgenstern
                                                _______________________________
                                           Title  President
                                                _______________________________

                                        RENT-WAY OF MICHIGAN, INC.

                                        By /s/ William E. Morgenstern

                                           Name   William E. Morgenstern
                                                _______________________________
                                           Title  President
                                                _______________________________

                                        ACTION RENT-TO-OWN HOLDINGS OF
                                           SOUTH CAROLINA, INC.

                                        By /s/ William E. Morgenstern

                                           Name   William E. Morgenstern
                                                _______________________________
                                           Title  President
                                                _______________________________

                                        RENT-WAY DEVELOPMENTS, INC.

                                        By /s/ William E. Morgenstern

                                           Name   William E. Morgenstern
                                                _______________________________
                                           Title  President
                                                _______________________________

                                       S-1

<PAGE>

                                        RENT-WAY OF TTIG, L.P.

                                        By   /s/ William E. Morgenstern

                                           Name  William E. Morgenstern
                                                 ______________________________

                                                 President
                                           Title ______________________________

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       S-2

<PAGE>

                                        "LENDERS"

                                        HARRIS TRUST AND SAVINGS BANK, in its
                                          individual capacity as a Lender, as
                                          L/C Issuer, and as Administrative
                                          Agent

                                        By     /s/ Thad Rasche

                                                 Thad Rasche
                                           Name  ______________________________

                                                 Vice President
                                           Title ______________________________

                                        Address:

                                        111 West Monroe Street
                                        Chicago, Illinois 60603
                                        Attention: Thad Rasche
                                        Telecopy:  (312) 461-5225
                                        Telephone: (312) 461-5739

                                        BANK OF MONTREAL, in its individual
                                          capacity as a Lender and as Lead
                                          Arranger

                                        By  /s/  Daniel J. Gresla

                                                 Daniel J. Gresla
                                           Name _______________________________

                                                 Managing Director
                                           Title ______________________________

                                        Address:

                                        111 West Monroe Street
                                        Chicago, Illinois 60603
                                        Attention: Syndications
                                        Telecopy:  (312) 750-3834
                                        Telephone: (312) 750-3759

                                       S-3

<PAGE>

                                        NATIONAL CITY BANK OF PENNSYLVANIA, in
                                          its individual capacity as a Lender
                                          and as Syndication Agent

                                        By /s/  Alan M. Zang

                                                Alan M. Zang
                                           Name________________________________

                                                Senior VP
                                           Title_______________________________

                                        Address:

                                        National City Center
                                        20 Stanwix Street
                                        Pittsburgh, PA 15222
                                        Attention: Alan M. Zang, Senior VP
                                        Telecopy:  (412) 644-6224
                                        Telephone: (412) 644-8426

                                       S-4

<PAGE>

                                    EXHIBIT A

                            NOTICE OF PAYMENT REQUEST

                                     [Date]

[Name of Lender]
[Address]

Attention:

         Reference is made to the Credit Agreement, dated as of June 2, 2003,
among Rent-Way, Inc., the Lenders party thereto, and Harris Trust and Savings
Bank, as Administrative Agent (the "Credit Agreement"). Capitalized terms used
herein and not defined herein have the meanings assigned to them in the Credit
Agreement. [THE BORROWER HAS FAILED TO PAY ITS REIMBURSEMENT OBLIGATION IN THE
AMOUNT OF $____________. YOUR REVOLVER PERCENTAGE OF THE UNPAID REIMBURSEMENT
OBLIGATION IS $_____________] OR [__________________________ HAS BEEN REQUIRED
TO RETURN A PAYMENT BY THE BORROWER OF A REIMBURSEMENT OBLIGATION IN THE AMOUNT
OF $_______________. YOUR REVOLVER PERCENTAGE OF THE RETURNED REIMBURSEMENT
OBLIGATION IS $_______________.]

                                        Very truly yours,

                                        HARRIS TRUST AND SAVINGS BANK,
                                        as L/C Issuer

                                        By
                                           Name________________________________
                                           Title_______________________________

<PAGE>

                                    EXHIBIT B

                               NOTICE OF BORROWING

                                                  Date:__________________, ____

To:      Harris Trust and Savings Bank, as Administrative Agent for the Lenders
         parties to the Credit Agreement dated as of June 2, 2003 (as extended,
         renewed, amended or restated from time to time, the "Credit
         Agreement"), among Rent-Way, Inc., certain Lenders which are
         signatories thereto, and Harris Trust and Savings Bank, as
         Administrative Agent.

Ladies and Gentlemen:

         The undersigned, ______________________________ (the "Borrower"),
refers to the Credit Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably, pursuant to Section
1.5 of the Credit Agreement, of the Borrowing specified below:

                  1. The Business Day of the proposed Borrowing is ___________,
         ____.

                  2. The aggregate amount of the proposed Borrowing is
         $______________.

                  3. The Borrowing is being advanced under the Revolving Credit.

                  4. The Borrowing is to be comprised of $___________ of [BASE
         RATE] [EURODOLLAR] Loans.

                  [5. THE DURATION OF THE INTEREST PERIOD FOR THE EURODOLLAR
         LOANS INCLUDED IN THE BORROWING SHALL BE ____________ MONTHS.]

         The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:

                  (a) the representations and warranties of the Borrower
         contained in Section 6 of the Credit Agreement are true and correct as
         though made on and as of such date (except to the extent such
         representations and warranties relate to an earlier date, in which case
         they are true and correct as of such date); and

                  (b) no Default or Event of Default has occurred and is
         continuing or would result from such proposed Borrowing.

                                        RENT-WAY, INC.

                                        By
                                           Name________________________________

<PAGE>

                                           Title_______________________________

                                       S-2

<PAGE>

                                    EXHIBIT C

                        NOTICE OF CONTINUATION/CONVERSION

                                                        Date: ____________, ____

To:    Harris Trust and Savings Bank, as Administrative Agent for the Lenders
       parties to the Credit Agreement dated as of June 2, 2003 (as extended,
       renewed, amended or restated from time to time, the "Credit Agreement")
       among Rent-Way, Inc., certain Lenders which are signatories thereto, and
       Harris Trust and Savings Bank, as Administrative Agent

Ladies and Gentlemen:

         The undersigned, _______________________ (the "Borrower"), refers to
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.5 of the
Credit Agreement, of the [CONVERSION] [CONTINUATION] of the Loans specified
herein, that:

                  1. The conversion/continuation Date is __________, ____.

                  2. The aggregate amount of the Revolving Loans to be
         [CONVERTED] [CONTINUED] is $______________.

                  3. The Loans are to be [converted into] [continued as]
         [Eurodollar] [Base Rate] Loans.

                  4. [IF APPLICABLE:] The duration of the Interest Period for
         the Revolving Loans included in the [CONVERSION] [CONTINUATION] shall
         be _________ months.

         The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed conversion/continuation
date, before and after giving effect thereto and to the application of the
proceeds therefrom:

                  (a) the representations and warranties of the Borrower
         contained in Section 6 of the Credit Agreement are true and correct as
         though made on and as of such date (except to the extent such
         representations and warranties relate to an earlier date, in which case
         they are true and correct as of such date); provided, however, that
         this condition shall not apply to the conversion of an outstanding
         Eurodollar Loan to a Base Rate Loan; and

<PAGE>

                  (b) no Default or Event of Default has occurred and is
         continuing, or would result from such proposed [CONVERSION]
         [CONTINUATION].

                                        RENT-WAY, INC.

                                        By
                                           Name________________________________
                                           Title_______________________________

                                       -2-

<PAGE>

                                   EXHIBIT D-1

                                 REVOLVING NOTE

U.S. $_______________                                       ____________, ______

         FOR VALUE RECEIVED, the undersigned, RENT-WAY, INC., a Pennsylvania
corporation (the "Borrower"), hereby promises to pay to the order of
____________________ (the "Lender") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office Harris Trust
and Savings Bank, as Administrative Agent, in Chicago, Illinois, in immediately
available funds, the principal sum of ___________________ Dollars ($__________)
or, if less, the aggregate unpaid principal amount of all Revolving Loans made
by the Lender to the Borrower pursuant to the Credit Agreement, together with
interest on the principal amount of each Revolving Loan from time to time
outstanding hereunder at the rates, and payable in the manner and on the dates,
specified in the Credit Agreement.

         This Note is one of the Revolving Notes referred to in the Credit
Agreement dated as of June 2, 2003, among the Borrower, Harris Trust and Savings
Bank, as Administrative Agent and the Lenders party thereto (the "Credit
Agreement"), and this Note and the holder hereof are entitled to all the
benefits and security provided for thereby or referred to therein, to which
Credit Agreement reference is hereby made for a statement thereof. All defined
terms used in this Note, except terms otherwise defined herein, shall have the
same meaning as in the Credit Agreement. This Note shall be governed by and
construed in accordance with the internal laws of the State of Illinois.

         Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.

         The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.

                                        RENT-WAY, INC.

                                        By
                                           Name________________________________
                                           Title_______________________________

<PAGE>

                                   EXHIBIT D-2

                                   SWING NOTE

U.S. $_____________                                           ____________, ____

         FOR VALUE RECEIVED, the undersigned, RENT-WAY, INC., a Pennsylvania
corporation (the "Borrower"), hereby promises to pay to the order of
___________________ (the "Lender") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office of Harris
Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of ________________________
Dollars ($___________) or, if less, the aggregate unpaid principal amount of all
Swing Loans made by the Lender to the Borrower pursuant to the Credit Agreement,
together with interest on the principal amount of each Swing Loan from time to
time outstanding hereunder at the rates, and payable in the manner and on the
dates, specified in the Credit Agreement.

         This Note is the Swing Note referred to in the Credit Agreement dated
as of June 2, 2003, among the Borrower, the Guarantors party thereto, the
Lenders party thereto, and Harris Trust and Savings Bank, as Administrative
Agent for the Lenders (the "Credit Agreement"), and this Note and the holder
hereof are entitled to all the benefits and security provided for thereby or
referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of Illinois.

         Voluntary prepayments may be made hereon, certain prepayments are
required to be made hereon, and this Note may be declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as
provided for in the Credit Agreement.

         The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.

                                        RENT-WAY, INC.

                                        By
                                           Name________________________________
                                           Title_______________________________

<PAGE>

                                    EXHIBIT E

                                 RENT-WAY, INC.

                             COMPLIANCE CERTIFICATE

To:      Harris Trust and Savings Bank, as
         Administrative Agent under, and the
         Lenders party to, the Credit Agreement
         described below

         This Compliance Certificate is furnished to the Administrative Agent
and the Lenders pursuant to that certain Credit Agreement dated as of June 2,
2003, among us (the "Credit Agreement"). Unless otherwise defined herein, the
terms used in this Compliance Certificate have the meanings ascribed thereto in
the Credit Agreement.

         THE UNDERSIGNED HEREBY CERTIFIES THAT:

                  1. I am the duly elected ____________ of RENT-WAY, INC.;

                  2. I have reviewed the terms of the Credit Agreement and I
         have made, or have caused to be made under my supervision, a detailed
         review of the transactions and conditions of the Borrower and its
         Subsidiaries during the accounting period covered by the attached
         financial statements;

                  3. The examinations described in paragraph 2 did not disclose,
         and I have no knowledge of, the existence of any condition or the
         occurrence of any event which constitutes a Default or Event of Default
         during or at the end of the accounting period covered by the attached
         financial statements or as of the date of this Compliance Certificate,
         except as set forth below;

                  4. The financial statements required by Section 8.5 of the
         Credit Agreement and being furnished to you concurrently with this
         Compliance Certificate are true, correct and complete as of the date
         and for the periods covered thereby; and

                  5. The Schedule I hereto sets forth financial data and
         computations evidencing the Borrower's compliance with certain
         covenants of the Credit Agreement, all of which data and computations
         are, to the best of my knowledge, true, complete and correct and have
         been made in accordance with the relevant Sections of the Credit
         Agreement.

         Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

<PAGE>

         ______________________________________________________________
         ______________________________________________________________
         ______________________________________________________________
         ______________________________________________________________

         The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ______ day of
__________________ 20___.

                                        RENT-WAY, INC.

                                        By
                                        Name___________________________________
                                        Title__________________________________

                                       -2-

<PAGE>

                                   SCHEDULE I

                            TO COMPLIANCE CERTIFICATE

                                 RENT-WAY, INC.

                             COMPLIANCE CALCULATIONS
                  FOR CREDIT AGREEMENT DATED AS OF JUNE 2, 2003

                    CALCULATIONS AS OF _____________, _______

<TABLE>
<S>                                                                                                <C>
A.       Leverage Ratio (Section 8.24)

         1.       Total Funded Debt                                                                $___________

         2.       Amounts on deposit in the Excess Cash Flow Escrow Account                        $___________

         3.       Lines A1 minus A2                                                                $___________

         4.       Net Income for past 4 quarters                                                   $___________

         5.       Interest Expense for past 4 quarters                                             $___________

         6.       Income taxes for past 4 quarters                                                 $___________

         7.       Depreciation and Amortization Expense for past 4 quarters                        $___________

         8.       Any fees, costs and expenses paid in connection with the execution and
                  delivery of this Agreement and the other Loan Documents and the issuance
                  and sale of the Senior Notes and Preferred Shares to the extent such
                  fees, costs and expenses are not capitalized                                     $___________

         9.       One-time non-cash charges not related to store closures                          $___________

         10.      Non-cash restructuring charges related to store closures occurring on or         $___________
                  before September 30 2004

         11.      Cash or non-cash charges resulting from discontinued operations
                  associated with store closures occurring on or before September 30, 2004         $___________

         12.      Sum of Lines A4, A5, A6, A7, A8, A9, A10 and A11 ("EBITDA")                      $___________

         13.      Ratio of Line A3 to A12                                                            ____:1.0

         14.      Line A13 ratio must not exceed                                                     ____:1.0

         15.      The Borrower is in compliance (circle yes or no)                                    yes/no
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                <C>
B.       Net Worth (Section 8.25)

         1.       Net Worth                                                                        $___________

         2.       75% of Net Income for each quarter of each fiscal year of the Borrower
                  ending on or after September 30, 2003                                            $___________

         3.       90% of any subsequent incremental issuance of new equity securities              $___________

         4.       The sum of Lines B2, B3 and $85,000,000                                          $___________

         5.       Lines B1 shall not be less than Line B4

         6.       The Borrower is in compliance (circle yes or no)                                    yes/no

C.       Fixed Charge Coverage Ratio (Section 8.23)

         1.       Line A12 above                                                                   $___________

         2.       Capital Expenditures not financed by Capitalized Leases for the past 4
                  quarters                                                                         $___________

         3.       Line C1 minus Line C2                                                            $___________

         4.       Principal payments made or to be made during the past 4 quarters with
                  respect to Indebtedness for Borrowed Money of the Borrower and each
                  Guarantor, but excluding payments of Obligations owed under the
                  Revolving Credit and the repayment of the Borrower's Indebtedness for
                  Borrowed Money under the Prior Credit Agreement                                  $___________

         5.       Cash Interest Expense for past 4 quarters                                        $___________

         6.       Restricted Payments for past 4 quarters                                          $___________

         7.       All prepayments (whether voluntary of mandatory) on the Senior Note for
                  past 4 quarters                                                                  $___________

         8.       Income taxes paid in cash for past 4 quarters                                    $___________

         9.       Sum of Lines C4, C5, C6, C7 and C8 ("Fixed Charges")                             $___________

         10.      Ratio of Line C3 to Line C9                                                        ____:1.0

         11.      Line C10 ratio must not be less than                                               ____:1.0

         12.      The Borrower is in compliance (circle yes or no)                                    yes/no
</TABLE>

                             -2-

<PAGE>

<TABLE>
<S>                                                                                                <C>
D.       Capital Expenditures (Section 8.22)

         1.       Year-to-date Capital Expenditures                                                $___________

         2.       Maximum permitted amount                                                         $___________

         3.       The Borrower is in compliance (circle yes or no)                                    yes/no

E.       Minimum Rental Merchandise Usage (Section 8.26)

         1.       Rental Merchandise under lease pursuant to Rental Contracts                      $___________

         2.       Total value of Rental Merchandise held for rental under Rental Contracts         $___________

         3.       Line E1 divided by E2 (then multiplied by 100)                                      ____%

         4.       Minimum permitted amount                                                            ____%

         5.       The Borrower is in compliance (circle yes or no)                                    yes/no

         6.       Value of idle jewelry held for rent                                              $___________

         7.       Line E6 divided by Line E2 (then multiplied by 100)                                 ____%

         8.       Maximum permitted amount                                                            ____%

         9.       The Borrower is in compliance (circle yes or no)                                    yes/no

F.       Minimum Monthly EBITDA (Section 8.27)

         1.       EBITDA (Line A12 above)                                                          $___________

         2.       Minimum permitted amount                                                         $___________

         3.       The Borrower is in compliance (circle yes or no)                                    yes/no
</TABLE>

                             -3-

<PAGE>

                          EXHIBIT F

               ADDITIONAL GUARANTOR SUPPLEMENT

                                                            ______________, ____

Harris Trust and Savings Bank, as
Administrative Agent for the Lenders
named in the Credit Agreement dated as
of June 2, 2003, among Rent-Way, Inc.,
as Borrower, the Guarantors referred to
therein, the Lenders from time to time
party thereto, and the Administrative
Agent (the "Credit Agreement")

Ladies and Gentlemen:

         Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.

         The undersigned, [NAME OF SUBSIDIARY GUARANTOR], a [JURISDICTION OF
INCORPORATION OR ORGANIZATION] hereby elects to be a "Guarantor" for all
purposes of the Credit Agreement, effective from the date hereof. The
undersigned confirms that the representations and warranties set forth in
Section 6 of the Credit Agreement are true and correct as to the undersigned as
of the date hereof and the undersigned shall comply with each of the covenants
set forth in Section 8 of the Credit Agreement applicable to it.

         Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 12 thereof, to the same extent and with the same force and
effect as if the undersigned were a signatory party thereto.

<PAGE>

         The undersigned acknowledges that this Agreement shall be effective
upon its execution and delivery o by the undersigned to the Administrative
Agent, and it shall not be necessary for the Administrative Agent or any Lender,
or any of their Affiliates entitled to the benefits hereof, to execute this
Agreement or any other acceptance hereof. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Illinois.

                                        Very truly yours,

                                        [NAME OF SUBSIDIARY GUARANTOR]

                                        By
                                           Name________________________________
                                           Title_______________________________

                                       -2-

<PAGE>

                                    EXHIBIT G

                            ASSIGNMENT AND ACCEPTANCE

                           Dated _____________, _____

         Reference is made to the Credit Agreement dated as of June 2, 2003 (the
"Credit Agreement") among Rent-Way, Inc., the Lenders (as defined in the Credit
Agreement) and Harris Trust and Savings Bank, as Administrative Agent for the
Lenders (the "Administrative Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.

         ______________________________________________________ (the "Assignor")
and _________________________ (the "Assignee") agree as follows:

                  1. The Assignor hereby sells and assigns to the Assignee, and
         the Assignee hereby purchases and assumes from the Assignor, a _______%
         interest in and to all of the Assignor's rights and obligations under
         the Credit Agreement as of the Effective Date (as defined below),
         including, without limitation, such percentage interest in the
         Assignor's Commitments as in effect on the Effective Date and the
         Loans, if any, owing to the Assignor on the Effective Date and the
         Assignor's Percentage of any outstanding L/C Obligations.

                  2. The Assignor (i) represents and warrants that as of the
         date hereof (A) its Revolving Credit Commitment is $_______________,
         (B) the aggregate outstanding principal amount of Loans made by it
         under the Credit Agreement that have not been repaid is $___________
         and a description of the interest rates and interest periods of such
         Loans is attached as Annex 1 hereto, and (C) the aggregate principal
         amount of Assignor's Percentage of outstanding L/C Obligations is
         $___________; (ii) represents and warrants that it is the legal and
         beneficial owner of the interest being assigned by it hereunder and
         that such interest is free and clear of any adverse claim, lien, or
         encumbrance of any kind; (iii) makes no representation or warranty and
         assumes no responsibility with respect to any statements, warranties or
         representations made in or in connection with the Credit Agreement or
         the execution, legality, validity, enforceability, genuineness,
         sufficiency or value of the Credit Agreement or any other instrument or
         document furnished pursuant thereto; and (iv) makes no representation
         or warranty and assumes no responsibility with respect to the financial
         condition of the Borrower or any Subsidiary or the performance or
         observance by the Borrower or any Subsidiary of any of their respective
         obligations under the Credit Agreement or any other instrument or
         document furnished pursuant thereto.

                  3. The Assignee (i) confirms that it has received a copy of
         the Credit Agreement, together with copies of the most recent financial
         statements delivered to the Lenders pursuant to Section 8.5(a) and (b)
         thereof and such other documents and

<PAGE>

         information as it has deemed appropriate to make its own credit
         analysis and decision to enter into this Assignment and Acceptance;
         (ii) agrees that it will, independently and without reliance upon the
         Administrative Agent, the Assignor or any other Lender and based on
         such documents and information as it shall deem appropriate at the
         time, continue to make its own credit decisions in taking or not taking
         action under the Credit Agreement; (iii) appoints and authorizes the
         Administrative Agent to take such action as Administrative Agent on its
         behalf and to exercise such powers under the Credit Agreement, the
         other Loan Documents and the Intercreditor Agreement as are delegated
         to the Administrative Agent by the terms thereof, together with such
         powers as are reasonably incidental thereto; (iv) agrees that it will
         perform in accordance with their terms all of the obligations which by
         the terms of the Credit Agreement are required to be performed by it as
         a Lender; and (v) specifies as its lending office (and address for
         notices) the offices set forth beneath its name on the signature pages
         hereof.

                  4. As consideration for the assignment and sale contemplated
         in Annex 1 hereof, the Assignee shall pay to the Assignor on the
         Effective Date in Federal funds an amount equal to $________________*.
         It is understood that commitment and/or letter of credit fees accrued
         to the Effective Date with respect to the interest assigned hereby are
         for the account of the Assignor and such fees accruing from and
         including the date hereof are for the account of the Assignee. Each of
         the Assignor and the Assignee hereby agrees that if it receives any
         amount under the Credit Agreement which is for the account of the other
         party hereto, it shall receive the same for the account of such other
         party to the extent of such other party's interest therein and shall
         promptly pay the same to such other party.

                  5. The effective date for this Assignment and Acceptance shall
         be ___________, (the "Effective Date"). Following the execution of this
         Assignment and Acceptance, it will be delivered to the Administrative
         Agent for acceptance and recording by the Administrative Agent and, if
         required, the relevant Borrower.

                  6. Upon such acceptance and recording, as of the Effective
         Date, (i) the Assignee shall be a party to the Credit Agreement and, to
         the extent provided in this Assignment and Acceptance, have the rights
         and obligations of a Lender thereunder and (ii) the Assignor shall, to
         the extent provided in this Assignment and Acceptance, relinquish its
         rights and be released from its obligations under the Credit Agreement.

                  7. Upon such acceptance and recording, from and after the
         Effective Date, the Administrative Agent shall make all payments under
         the Credit Agreement in respect of the interest assigned hereby
         (including, without limitation, all payments of principal, interest and
         commitment fees with respect thereto) to the Assignee. The Assignor and

----------------------
*  Amount should combine principal together with accrued interest and breakage
   compensation, if any, to be paid by the Assignee, net of any portion of any
   upfront fee to be paid by the Assignor to the Assignee. It may be preferable
   in an appropriate case to specify these amounts generically or by formula
   rather than as a fixed sum.

                                       -2-

<PAGE>

         Assignee shall make all appropriate adjustments in payments under the
         Credit Agreement for periods prior to the Effective Date directly
         between themselves.

                  8. In accordance with Section 13.12 of the Credit Agreement,
         the Assignor and the Assignee request and direct that the
         Administrative Agent prepare and cause the relevant Borrower to execute
         and deliver to the Assignee the relevant Note payable to the Assignee
         in the amount of its Commitment and a new Note to the Assignor in the
         amount of its Commitment after giving effect to this assignment.

                  9. This Assignment and Acceptance shall be governed by, and
         construed in accordance with, the laws of the State of Illinois.

                                       [Assignor Lender]

                                       By
                                          Name _______________________________
                                          Title ______________________________

                                       [Assignee Lender]

                                       By
                                          Name _______________________________
                                          Title ______________________________

                                       Lending office (and address for notices):

Accepted and consented this
____ day of _____________

RENT-WAY, INC.

By ________________________________
   Name ___________________________
   Title __________________________

Accepted and consented to by the Administrative Agent this
_______ day of _________________

HARRIS TRUST AND SAVINGS BANK, as Administrative Agent

By _________________________________
   Name ____________________________
   Title ___________________________

                                       -3-

<PAGE>

                                     ANNEX I
                          TO ASSIGNMENT AND ACCEPTANCE

PRINCIPAL AMOUNT       TYPE OF LOAN       INTEREST RATE      MATURITY DATE

<PAGE>

                                    EXHIBIT H

                                 EXISTING SWAPS

<TABLE>
<CAPTION>
                             NOTIONAL           MATURITY           RATE
                             --------           --------           ----
<S>                        <C>                  <C>               <C>
Harris Bank                 20,000,000           Dec-03           5.090%
SunTrust Bank                   -                Dec-03           5.105%
LaSalle Bank                10,000,000           Dec-03           5.095%
Bank of America             10,000,000           Dec-03           5.120%
Harris Bank                 10,000,000           Dec-03           5.120%
PNC Bank                     2,000,000           Sep-04           6.740%
National City               10,000,000           Sep-04           6.730%
Bank
Bank One                    10,000,000           Aug-05           6.950%
PNC Bank                    10,000,000           Aug-05           6.965%
Harris Bank                 20,000,000           Aug-05           6.880%
                           102,000,000
</TABLE>

<PAGE>

                                  SCHEDULE 1

                                  COMMITMENTS

<TABLE>
<CAPTION>
                                       REVOLVING
                                         CREDIT          SWING LINE
        NAME OF LENDER                 COMMITMENT        COMMITMENT
<S>                                   <C>                <C>
Harris Trust and Savings Bank         $25,000,000        $5,000,000

   National City Bank of
         Pennsylvania                 $22,500,000        $        0

     Bank of Montreal                 $12,500,000        $        0

   TOTAL                              $60,000,000        $5,000,000
</TABLE>

<PAGE>

                                  SCHEDULE 1.2

                           EXISTING LETTERS OF CREDIT

<TABLE>
<CAPTION>
              ISSUER                                BENEFICIARY                    AMOUNT
<S>                                       <C>                                    <C>
National City Bank of Pennsylvania                   Travelers                   $5,000,000

National City Bank of Pennsylvania                  GE Capital                   $2,400,000

National City Bank of Pennsylvania         Employers Insurance of Wausau         $  650,000

National City Bank of Pennsylvania                JP Morgan Chase                $  300,000

National City Bank of Pennsylvania           Liberty Mutual Insurance            $  200,000

National City Bank of Pennsylvania            Hartford Fire Insurance            $  100,000

National City Bank of Pennsylvania              Reliance Insurance               $   50,000

National City Bank of Pennsylvania        Tennessee Regulatory Authority         $   20,000
</TABLE>

<PAGE>

                                  SCHEDULE 6.2

                                  SUBSIDIARIES

<TABLE>
<CAPTION>
                                           JURISDICTION OF          PERCENTAGE
              NAME                           ORGANIZATION           OWNERSHIP                   OWNER
<S>                                        <C>                      <C>                     <C>
Rent-Way of Tomorrow, Inc.                     Delaware                100%                     Borrower
("Tomorrow")

Rent-Way of Michigan, Inc.                     Delaware                100%                     Borrower
("Michigan")

Action Rent-To-Own
Holdings of South Carolina,                 South Carolina             100%                     Borrower
Inc.

Rent-Way Developments, Inc.                    Delaware                100%                     Michigan
("Developments")

Rent-Way of TTIG, L.P.                         Indiana                 100%                 Developments and
                                                                                                Tomorrow

dPi Teleconnect, L.L.C.                        Delaware                 70%                      Borrower
</TABLE>

<PAGE>

                                  SCHEDULE 8.8

                                 EXISTING LIENS

                                     -NONE-<PAGE>
                                                                    Exhibit 10.3
                             INTERCREDITOR AGREEMENT

         This INTERCREDITOR AGREEMENT, dated as of June 2, 2003, is entered
into among HARRIS TRUST AND SAVINGS BANK, as Senior Agent (as defined below),
MANUFACTURERS AND TRADERS TRUST COMPANY, as trustee and collateral agent under
the Indenture referred to below, and RENT-WAY, INC., a Pennsylvania corporation
(the "Borrower").

                              W I T N E S S E T H:

         WHEREAS, the Borrower, the financial institutions party to the Senior
Credit Agreement referred to below as lenders and issuing banks, and Harris
Trust and Savings Bank, as administrative agent and collateral agent for such
lenders and issuing banks (in such capacity, the "Senior Agent") (as such
agreement may be amended, amended and restated, supplemented or otherwise
modified, from time to time at the option of the parties thereto and any other
agreements pursuant to which any of the indebtedness, commitments, obligations,
costs, expenses, fees, reimbursements, indemnities or other obligations payable
or owing thereunder may be refinanced, restructured, renewed, extended,
increased, refunded or replaced as any such other agreements may from time to
time at the option of the parties thereto be amended, amended and restated,
supplemented, renewed or otherwise modified, being collectively referred to
herein the "Senior Credit Agreement"); and

         WHEREAS, the Borrower and Manufacturers and Traders Trust Company, as
the trustee and the collateral agent (in its capacity as collateral agent, the
"Trustee") under the Indenture referred to below, propose to enter into an
Indenture, dated as of June 2, 2003 (as such Indenture may be amended, amended
and restated, supplemented or otherwise modified, from time to time at the
option of the parties thereto, the "Indenture") governing the rights and duties
of the Borrower and its Subsidiaries under the 11 7/8% Senior Secured Notes due
2010 (the "Senior Secured Notes"); and

         WHEREAS, it is a condition precedent to the effectiveness of the Senior
Credit Agreement that the Senior Agent (for itself and for the benefit of the
Senior Lenders), the Trustee (for itself and for the benefit of the Noteholders)
and the Borrower enter into this Agreement;

         NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the adequacy and receipt of which are hereby acknowledged, and in reliance upon
the representations, warranties and covenants herein contained, the parties
hereto, intending to be legally bound, hereby agree as follows:

SECTION 1.        DEFINITIONS.

         As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural form of the terms indicated) and capitalized terms defined in the Senior
Credit Agreement used (but not otherwise defined) herein shall have the meanings
ascribed to them in the Senior Credit Agreement:

<PAGE>

         "Agreement" shall mean this Agreement, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.

         "Bankruptcy Code" shall mean title 11 of the United States Code (11
U.S.C. 101 et seq.), as amended from time to time and any successor statute.

         "Business Day" shall mean any day other than Saturday, Sunday and a day
that is a legal holiday under the laws of the State of New York or on which
banking institutions in the State of New York are required or authorized by law
or other governmental action to close.

         "Common Collateral" shall mean all of the assets of the Borrower or any
of its Subsidiaries whether real, personal or mixed, constituting both Senior
Lender Collateral and Noteholder Collateral.

         "Comparable Noteholder Collateral Document" means, in relation to any
Common Collateral subject to any Senior Lender Collateral Document, that
Noteholder Collateral Document which creates a security interest in the same
Common Collateral, granted by the Borrower or same Guarantor, as applicable.

         "Discharge of Senior Lender Claims" shall mean, except to the extent
otherwise provided in Section 5.6, payment in full of the principal of, interest
and premium, if any, on all indebtedness outstanding under the Senior Credit
Agreement and any other Future First-Lien Credit Facility or, with respect to
Hedging Obligations or letters of credit outstanding thereunder, delivery of
cash collateral or backstop letters of credit in respect thereof in compliance
with the Senior Credit Agreement or such First-Lien Credit Facility, as
applicable, in each case after or concurrently with termination of all
commitments to extend credit thereunder, and payment in full of any other Senior
Lender Claims that are due and payable at or prior to the time such principal
and interest are paid.

         "Excess Cash Flow Collateral Account" shall mean that certain
securities account maintained by Trustee for the deposit of certain excess cash
flow proceeds as required by Section 4.19 of the Indenture pursuant to an
Account Control Agreement in the form attached as Exhibit A hereto.

         "Future First-Lien Credit Facility" shall mean any First-Lien Credit
Facility (as defined in the Indenture) that is designated by the Borrower as a
"First-Lien Credit Facility" for purposes of the Indenture and as permitted by
the Indenture (other than the Senior Credit Agreement referenced in the recitals
hereto), provided that the Required Lenders under any Senior Credit Agreement
then in effect have consented to such designation.

         "Future Other First-Lien Obligations" shall mean all Obligations of the
Borrower or any of its Subsidiaries in respect of cash management services or
Hedging Obligations that are designated by the Borrower as "Credit Agreement
Obligations" for purposes of the Indenture (other than any Senior Lender Cash
Management Obligations and Senior Lender Hedging Obligations), provided that the
Required Lenders under any Senior Credit Agreement then in effect have consented
to such designation.

                                       -2-

<PAGE>

         "Guarantor" means each Subsidiary of the Borrower that is a guarantor
of the Noteholder Claims.

         "Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate agreements, interest rate cap
agreements, interest rate collar agreements and (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.

         "Indebtedness" means, with respect to any specified Person without
duplication, any indebtedness of such Person, whether or not contingent (a) in
respect of borrowed money; (b) evidenced by bonds, notes, debentures or other
similar instruments or letters of credit (or reimbursement agreements in respect
thereof); (c) in respect of banker's acceptances; (d) representing obligations
in connection with Capital Leases; (e) representing the balance deferred and
unpaid of the purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
preceding items (other than letters of credit) would appear as a liability upon
a balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of other Persons
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) to the extent of the fair
market value of such asset where the Indebtedness so secured is not the
Indebtedness of such Person and, to the extent not otherwise included, the
guaranty by the specified Person of the Indebtedness of any other Person. The
amount of any Indebtedness outstanding as of any date will be (i) the accreted
value of the Indebtedness, in the case of any Indebtedness issued with original
issue discount; and (ii) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due, in the case
of any other Indebtedness. Hedging Obligations shall not constitute
Indebtedness, except to the extent they appear on the balance sheet of the
Borrower or as included in the Indenture. Indebtedness of the Borrower and its
Restricted Subsidiaries (as defined in the Indenture) shall not include any
Indebtedness of the Borrower or any of its Restricted Subsidiaries that has been
either satisfied and discharged or defeased through covenant defeasance or legal
defeasance.

         "Indenture" shall have the meaning set forth in the recitals hereto.

         "Insolvency or Liquidation Proceeding" shall mean (a) any voluntary or
involuntary case or proceeding under the Bankruptcy Code with respect to the
Borrower or any Guarantor, (b) any other voluntary or involuntary insolvency,
reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding with respect to
the Borrower or any Guarantor or with respect to any of their respective assets,
(c) any liquidation, dissolution, reorganization or winding up of the Borrower
or any Guarantor whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (d) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Borrower or any
Guarantor.

         "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, deposit arrangement, encumbrance, lien or
preference priority or other security agreement or other preferential
arrangement whatsoever, including, without limitation, any right

                                       -3-

<PAGE>

of setoff, any conditional sale or other title retention agreement, the interest
of a lessor under a lease or any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement naming the owner of the asset to which such Lien relates as debtor.

         "Noteholder Claims" shall mean all indebtedness, obligations and other
liabilities (contingent or otherwise) arising under or with respect to the
Noteholder Documents or any of them.

         "Noteholder Collateral" shall mean all of the assets of the Borrower or
any Guarantor whether real, personal or mixed, in which the Noteholders or the
Trustee or any of them now or hereafter holds a Lien as security for any
Noteholder Claim.

         "Noteholder Collateral Documents" shall mean the Noteholder Security
Agreement, the Noteholder Mortgages, and any document or instrument executed and
delivered pursuant to any Noteholder Document at any time or otherwise pursuant
to which a Lien is granted by the Borrower or a Guarantor to secure the
Noteholder Claims or under which rights or remedies with respect to any such
Lien are governed, as the same may be amended, renewed, extended, supplemented
or modified from time to time.

         "Noteholder Documents" shall mean the Indenture, the Notes (as defined
in the Indenture), the Noteholder Collateral Documents, any document or
instrument evidencing any Obligations (as defined in the Indenture) under the
Indenture and any other related document or instrument executed and delivered
pursuant to any Noteholder Document at any time or otherwise evidencing any
Noteholder Claims, as the same may be amended, renewed, extended, supplemented
or modified from time to time.

         "Noteholder Mortgages" shall mean a collective reference to each
mortgage, deed of trust and any other document or instrument under which any
Lien on real property owned by the Borrower or any Subsidiary is granted to
secure the Noteholder Claims or under which rights or remedies with respect to
any such Liens are governed, as the same may be amended, renewed, extended,
supplemented or modified.

         "Noteholder Security Agreement" shall mean the Security and Pledge
Agreement, dated as of June __, 2003, between the Borrower, the Guarantors and
the Trustee, as the same may be amended, renewed, extended, supplemented or
modified.

         "Noteholders" shall mean the Persons holding Noteholder Claims.

         "Obligations" shall mean any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness (including any obligation to post
cash collateral in respect of letters of credit and any other obligations), or
any obligation for cash management services or Hedging Obligations.

         "Person" shall mean any person, individual, sole proprietorship,
partnership, joint venture, corporation, unincorporated organization,
association, institution, entity or other party,

                                       -4-

<PAGE>

including, without limitation, any government and any political subdivision,
agency or instrumentality thereof.

         "Pledged Collateral" shall mean the "Pledged Notes" and the "Pledged
Stock" under, and as defined in, the Security Agreement, cash and other items in
lockbox accounts established pursuant to the Senior Lender Documents and the
Excess Cash Flow Collateral Accounts, and any other property in the possession
of the Senior Agent (or its agents or bailees).

         "Recovery" shall have the meaning set forth in Section 6.5 hereof.

         "Required Lenders" shall mean, with respect to any amendment or
modification of the Senior Credit Agreement, or any termination or waiver of any
provision of the Senior Credit Agreement, or any consent or departure by the
Borrower therefrom, those Senior Lenders, the approval of which is required to
approve such amendment or modification, termination or waiver or consent or
departure.

         "Senior Agent" shall include, in addition to the Senior Agent referred
to in the recitals hereto, the then acting collateral agent for the Senior
Lenders (or if there is more than one agent, a majority of them) under the
Senior Lender Documents and any successor thereto exercising substantially the
same rights and powers, or if there is no acting Senior Agent under the Senior
Credit Agreement, the Required Lenders.

         "Senior Credit Agreement" shall have the meaning set forth in the
recitals hereto; provided that if at any time a Discharge of Senior Lender
Claims occurs with respect to the Senior Credit Agreement referenced in the
recitals hereto (without giving effect to Section 5.6), then, to the extent
provided in Section 5.6, the term "Senior Credit Agreement" shall mean the
Future First-Lien Credit Facility designated by the Borrower in accordance with
the terms of such section.

         "Senior Lender Cash Management Obligations" means all Obligations (as
defined in the Senior Credit Agreement or any Future First-Lien Credit Facility)
of the Borrower or any of its Subsidiaries in respect of cash management
services.

         "Senior Lender Claims" shall mean (a) all Indebtedness outstanding
under one or more of the Senior Lender Documents, including any Future
First-Lien Credit Facilities, the Indebtedness under each of which (i)
constitutes Permitted Debt (as defined in the Indenture) or is otherwise
permitted by the Indenture and (ii) is designated by the Borrower as "Credit
Agreement Obligations" for purposes of the Indenture, (b) all other Obligations
not constituting Indebtedness of the Borrower or a Guarantor under the Senior
Lender Documents or any such other Future First-Lien Credit Facility, including,
without limitation, all Senior Lender Hedging Obligations and Senior Lender Cash
Management Obligations and (c) all Future Other First-Lien Obligations. Senior
Lender Claims shall include all interest accrued or accruing (or which would,
absent the commencement of an Insolvency or Liquidation Proceeding, accrue)
after the commencement of an Insolvency or Liquidation Proceeding in accordance
with and at the rate specified in the Senior Credit Agreement whether or not the
claim for such interest is allowed as a claim in such Insolvency or Liquidation
Proceeding. To the extent any payment with respect to

                                       -5-

<PAGE>

the Senior Lender Claims (whether by or on behalf of any Borrower, as proceeds
of security, enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.

         "Senior Lender Collateral" shall mean all of the assets of the Borrower
or any of the Borrower's Subsidiaries whether real, personal or mixed, in which
the Senior Lenders or the Senior Agent or any of them now or hereafter holds a
Lien as security for any Senior Lender Claim.

         "Senior Lender Collateral Documents" shall mean the Security Agreement,
the Mortgages, and any Loan Document or other document or instrument pursuant to
which a Lien is granted securing the Senior Lender Claims, as the same may be
amended, renewed, extended, supplemented or modified from time to time.

         "Senior Lender Documents" shall mean the Senior Credit Agreement and
each of the other Loan Documents (including, without limitation, each document
or instrument evidencing a Senior Lender Hedging Obligation or Senior Lender
Cash Management Obligation), all documents and instruments evidencing any other
obligation under the Senior Credit Agreement or any Future First-Lien Credit
Facility or any Future Other First-Lien Obligations, and any other related
document or instrument executed or delivered pursuant to any Senior Lender
Document at any time or otherwise evidencing any Senior Lender Claims, as any
such document or instrument may from time to time be amended, renewed, restated,
supplemented or otherwise modified.

         "Senior Lender Hedging Obligations" means Obligations (as defined in
the Senior Credit Agreement or any Future First-Lien Credit Facility)
constituting Hedging Obligations of the Borrower or any of its Subsidiaries.

         "Senior Lenders" shall mean the Persons holding Senior Lender Claims,
including, without limitation, the Senior Agent.

         "TIA" shall mean the Trust Indenture Act of 1939, as amended.

         "Trustee" shall include, in addition to the Trustee referred to in the
recitals hereto, the then acting collateral agent under the Indenture and any
successor thereto exercising substantially the same rights and powers, or if
there is no acting collateral agent under the Indenture, the Noteholders holding
a majority in principal amount of Noteholder Claims then outstanding.

         "Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of the State of New York, as amended.

                                       -6-

<PAGE>

SECTION 2.        LIEN PRIORITIES.

         Section 2.1. Subordination. Notwithstanding the date, manner or order
of grant, attachment or perfection of any Liens granted to the Trustee or the
Noteholders on the Common Collateral or of any Liens granted to the Senior Agent
or the Senior Lenders on the Common Collateral and notwithstanding any provision
of the UCC, or any applicable law or the Noteholder Documents or the Senior
Lender Documents or any other circumstance whatsoever, the Trustee, on behalf of
itself and the Noteholders, hereby agrees that: (a) any Lien on the Common
Collateral securing the Senior Lender Claims now or hereafter held by the Senior
Agent or the Senior Lenders shall be senior and prior to any Lien on the Common
Collateral securing the Noteholder Claims; and (b) any Lien on the Common
Collateral now or hereafter held by the Trustee or the Noteholders regardless of
how acquired, whether by grant, statute, operation of law, subrogation or
otherwise, shall be junior and subordinate in all respects to all Liens on the
Common Collateral securing the Senior Lender Claims. All Liens on the Common
Collateral securing the Senior Lender Claims shall be and remain senior to all
Liens on the Common Collateral securing the Noteholder Claims for all purposes,
whether or not such Liens securing the Senior Lender Claims are subordinated to
any Lien securing any other obligation of the Borrower or any Guarantor.

         Section 2.2. Prohibition on Contesting Liens. Each of the Trustee, for
itself and on behalf of each Noteholder, and the Senior Agent, for itself and on
behalf of each Senior Lender, agrees that it shall not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including, without limitation, any Insolvency or Liquidation Proceeding), the
priority, validity or enforceability of a Lien held by the Senior Lenders in the
Senior Lender Collateral or by the Noteholders in the Common Collateral, as the
case may be.

         Section 2.3. No New Liens. So long as the Discharge of Senior Lender
Claims has not occurred, (a) the parties hereto agree that, after the date
hereof, if the Trustee shall hold any Lien on any assets of the Borrower or any
of its Subsidiaries securing the Noteholder Claims that are not also subject to
the first-priority Lien of the Senior Agent under the Senior Lender Documents,
the Trustee, upon demand by the Senior Agent, will either release such Lien or
assign it to the Senior Agent as security for the Senior Lender Claims, and (b)
the Borrower agrees not to grant any Lien on any of its assets, or permit any
Subsidiary of the Borrower to grant a Lien on any of its assets, in favor of the
Trustee or the Noteholders unless it, or such Subsidiary, has granted a similar
Lien on such assets in favor of the Senior Agent or the Senior Lenders.

SECTION 3.        ENFORCEMENT.

         Section 3.1. Exercise of Remedies. (a) So long as the Discharge of
Senior Lender Claims has not occurred, whether or not any Insolvency or
Liquidation Proceeding has been commenced by or against any Borrower or
Guarantor, (i) the Trustee and the Noteholders will not exercise or seek to
exercise any rights or remedies (including setoff) with respect to any Common
Collateral, institute any action or proceeding with respect to such rights or
remedies, including, without limitation, any action of foreclosure, contest,
protest or object to any foreclosure proceeding or action brought by the Senior
Agent or any Senior Lender, the exercise of any right under any lockbox
agreement, control agreement, landlord waiver or bailee's letter or

                                       -7-

<PAGE>

similar agreement or arrangement to which the Trustee or any Noteholder is a
party, or any other exercise by any such party, of any rights and remedies
relating to the Common Collateral under the Senior Lender Documents or
otherwise, or object to the forbearance by the Senior Lenders from bringing or
pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the Common Collateral and (ii) the Senior Agent
and the Senior Lenders shall have the exclusive right to enforce rights,
exercise remedies (including, without limitation, setoff and the right to credit
bid their debt) and make determinations regarding release, disposition, or
restrictions with respect to the Common Collateral without any consultation with
or the consent of the Trustee or any Noteholder; provided, however, (A) that in
any Insolvency or Liquidation Proceeding commenced by or against the Borrower or
any Guarantor, the Trustee may file a claim or statement of interest with
respect to the Noteholder Claims, and (B) the Trustee may take any action not
adverse to the Liens on the Common Collateral securing the Senior Lender Claims
in order to preserve or protect its rights in the Common Collateral. In
exercising rights and remedies with respect to the Common Collateral, the Senior
Agent and the Senior Lenders may enforce the provisions of the Senior Lender
Documents and exercise remedies thereunder, all in such order and in such manner
as they may determine in the exercise of their sole discretion. Such exercise
and enforcement shall include, without limitation, the rights of an agent or
other representative appointed by them to sell or otherwise dispose of Common
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured lender
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under bankruptcy or similar laws of any applicable
jurisdiction.

            (b) The Trustee, on behalf of itself and the Noteholders, agrees
that it will not take or receive any Common Collateral or any proceeds of Common
Collateral in connection with the exercise of any right or remedy (including
setoff) with respect to any Common Collateral, unless and until the Discharge of
Senior Lender Claims has occurred. Without limiting the generality of the
foregoing, unless and until the Discharge of Senior Lender Claims has occurred,
except as expressly provided in the proviso in Section 3.1(a)(ii) above, the
sole right of the Trustee and the Noteholders with respect to the Common
Collateral is to hold a Lien on the Common Collateral pursuant to the Noteholder
Documents for the period and to the extent granted therein and to receive a
share of the proceeds thereof, if any, after the Discharge of the Senior Lender
Claims has occurred.

            (c) Subject to the proviso in Section 3.1(a)(ii) above, (a) the
Trustee, for itself or on behalf of the Noteholders, agrees that the Trustee and
the Noteholders will not take any action that would hinder any exercise of
remedies undertaken by the Senior Agent under the Senior Loan Documents,
including any sale, lease, exchange, transfer or other disposition of the Common
Collateral, whether by foreclosure or otherwise, and (b) the Trustee, for itself
and on behalf of the Noteholders, hereby waives any and all rights it or the
Noteholders may have as a junior lien creditor or otherwise to object to the
manner in which the Senior Agent or the Senior Lenders seek to enforce or
collect the Senior Lender Claims or the Liens granted in any of the Senior
Lender Collateral.

         Section 3.2. Cooperation. Subject to the proviso in Section 3.1(a)(ii)
above, the Trustee, on behalf of itself and the Noteholders, agrees that, unless
and until the Discharge of Senior

                                       -8-

<PAGE>

Lender Claims has occurred, it will not commence, or join with any Person (other
than the Senior Lenders and the Senior Agent upon the request thereof) in
commencing any enforcement, collection, execution, levy or foreclosure action or
proceeding with respect to any Lien held by it under any of the Noteholder
Documents or otherwise.

SECTION 4.        PAYMENTS.

         Section 4.1. Application of Proceeds. As long as the Discharge of
Senior Lender Claims has not occurred, the cash proceeds of Common Collateral
received in connection with the sale of, or collection on, such Common
Collateral upon the exercise of remedies, shall be applied by the Senior Agent
to the Senior Lender Claims in such order as specified in the Senior Credit
Agreement until Discharge of Senior Lender Claims has occurred. Upon Discharge
of the Senior Lender Claims, the Senior Agent shall deliver to the Trustee any
proceeds of Common Collateral held by it in the same form as received, with any
necessary endorsements or as a court of competent jurisdiction may otherwise
direct.

         Section 4.2. Payments Over. Any Common Collateral or proceeds thereof
received by the Trustee or any Noteholder in connection with the exercise of any
right or remedy (including setoff) relating to the Common Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Senior Agent for the benefit of the Senior Lenders in
the same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct. The Senior Agent is hereby
authorized to make any such endorsements as agent for the Trustee or any such
Noteholder. This authorization is coupled with an interest and is irrevocable.

SECTION 5.        OTHER AGREEMENTS.

         Section 5.1. Releases. (a) If in connection with:

                  (i)      the exercise of the Senior Agent's remedies in
            respect of the Common Collateral provided for in Section 3.1,
            including any sale, lease, exchange, transfer or other disposition
            of such Common Collateral;

                  (ii)     any sale, lease, exchange, transfer or other
            disposition of Common Collateral permitted under the terms of the
            Senior Credit Agreement (whether or not an event of default under,
            and as defined therein, has occurred and is continuing) and
            permitted or not prohibited under Section 4.11 of the Indenture
            (Asset Sales); or

                  (iii)    any agreement between the Senior Agent and the
            Borrower to release the Senior Agent's Lien on any portion of the
            Common Collateral or to release any Guarantor from its obligations
            under its guaranty of the Senior Lender Claims, unless an event of
            default exists under the Noteholder Documents or such release would
            be prevented by Section 5.1(a)(ii) above or the event giving rise to
            the agreement to release Common Collateral would cause an event of
            default under the Noteholder Documents other than

                                       -9-

<PAGE>

            the general covenant that the Borrower maintain a second priority
            lien on the collateral contemplated by the Indenture;

the Senior Agent, for itself or on behalf of any of the Senior Lenders, releases
any of its Liens on any part of the Common Collateral (or any Guarantor from its
obligations under its guaranty of the Senior Lender Claims), the Liens, if any,
of the Trustee, for itself or for the benefit of the Noteholders, on such Common
Collateral (and the obligations of such Guarantor under its guaranty of the
Noteholder Claims) shall be automatically, unconditionally and simultaneously
released and the Trustee, for itself or on behalf of any such Noteholder,
promptly shall execute and deliver to the Senior Agent or the Borrower such
termination statements, releases and other documents as the Senior Agent or the
Borrower may request to effectively confirm such release.

            (b) The Trustee, for itself and on behalf of the Noteholders, hereby
irrevocably constitutes and appoints the Senior Agent and any officer or agent
of the Administrative Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Trustee or such holder or in the Senior Agent's own name, from
time to time in the Senior Agent's discretion, for the purpose of carrying out
the terms of this Section 5.1, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Section 5.1, including, without
limitation, any financing statements, endorsements or other instruments or
transfer or release.

         Section 5.2. Insurance. Unless and until the Discharge of Senior Lender
Claims has occurred, the Senior Agent and the Senior Lenders shall have the sole
and exclusive right, subject to the rights of the Borrower and the Guarantors
under the Senior Lender Documents, to adjust settlement for any insurance policy
covering the Common Collateral in the event of any loss thereunder and to
approve any award granted in any condemnation or similar proceeding affecting
the Common Collateral. Unless and until the Discharge of Senior Lender Claims
has occurred, all proceeds of any such policy and any such award if in respect
to the Common Collateral shall be paid to the Senior Agent for the benefit of
the Senior Lenders to the extent required under the Senior Credit Agreement and
thereafter to the Trustee for the benefit of the Noteholders to the extent
required under the applicable Noteholder Documents and then to the owner of the
subject property or as a court of competent jurisdiction may otherwise direct;
provided, however, that from and after the Revolving Loan Commitment Termination
Date, all such proceeds shall be paid to the Senior Agent for the benefit of the
Senior Lenders until the Discharge of Senior Lender Claims has occurred and
thereafter to the Trustee for the benefit of the Noteholders to the extent
required under the applicable Noteholder Documents and then to the owner of the
subject property or as a court of competent jurisdiction may otherwise direct.
If the Trustee or any Noteholder shall, at any time, receive any proceeds of any
such insurance policy or any such award in contravention of this Agreement, it
shall pay such proceeds over to the Senior Agent in accordance with the terms of
Section 4.2.

         Section 5.3. Amendments to Noteholder Collateral Documents. (a) The
Trustee agrees that each Noteholder Mortgage covering any Common Collateral
shall contain such other language as the Senior Agent may reasonably request to
reflect the subordination of such Noteholder Mortgage to the Mortgage covering
such Common Collateral.

                                      -10-

<PAGE>

            (b) In the event the Senior Agent or the Senior Lenders enter into
any amendment, waiver or consent in respect of any of the Senior Lender
Collateral Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures from any provisions of, any Senior Lender
Collateral Document or changing in any manner the rights of the Senior Agent,
the Senior Lenders, the Borrower or the Guarantors thereunder, then such
amendment, waiver or consent shall apply automatically to any comparable
provision of the Comparable Noteholder Collateral Document without the consent
of the Trustee or the Noteholders and without any action by the Trustee, the
Borrower or any Guarantor; provided, however, (i) that no such amendment, waiver
or consent shall apply automatically to the Noteholder Collateral Documents if
it (A) shall have the effect of removing assets subject to the Lien of the
Noteholder Collateral Documents, except to the extent that a release of such
Lien is permitted by Section 5.1, (B) increases the principal amount of
Indebtedness under the Senior Credit Agreement to exceed the amounts of first
priority lien indebtedness permitted pursuant to the Indenture (being (x)
$60,000,000, (y) such additional amounts of up to $15,000,000 (pursuant to
Section 4.8(b)(ix) of the Indenture to the extent such $15,000,000 is not
incurred by Borrower outside of the Senior Credit Facility and (z) such
additional amounts permitted under Section 4.8(b)(v) of the Indenture to the
extent provided for in the Senior Credit Facility), (C) modifies any material
remedy provided for under the Noteholder Collateral Documents, (D) secures
indebtedness or obligations owed in favor of any other creditor or group of
creditors except as contemplated by Section 6, or (E) changes the priority of or
subordinates the Liens created under the Noteholder Collateral Documents, except
as contemplated by Section 6, and (ii) notice of such amendment, waiver or
consent shall have been given to the Trustee.

         Section 5.4. Rights As Unsecured Creditors. Notwithstanding anything to
the contrary in this Agreement, the Trustee and the Noteholders may exercise
rights and remedies as an unsecured creditor against the Borrower and its
Subsidiaries in accordance with the terms of the Noteholder Documents and
applicable law. Nothing in this Agreement shall prohibit the receipt by the
Trustee or any Noteholders of the required payments of interest and principal so
long as such receipt is not the direct or indirect result of the exercise by the
Trustee or any Noteholder of rights or remedies as a secured creditor or
enforcement of any Lien held by any of them in contravention of this Agreement.
In the event the Trustee or any Noteholder becomes a judgment lien creditor in
respect of Common Collateral as a result of its enforcement of its rights as an
unsecured creditor, such judgment lien shall be subordinated to the Liens
securing Senior Lender Claims on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to such Senior Lender Claims under this
Agreement. Nothing in this Agreement modifies any rights or remedies the Senior
Agent or the Senior Lenders may have with respect to the Senior Lender
Collateral.

         Section 5.5. Bailee for Perfection. (a) The Senior Agent agrees to hold
the Pledged Collateral that is part of the Common Collateral in its possession
or control (or in the possession or control of its agents or bailees) as bailee
for the Trustee and any assignee solely for the purpose of perfecting the
security interest granted in such Pledged Collateral pursuant to the Noteholder
Security Agreement, subject to the terms and conditions of this Section 5.5.

            (b) Until the Discharge of Senior Lender Claims has occurred, the
Senior Agent shall be entitled to deal with the Pledged Collateral in accordance
with the terms of the Senior Lender

                                      -11-

<PAGE>

Documents as if the Lien of the Trustee under the Noteholder Security Agreement
did not exist. The rights of the Trustee shall at all times be subject to the
terms of this Agreement and to the Senior Agent's rights under the Senior Lender
Documents.

            (c) The Senior Agent shall have no obligation whatsoever to the
Trustee or any Noteholder to assure that the Pledged Collateral is genuine or
owned by the Borrower or one of its Subsidiaries or to preserve rights or
benefits of any Person except as expressly set forth in this Section 5.5. The
duties or responsibilities of the Senior Agent under this Section 5.5 shall be
limited solely to holding the Pledged Collateral as bailee for the Trustee for
purposes of perfecting the Lien held by the Trustee.

            (d) The Senior Agent shall not have by reason of the Noteholder
Security Agreement or this Agreement or any other document a fiduciary
relationship in respect of the Trustee or any Noteholder.

            (e) Upon the Discharge of Senior Lender Claims, the Senior Agent
shall deliver to the Trustee the Pledged Collateral together with any necessary
endorsements (or otherwise allow such Trustee to obtain control of such Pledged
Collateral) or as a court of competent jurisdiction may otherwise direct.

            (f) In addition to the foregoing, the parties hereby acknowledge and
agree that the Excess Cash Flow Collateral Account has been established in the
name of the Company and subject to the control of the Senior Agent for the
Senior Lenders and the Trustee for the Noteholders to be maintained by
Manufacturers and Traders Trust Company as securities intermediary and that the
Senior Agent shall be deemed the "entitlement holder" as defined in Section
8-102(a)(7) of the New York UCC for benefit of the Senior Lenders and Trustee
shall be deemed to be the "entitlement holder" (as so defined) on behalf of the
Noteholders. By its execution of this agreement Senior Agent agrees to take all
such actions and direct all "entitlement orders" (as defined in Section 8-102(8)
of the New York UCC) as may be required to make such payments as required under
Section 4.19 of the Indenture to the extent permitted by Sections 4.5 and 8.21
of the Credit Agreement. In addition, upon the Discharge of the Senior Lender
Claims, the Senior Agent shall take such actions as shall be necessary to
terminate its Lien in and control over the Excess Cash Flow Collateral Account
including issuance of entitlement orders as may be necessary to relinquish
control over the Excess Cash Flow Collateral Account and to deliver such
certificates or instruments representing or evidencing a portion of the
Collateral that are not carried or credited in the Excess Cash Flow Collateral
Account to the Trustee. In addition, the Company hereby grants to the Trustee
for the benefit of the Holders control over the Excess Cash Flow Collateral
Account and all securities, accounts and monies deposited therein effective on
the relinquishment of control by the Senior Agent. The Company agrees to execute
such additional instruments to confirm the Senior Agent's control over the
Excess Cash Flow Collateral Account and all securities, accounts and monies
deposited therein and confirm the status of the Senior Agent as a protected
purchaser with respect to the Excess Cash Flow Collateral Account and collateral
therein as provided in Section 8-3-3 of the New York UCC and to confirm the
foregoing grant of control to the Trustee and confirm the status of Trustee to
be a protected purchaser with respect to the Excess Cash Flow Collateral Account
and collateral therein as provided in Section 8-3-3 of the New York UCC.

                                      -12-

<PAGE>

         Section 5.6. When Discharge of Senior Lender Claims Deemed to Not Have
Occurred. If at any time after the Discharge of Senior Lender Claims has
occurred the Borrower designates any Future First-Lien Credit Facility to be the
"Senior Credit Agreement" hereunder in accordance with the terms of the
Indenture, then such Discharge of Senior Lender Claims shall automatically be
deemed not to have occurred for all purposes of this Agreement (other than with
respect to any actions taken prior to the date of such designation as a result
of the occurrence of such first Discharge of Senior Lender Claims), and such
Future First-Lien Credit Facility shall automatically be treated as the Senior
Credit Agreement for all purposes of this Agreement, including without
limitation for purposes of the Lien priorities and rights in respect of
Collateral set forth herein. Upon receipt of notice of such designation
(including the identity of the new Senior Agent), the Trustee shall promptly
deliver to the Senior Agent the Pledged Collateral together with any necessary
endorsements (or otherwise allow such Senior Agent to obtain control of such
Pledged Collateral).

SECTION 6.        INSOLVENCY OR LIQUIDATION PROCEEDINGS.

         Section 6.1. Financing Issues. If any Borrower or Guarantor shall be
subject to any Insolvency or Liquidation Proceeding and the Senior Agent shall
desire to permit the use of cash collateral or to permit the Borrower to obtain
financing under section 363 or section 364 of the Bankruptcy Code ("DIP
Financing"), then the Trustee, on behalf of itself and the Noteholders, agrees
that it will raise no objection to such use or DIP Financing and will not
request adequate protection or any other relief in connection therewith (except
to the extent permitted by Section 6.3) and, to the extent the Liens securing
the Senior Lender Claims are subordinated or pari passu with such DIP Financing,
will subordinate its Liens in the Common Collateral to such DIP Financing (and
all Obligations relating thereto) on the same basis as the other Liens securing
the Noteholder Claims are so subordinated to Senior Lender Claims under this
Agreement.

         Section 6.2. Relief from the Automatic Stay. Until the Discharge of
Senior Lender Claims has occurred, the Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency or Liquidation Proceeding in respect of the
Common Collateral, without the prior written consent of the Senior Agent and the
Required Lenders.

         Section 6.3. Adequate Protection. The Trustee, on behalf of itself and
the Noteholders, agrees that none of them shall contest (or support any other
Person contesting) (a) any request by the Senior Agent or the Senior Lenders for
adequate protection or (b) any objection by the Senior Agent or the Senior
Lenders to any motion, relief, action or proceeding based on the Senior Agent or
the Senior Lenders claiming a lack of adequate protection. Notwithstanding the
foregoing contained in this Section 6.3, in any Insolvency or Liquidation
Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of its cash collateral under section 363 or section 364 of
the Bankruptcy Code, then the Trustee, on behalf of itself or any of the
Noteholders, may seek or request adequate protection in the form of a
replacement Lien on such additional collateral, which Lien is subordinated to
the Liens securing the Senior Lender Claims and such DIP Financing (and all
Obligations relating thereto) on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to the Senior Lender Claims under this

                                      -13-

<PAGE>

Agreement, and (ii) in the event the Trustee, on behalf of itself and the
Noteholders, seeks or requests adequate protection and such adequate protection
is granted in the form of additional collateral, then the Trustee, on behalf of
itself or any of the Noteholders, agrees that the Senior Agent shall also be
granted a senior Lien on such additional collateral as security for the Senior
Lender Claims and any such DIP Financing and that any Lien on such additional
collateral securing the Noteholder Claims shall be subordinated to the Liens on
such collateral securing the Senior Lender Claims and any such DIP Financing
(and all Obligations relating thereto) and any other Liens granted to the Senior
Lenders as adequate protection on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to such Senior Lender Claims under this
Agreement.

         Section 6.4. No Waiver. Nothing contained herein shall prohibit or in
any way limit the Senior Agent or any Senior Lender from objecting in any
Insolvency or Liquidation Proceeding or otherwise to any action taken by the
Trustee or any of the Noteholders, including, without limitation, the seeking by
the Trustee or any Noteholder of adequate protection or the asserting by the
Trustee or any Noteholder of any of its rights and remedies under the Noteholder
Documents or otherwise.

         Section 6.5. Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of the Borrower or any Guarantor any amount (a "Recovery"), then
the Senior Lender Claims shall be reinstated to the extent of such Recovery and
the Senior Lenders shall be entitled to a Discharge of Senior Lender Claims with
respect to all such recovered amounts. If this Agreement shall have been
terminated prior to such Recovery, this Agreement shall be reinstated in full
force and effect, and such prior termination shall not diminish, release,
discharge, impair or otherwise affect the obligations of the parties hereto from
such date of reinstatement.

SECTION 7.        RELIANCE; WAIVERS; ETC.

         Section 7.1. Reliance. The consent by the Senior Lenders to the
execution and delivery of the Noteholder Documents and the grant to the Trustee
on behalf of the Noteholders of a Lien on the Common Collateral and all loans
and other extensions of credit made or deemed made on and after the date hereof
by the Senior Lenders to the Borrower shall be deemed to have been given and
made in reliance upon this Agreement. The Trustee, on behalf of itself and the
Noteholders, acknowledges that it and the Noteholders have, independently and
without reliance on the Senior Agent or any Senior Lender, and based on
documents and information deemed by them appropriate, made their own credit
analysis and decision to enter into the Indenture, this Agreement and the
transactions contemplated hereby and thereby and they will continue to make
their own credit decision in taking or not taking any action under the Indenture
or this Agreement.

         Section 7.2. No Warranties or Liability. The Trustee, on behalf of
itself and Noteholders, acknowledges and agrees that each of the Senior Agent
and the Senior Lenders have made no express or implied representation or
warranty, including, without limitation, with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the
Senior Lender Documents. The Senior Lenders will be entitled to manage and
supervise their

                                      -14-

<PAGE>

respective loans and extensions of credit to the Borrower in accordance with law
and as they may otherwise, in their sole discretion, deem appropriate, and the
Senior Lenders may manage their loans and extensions of credit without regard to
any rights or interests that the Trustee or any of the Noteholders have in the
Common Collateral or otherwise, except as otherwise provided in this Agreement.
Neither the Senior Agent nor any Senior Lender shall have any duty to the
Trustee or any of the Noteholders to act or refrain from acting in a manner
which allows, or results in, the occurrence or continuance of an event of
default or default under any agreements with the Borrower (including, without
limitation, the Noteholder Documents), regardless of any knowledge thereof which
they may have or be charged with.

         Section 7.3. No Waiver of Lien Priorities. (a) No right of the Senior
Lenders, the Senior Agent or any of them to enforce any provision of this
Agreement shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Borrower or the Guarantors or by any act or
failure to act by any Senior Lender or the Senior Agent, or by any noncompliance
by any Person with the terms, provisions and covenants of this Agreement, any of
the Senior Lender Documents or any of the Noteholder Documents, regardless of
any knowledge thereof which the Senior Agent or the Senior Lenders, or any of
them, may have or be otherwise charged with;

            (b) Without in any way limiting the generality of the foregoing
paragraph (but subject to the rights of the Borrower and the Guarantors under
the Senior Lender Documents), the Senior Lenders, the Senior Agent and any of
them, may, at any time and from time to time, without the consent of, or notice
to, the Trustee or any Noteholder, without incurring any liabilities to the
Trustee or any Noteholder and without impairing or releasing the lien priorities
and other benefits provided in this Agreement (even if any right of subrogation
or other right or remedy of the Trustee or any Noteholder is affected, impaired
or extinguished thereby) do any one or more of the following:

                  (i)      change the manner, place or terms of payment or
            change or extend the time of payment of, or renew, exchange, amend,
            increase or alter, the terms of any of the Senior Lender Claims or
            any Lien in any Senior Lender Collateral or guaranty thereof or any
            liability of the Borrower or any Guarantor, or any liability
            incurred directly or indirectly in respect thereof (including,
            without limitation, any increase in or extension of the Senior
            Lender Claims), without any restriction as to the amount, tenor or
            terms of any such increase or extension or otherwise amend, renew,
            exchange, extend, modify or supplement in any manner any Liens held
            by the Senior Lenders, the Senior Lender Claims or any of the Senior
            Lender Documents;

                  (ii)     sell, exchange, release, surrender, realize upon,
            enforce or otherwise deal with in any manner and in any order any
            part of the Senior Lender Collateral or any liability of the
            Borrower or any Guarantor to the Senior Lenders or the Senior Agent,
            or any liability incurred directly or indirectly in respect thereof;

                  (iii)    settle or compromise any Senior Lender Claim or any
            other liability of the Borrower or any Guarantor or any security
            therefor or any liability incurred directly or indirectly in respect
            thereof and apply any sums by whomsoever paid and however

                                      -15-

<PAGE>

            realized to any liability (including, without limitation, the Senior
            Lender Claims) in any manner or order; and

                  (iv)     exercise or delay in or refrain from exercising any
            right or remedy against the Borrower or any security or any
            Guarantor or any other Person, elect any remedy and otherwise deal
            freely with the Borrower and the Senior Lender Collateral and any
            security and any guarantor or any liability of the Borrower or any
            Guarantor to the Senior Lenders or any liability incurred directly
            or indirectly in respect thereof;

provided, however, that nothing contained in this Section 7.3(b) is intended as
a waiver or modification by the Trustee or any Noteholder of the terms and
conditions of the Noteholder Documents.

            (c) The Trustee, on behalf of itself and the Noteholders, also
agrees that the Senior Lenders and the Senior Agent shall have no liability to
the Trustee or any Noteholder, and the Trustee, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the Senior
Agent, arising out of any and all actions which the Senior Lenders or the Senior
Agent may take or permit or omit to take with respect to: (i) the Senior Lender
Documents, (ii) the collection of the Senior Lender Claims or (iii) the
foreclosure upon, or sale, liquidation or other disposition of, the Senior
Lender Collateral. The Trustee, on behalf of itself and the Noteholders, agrees
that the Senior Lenders and the Senior Agent have no duty to them in respect of
the maintenance or preservation of the Senior Lender Collateral, the Senior
Lender Claims or otherwise; and

            (d) The Trustee, on behalf of itself and the Noteholders, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or otherwise claim the benefit of,
any marshalling, appraisal, valuation or other similar right that may otherwise
be available under applicable law or any other similar rights a junior secured
creditor may have under applicable law.

         Section 7.4. Obligations Unconditional. All rights, interests,
agreements and obligations of the Senior Agent and the Senior Lenders and the
Trustee and the Noteholders, respectively, hereunder shall remain in full force
and effect irrespective of:

                  (a) any lack of validity or enforceability of the Senior
            Lender Documents or any Noteholder Documents;

                  (b) any change in the time, manner or place of payment of, or
            in any other terms of, all or any of the Senior Lender Claims or
            Noteholder Claims, or any amendment or waiver or other modification,
            including, without limitation, any increase in the amount thereof,
            whether by course of conduct or otherwise, of the terms of the
            Senior Credit Agreement or any other Senior Lender Document or of
            the terms of the Indenture or any other Noteholder Document;

                  (c) any exchange of any security interest in any Common
            Collateral or any other collateral, or any amendment, waiver or
            other modification, whether in writing or

                                      -16-

<PAGE>

            by course of conduct or otherwise, of all or any of the Senior
            Lender Claims or Noteholder Claims or any guarantee thereof;

                  (d) the commencement of any Insolvency or Liquidation
            Proceeding in respect of the Borrower or any Guarantor; or

                  (e) any other circumstances which otherwise might constitute a
            defense available to, or a discharge of, any Borrower or Guarantor
            in respect of the Senior Lender Claims, or of the Trustee or any
            Noteholder in respect of this Agreement.

SECTION 8.        MISCELLANEOUS.

         Section 8.1. Conflicts. In the event of any conflict between the
provisions of this Agreement and the provisions of the Senior Lender Documents
or the Noteholder Documents, the provisions of this Agreement shall govern.

         Section 8.2. Continuing Nature of this Agreement. This Agreement shall
continue to be effective until the Discharge of Senior Lender Claims shall have
occurred. This is a continuing agreement of lien subordination and the Senior
Lenders may continue, at any time and without notice to the Trustee or any
Noteholder, to extend credit and other financial accommodations and lend monies
to or for the benefit of the Borrower constituting Senior Lender Claims on the
faith hereof. The Trustee, on behalf of itself and the Noteholders, hereby
waives any right it may have under applicable law to revoke this Agreement or
any of the provisions of this Agreement. The terms of this Agreement shall
survive, and shall continue in full force and effect, in any Insolvency or
Liquidation Proceeding.

         Section 8.3. Amendments; Waivers. No amendment, modification or waiver
of any of the provisions of this Agreement by the Trustee or the Senior Agent
shall be deemed to be made unless the same shall be in writing signed on behalf
of the party making the same or its authorized agent and each waiver, if any,
shall be a waiver only with respect to the specific instance involved and shall
in no way impair the rights of the parties making such waiver or the obligations
of the other parties to such party in any other respect or at any other time.
The Borrower and Guarantors shall not have any right to amend, modify or waive
any provision of this Agreement without the consent of the Trustee or the Senior
Agent, as applicable, nor shall any consent or signed writing be required of any
of them to effect any amendment, modification or waiver of any provision of this
Agreement, except that no amendment, modification or waiver affecting any
obligation or right of the Borrower or any Guarantor hereunder shall be made
without the consent of the Borrower.

         Section 8.4. Information Concerning Financial Condition of the Borrower
and its Subsidiaries. The Senior Agent and the Senior Lenders, on the one hand,
and the Trustee and the Noteholders, on the other hand, shall each be
responsible for keeping themselves informed of (a) the financial condition of
the Borrower and its Subsidiaries and all endorsers and/or guarantors of the
Noteholder Claims or the Senior Lender Claims and (b) all other circumstances
bearing upon the risk of nonpayment of the Noteholder Claims or the Senior
Lender Claims. The Senior Agent and the Senior Lenders shall have no duty to
advise the Trustee or any Noteholder

                                      -17-

<PAGE>

of information known to it or them regarding such condition or any such
circumstances or otherwise. In the event the Senior Agent or any of the Senior
Lenders, in its or their sole discretion, undertakes at any time or from time to
time to provide any such information to the Trustee or any Noteholder, it or
they shall be under no obligation (x) to provide any additional information or
to provide any such information on any subsequent occasion, (y) to undertake any
investigation or (z) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, such party wishes to maintain
confidential.

         Section 8.5. Section 8.5. Subrogation. The Trustee, on behalf of itself
and the Noteholders, hereby waives any rights of subrogation it may acquire as a
result of any payment hereunder until the Discharge of Senior Lender Claims has
occurred.

         Section 8.6. Application of Payments. All payments received by the
Senior Lenders may be applied, reversed and reapplied, in whole or in part, to
such part of the Senior Lender Claims as the Senior Lenders, in their sole
discretion, deem appropriate. The subordination of the Liens of the Noteholders
and other agreements of the Trustee will not be affected by any extension or
postponement of the time of payment of the Senior Lender Claims or any part
thereof and to any other indulgence with respect thereto, to any substitution,
exchange or release of any security which may at any time secure any part of the
Senior Lender Claims and to the addition or release of any other Person
primarily or secondarily liable therefor.

         Section 8.6. Consent to Jurisdiction; Waivers. The parties hereto
consent to the jurisdiction of any state or federal court located in New York,
New York, and consent that all service of process may be made by registered mail
directed to such party as provided in Section 8.7 below for such party. Service
so made shall be deemed to be completed three (3) days after the same shall be
posted as aforesaid. The parties hereto waive any objection to any action
instituted hereunder based on forum non conveniens, and any objection to the
venue of any action instituted hereunder. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any other Loan
Document, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto.

         Section 8.7. Notices. All notices to the Noteholders and the Senior
Lenders permitted or required under this Agreement may be sent to the Trustee
and the Senior Agent, respectively. Unless otherwise specifically provided
herein, any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied,
electronically mailed or sent by courier service or U.S. mail and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of a telecopy or electronic mail or four Business Days after deposit in
the U.S. mail (registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the parties hereto shall
be as set forth below each party's name on the signature pages hereto, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.

         Section 8.8. Further Assurances. The Trustee, on behalf of itself and
the Noteholders, agrees that each of them shall take such further action and
shall execute and deliver to the Senior

                                      -18-

<PAGE>

Agent and the Senior Lenders such additional documents and instruments (in
recordable form, if requested) as the Senior Agent or the Senior Lenders may
reasonably request to effectuate the terms of and the lien priorities
contemplated by this Agreement.

         Section 8.9. Governing Law. This Agreement has been delivered and
accepted at and shall be deemed to have been made at New York, New York and
shall be interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.

         Section 8.10. Binding on Successors and Assigns. This Agreement shall
be binding upon the Senior Agent, the Senior Lenders, the Trustee, the
Noteholders and their respective permitted successors and assigns.

         Section 8.11. Specific Performance. The Senior Agent may demand
specific performance of this Agreement. The Trustee, on behalf of itself and the
Noteholders hereby irrevocably waives any defense based on the adequacy of a
remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the Senior Agent.

         Section 8.12. Compliance With TIA. Nothing contained herein shall
impair the ability of the Trustee to take any action necessary to comply with
any obligations imposed under applicable law, including without limitation, the
TIA.

         Section 8.13. Section Titles; Time Periods. The section titles
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of this Agreement. In the
computation of time periods, unless otherwise specified, the word "from" means
"from and including" and each of the words "to" and "until" means "to but
excluding" and the word "through" means "to and including".

         Section 8.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be an original and all of which shall
together constitute one and the same document.

         Section 8.15. Authorization. By its signature, each Person executing
this Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.

         Section 8.16. No Third Party Beneficiaries. This Agreement and the
rights and benefits hereof shall inure to the benefit of the Senior Agent and
the Senior Lenders and their respective successors and assigns and, to the
extent applicable, the Borrower, the Guarantors, the Trustee and the Noteholders
and their respective permitted successors and assigns. No other Person, shall
have or be entitled to assert rights or benefits hereunder. Notwithstanding
anything to the contrary in this Agreement, the Borrower shall cause the
Guarantors to comply with the terms of this Agreement.

                                      -19-

<PAGE>

         Section 8.17. Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to the Borrower or Guarantors shall include any
Borrower or Guarantor as debtor and debtor-in-possession and any receiver or
trustee for the Borrower or any Guarantor (as the case may be) in any Insolvency
or Liquidation Proceeding.

                           [Signature Pages to Follow]

                                      -20-

<PAGE>

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

                                       SENIOR AGENT:

                                       HARRIS TRUST AND SAVINGS BANK,
                                          as Senior Agent

                                             /s/ Thad Rasche
                                       By: ____________________________________

                                                 Thad Rasche
                                           Name: ______________________________

                                                  Vice President
                                           Title: _____________________________

                                       Address:

                                       111 West Monroe Street
                                       Chicago, Illinois 60603
                                       Attention: Thad Rasche
                                       Telecopy no.: (312) 461-5739

\
                                       TRUSTEE:

                                       MANUFACTURERS AND TRADERS TRUST
                                          COMPANY, as Collateral Agent

                                            /s/ Russell T. Whitley
                                       By: _____________________________________

                                                 Russell T. Whitley
                                           Name: _______________________________

                                                  Assistant Vice President
                                           Title: ______________________________

                                       Address:

                                       One M&T Plaza
                                       Buffalo, NY 14203
                                                  Corporate Trust Department
                                       Attention: ______________________________
                                       Telecopy no.: (716) 842-5602

                                      -21-

<PAGE>

                                       RENT-WAY, INC.

                                       By: /s/ William E. Morgenstern
                                           _____________________________________
                                           Name:  William E. Morgenstern
                                                  ______________________________
                                           Title: Chief Executive Officer
                                                  ______________________________

                                       Address:

                                       One Rent Way Place
                                       Erie, Pennsylvania 16505
                                       Attention: Chief Financial Officer
                                       Telecopy no.: (814) 455-5378

                                      -22-

<PAGE>

                      EXHIBIT A TO INTERCREDITOR AGREEMENT
                            ACCOUNT CONTROL AGREEMENT

         This Account Control Agreement (as amended, supplemented or otherwise
modified and in effect from time to time, this "Agreement") is by and among
Rent-Way, Inc., a Pennsylvania corporation (the "Company"), Manufacturers and
Traders Trust Company (the "Bank") and Harris Trust and Savings Bank, as
administrative agent and secured party (in such capacity, the "Administrative
Agent").

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

         1.       Account. (a) The Company hereby notifies you (the "Bank") that
the Company has granted a security interest in, and has transferred control
over, account no. __________ maintained with the Bank (the "Account") to the
Administrative Agent. The Account is registered on the books and records of the
Bank in the name of "Rent-Way Excess Cash Flow Collateral Account". The Company
hereby irrevocably directs Bank to, and the Bank hereby agrees that it will,
comply with all entitlement orders (as such term is defined in the UCC) and
other instructions originated by the Administrative Agent concerning the Account
and all financial assets, cash, and other property on deposit therein or
otherwise held therein (the "Account Collateral") without further consent by the
Company. In addition, the Company, the Administrative Agent and the Bank agree
that until such time as the Administrative Agent shall have delivered to the
Bank a direction notice in substantially the form of Exhibit A hereto (the
"Direction Notice"), the Bank is hereby authorized to:

                  (i)      follow its usual operating procedures for crediting
         funds to the Account, except as modified by this Agreement;

                  (ii)     charge the Account for all returned funds, service
         charges, and other fees and charges associated with the Account;

                  (iii)    follow its usual procedures in the event the Account
         or any monies, financial assets or other property credited thereto
         should be or become the subject of any writ, levy, order or other
         similar judicial or regulatory order or process;

                  (iv)     permit the Company to operate and transact business
         through the Account in its normal fashion; provided that the Bank shall
         neither accept nor comply with any entitlement order from the Company
         requiring a free delivery of any financial asset from the Account or
         deliver any such financial asset to the Company nor pay any free credit
         balance or other amount owing from the Bank to the Company with respect
         to the Account or the Account Collateral except in accordance with the
         Intercreditor Agreement; and

                  (v)      permit the Company and the Administrative Agent to
         obtain upon request any information relating to the Account, including,
         without limitation, any information regarding the balance or activity
         of the Account.

<PAGE>

         (b)      Following delivery by the Administrative Agent of a Direction
Notice, the Bank shall take sole and exclusive instruction from the
Administrative Agent as to the disposition of all amounts deposited in the
Account, and the Bank shall not comply with any entitlement order or other
request or direction by the Company or any other person with respect to the
Account or the Account Collateral.

         (c)      The Account is either a "securities account" (as defined in
Section 8-501 of the Uniform Commercial Code (the "UCC")) or a "deposit account"
(as defined in Section 9-102(a)(29) of the UCC)). To the extent the Account is a
securities account, each item of property (whether constituting investment
property, a financial asset, a security, an instrument or cash) shall be treated
as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC. All
securities or other property underlying any financial assets credited to the
Account shall be registered in the name of the Bank, indorsed to the Bank or in
blank or credited to another securities account maintained in the name of the
Bank, and in no case will any financial asset credited to the Account be
registered in the name of the Company or its affiliates, payable to the order of
the Company or its affiliates or specially indorsed to the Company or its
affiliates except to the extent the foregoing have been specially indorsed to
the Bank or in blank.

         (d)      The Company and Administrative Agent acknowledge that Bank has
been granted a security interest in the Account pursuant to that certain
Indenture dated June 2, 2003 from the Company securing the repayment of the
11-7/8ths Senior Secured Notes Due 2010 and ("Indenture") and related security
agreements which liens and security interests have been expressly subordinated
to the lien and security interests granted to the Administrative Agent in
accordance with that certain Intercreditor Agreement dated as of June 2, 2003 by
and among Administrative Agent, Bank and the Company ("Intercreditor
Agreement"). Pursuant to said Intercreditor Agreement the Administrative Agent
has agreed to issue entitlement orders (Direction Notices hereunder) as may be
required to make certain payments under the Indenture.

         (e)      The Bank hereby confirms that except for the liens and
security interests of the Bank as Trustee for the Noteholders under the
Indenture which have been made expressly subordinate to the liens and security
interests of the Administrative Agent pursuant to the Intercreditor Agreement
(i) there are no other agreements entered into between the Bank, on the one
hand, and the Company or any of their affiliates, on the other hand, with
respect to the Account, (ii) it has not entered into, and until the termination
of this Agreement will not enter into, any agreement with any other person
relating to the Account and/or any property credited thereto pursuant to which
the Bank has agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the UCC) or instructions (within the meaning of Section 9-104 of
the UCC) of such other person, (iii) it has not entered into, and until the
termination of this Agreement will not enter into, any agreement with the
Administrative Agent, the Company, or any of their affiliates purporting to
limit or condition the obligation of the Bank to comply with entitlement orders
or instructions and (iv) except for the claims and interests of the
Administrative Agent, and the Company in the Account, the Bank does not know of
any lien on, or claim to, or interest in, the Account or in any financial asset
(as defined in Section 8-102(a) of the UCC) credited thereto. The Bank shall
give the Administrative Agent prompt written notice of any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Account or in any financial asset
carried therein.

                                       -2-

<PAGE>

         (f)      The Bank shall not change the name, location or account number
of the Account without the prior written consent of the Administrative Agent.

         2.       Other Agreements. The Bank shall not be deemed to have any
knowledge (imputed or otherwise) of: (i) any of the terms or conditions of any
other agreement (any "Other Agreement") involving the Administrative Agent and
the Company or (ii) any breach of any term or condition of any Other Agreement.
The Bank has no obligation to inform any person of any such breach or take any
action in connection with any of the foregoing, except such actions regarding
the Account as are specified in this Agreement. The Bank is not responsible for
the effectiveness, enforceability, genuineness or validity of any provision of
the Other Agreements or for the observance or performance of any of the terms or
conditions thereof.

         3.       Set-Off; Etc. The Bank hereby agrees that it shall not
exercise any right of set-off, banker's lien or any other right in favor of any
person other than the Administrative Agent with respect to the Account except as
expressly provided herein, until it has been advised in writing by
Administrative Agent that all amounts due and owing by the Company under the
Credit Agreement dated as of June 2, 2003 by and among the Company, the
Guarantors from time to time Parties thereto, the Lenders from time to time
Parties thereto and Harris Trust and Savings Bank, as Administrative Agent and
National City Bank, as Syndication Agent and BMO Nesbitt Burns, as Lead Arranger
("Credit Agreement") have been paid in full. The Administrative Agent shall
notify Bank promptly in writing upon payment in full of all such obligations,
and this Agreement shall automatically terminate upon receipt of such notice.
All expenses for the maintenance and administration of the Account are the
responsibility of the Company. The Company, the Bank and the Administrative
Agent agree that the Bank may debit the Account for (i) any items deposited in
the Account which may be returned and (ii) all customary service charges and
fees, to the extent that the same is not paid by the Company within thirty (30)
days after the due date thereof.

         4.       Indemnification. The Company agrees to indemnify and hold the
Bank harmless against actual loss incurred by the Bank with respect to this
Agreement, including, without limitation: (i) any funds which are returned for
any reason and (ii) any failure of the Company to pay any invoice or charge of
the Bank for services with respect to the Agreement or the Account or any amount
owing to the Bank from the Company or the Administrative Agent under this
Agreement. The Company shall indemnify the Bank against, and hold it harmless
from, any and all liabilities, claims, costs, expenses and damages of any nature
(including but not limited to allocated costs of staff counsel, other reasonable
attorney's fees and any fees and expenses incurred in enforcing this Agreement)
in any way arising out of or relating to disputes or legal actions concerning
this Agreement, the Account or any funds on deposit in the Account; provided
that this Section 4 shall not apply to any cost or damage attributable to the
gross negligence or willful misconduct of the Bank or its officers, agents or
employees. The Company also agrees to pay to the Bank, upon receipt of the
Bank's invoice, all reasonable costs, expenses and attorneys' fees (including
allocated costs for in-house legal services) incurred by the Bank in connection
with the enforcement of this Agreement and any instrument or agreement required
hereunder including, but not limited to, any such costs, expenses and fees
arising out of the resolution of any conflict, dispute, motion regarding
entitlement to rights or rights of action, or other action to enforce the Bank's
rights in a case arising under Title 11, United States Code.

                                       -3-

<PAGE>

The Company agrees to pay the Bank, promptly upon receipt of the Bank's invoice,
all reasonable costs, expenses and attorneys' fees incurred by the Bank in the
preparation and administration of this Agreement (including any amendments
hereto or instruments or agreements required hereunder). The Company's
obligations under this Section 4 shall survive termination of this Agreement.

         5.       Limitation of Liability. The Bank shall not be liable to the
Company or the Administrative Agent for any expense, claim, loss, damage or cost
(collectively, "Damages") arising out of or relating to its performance under
this Agreement, other than those Damages which result directly from its acts or
omissions (including acts or omissions of its officers, agents or employees)
constituting negligence.

         6.       Failure to Perform. The Bank will excused from failing to act
or delay in acting, and no such failure or delay shall constitute a breach of
this Agreement or otherwise give rise to any liability of the Bank, if such
failure or delay is caused by circumstances beyond the Bank's reasonable
control, including, but not limited to, legal constraint, emergency conditions,
action or inaction of governmental, civil or military authority, fire, strike,
lockout or other labor dispute, war, riot, theft, flood, earthquake or other
natural disaster, breakdown of public or private or common carrier
communications or transmission facilities, equipment failure.

         7.       Termination. The Administrative Agent may terminate this
Agreement by written notice to the Bank, with a copy to the Company, no later
than ten (10) days prior to the termination date specified in such notice. The
Bank may terminate this Agreement by written notice to the Administrative Agent,
with a copy to the Company, no later than sixty (60) days prior to the
termination date specified in such notice. Upon receipt of such notice, whether
or not a default exists under the agreement between the Company and the
Administrative Agent, the Administrative Agent is hereby authorized to issue a
Direction Notice and take such steps as the Administrative Agent may require to
protect its security interest in the Account Collateral, including, but not
limited to, transferring all of the financial assets and credit balances in the
Account to another securities account in the name of the Administrative Agent or
its designee. No such termination shall affect any claim or cause of action of
any party hereto that existed under this Agreement prior to, or at any time of,
such termination.

         8.       Notices. Any notice under this Agreement shall be given (i) in
writing through first class United States or express mail service, charges
prepaid by the person giving such notice or (ii) by telecopy and confirmed in
writing in accordance with clause (i) of this Section 8. All other notices
required or permitted to be given under this Agreement shall be given by any
commercially reasonable means. Except as otherwise provided in this Agreement or
by applicable law, all notices shall be effective when delivered. Each written
notice given pursuant to this Agreement shall be addressed to the address of
such person specified below. The Administrative Agent, the Company, and the Bank
may each change the address for service of notice upon it by a notice in writing
to the others.

                                       -4-

<PAGE>

                  If to the Company:

                           Rent-Way, Inc.
                           One Rent-Way Place
                           Erie, Pennsylvania 16505
                           Attn: Chief Financial Officer
                           Telephone: (814) 455-5378
                           Telecopy: (814) 461-5401

                  If to the Administrative Agent:

                           Harris Trust and Savings Bank
                           111 West Monroe Street
                           Chicago, Illinois   60603
                           Attention: Thad Rasche
                           Telecopy: (312) 461-5225
                           Telephone: (312) 461-573

                  If to the Bank:

                           Manufacturers and Traders Trust Company
                           One M&T Plaza
                           Buffalo, NY 14203
                           Telephone: (716) 842-5602
                           Telecopy: (716) 842-4474
                           Attention: Corporate Trust Department

         9.       Amendments and Waivers. The provisions of this Agreement may
not be amended, supplemented or otherwise modified or waived without the prior
written consent of each party hereto.

         10.      Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

         11.      No Extension of Credit. Nothing in this Agreement constitutes
a commitment of the Bank, or otherwise obligates the Bank, to extend any credit
to the Administrative Agent, or the Company, nor shall any course of dealing
between or among the Company, the Administrative Agent or the Bank be deemed to
be, or constitute, any such commitment or obligation.

         12.      Availability of Funds. The availability of funds contemplated
by this Agreement will be in accordance with the Bank's then current applicable
availability policy or, if such funds are not subject to such policy, upon such
funds becoming final and irrevocable funds. Even if an account statement for the
Account shows such funds have been credited to the Account, the Bank may delay
credit on its books for such funds in accordance with the Bank's then current
applicable availability policy. Anything in this Agreement or in any course of
dealing between or among the Company, the Administrative Agent or the Bank to
the contrary notwithstanding, the

                                       -5-

<PAGE>

Bank, upon prompt written notice to the Company and the Administrative Agent (as
permitted by any applicable laws, regulations, rules and operating circulars of
governmental agencies, funds transfer and clearing house rules and clearing
arrangements, whether or not the Bank is party thereto (the "Rules")), may
change the time in which funds deposited in the Account become available to the
Administrative Agent or the Company, provided such change does not extend such
time beyond the maximum, if any, permitted by the applicable Rules.

         13.      Taxes. The Company, is responsible for all tariffs, duties and
taxes (excluding United States Federal and state taxation on the overall net
income of the Bank) imposed by any government or governmental agency in
connection with this Agreement, however designated, levied or based, including
without limitation, state and local lease, personal, sales and use taxes.

         14.      Assignments. This Agreement will inure to the benefit of, and
be binding upon, the parties hereto and their respective successors and assigns.
No party hereto may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the other parties hereto;
provided that the Bank may freely assign its rights and obligations if this
Agreement to any successor by merger of the Bank or to any entity that is
directly or indirectly (i) in control of the Bank, (ii) under the control of the
Bank or (iii) under common control with the Bank.

         15.      Other Agreements and Services. Except as specifically set
forth in this Agreement, nothing in this Agreement limits or otherwise affects:
any other agreement now or hereafter existing between the Company and its
affiliates and the Bank relating to any other financial services provided by the
Bank to the Company or its affiliates or the Bank's right to accept deposits
from, lend money to and generally engage in any kind of banking or trust
business with the Company or its affiliates. This Agreement controls in the
event of any conflict between this Agreement and any other document or written
or oral statement. This Agreement supersedes all prior understandings, writings,
proposals, representations and communications, oral or written, of any party
relating to the subject matter hereof.

         16.      Representations and Warranties. Each of the parties hereto
represents and warrants that (i) it is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) it
has the requisite power and authority to execute, deliver and perform its
obligations under this Agreement, (iii) this Agreement has been duly authorized,
executed and delivered by it and (iv) this Agreement constitutes a valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar process,
whether considered in a proceeding in law or at equity.

         17.      Counterparts. (a) This Agreement may be executed by the
Administrative Agent, the Company and the Bank individually or in several
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same agreement.

         (b)      The parties hereto unconditionally and irrevocably waive any
right to trial by jury in any legal proceeding relating to any dispute arising
under this Agreement.

                                       -6-

<PAGE>

         Please agree to the terms of this Account Control Agreement by signing
in the space provided below.

                                        Very truly yours,

                                       -7-

<PAGE>

                                                                       EXHIBIT A

                           [FORM OF DIRECTION NOTICE]

                             _______________, 20___

[Name and Address of Lockbox Bank]

         Re:                   Account No._______

Ladies and Gentlemen:

         Reference is hereby made to that certain Account Control Agreement,
dated as of _______, 2003 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Agreement"), by and among [______________], and
you. Capitalized terms used herein and not defined herein shall have the meaning
assigned to such terms in the Agreement.

         This is a Direction Notice referred to in the Agreement. We hereby give
you notice that, on and after the date hereof, you shall take sole and exclusive
instruction from the Administrative Agent as to the disposition of the Account
and financial assets and funds credited thereto. You are hereby instructed not
to accept any direction, instructions or entitlement orders or instructions with
respect to the Account or the financial assets and funds credited thereto from
any person other than the Administrative Agent, unless otherwise ordered by a
court of competent jurisdiction.

         Kindly acknowledge your receipt and understanding of this letter and
its terms in the space provided below.

                                        Very truly yours,

                                        [____________], as Administrative Agent

                                        By: ____________________________________
                                           Name:
                                           Title:

Accepted and agreed:

[BANK]

By: _________________________________
   Name:
   Title:

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