Document:

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                                                               EXECUTION VERSION

                                                                   EXHIBIT 10.4

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                                CREDIT AGREEMENT

                                      among

                              RENT-A-CENTER, INC.,

                                  as Borrower,

              The Several Lenders from Time to Time Parties Hereto,

                       MORGAN STANLEY SENIOR FUNDING INC.,

                             as Documentation Agent,

                JPMORGAN CHASE BANK and BEAR, STEARNS & CO. INC.,

                             as Syndication Agents,

              WACHOVIA BANK, NATIONAL ASSOCIATION, UBS WARBURG LLC,

                    UNITED OVERSEAS BANK and CREDIT LYONNAIS

                               as Managing Agents,

                                       and

                          LEHMAN COMMERCIAL PAPER INC.,

                             as Administrative Agent

                            Dated as of May 28, 2003

              LEHMAN BROTHERS INC. and J.P. MORGAN SECURITIES INC.,

                     as Joint Lead Arrangers and Bookrunners

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

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                                TABLE OF CONTENTS

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SECTION 1.        DEFINITIONS.....................................................................................    1

         1.1.     Defined Terms...................................................................................    1
         1.2.     Other Definitional Provisions..................................................................    23

SECTION 2.        AMOUNT AND TERMS OF FACILITIES.................................................................    24

         2.1.     Term Loans.....................................................................................    24
         2.2.     Revolving Commitments..........................................................................    24
         2.3.     Swingline Commitment...........................................................................    25
         2.4.     Procedure for Term Loan Borrowing..............................................................    25
         2.5.     Procedure for Revolving Loan Borrowing.........................................................    25
         2.6.     Procedure for Swingline Borrowing; Refunding of Swingline Loans................................    26
         2.7.     Repayment of Loans.............................................................................    27
         2.8.     Commitment Fees, Etc...........................................................................    28
         2.9.     Termination or Reduction of Commitments........................................................    28
         2.10.    Optional Prepayments...........................................................................    29
         2.11.    Mandatory Prepayments..........................................................................    29
         2.12.    Conversion and Continuation Options............................................................    30
         2.13.    Limitations on Eurodollar Tranches.............................................................    31
         2.14.    Interest Rates and Payment Dates...............................................................    31
         2.15.    Computation of Interest and Fees...............................................................    31
         2.16.    Inability to Determine Interest Rate...........................................................    32
         2.17.    Pro Rata Treatment and Payments................................................................    32
         2.18.    Requirements of Law............................................................................    33
         2.19.    Taxes..........................................................................................    34
         2.20.    Indemnity......................................................................................    36
         2.21.    Change of Lending Office.......................................................................    36
         2.22.    Replacement of Lenders.........................................................................    36
         2.23.    Illegality.....................................................................................    37

SECTION 3.        LETTERS OF CREDIT..............................................................................    37

         3.1.     LC Commitments.................................................................................    37
         3.2.     Procedure for Issuance of Letter of Credit.....................................................    38
         3.3.     Fees and Other Charges.........................................................................    38
         3.4.     RC LC Participations...........................................................................    38
         3.5.     Tranche A LC Participations....................................................................    39
         3.6.     Reimbursement Obligation of the Borrower.......................................................    41
         3.7.     Obligations Absolute...........................................................................    41
         3.8.     Letter of Credit Payments......................................................................    42
         3.9.     Applications...................................................................................    42

SECTION 4.        REPRESENTATIONS AND WARRANTIES.................................................................    42

         4.1.     Financial Condition............................................................................    42
         4.2.     No Change......................................................................................    42
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         4.3.     Existence; Compliance with Law.................................................................    43
         4.4.     Power; Authorization; Enforceable Obligations..................................................    43
         4.5.     No Legal Bar...................................................................................    43
         4.6.     Litigation.....................................................................................    43
         4.7.     No Default.....................................................................................    43
         4.8.     Ownership of Property; Liens...................................................................    44
         4.9.     Intellectual Property..........................................................................    44
         4.10.    Taxes..........................................................................................    44
         4.11.    Federal Regulations............................................................................    44
         4.12.    Labor Matters..................................................................................    44
         4.13.    ERISA..........................................................................................    44
         4.14.    Investment Company Act; Other Regulations......................................................    45
         4.15.    Subsidiaries...................................................................................    45
         4.16.    Use of Proceeds................................................................................    45
         4.17.    Environmental Matters..........................................................................    45
         4.18.    Accuracy of Information, etc...................................................................    46
         4.19.    Security Documents.............................................................................    46
         4.20.    Solvency.......................................................................................    47
         4.21.    Senior Indebtedness............................................................................    47
         4.22.    Regulation H...................................................................................    47
         4.23.    Insurance......................................................................................    47
         4.24.    Lease Payments.................................................................................    47

SECTION 5.        CONDITIONS PRECEDENT...........................................................................    48

         5.1.     Conditions to Effectiveness....................................................................    48
         5.2.     Conditions to Each Extension of Credit.........................................................    50

SECTION 6.        AFFIRMATIVE COVENANTS..........................................................................    50

         6.1.     Financial Statements...........................................................................    50
         6.2.     Certificates; Other Information................................................................    51
         6.3.     Payment of Obligations.........................................................................    52
         6.4.     Maintenance of Existence; Compliance...........................................................    52
         6.5.     Maintenance of Property; Insurance.............................................................    52
         6.6.     Inspection of Property; Books and Records; Discussions.........................................    52
         6.7.     Notices........................................................................................    52
         6.8.     Environmental Laws.............................................................................    53
         6.9.     Additional Collateral, etc.....................................................................    53
         6.10.    Permitted Acquisitions and Permitted Foreign Acquisitions......................................    54
         6.11.    Use of Proceeds................................................................................    55
         6.12.    Further Assurances.............................................................................    55

SECTION 7.        NEGATIVE COVENANTS.............................................................................    55

         7.1.     Financial Condition Covenants..................................................................    56
         7.2.     Indebtedness...................................................................................    56
         7.3.     Liens..........................................................................................    57
         7.4.     Fundamental Changes............................................................................    59
         7.5.     Disposition of Property........................................................................    59
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         7.6.     Restricted Payments............................................................................    60
         7.7.     Capital Expenditures...........................................................................    61
         7.8.     Investments....................................................................................    61
         7.9.     Payments and Modifications of Certain Debt Instruments and Preferred Stock.....................    62
         7.10.    Transactions with Affiliates...................................................................    63
         7.11.    Sales/Leaseback Transactions...................................................................    63
         7.12.    Changes in Fiscal Periods......................................................................    63
         7.13.    Negative Pledge Clauses........................................................................    63
         7.14.    Clauses Restricting Subsidiary Distributions...................................................    64
         7.15.    Lines of Business..............................................................................    64

SECTION 8.        EVENTS OF DEFAULT..............................................................................    64

SECTION 9.        THE AGENTS.....................................................................................    67

         9.1.     Appointment....................................................................................    67
         9.2.     Delegation of Duties...........................................................................    68
         9.3.     Exculpatory Provisions.........................................................................    68
         9.4.     Reliance by Administrative Agent...............................................................    68
         9.5.     Notice of Default..............................................................................    68
         9.6.     Non-Reliance on Agents and Other Lenders.......................................................    69
         9.7.     Indemnification................................................................................    69
         9.8.     Agent in Its Individual Capacity...............................................................    70
         9.9.     Successor Administrative Agent.................................................................    70
         9.10.    Authorization to Release Guarantees and Liens..................................................    70
         9.11.    Documentation Agent, Syndication Agents and Managing Agents....................................    70

SECTION 10.       MISCELLANEOUS..................................................................................    70

         10.1.    Amendments and Waivers.........................................................................    70
         10.2.    Notices........................................................................................    71
         10.3.    No Waiver; Cumulative Remedies.................................................................    72
         10.4.    Survival of Representations and Warranties.....................................................    72
         10.5.    Payment of Expenses and Taxes..................................................................    72
         10.6.    Successors and Assigns; Participations and Assignments.........................................    73
         10.7.    Adjustments; Setoff............................................................................    75
         10.8.    Counterparts...................................................................................    76
         10.9.    Severability...................................................................................    76
         10.10.   Integration....................................................................................    76
         10.11.   GOVERNING LAW..................................................................................    76
         10.12.   Submission To Jurisdiction; Waivers............................................................    76
         10.13.   Acknowledgements...............................................................................    77
         10.14.   Confidentiality................................................................................    77
         10.15.   Delivery of Lender Addenda.....................................................................    78
         10.16.   WAIVERS OF JURY TRIAL..........................................................................    78
</TABLE>

                                      iii

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ANNEX:

A                 Pricing Grid

SCHEDULES:

1.1               Existing Letters of Credit
4.4               Consents, Authorizations, Filings and Notices
4.6               Litigation
4.15              Subsidiaries
4.19(a)           UCC and Other Filings / Jurisdictions and Offices
7.2(d)            Existing Indebtedness
7.3(f)            Existing Liens
7.14              Existing Restrictions

EXHIBITS:

A                 Form of Guarantee and Collateral Agreement
B                 Form of Compliance Certificate
C                 Form of Closing Certificate
D                 Form of Mortgage
E                 Form of Assignment and Acceptance
F                 Form of Legal Opinion of Winstead Sechrest & Minick P.C.
G                 Form of Exemption Certificate
H                 Form of Lender Addendum
I                 Form of Subordinated Intercompany Note
J                 Form of Term Note
K                 Form of Tranche A Note
L                 Form of Revolving Note
M                 Form of Swingline Note
N                 Form of Increased Revolving Facility Activation Notice
O                 Form of New Revolving Lender Supplement

                                       iv

<PAGE>

                  CREDIT AGREEMENT, dated as of May 28, 2003, among
RENT-A-CENTER, INC., a Delaware corporation (the "Borrower"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), MORGAN STANLEY SENIOR FUNDING INC., as documentation
agent (in such capacity, the "Documentation Agent"), JPMORGAN CHASE BANK and
BEAR, STEARNS & CO. INC., each as syndication agent (in such capacity, the
"Syndication Agents"), WACHOVIA BANK, NATIONAL ASSOCIATION, UBS WARBURG LLC,
UNITED OVERSEAS BANK and CREDIT LYONNAIS, each as managing agent (in such
capacity, the "Managing Agents"), and LEHMAN COMMERCIAL PAPER INC., as
administrative agent.

                  WHEREAS, the Borrower has requested that the Lenders make
certain credit facilities available to the Borrower, and the Lenders are willing
to make such credit facilities available upon and subject to the terms and
conditions hereinafter set forth;

                  NOW, THEREFORE, in consideration of the above premises, the
parties hereto hereby agree as follows:

                             SECTION 1. DEFINITIONS

                  1.1.     Defined Terms.  As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.

                  "ABR": for any day, a rate of interest per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the prime lending rate as set forth on the British Bankers Association Telerate
page 5 (or such other comparable publicly available page as may, in the
reasonable opinion of the Administrative Agent after notice to the Borrower,
replace such page for the purpose of displaying such rate if such rate no longer
appears on the British Bankers Association Telerate page 5), as in effect from
time to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually available. Any change in the ABR due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.

                  "ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.

                  "Adjustment Date":  as defined in the Pricing Grid.

                  "Administrative Agent": Lehman Commercial Paper Inc., together
with its affiliates, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents, together with any of its successors.

                  "Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

                  "Agents": the collective reference to the Syndication Agents,
the Documentation Agent, the Managing Agents and the Administrative Agent.

<PAGE>

                  "Aggregate Exposure": with respect to any Lender at any time,
an amount equal to, without duplication, the sum of (a) the aggregate then
unpaid principal amount of such Lender's Term Loans together with such Lender's
Term Loan Commitments then in effect, (b) the amount of such Lender's Revolving
Commitment then in effect or, if the Revolving Commitments have been terminated,
the amount of such Lender's Revolving Extensions of Credit then outstanding and
(c) the aggregate then unpaid principal amount of such Lender's Tranche A Loans
together with such Lender's Tranche A Commitments then in effect.

                  "Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.

                  "Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.

                  "Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:

<TABLE>
<CAPTION>
                                       ABR                    Eurodollar
                                      Loans                     Loans
                                      -----                   ----------
<S>                                   <C>                     <C>
Revolving Loans and
  Swingline Loans                     1.25%                      2.25%
Tranche A Loans                       1.25%                      2.25%
Term Loans                            1.25%                      2.25%
</TABLE>

         provided, that on and after the first Adjustment Date occurring after
         the completion of two full fiscal quarters of the Borrower after the
         Closing Date, the Applicable Margin will be determined pursuant to the
         Pricing Grid.

                  "Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to issue a
Letter of Credit.

                  "Approved Fund": with respect to any Lender, any fund that
invests in commercial loans and is managed by such Lender or managed or advised
by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

                  "Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (f), (g), (h), (i) or (j) of Section 7.5 and any Disposition
of Cash Equivalents) that yields gross proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.

                  "Assignee":  as defined in Section 10.6(c).

                  "Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E.

                  "Assignor":  as defined in Section 10.6(c).

                                       2

<PAGE>

                  "Assumed Indebtedness": Indebtedness assumed in connection
with a Permitted Acquisition or Permitted Foreign Acquisition provided that (a)
such Indebtedness is outstanding at the time of such acquisition and was not
incurred in connection therewith or in contemplation thereof and (b) in the
event that such Permitted Acquisition or Permitted Foreign Acquisition
constitutes an acquisition of property other than Capital Stock, such
Indebtedness was incurred in order to acquire or improve such property.

                  "Available Revolving Commitment": as to any Revolving Lender
at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Commitment then in effect over (b) such Lender's Revolving Extensions
of Credit then outstanding; provided, that in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 2.8(a), the aggregate principal amount
of Swingline Loans then outstanding shall be deemed to be zero.

                  "Available Term Commitment": as to any Term Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Term Loan
Commitment then in effect over (b) such Lender's Term Loans then outstanding.

                  "Benefitted Lender":  as defined in Section 10.7(a).

                  "Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).

                  "Borrower": as defined in the preamble hereto.

                  "Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.

                  "Business": as defined in Section 4.17(b).

                  "Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close, provided, that with respect to notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
such day is also a day for trading by and between banks in Dollar deposits in
the interbank eurodollar market.

                  "Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures (other than those made pursuant to
Permitted Acquisitions or Permitted Foreign Acquisitions) by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period but excluding
merchandise inventory acquired during such period) that should be capitalized
under GAAP on a consolidated balance sheet of such Person and its Subsidiaries.

                  "Capital Expenditures (Expansion)": for any period, with
respect to any Person, any Capital Expenditures made by such Person in
connection with the opening of new stores to be operated by such Person.

                  "Capital Expenditures (Maintenance)": for any period, with
respect to any Person, any Capital Expenditures which do not constitute Capital
Expenditures (Expansion) of such Person.

                  "Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal

                                       3

<PAGE>

property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.

                  "Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.

                  "Cash/Debt Consideration": with respect to any Permitted
Acquisition or any Permitted Foreign Acquisition, the portion of the Purchase
Price with respect thereto that is payable in the forms referred to in clauses
(a) and (d) of the definition of "Purchase Price" set forth in Section 1.1.

                  "Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2 by Moody's
Investors Service, Inc. ("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 commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) short term investments (not exceeding 35 days) in loans made to
obligors having an investment grade rating from each of S&P and Moody's; or (h)
shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (g) of this
definition.

                  "Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date is May 28, 2003.

                  "Code": the Internal Revenue Code of 1986, as amended from
time to time.

                  "Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.

                  "Commitment": as to any Lender, the sum of the Term Loan
Commitment, the Tranche A Commitment and the Revolving Commitment of such
Lender.

                                       4

<PAGE>

                  "Commitment Fee Rate": 1/2 of 1% per annum; provided, that on
and after the first Adjustment Date occurring after the completion of two full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.

                  "Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.

                  "Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.

                  "Consolidated Current Assets": at any date, (a) all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date and
(b) without duplication of clause (a) above, the book value of all rental
merchandise inventory of the Borrower and its Subsidiaries at such date.

                  "Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
or Swingline Loans to the extent otherwise included therein.

                  "Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected as a
charge or reduction in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions and other fees
and charges associated with Indebtedness (including the Loans), (c) depreciation
(excluding depreciation of rental merchandise) and amortization expense,
including, without limitation, amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (d) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business) and (e) any other non-cash charges, and minus, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (a) interest income, (b) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, gains on
the sales of assets outside of the ordinary course of business) and (c) any
other non-cash income earned outside the ordinary course of business, all as
determined on a consolidated basis. For the purposes of calculating Consolidated
EBITDA for any Reference Period pursuant to any determination of the
Consolidated Leverage Ratio, if during such Reference Period the Borrower or any
Subsidiary shall have made a Material Disposition or Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Material Disposition or Material Acquisition
(including any indebtedness incurred or acquired in connection therewith)
occurred on the first day of such Reference Period. As used in this definition,
"Material Acquisition" means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the payment
of consideration by the Borrower and its Subsidiaries in excess of $15,000,000
(or such lesser amount as the Borrower may determine in its discretion); and
"Material Disposition" means any Disposition of property or series of related

                                       5

<PAGE>

Dispositions of property that yields gross proceeds to the Borrower or any of
its Subsidiaries in excess of $15,000,000 (or such lesser amount as the Borrower
may determine in its discretion).

                  "Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) the sum of Consolidated EBITDA for such period and, to the
extent reducing Consolidated Net Income for such period, Consolidated Lease
Expense for such period, less the aggregate amount actually paid by the Borrower
and its Subsidiaries during such period on account of Capital Expenditures
(Maintenance) to (b) Consolidated Fixed Charges for such period.

                  "Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period, (c) regular, scheduled payments made
during such period on account of principal of Indebtedness of the Borrower or
any of its Subsidiaries (including scheduled principal payments in respect of
the Term Loans but excluding prepayments thereof) and (d) cash dividend payments
made during such period in respect of the Preferred Stock.

                  "Consolidated Funded Debt": at any date, the aggregate
principal amount of all Funded Debt (which, for purposes of the calculation of
Consolidated Funded Debt, shall be deemed to exclude any unfunded portion of the
Letters of Credit) of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.

                  "Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b)Consolidated Interest
Expense for such period.

                  "Consolidated Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations), net
of cash interest income, of the Borrower and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing,
commitment fees payable pursuant to Section 2.8 and net costs under Hedge
Agreements in respect of such Indebtedness to the extent such net costs are
allocable to such period in accordance with GAAP).

                  "Consolidated Lease Expense": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP.

                  "Consolidated Leverage Ratio": as at the last day of any
period, the ratio of (a) Consolidated Funded Debt on such day to (b)
Consolidated EBITDA for such period.

                  "Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.

                                       6

<PAGE>

                  "Consolidated Net Income Amount": at any date of
determination, an amount equal to cumulative Consolidated Net Income from
January 1, 2003 through the last day of the most recent fiscal quarter for which
financial statements have been delivered pursuant to Section 6.1.

                  "Consolidated Net Worth": at any date, all amounts that would,
in conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.

                  "Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.

                  "Continuing Directors": the directors of the Borrower on the
Closing Date, and each other director of the Borrower, if, in each case, such
other director's nomination for election to the board of directors of the
Borrower is recommended by at least 66-2/3% of the then Continuing Directors.

                  "Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

                  "Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.

                  "Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied (including, in any event, a "Default" under and as defined in the
Senior Subordinated Note Indenture).

                  "Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.

                  "Disqualified Stock": any Capital Stock or other ownership or
profit interest of any Loan Party that any Loan Party is or, upon the passage of
time or the occurrence of any event, may become obligated to redeem, purchase,
retire, defease or otherwise make any payment in respect of in consideration
other than Capital Stock (other than Disqualified Stock).

                  "Documentation Agent":  as defined in the preamble hereto.

                  "Dollars" and "$": dollars in lawful currency of the United
States.

                  "Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.

                  "Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

                                       7

<PAGE>

                  "ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.

                  "Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.

                  "Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan (other than any Eurodollar Loan
having a seven-day Interest Period), the rate per annum determined on the basis
of the rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page 3750 of
the British Bankers Association Telerate screen as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period, provided that
if such rate does not appear on Page 3750 of the British Bankers Association
Telerate screen (or otherwise on such screen) the "Eurodollar Base Rate" shall
be determined by reference to such other comparable publicly available service
for displaying eurodollar rates as may be selected by the Administrative Agent.
If no such rate is available or if the Eurodollar Base Rate is being determined
in connection with any Eurodollar Loan having a seven-day Interest Period, such
rate shall be determined by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where its eurodollar and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.

                  "Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.

                  "Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100th of 1%):

                              Eurodollar Base Rate
                    ----------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

                  "Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).

                  "Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied (including, in any event, an "Event of Default" under
and as defined in the Senior Subordinated Note Indenture).

                  "Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation (other than depreciation of rental merchandise)
and amortization) deducted in arriving at such Consolidated Net Income, (iii)
decreases in Consolidated Working Capital for such fiscal year, (iv) an amount
equal to the aggregate net non-cash loss on the Disposition of property by the
Borrower and its Subsidiaries during such fiscal year (other than

                                       8

<PAGE>

Dispositions of (x) rental merchandise otherwise included in changes in
Consolidated Working Capital and (y) inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net Income
and (v) amounts paid or invested by the Insurance Subsidiary in the Borrower and
its Subsidiaries as permitted by this Agreement (other than reimbursement of
insurance claims to the Borrower or its Subsidiaries), over (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such fiscal
year on account of Capital Expenditures (excluding the principal amount of
Indebtedness incurred in connection with such expenditures and any such
expenditures financed with the proceeds of any Reinvestment Deferred Amount),
(iii) the aggregate amount actually paid by the Borrower and its Subsidiaries in
cash during such fiscal year on account of Permitted Acquisitions or Permitted
Foreign Acquisitions (excluding the principal amount of Indebtedness incurred in
connection with such expenditures and any such expenditures financed with the
proceeds of any Reinvestment Deferred Amount), (iv) the aggregate amount of all
prepayments of Revolving Loans and Swingline Loans during such fiscal year to
the extent accompanying permanent optional reductions of the Revolving
Commitments and all optional prepayments of the Term Loans during such fiscal
year (including prepayments of the Term Loans required by Section 7.5(e), (v)
the aggregate amount of all regularly scheduled principal payments of Funded
Debt (including the Term Loans) of the Borrower and its Subsidiaries made during
such fiscal year (other than any such payment of a facility that may thereafter
be reborrowed), (vi) increases in Consolidated Working Capital for such fiscal
year, (vii) an amount equal to the aggregate net non-cash gain on the
Disposition of property by the Borrower and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income and (viii) the
aggregate amount of cash paid to the Insurance Subsidiary by the Borrower and
its Subsidiaries as insurance premiums and in additional capital contributions,
to the extent the same are required to meet regulatory capital guidelines,
policies or rules.

                  "Excess Cash Flow Application Date": as defined in Section
2.11(d).

                  "Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.

                  "Existing Credit Agreement": the Credit Agreement, dated as of
August 5, 1998, as amended and restated as of December 31, 2002, among the
Borrower, RAC East, JPMorgan Chase Bank, as administrative agent, the banks,
financial institutions or other entities parties thereto as lenders and certain
other parties, as amended by the First Amendment to the Credit Agreement, dated
as of April 22, 2003.

                  "Existing Letter of Credit": each letter of credit issued
under the Existing Credit Agreement identified on Schedule 1.1 hereto that is
outstanding on the Closing Date and each renewal of such letter of credit, each
of which shall be deemed, on and after the Closing Date, to have been issued
hereunder, and each of which shall, as a whole or in part, be designated as a
"RC Letter of Credit" or a "Tranche A Letter of Credit" as set forth on Schedule
1.1.

                  "Facility": the credit facility consisting of, as applicable,
(a) the Term Loans and Term Loan Commitments (the "Term Facility"), (b) the
Revolving Commitments and the extensions of credit made thereunder (the
"Revolving Facility") and (c) the Tranche A Commitments and the extensions of
credit made thereunder (the "Tranche A LC Facility").

                                       9

<PAGE>

                  "Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.

                  "Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.

                  "Funded Debt": as to any Person, on any date, (a) all
Indebtedness of such Person that matures more than one year from the date of its
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year from such
date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date, including all current maturities and current sinking fund payments in
respect of such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower, Indebtedness in
respect of the Loans and the Reimbursement Obligations (but excluding, in the
case of the Borrower, any Guarantee Obligations of the Borrower in respect of
Indebtedness of franchisees, to the extent permitted by Section 7.2(h)), minus
(b) the aggregate amount of cash and Cash Equivalents on the consolidated
balance sheet of the Borrower and its Subsidiaries on such date, but in no event
exceeding $50,000,000.

                  "Funding Office": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.

                  "GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the
Closing Date and consistent with those used in the preparation of the most
recent audited financial statements delivered pursuant to Section 4.1(b). In the
event that any "Accounting Change" (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Change with the desired
result that the criteria for evaluating the Borrower's financial condition shall
be the same after such Accounting Change as if such Accounting Change had not
been made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Accounting Change had not occurred.
"Accounting Change" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.

                  "Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

                  "Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.

                                       10

<PAGE>

                  "Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued or incurred a reimbursement, counterindemnity
or similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

                  "Hedge Agreements": all swaps, caps, collars or similar
arrangements providing for protection against fluctuations in interest rates
(whether from floating to fixed or from fixed to floating), currency exchange
rates or commodities prices or the exchange of nominal interest obligations,
either generally or under specific contingencies.

                  "Increased Revolving Facility Activation Notice": a notice
substantially in the form of Exhibit N.

                  "Increased Revolving Facility Closing Date": any Business Day
designated as such in an Increased Revolving Facility Activation Notice.

                  "Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) 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 default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) the
liquidation value of all redeemable preferred Capital Stock of such Person
(other than any such preferred Capital Stock that is not redeemable until a date
that is no earlier than one year and one day after the final maturity of the
Loans and the Preferred Stock) and all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
Capital Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such

                                       11

<PAGE>

Person has assumed or become liable for the payment of such obligation; and (j)
for the purposes of Section 8(e) only, all obligations of such Person in respect
of Hedge Agreements (which, for purposes of such Section 8(e), will be deemed to
have an outstanding principal amount equal to the net amount which would be
payable (or would permit the counterparty thereto to cause to become payable) by
the Borrower or Subsidiary party thereto (including any net termination payment)
upon the occurrence of any default, event or condition specified in such Section
8(e)).

                  "Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

                  "Insolvent": pertaining to a condition of Insolvency.

                  "Insurance Subsidiary": Legacy Insurance Co., Ltd., a Bermuda
company and a Wholly Owned Subsidiary of the Borrower formed for the sole
purpose of writing insurance only for the risks of the Borrower and its
Subsidiaries.

                  "Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.

                  "Intellectual Property Security Agreement": the Intellectual
Property Security Agreement between the certain Loan Parties and the
Administrative Agent, dated as of the date hereof and substantially in the form
of Exhibit B-1 to the Guarantee and Collateral Agreement.

                  "Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Loan that is an ABR Loan
and any Swingline Loan), the date of any repayment or prepayment made in respect
thereof.

                  "Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending seven days (in the case of
Revolving Loans only) or one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as the case
may be, given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending seven days (in the case of Revolving Loans only) or
one, two, three or six months thereafter, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:

                  (i)      if any Interest Period would otherwise end on a day
         that is not a Business Day, such Interest Period shall be extended to
         the next succeeding Business Day unless the result of such extension
         would be to carry such Interest Period into another calendar month in
         which event such Interest Period shall end on the immediately preceding
         Business Day;

                                       12

<PAGE>

                  (ii)     the Borrower may not select an Interest Period for a
         particular Facility that would extend beyond the final maturity date
         applicable thereto;

                  (iii)    any Interest Period that begins on the last Business
         Day of a calendar month (or on a day for which there is no numerically
         corresponding day in the calendar month at the end of such Interest
         Period) shall end on the last Business Day of a calendar month; and

                  (iv)     the Borrower shall select Interest Periods so as not
         to require a payment or prepayment of any Eurodollar Loan during an
         Interest Period for such Loan.

Notwithstanding the foregoing, clause (iii) above shall not apply to Eurodollar
Loans having a seven-day Interest Period.

                  "Investments":  as defined in Section 7.8.

                  "Issuing Lender": JPMorgan Chase Bank (or any of its
Affiliates), in its capacity as issuer of any Letter of Credit.

                  "LC Fee Payment Date": the last day of each March, June,
September and December, the last day of the Revolving Commitment Period (in the
case of RC Letters of Credit) and the Tranche A LC Termination Date (in the case
of Tranche A Letters of Credit).

                  "LC Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed.

                  "Legacy Trust": Legacy Drive Trust, a trust formed under the
laws of the State of Texas pursuant to, and operating in accordance with, the
Trust Agreement.

                  "Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit H, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.15.

                  "Lenders":  as defined in the preamble hereto.

                  "Letters of Credit": the letters of credit issued pursuant to
Section 3.1, which shall be deemed to include the Existing Letters of Credit.

                  "Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing) or any purchase
option, call option, right of first refusal or similar right.

                  "Loan": any loan made by any Lender pursuant to this
Agreement, including any Tranche A Loan.

                  "Loan Documents": this Agreement, the Security Documents and
the Notes.

                                       13

<PAGE>

                  "Loan Parties": the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.

                  "Majority Facility Lenders": (i) with respect to the Term Loan
Facility, the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans and aggregate Term Loan Commitments outstanding under such
facility, (ii) with respect to the Revolving Facility, the holders of more than
50% of the Total Revolving Extensions of Credit (or, prior to any termination of
the Revolving Commitments, the holders of more than 50% of the Total Revolving
Commitments) outstanding under such Facility or (iii) with respect to the
Tranche A LC Facility, the holders of more than 50% of the aggregate Tranche A
Loans and aggregate Tranche A Commitments outstanding under such Facility.

                  "Managing Agents":  as defined in the preamble hereto.

                  "Material Adverse Effect": a material adverse effect on (a)
the business, property, operations, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Administrative Agent or the Secured Parties
hereunder or thereunder or (c) the validity, enforceability or priority of the
Liens purported to be created by the Security Documents taken as a whole.

                  "Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.

                  "Mortgaged Property": any real property of any Loan Party as
to which the Administrative Agent for the benefit of the Secured Parties has
been granted a Lien pursuant to any Mortgage.

                  "Mortgage": any mortgage or deed of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.

                  "Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

                  "Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of reasonable attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable currently as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of reasonable attorneys' fees, investment banking
fees, accountants'

                                       14

<PAGE>

fees, underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith.

                  "New Revolving Lender":  as defined in Section 2.2(c).

                  "New Revolving Lender Supplement": as defined in Section
2.2(c).

                  "Non-Excluded Taxes":  as defined in Section 2.19(a).

                  "Non-U.S. Lender": as defined in Section 2.19(d).

                  "Notes": the collective reference to any promissory note
evidencing Loans, substantially in the form of Exhibit J, Exhibit K, Exhibit L
or Exhibit M.

                  "Obligations": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Loan Party, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of any Loan Party to the Administrative Agent or to
any Secured Party, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any other Loan Document, the Letters
of Credit, any Specified Hedge Agreement or any other document made, delivered
or given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the Administrative
Agent or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise; provided, that (i) Obligations of the Borrower or any
other Loan Party under any Specified Hedge Agreement shall be secured and
guaranteed pursuant to the Security Documents only to the extent that, and for
so long as, the other Obligations are so secured and guaranteed, (ii) any
release of Collateral or Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements and (iii) the amount of secured Obligations under any
Specified Hedge Agreements shall not exceed the net amount, including any net
termination payments, that would be required to be paid to the counterparty to
such Specified Hedge Agreement on the date of termination of such Specified
Hedge Agreement.

                  "Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

                  "Participant":  as defined in Section 10.6(b).

                  "PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).

                  "Permitted Acquisition": any acquisition, consisting of a
single transaction or a series of related transactions, by the Borrower or any
one or more of its Wholly Owned Subsidiary Guarantors of all of the Capital
Stock of, or all or a substantial part of the assets of, or of a business, unit
or division of, any Person organized under the laws of the United States or any
state thereof (or a business, unit or division of any Person organized under the
laws of any governmental instrumentality other than the United States or any
state thereof, which business unit or division operates entirely within the
United States) (such business, unit or division, the "Acquired Business"),
provided that (a) the consideration paid

                                       15

<PAGE>

by the Borrower or such Subsidiary or Subsidiaries pursuant to such acquisition
shall be solely in a form referred to in clause (a), (b), (c) or (d) of the
definition of "Purchase Price" (or some combination thereof), (b) the
requirements of Section 6.10 have been satisfied with respect to such
acquisition, (c) the Borrower shall be in compliance, on a pro forma basis after
giving effect to such acquisition, with the covenants contained in Section 7.1,
in each case recomputed as at the last day of the most recently ended fiscal
quarter of the Borrower as if such acquisition had occurred on the first day of
each relevant period for testing such compliance, (d) no Default or Event of
Default shall have occurred and be continuing, or would occur after giving
effect to such acquisition, (e) all actions required to be taken with respect to
any acquired or newly formed Subsidiary or otherwise with respect to the
Acquired Business in such acquisition under Section 6.9 and 6.10 shall have been
taken, (f) the aggregate Purchase Prices in respect of such acquisition and all
other Permitted Acquisitions consummated in accordance with this Agreement shall
not exceed, in any fiscal year of the Borrower, the sum of (i) $100,000,000 (or,
if the Consolidated Leverage Ratio as of the last day of any fiscal quarter
during such fiscal year is less than 2.25 to 1.00, $175,000,000) and (ii) an
additional up to $30,000,000 to the extent not expended as Capital Expenditures
(Expansion) during such fiscal year pursuant to 7.7(b), (g) the Cash/Debt
Consideration in respect of such acquisition and all other Permitted
Acquisitions consummated in accordance with this Agreement shall not exceed, in
any fiscal year of the Borrower, $175,000,000 (plus any amounts available
pursuant to the foregoing clause (f)(ii)), and (h) any such acquisition shall
have been approved by the Board of Directors or such comparable governing body
of the Person (or whose business, unit or division is, as the case may be) being
acquired.

                  "Permitted Foreign Acquisition": any acquisition, consisting
of a single transaction or a series of related transactions, by the Borrower or
any one or more of its Wholly Owned Subsidiary Guarantors of all of the Capital
Stock of, or all or a substantial part of the assets of, or of a business, unit
or division of, any Person organized under the laws of any governmental
instrumentality other than the United States or any state thereof (or a
business, unit or division of any Person organized under the laws of the United
States or any state thereof, which business unit or division operates entirely
outside of the United States) (such business, unit or division, the "Acquired
Foreign Business"), provided that (a) the consideration paid by the Borrower or
such Subsidiary or Subsidiaries pursuant to such acquisition shall be solely in
a form referred to in clause (a), (b), (c) or (d) of the definition of "Purchase
Price" (or some combination thereof), (b) the requirements of Section 6.10 have
been satisfied with respect to such acquisition, (c) the Borrower shall be in
compliance, on a pro forma basis after giving effect to such acquisition, with
the covenants contained in Section 7.1, in each case recomputed as at the last
day of the most recently ended fiscal quarter of the Borrower as if such
acquisition had occurred on the first day of each relevant period for testing
such compliance, (d) no Default or Event of Default shall have occurred and be
continuing, or would occur after giving effect to such acquisition, (e) all
actions required to be taken with respect to any acquired or newly formed
Subsidiary or otherwise with respect to the Acquired Foreign Business in such
acquisition under Section 6.9 and 6.10 shall have been taken, (f) the aggregate
Purchase Prices in respect of such acquisition and all other Permitted Foreign
Acquisitions consummated in accordance with this Agreement shall not exceed
$50,000,000 in any single fiscal year of the Borrower and shall not exceed
$100,000,000 during the term of this Agreement, (g) the Cash/Debt Consideration
in respect of such acquisition and all other Permitted Foreign Acquisitions
consummated in accordance with this Agreement shall not exceed in the aggregate,
$100,000,000, and (h) any such acquisition shall have been approved by the Board
of Directors or such comparable governing body of the Person (or whose business,
unit or division is, as the case may be) being acquired.

                  "Permitted Investors": the collective reference to (a) the
Sponsor and (b) the Speese Persons.

                                       16

<PAGE>

                  "Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

                  "Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.

                  "Preferred Stock": the Series A Preferred Stock, $0.01 par
value, of the Borrower and the Series C Preferred Stock, $0.01 par value, of the
Borrower to be issued pursuant to a certificate of designation in substantially
the form previously provided to the Administrative Agent (with changes thereto
reasonably acceptable to the Administrative Agent) in exchange for the
outstanding Series A Preferred Stock.

                  "Pricing Grid": the pricing grid attached hereto as Annex A.

                  "Projections": as defined in Section 6.2(c).

                  "Properties": as defined in Section 4.17(a).

                  "Purchase Price": with respect to any Permitted Acquisition or
Permitted Foreign Acquisition, the sum (without duplication) of (a) the amount
of cash paid by the Borrower and its Subsidiaries in connection with such
acquisition, (b) the value (as determined for purposes of such acquisition in
accordance with the applicable acquisition agreement) of all Capital Stock of
the Borrower issued or given as consideration in connection with such
acquisition, (c) the Qualified Net Cash Equity Proceeds applied to finance such
acquisition and (d) the principal amount (or, if less, the accreted value) at
the time of such acquisition of all Assumed Indebtedness with respect thereto.

                  "Qualified Net Cash Debt Proceeds": the Net Cash Proceeds of
Indebtedness incurred by the Borrower pursuant to Section 7.2(f)(iii), provided
that (1) such unsecured subordinated notes were issued in express contemplation
of a Permitted Acquisition or Permitted Foreign Acquisition and (2) such
Permitted Acquisition or Permitted Foreign Acquisition is consummated within 90
days after receipt by the Borrower of such Net Cash Proceeds.

                  "Qualified Net Cash Equity Proceeds": the Net Cash Proceeds of
any offering of Capital Stock of the Borrower, provided that (a) such offering
was made in express contemplation of a Permitted Acquisition or Permitted
Foreign Acquisition, (b) such Capital Stock is not mandatorily redeemable and
(c) such Permitted Acquisition or Permitted Foreign Acquisition is consummated
within 90 days after receipt by the Borrower of such Net Cash Proceeds.

                  "RAC East": Rent-A-Center East, Inc., a Delaware corporation.

                  "RC LC Obligations": at any time, an amount equal to the sum
of (a) the aggregate then undrawn and unexpired amount of the then outstanding
RC Letters of Credit and (b) the aggregate amount of drawings under RC Letters
of Credit that have not then been reimbursed by the Borrower pursuant to Section
3.6.

                  "RC LC Participants": the collective reference to all
Revolving Lenders (including the Issuing Lender), as participants in each RC
Letter of Credit.

                                       17

<PAGE>

                  "RC Letter of Credit": each Letter of Credit issued by the
Issuing Bank under the Revolving Facility pursuant to Section 3.1, including any
portion of any Existing Letter of Credit deemed to be an RC Letter of Credit in
accordance with Section 3.1 and as indicated on Schedule 1.1.

                  "Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.

                  "Reference Period": with respect to any date, the period of
four consecutive fiscal quarters of the Borrower immediately preceding such date
or, if such date is the last day of a fiscal quarter, ending on such date.

                  "Refunded Swingline Loans": as defined in Section 2.6(b).

                  "Refunding Date": as defined in Section 2.6(c).

                  "Register": as defined in Section 10.6(d).

                  "Regulation U": Regulation U of the Board as in effect from
time to time.

                  "Reimbursement Obligation": the obligation of the Borrower to
reimburse pursuant to Section 3.6 amounts paid under Letters of Credit.

                  "Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith that are not applied to prepay
the Term Loans pursuant to Section 2.11(c) as a result of the delivery of a
Reinvestment Notice.

                  "Reinvestment Event": any Asset Sale or Recovery Event in
respect of which the Borrower has delivered a Reinvestment Notice.

                  "Reinvestment Notice": a written notice executed by a
Responsible Officer stating that no Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary of
the Borrower other than a Specified Subsidiary (unless such Specified Subsidiary
was the recipient of such Net Cash Proceeds)) intends and expects to use all or
a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event
to acquire assets useful in its business.

                  "Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.

                  "Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months after
such Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets useful in
the Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.

                  "Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

                                       18

<PAGE>

                  "Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.

                  "Repurchase Amount": as defined in Section 7.6(b).

                  "Required Lenders": at any time, the holders of more than 50%
of the sum of (a) the aggregate unpaid principal amount of the Term Loans and
the aggregate Term Loan Commitments then outstanding, (b) the Total Revolving
Commitments then in effect or, if the Revolving Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding and (c)
the aggregate unpaid principal amount of Tranche A Loans together with the
aggregate Tranche A Commitments then in effect.

                  "Required Prepayment Lenders": the Majority Facility Lenders
in respect of each of the Term Facility and the Revolving Facility.

                  "Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

                  "Responsible Officer": the chief executive officer, president,
chief financial officer or treasurer of the Borrower, but in any event, with
respect to financial matters, the chief financial officer or president of the
Borrower.

                  "Restricted Payments": as defined in Section 7.6.

                  "Revolving Commitment": as to any Lender, the obligation of
such Lender, if any, to make Revolving Loans and participate in Swingline Loans
and RC Letters of Credit, in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Revolving Commitment" opposite
such Lender's name on Schedule 1 to the Lender Addendum delivered by such
Lender, or, as the case may be, in the Assignment and Acceptance pursuant to
which such Lender became a party hereto, as the same may be changed from time to
time pursuant to the terms hereof; provided that the original aggregate amount
of the Revolving Commitments is $120,000,000.

                  "Revolving Commitment Period": the period ending on the
Revolving Scheduled Commitment Termination Date.

                  "Revolving Extensions of Credit": as to any Revolving Lender
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the RC LC Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.

                  "Revolving Lender": each Lender that has a Revolving
Commitment or that holds Revolving Loans.

                  "Revolving Loans": as defined in Section 2.2.

                  "Revolving Percentage": as to any Revolving Lender at any
time, the percentage which such Lender's Revolving Commitment then constitutes
of the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the

                                       19

<PAGE>

aggregate principal amount of such Lender's Revolving Loans then outstanding
constitutes of the aggregate principal amount of the Revolving Loans then
outstanding).

                  "Revolving Scheduled Commitment Termination Date": May 28,
2008.

                  "Sale/Leaseback Transaction": any arrangement providing for
the leasing to the Borrower or any Subsidiary of real or personal property that
has been or is to be (a) sold or transferred by the Borrower or any Subsidiary
or (b) constructed or acquired by a third party in anticipation of a program of
leasing to the Borrower or any Subsidiary.

                  "SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.

                  "Secured Parties": collectively, the Arranger, the Agents, the
Lenders and, with respect to any Specified Hedge Agreement, any affiliate of any
Lender party thereto (or any Person that was a Lender or an affiliate thereof
when such Specified Hedge Agreement was entered into) that has agreed to be
bound by the provisions of Section 7.2 of the Guarantee and Collateral Agreement
as if it were a party thereto and by the provisions of Section 9 hereof as if it
were a Lender party hereto; provided that any counterparty to a Specified Hedge
Agreement that is not a Lender shall have no rights in connection with the
management or release of any Collateral or the obligations of any Guarantor
under the Loan Documents.

                  "Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Intellectual Property
Security Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.

                  "Senior Subordinated Note Indenture": the collective reference
to each Indenture entered into by the Borrower and certain of its Subsidiaries
in connection with any issuance of Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower or such
Subsidiaries in connection therewith, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.9.

                  "Senior Subordinated Notes": the collective reference to (a)
the subordinated notes of the Borrower or RAC East outstanding on the Closing
Date and (b) any subordinated notes of the Borrower issued thereafter pursuant
to Section 7.2(f) on terms no less favorable to the Borrower and its
Subsidiaries (taken as a whole) and to the Lenders than the terms applicable to
the subordinated notes referred to in clause (a) above.

                  "Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but that is not a Multiemployer Plan.

                  "Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) the realization of the current assets of such Person in
the ordinary course of business will be sufficient for such Person to pay

                                       20

<PAGE>

recurring current debt, short-term debt and long-term debt service as such debts
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.

                  "Specified Change of Control": a "Change of Control" or
similar event (however defined) as defined in any Senior Subordinated Note
Indenture.

                  "Specified Hedge Agreement": any Hedge Agreement (a) entered
into by (i) the Borrower or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, or any Person that was a Lender or an affiliate thereof when
such Hedge Agreement was entered into as counterparty and (b) which has been
designated by such Lender and the Borrower, by notice to the Administrative
Agent not later than 90 days after the execution and delivery thereof by the
Borrower or such Subsidiary, as a Specified Hedge Agreement; provided that the
designation of any Hedge Agreement as a Specified Hedge Agreement shall not
create in favor of any Lender or affiliate thereof that is a party thereto any
rights in connection with the management or release of any Collateral or of the
obligations of any Guarantor under the Guarantee and Collateral Agreement.

                  "Specified Subsidiaries": the collective reference to the
Insurance Subsidiary, Legacy Trust and any Excluded Foreign Subsidiary.

                  "Speese Persons": the collective reference to Mark E. Speese,
any person having a relationship with Mark E. Speese by blood, marriage or
adoption not more remote than first cousin and any trust established for the
benefit of any such person.

                  "Sponsor": Apollo Management IV, L.P., Apollo Investment Fund
IV, L.P., Apollo Overseas Partners IV, L.P., Apollo Management, L.P. and their
Control Investment Affiliates.

                  "Subordinated Intercompany Note": the Subordinated
Intercompany Note to be executed and delivered by the Borrower and each of its
Subsidiaries, substantially in the form of Exhibit I, as the same may be
amended, supplemented, replaced or otherwise modified from time to time in
accordance with this Agreement.

                  "Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower. Legacy Trust shall be
considered a Subsidiary of the Borrower.

                  "Subsidiary Guarantor": each Subsidiary of the Borrower other
than the Specified Subsidiaries.

                                       21

<PAGE>

                  "Swingline Commitment": the obligation of the Swingline Lender
to make Swingline Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $30,000,000.

                  "Swingline Lender": Lehman Commercial Paper Inc., in its
capacity as the lender of Swingline Loans.

                  "Swingline Loans": as defined in Section 2.3.

                  "Swingline Participation Amount": as defined in Section
2.6(c).

                  "Syndication Agents": as defined in the preamble hereto.

                  "Term Commitment Percentage": as to any Term Lender at any
time, the percentage which such Term Lender's Term Loan Commitment constitutes
of the aggregate Term Loan Commitments of all Term Loan Lenders.

                  "Term Commitment Termination Date": August 5, 2003.

                  "Term Lenders": each Lender that holds a Term Loan.

                  "Term Loan Commitment": as to any Term Loan Lender at any
time, the obligation of such Lender, if any, to make Term Loans to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the
heading "Term Loan Commitment" opposite such Lender's name on Schedule 1 to the
Lender Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof;
provided that the original aggregate amount of the Term Loan Commitments is
$400,000,000.

                  "Term Loan Percentage": as to any Term Lender at any time, the
percentage which the aggregate principal amount of such Lender's Term Loans then
outstanding constitutes of the aggregate principal amount of the Term Loans then
outstanding.

                  "Term Loans": as defined in Section 2.1(a).

                  "Total Revolving Commitments": at any time, the aggregate
amount of the Revolving Commitments then in effect. The amount of the Total
Revolving Commitments as of the Closing Date is $120,000,000.

                  "Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.

                  "Total Tranche A Extensions of Credit": at any time, the
aggregate amount of the Tranche A LC Obligations and the Tranche A Loans
outstanding at such time.

                  "Tranche A Commitment": as to any Tranche A Lender, the
obligation of such Lender to make Tranche A Loans to the Borrower or (without
duplication) to participate in Tranche A Letters of Credit. The aggregate amount
of the Tranche A Commitments as of the Closing Date is $80,000,000.

                  "Tranche A LC Obligations": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the then
outstanding Tranche A Letters of Credit and

                                       22

<PAGE>

(b) the aggregate amount of drawings under Tranche A Letters of Credit that have
not then been reimbursed by the Borrower pursuant to Section 3.6.

                  "Tranche A LC Termination Date": the earlier to occur of (i)
May 28, 2008 and (ii) the date on which all Tranche A Letters of Credit are
permanently canceled, expire or terminate.

                  "Tranche A Lender": each Lender that holds Tranche A
Commitments or Tranche A Loans.

                  "Tranche A Letter of Credit": each Existing Letter of Credit
(or portion thereof) set forth under the heading "Tranche A Letters of Credit"
on Schedule 1.1 hereto, and each renewal thereof.

                  "Tranche A Loan": as defined in Section 3.6.

                  "Tranche A Percentage": as to any Tranche A Lender at any
time, the percentage which such Lender's Tranche A Commitment then constitutes
of the aggregate Tranche A Commitments (or, at any time after the Tranche A
Commitments shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Tranche A Loans then outstanding constitutes
of the aggregate principal amount of the Tranche A Loans then outstanding).

                  "Transferee": any Assignee or Participant.

                  "Trust Agreement": the Trust Agreement, dated December 31,
2002, between the Borrower and JPMorgan Chase Bank, as trustee, as amended from
time to time in accordance with the terms hereof and thereof (and provided that
no Event of Default would occur hereunder as a result of such amendment).

                  "Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.

                  "Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.

                  "United States": the United States of America.

                  "Voting Stock": with respect to any Person, any class or
series of Capital Stock of such Person that is ordinarily entitled to vote in
the election of directors thereof at a meeting of stockholders called for such
purpose, without the occurrence of any additional event or contingency.

                  "Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.

                  "Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.

                  1.2.     Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.

                                       23

<PAGE>

                  (b)      As used herein and in the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to the Borrower and its Subsidiaries not defined
in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation" and (iii) the words "asset" and "property"
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, Capital
Stock, securities, revenues, accounts, leasehold interests and contract rights.

                  (c)      The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.

                  (d)      The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                           SECTION 2. AMOUNT AND TERMS OF FACILITIES

                  2.1.     Term Loans. Subject to the terms and conditions
hereof, each Term Lender severally agrees to make a term loan (a "Term Loan") to
the Borrower (i) on the Closing Date and (ii) on any other Business Day on or
prior to August 5, 2003 in an amount, on each of the dates set forth in the
preceding clauses (i) and (ii), equal to the amount of such requested Term Loan
multiplied by such Term Lender's Term Commitment Percentage (which amounts in
the aggregate shall not exceed the amount of the Term Loan Commitment of such
Term Lender). The Term Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.4 and 2.12.

                  2.2.     Revolving Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("Revolving Loans") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the sum
of (i) the RC LC Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender's Revolving Commitment. During the Revolving Commitment Period the
Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.12.

                  (b)      The Borrower and any one or more Revolving Lenders
(including New Revolving Lenders) may agree that each such Lender shall obtain a
Revolving Commitment or increase the amount of its existing Revolving
Commitment, as applicable, in each case by executing and delivering to the
Administrative Agent an Increased Revolving Facility Activation Notice
specifying (i) the amount of such increase and (ii) the Increased Revolving
Facility Closing Date. Notwithstanding the foregoing, without the consent of the
Required Lenders, (i) the aggregate amount of incremental Revolving Commitments
obtained pursuant to this paragraph shall not exceed $40,000,000 and (ii) no
more than three Increased Revolving Facility Closing Dates may be selected by
the Borrower during the term of this Agreement. No Lender shall have any
obligation to participate in any increase described in this paragraph unless it
agrees to do so in its sole discretion.

                                       24

<PAGE>

                  (c)      Any additional bank, financial institution or other
entity which, with the consent of the Borrower and the Administrative Agent
(which consent shall not be unreasonably withheld), elects to become a
"Revolving Lender" under this Agreement in connection with any transaction
described in Section 2.2(b) shall execute a New Revolving Lender Supplement
(each, a "New Revolving Lender Supplement"), substantially in the form of
Exhibit O, whereupon such bank, financial institution or other entity (a "New
Revolving Lender") shall become a Revolving Lender for all purposes and to the
same extent as if originally a party hereto and shall be bound by and entitled
to the benefits of this Agreement.

                  (d)      For the purpose of providing that the respective
amounts of Revolving Loans (and Eurodollar Tranches in respect thereof) held by
the Revolving Lenders are held by them on a pro rata basis according to their
respective Revolving Percentages, on each Increased Revolving Facility Closing
Date (i) all outstanding Revolving Loans shall be converted into a single
Revolving Loan that is a Eurodollar Loan (with an interest period to be selected
by the Borrower), and upon such conversion the Borrower shall pay any amounts
owing pursuant to Section 2.20, if any, (ii) any new borrowings of Revolving
Loans on such date shall also be part of such single Revolving Loan and (iii)
all Revolving Lenders (including the New Revolving Lenders) shall hold a portion
of such single Revolving Loan equal to its Revolving Percentage thereof and any
fundings on such date shall be made in such a manner so as to achieve the
foregoing.

                  2.3.     Swingline Commitment. Subject to the terms and
conditions hereof, the Swingline Lender agrees to make a portion of the credit
otherwise available to the Borrower under the Revolving Commitments from time to
time during the Revolving Commitment Period by making swing line loans
("Swingline Loans") to the Borrower; provided that (a) the aggregate principal
amount of Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (b) the Borrower shall not request, and the Swingline Lender shall not make,
any Swingline Loan if, after giving effect to the making of such Swingline Loan,
the aggregate amount of the Available Revolving Commitments would be less than
zero. During the Revolving Commitment Period, the Borrower may use the Swingline
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swingline Loans shall be ABR Loans only.

                  2.4.     Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:00 Noon, New York City time, one
Business Day prior to the anticipated Borrowing Date with respect to ABR Loans
and three Business Days prior to the anticipated Borrowing Date with respect to
Eurodollar Loans) requesting that the Term Lenders make the Term Loans on the
Borrowing Date and specifying the amount to be borrowed. Each borrowing of Term
Loans shall be in an amount equal to $2,000,000 or a whole multiple of $500,000
in excess thereof (or, if the then aggregate Available Term Commitments are less
than $2,000,000, such lesser amount). Upon receipt of such notice the
Administrative Agent shall promptly notify each Term Lender thereof. Not later
than 12:00 Noon, New York City time, on the Borrowing Date each Term Lender
shall make available to the Administrative Agent at the Funding Office an amount
in immediately available funds equal to the Term Loan or Term Loans to be made
by such Lender. The Administrative Agent shall make available to the Borrower
the aggregate of the amounts made available to the Administrative Agent by the
Term Lenders in like funds.

                  2.5.     Procedure for Revolving Loan Borrowing. (a) The
Borrower may borrow under the Revolving Commitments during the Revolving
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:00 Noon, New York City time, (a) three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) one Business Day prior to the

                                       25

<PAGE>

requested Borrowing Date, in the case of ABR Loans), specifying (i) the amount
and Type of Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in
the case of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Period therefor. Each
borrowing under the Revolving Commitments shall be in an amount equal to (x) in
the case of ABR Loans, $2,000,000 or a whole multiple of $500,000 in excess
thereof (or, if the then aggregate Available Revolving Commitments are less than
$2,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$3,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that
the Swingline Lender may request, on behalf of the Borrower, borrowings under
the Revolving Commitments that are ABR Loans in other amounts pursuant to
Section 2.6 and the Borrower may request borrowings under the Revolving
Commitments that are ABR Loans in other amounts pursuant to Section 3.6.

                  (b)      Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each relevant Lender thereof.
Each relevant Lender will make the amount of its pro rata share of each such
borrowing available to the Administrative Agent for the account of the Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the relevant Lenders and in like funds as received by
the Administrative Agent or, if the borrowing was made pursuant to Section 3.6,
by paying the Issuing Bank the amounts funded by it with respect to the Letter
of Credit drawing which gave rise to such borrowing.

                  2.6.     Procedure for Swingline Borrowing; Refunding of
Swingline Loans. (a) Whenever the Borrower desires that the Swingline Lender
make Swingline Loans it shall give the Swingline Lender irrevocable telephonic
notice confirmed promptly in writing (which telephonic notice must be received
by the Swingline Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Commitment Period). Each borrowing under the Swingline Commitment shall be in an
amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not
later than 3:00 P.M., New York City time, on the Borrowing Date specified in a
notice in respect of Swingline Loans, the Swingline Lender shall make available
to the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the amount of the Swingline Loan to be made by the
Swingline Lender. The Administrative Agent shall make the proceeds of such
Swingline Loan available to the Borrower on such Borrowing Date by depositing
such proceeds in the account of the Borrower with the Administrative Agent on
such Borrowing Date in immediately available funds.

                  (b)      The Swingline Lender, at any time and from time to
time in its sole and absolute discretion may (and, not later than 10 Business
Days after the making of a Swingline Loan, shall) on behalf of the Borrower
(which hereby irrevocably directs the Swingline Lender to act on its behalf), on
one Business Day's notice given by the Swingline Lender no later than 12:00
Noon, New York City time (with a copy of such notice being provided to the
Borrower), request each Revolving Lender to make, and each Revolving Lender
hereby agrees to make, a Revolving Loan, in an amount equal to such Revolving
Lender's Revolving Percentage of the aggregate amount of the Swingline Loans
(the "Refunded Swingline Loans") outstanding on the date of such notice, to
repay the Swingline Lender. Each Revolving Lender shall make the amount of such
Revolving Loan available to the Administrative Agent at the Funding Office in
immediately available funds, not later than 10:00 A.M., New York City time, one
Business Day after the date of such notice. The proceeds of such Revolving Loans
shall be immediately made available by the Administrative Agent to the Swingline
Lender for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to
charge the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swingline

                                       26

<PAGE>

Loans to the extent amounts received from the Revolving Lenders are not
sufficient to repay in full such Refunded Swingline Loans (with notice of such
charge being provided to the Borrower, provided that the failure to give such
notice shall not affect the validity of such charge).

                  (c)      If prior to the time a Revolving Loan would have
otherwise been made pursuant to Section 2.6(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 2.6(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 2.6(b) (the "Refunding
Date"), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the
"Swingline Participation Amount") equal to (i) such Revolving Lender's Revolving
Percentage times (ii) the sum of the aggregate principal amount of Swingline
Loans then outstanding that were to have been repaid with such Revolving Loans.

                  (d)      Whenever, at any time after the Swingline Lender has
received from any Revolving Lender such Lender's Swingline Participation Amount,
the Swingline Lender receives any payment on account of the Swingline Loans, the
Swingline Lender will distribute to such Revolving Lender its Swingline
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Revolving Lender's participating
interest was outstanding and funded and, in the case of principal and interest
payments, to reflect such Revolving Lender's pro rata portion of such payment if
such payment is not sufficient to pay the principal of and interest on all
Swingline Loans then due); provided, however, that in the event that such
payment received by the Swingline Lender is required to be returned, such
Revolving Lender will return to the Swingline Lender any portion thereof
previously distributed to it by the Swingline Lender.

                  (e)      Each Revolving Lender's obligation to make the Loans
referred to in Section 2.6(b) and to purchase participating interests pursuant
to Section 2.6(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including (i) any setoff, counterclaim, recoupment, defense
or other right that such Revolving Lender or the Borrower may have against the
Swingline Lender, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv)
any breach of this Agreement or any other Loan Document by the Borrower, any
other Loan Party or any other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

                  2.7.     Repayment of Loans. (a) The Term Loan of each Term
Lender shall mature in 24 installments, each of which shall be in an amount
equal to such Term Lender's Term Loan Percentage multiplied by an amount equal
to (x) the percentage set forth below opposite the applicable installment date
multiplied by (y) the aggregate principal amount of Term Loans outstanding on
the Term Commitment Termination Date less any amounts prepaid pursuant to
Section 2.10 or 2.11 on or prior to such installment date (provided that the
aggregate amount of the final installment shall in any event equal the aggregate
then outstanding principal amount of the Term Loans):

<TABLE>
<CAPTION>
    Installment                       Percentage of Principal Amount
------------------                    ------------------------------
<S>                                   <C>
September 30, 2003                                0.25%
December 31, 2003                                 0.25%
March 31, 2004                                    0.25%
June 30, 2004                                     0.25%
</TABLE>

                                       27

<PAGE>

<TABLE>
<S>                                              <C>
September 30, 2004                                0.25%
December 31, 2004                                 0.25%
March 31, 2005                                    0.25%
June 30, 2005                                     0.25%
September 30, 2005                                0.25%
December 31, 2005                                 0.25%
March 31, 2006                                    0.25%
June 30, 2006                                     0.25%
September 30, 2006                                0.25%
December 31, 2006                                 0.25%
March 31, 2007                                    0.25%
June 30, 2007                                     0.25%
September 30, 2007                                0.25%
December 31, 2007                                 0.25%
March 31, 2008                                    0.25%
June 30, 2008                                     0.25%
September 30, 2008                               23.75%
December 31, 2008                                23.75%
March 31, 2009                                   23.75%
May 28, 2009                                     23.75%
</TABLE>

                  (b)      The Borrower shall repay all outstanding Revolving
Loans and Swingline Loans on the Revolving Scheduled Commitment Termination
Date.

                  (c)      The Borrower shall repay all outstanding Tranche A
Loans on the Tranche A LC Termination Date.

                  2.8.     Commitment Fees, Etc. (a) The Borrower agrees to pay
to the Administrative Agent for the account of each Revolving Lender a
commitment fee accruing during the Revolving Commitment Period, computed at a
per annum rate equal to the Commitment Fee Rate on the average daily amount of
the Available Revolving Commitment of such Lender during the period for which
payment is made, payable on the last day of each March, June, September and
December and on the Revolving Scheduled Commitment Termination Date.

                  (b)      The Borrower agrees to pay to the Administrative
Agent for the account of each Term Lender a commitment fee accruing during the
period beginning on the Closing Date and ending on the Term Commitment
Termination Date, computed at a per annum rate equal to 1/2 of 1% on the average
daily amount of the Available Term Commitment of such Lender during the period
for which payment is made, payable on the Term Commitment Termination Date.

                  (c)      The Borrower agrees to pay to the Administrative
Agent the fees in the amounts and on the dates previously agreed to in writing
by the Borrower and the Administrative Agent.

                  2.9.     Termination or Reduction of Commitments. (a) The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Commitments or, from time
to time, to reduce the amount of the Revolving Commitments;

                                       28

<PAGE>

provided that no such termination or reduction of Revolving Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Loans and Swingline Loans made on the effective date thereof, the
Total Revolving Extensions of Credit would exceed the Total Revolving
Commitments. Any such partial reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments then in effect.

                  (b)      The Borrower shall have the right, upon not less than
three Business Days' notice to the Administrative Agent, to terminate the
Tranche A Commitments or, from time to time, to reduce the amount of the Tranche
A Commitments; provided that no such termination or reduction of Tranche A
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Tranche A Loans made on the effective date thereof, the Total
Tranche A Extensions of Credit would exceed the aggregate Tranche A Commitments.
Any such partial reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the Tranche A Commitments then in
effect. Notwithstanding the foregoing, the Tranche A Commitments shall be
automatically and permanently reduced on a dollar-for-dollar basis upon the
cancellation, termination or expiration without renewal of each Tranche A Letter
of Credit or any portion of the face amount thereof.

                  (c)      The Borrower shall have the right, upon not less than
three Business Days' notice to the Administrative Agent, to terminate the Term
Loan Commitments or, from time to time, to reduce the amount of the Term Loan
Commitments. Any such partial reduction shall be in an amount equal to
$1,000,000, or a whole multiple thereof, and shall reduce permanently the Term
Loan Commitments then in effect.

                  2.10.    Optional Prepayments. Subject to Section 2.17, the
Borrower may at any time and from time to time prepay the Loans, in whole or in
part, without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent at least three Business Days prior thereto in the case of
Eurodollar Loans and at least one Business Day prior thereto in the case of ABR
Loans, which notice shall specify the date and amount of prepayment and, if
applicable, whether the prepayment is of Eurodollar Loans or ABR Loans;
provided, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.20. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such
date on the amount prepaid. Partial prepayments of Loans (other than Swingline
Loans) shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof. Partial prepayments of Swingline Loans shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof.

                  2.11.    Mandatory Prepayments. (a) Unless the Required
Prepayment Lenders shall otherwise agree, if any Capital Stock (other than any
Capital Stock issued by the Borrower which yields Qualified Net Cash Equity
Proceeds) shall be issued by the Borrower or any of its Subsidiaries at such
time when the Consolidated Leverage Ratio (determined as at the end of the most
recent period of four consecutive fiscal quarters ended prior to the required
date of prepayment for which the relevant financial information is available on
a pro forma basis as if such issuance had occurred on the first day of such
period) is greater than or equal to 1.50 to 1.00, an amount equal to 25% of the
Net Cash Proceeds thereof shall be applied within two Business Days following
the date of such issuance (or with respect to Net Cash Proceeds at one time
constituting Qualified Net Cash Equity Proceeds, failure to constitute Qualified
Net Cash Equity Proceeds) toward the prepayment of the Term Loans.

                  (b)      Unless the Required Prepayment Lenders shall
otherwise agree, if any Indebtedness shall be incurred by the Borrower or any of
its Subsidiaries (including any Indebtedness

                                       29

<PAGE>

incurred in accordance with Section 7.2(f)(iii), other than Indebtedness which
yields Qualified Net Cash Debt Proceeds in an aggregate amount not to exceed
$175,000,000, but excluding any other Indebtedness incurred in accordance with
Section 7.2), an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such incurrence (or with respect to Net Cash Proceeds at
one time constituting Qualified Net Cash Debt Proceeds, failure to constitute
Qualified Net Cash Debt Proceeds) toward the prepayment of the Term Loans.

                  (c)      Unless the Required Prepayment Lenders shall
otherwise agree, if on any date the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, an amount equal to
75% of such Net Cash Proceeds shall be applied within two Business Days
following such date toward the prepayment of the Term Loans; provided, that,
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $25,000,000 in any fiscal year of the
Borrower, and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans; provided, further,
that, notwithstanding the foregoing, the Borrower shall not be required to
prepay the Term Loans in accordance with this paragraph (c) except to the extent
that the Net Cash Proceeds from all Asset Sales which have not been so applied
equals or exceeds $10,000,000 in the aggregate.

                  (d)      Unless the Required Prepayment Lenders shall
otherwise agree, if, for any fiscal year of the Borrower, commencing with the
fiscal year ending December 31, 2003, there shall be Excess Cash Flow and the
Consolidated Leverage Ratio as of the last day of such fiscal year is greater
than or equal to 1.50 to 1.00, the Borrower shall, on the relevant Excess Cash
Flow Application Date, apply 50% (or, if the Consolidated Leverage Ratio as of
the last day of such fiscal year is less than 1.50 to 1.00 but greater than or
equal to 1.00 to 1.00, 25%) of such Excess Cash Flow toward the prepayment of
the Term Loans. Each such prepayment shall be made on a date (an "Excess Cash
Flow Application Date") no later than five Business Days after the earlier of
(i) the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.

                  (e)      The application of any prepayment of Loans pursuant
to this Section 2.11 shall be made, first, to ABR Loans and, second, to
Eurodollar Loans. Each prepayment of the Loans under Section 2.11 (except in the
case of Revolving Loans that are ABR Loans and Swingline Loans) shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.

                  2.12.    Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.

                  (b)      Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the

                                       30

<PAGE>

Administrative Agent, in accordance with the applicable provisions of the term
"Interest Period", of the length of the next Interest Period to be applicable to
such Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.

                  2.13.    Limitations on Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $3,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no
more than 15 Eurodollar Tranches shall be outstanding at any one time.

                  2.14.    Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.

                  (b)      Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.

                  (c)      (i) If all or a portion of the principal amount of
any Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would otherwise
be applicable thereto pursuant to the foregoing provisions of this Section 2.14
plus 2% or (y) in the case of Reimbursement Obligations under the Revolving
Facility or the Tranche A LC Facility, the rate applicable to ABR Loans under
the Revolving Facility or the Tranche A LC Facility, respectively, plus 2% and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee, Letter of Credit fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to ABR Loans under the relevant
Facility plus 2% (or, in the case of any such other amounts that do not relate
to a particular Facility, the rate then applicable to ABR Loans under the
Revolving Facility plus 2%), in each case, with respect to clauses (i) and (ii)
above, from the date of such non-payment until such amount is paid in full
(after as well as before judgment).

                  (d)      Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.

                  2.15.    Computation of Interest and Fees. (a) Interest and
fees payable pursuant hereto shall be calculated on the basis of a 360-day year
for the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall

                                       31

<PAGE>

as soon as practicable notify the Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.

                  (b)      Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.15(a).

                  2.16.    Inability to Determine Interest Rate. If prior to the
first day of any Interest Period

                  (a)      the Administrative Agent shall have determined (which
         determination shall be conclusive and binding upon the Borrower) that,
         by reason of circumstances affecting the relevant market, adequate and
         reasonable means do not exist for ascertaining the Eurodollar Rate for
         such Interest Period, or

                  (b)      the Administrative Agent shall have received notice
         from the Majority Facility Lenders in respect of the relevant Facility
         that the Eurodollar Rate determined or to be determined for such
         Interest Period will not adequately and fairly reflect the cost to such
         Lenders (as conclusively certified by such Lenders) of making or
         maintaining their affected Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.

                  2.17.    Pro Rata Treatment and Payments. (a) Each borrowing
by the Borrower from the Lenders hereunder, each payment by the Borrower on
account of any commitment fee and any reduction of the Commitments of the
Lenders shall be made pro rata according to the Commitments in the relevant
Facility held by the relevant Lenders.

                  (b)      Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Term Loans or Tranche A
Loans shall be made pro rata according to the respective outstanding principal
amounts of the Term Loans or Tranche A Loans then held by the Term Lenders or
Tranche A Lenders, respectively. The amount of each principal prepayment of the
Term Loans shall be applied to reduce the then remaining installments of the
Term Loans on a pro rata basis based upon the then remaining principal amount
thereof. Amounts repaid or prepaid on account of the Term Loans or Tranche A
Loans may not be reborrowed.

                  (c)      Each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Loans shall be
made pro rata to the Revolving Lenders according to the respective outstanding
principal amounts of the Revolving Loans then held by the Revolving Lenders.

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<PAGE>

                  (d)      All payments (including prepayments) to be made by
the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.

                  (e)      Unless the Administrative Agent shall have been
notified in writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans under the relevant Facility, on demand, from
the Borrower.

                  (f)      Unless the Administrative Agent shall have been
notified in writing by the Borrower prior to the date of any payment being made
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such required
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate. Nothing herein shall be
deemed to limit the rights of the Administrative Agent or any Lender against the
Borrower.

                  2.18.    Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the Closing Date:

                  (i)      shall subject any Lender to any tax of any kind
         whatsoever with respect to this Agreement, any Letter of Credit, any
         Application or any Eurodollar Loan made by it, or change the basis of
         taxation of payments to such Lender in respect thereof (except for
         Non-Excluded

                                       33

<PAGE>

         Taxes covered by Section 2.19 and changes in the rate of tax on the
         overall net income of such Lender);

                  (ii)     shall impose, modify or hold applicable any reserve,
         special deposit, compulsory loan or similar requirement against assets
         held by, deposits or other liabilities in or for the account of,
         advances, loans or other extensions of credit by, or any other
         acquisition of funds by, any office of such Lender that is not
         otherwise included in the determination of the Eurodollar Rate
         hereunder; or

                  (iii)    shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, issuing or participating in Letters
of Credit, or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, the Borrower shall promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to this paragraph, it shall promptly
notify (no more frequently than quarterly) the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.

                  (b)      If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Closing Date shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit 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, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor (which may be submitted no more frequently
than quarterly), the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction; provided that the
Borrower shall not be required to compensate a Lender pursuant to this paragraph
for any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor;
and provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.

                  (c)      In determining any additional amounts payable
pursuant to this Section 2.18, each Lender will act reasonably and in good faith
and will use averaging and attribution methods which are reasonable, provided
that such Lender's determination of compensation owing under this Section 2.18
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto. Each Lender, upon determining that any additional amounts will
be payable pursuant to this Section 2.18, shall give prompt written notice of
such determination to the Borrower, which notice shall show the basis for
calculation of such additional amounts. The obligations of the Borrower pursuant
to this Section 2.18 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

                  2.19.    Taxes. (a) Subject to the last proviso of this
paragraph (a), all payments made by the Borrower under this Agreement shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,

                                       34

<PAGE>

duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.

                  (b)      In addition, the Borrower shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.

                  (c)      Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Administrative Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.

                  (d)      Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any state thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 8-BEN or Form
8-ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form 8-BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
request of the Borrower as a result of the obsolescence, inaccuracy or
invalidity of any form previously delivered by such Non-U.S. Lender. Each
Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer qualified to provide or capable of providing any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this

                                       35

<PAGE>

paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.

                  (e)      A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.

                  (f)      If any Lender receives a refund of any Non-Excluded
Taxes or Other Taxes paid or indemnified by the Borrower under this Section
2.19, such Lender shall pay the amount of such refund to the Borrower within 15
days of the date it received such refund.

                  (g)      The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

                  2.20.    Indemnity. The Borrower agrees to indemnify each
Lender and to hold each Lender harmless from any loss or expense that such
Lender may sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

                  2.21.    Change of Lending Office. Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.18,
2.19(a) or 2.23 with respect to such Lender, it will use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans affected by such event with the object of avoiding
the consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section
2.18, 2.19(a) or 2.23.

                  2.22.    Replacement of Lenders. The Borrower shall be
permitted to replace any Lender that (a) requests reimbursement for amounts
owing pursuant to Section 2.18 or 2.19(a) or (b) defaults in

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<PAGE>

its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.21 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.18 or 2.19(a),
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.20 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.18 or 2.19(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.

                  2.23.    Illegality. Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 2.20.

                           SECTION 3. LETTERS OF CREDIT

                  3.1.     LC Commitments. (a) Subject to the terms and
conditions hereof, the Issuing Lender, in reliance on the agreements of the RC
LC Participants or the Tranche A Lenders, as the case may be, set forth in this
Section 3, agrees to issue, on any Business Day, Letters of Credit for the
account of the Borrower (including the account of the Borrower acting on behalf
of any of its Subsidiaries), each of which shall be designated according to the
Facility under which such Letter of Credit is issued, as either an RC Letter of
Credit or a Tranche A Letter of Credit, as the case may be, and in such form as
may be approved from time to time by the Issuing Lender; provided that (i) the
Issuing Lender shall have no obligation to issue any RC Letter of Credit if,
after giving effect to such issuance, (x) the RC LC Obligations would exceed the
Total Revolving Commitments or (y) the aggregate amount of the Available
Revolving Commitments would be less than zero and (ii) the Tranche A Letters of
Credit shall be Existing Letters of Credit (or portions thereof) only, as set
forth on Schedule 1.1. Any portion of the Existing Letters of Credit in excess
of the aggregate Tranche A Commitments on the Closing Date shall be deemed to
constitute RC Letters of Credit, as specified on Schedule 1.1. Each Letter of
Credit shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
that is five Business Days prior to (1) in the case of RC Letters of Credit, the
Revolving Scheduled Commitment Termination Date or (2) in the case of Tranche A
Letters of Credit, the date set forth in clause (i) of the definition of
"Tranche A LC Termination Date"; provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above). Any draw on (and any reimbursement under) a Letter of Credit for
which a portion is allocated to each of the Revolving Facility

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<PAGE>

and the Tranche A LC Facility shall be made on a pro rata basis between the
Revolving Facility and the Tranche A LC Facility in proportion to the amount of
such Letter of Credit allocated to such Facility.

                  (b)      Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.

                  (c)      The Issuing Lender shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any LC Participant to exceed any limits imposed by,
any applicable Requirement of Law.

                  3.2.     Procedure for Issuance of Letter of Credit. The
Borrower may from time to time request that the Issuing Lender issue a Letter of
Credit by delivering to the Issuing Lender at its address for notices specified
herein an Application therefor (and, with respect to RC Letters of Credit,
delivery of a copy of such Application to the Administrative Agent), completed
to the satisfaction of the Issuing Lender, and such other certificates,
documents and other papers and information as the Issuing Lender may request.
Upon receipt of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and
the Borrower. The Issuing Lender shall furnish a copy of such Letter of Credit
to the Borrower (and, with respect to RC Letters of Credit, to the
Administrative Agent) promptly following the issuance thereof. The Issuing
Lender shall promptly furnish to the Administrative Agent, which shall in turn
promptly furnish to the Lenders, notice of the issuance of each Letter of Credit
(including the amount thereof).

                  3.3.     Fees and Other Charges. (a) The Borrower will pay a
Letter of Credit fee calculated at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the Revolving
Facility or the Tranche A LC Facility, respectively, and payable on the face
amount of all outstanding RC Letters of Credit and Tranche A Letters of Credit,
in each case shared ratably among the Lenders under the relevant Facility and
payable quarterly in arrears on each LC Fee Payment Date. In addition, the
Borrower shall pay to the Issuing Lender for its own account a fronting fee of
0.25% per annum on the undrawn and unexpired amount of each Letter of Credit,
payable quarterly in arrears on each LC Fee Payment Date.

                  (b)      In addition to the foregoing fees, the Borrower shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.

                  3.4.     RC LC Participations. (a) The Issuing Lender
irrevocably agrees to grant and hereby grants to each RC LC Participant, and, to
induce the Issuing Lender to issue RC Letters of Credit hereunder, each RC LC
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such RC LC Participant's own account and risk an undivided interest
equal to such RC LC Participant's Revolving Percentage in the Issuing Lender's
obligations and rights under each RC Letter of Credit (including, for the
avoidance of doubt, any portion of an Existing Letter of Credit deemed to be a
RC Letter of Credit in accordance with Section 3.1 and as indicated on Schedule
1.1) issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each RC LC Participant unconditionally and irrevocably agrees with
the Issuing Lender that, if a draft is paid under any RC Letter of Credit for
which the Issuing

                                       38

<PAGE>

Lender is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such RC LC Participant shall pay to the Administrative Agent for
the account of the Issuing Lender upon demand at the Administrative Agent's
address for notices specified herein (and thereafter the Administrative Agent
shall promptly pay to the Issuing Lender) an amount equal to such RC LC
Participant's Revolving Percentage of the amount of such draft, or any part
thereof, that is not so reimbursed.

                  (b)      If any amount required to be paid by any RC LC
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any RC
Letter of Credit is paid to the Issuing Lender within three Business Days after
the date such payment is due, the Issuing Lender shall so notify the
Administrative Agent, who shall promptly notify the RC LC Participants, and each
such RC LC Participant shall pay to the Administrative Agent, for the account of
the Issuing Lender, on demand (and thereafter the Administrative Agent shall
promptly pay to the Issuing Lender) an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any RC LC Participant pursuant to Section 3.4(a) is not made available
to the Administrative Agent for the account of the Issuing Lender by such RC LC
Participant within three Business Days after the date such payment is due, the
Administrative Agent on behalf of the Issuing Lender shall be entitled to
recover from such RC LC Participant, on demand, such amount with interest
thereon calculated from such due date at the rate per annum applicable to ABR
Loans under the Revolving Facility. A certificate of the Administrative Agent
submitted on behalf of the Issuing Lender to any RC LC Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.

                  (c)      Whenever, at any time after the Issuing Lender has
made payment under any RC Letter of Credit and has received from the
Administrative Agent any RC LC Participant's pro rata share of such payment in
accordance with Section 3.4(a), the Issuing Lender receives any payment related
to such RC Letter of Credit (whether directly from the Borrower or otherwise,
including proceeds of collateral applied thereto by the Issuing Lender), or any
payment of interest on account thereof, the Issuing Lender will distribute to
the Administrative Agent for the account of such RC LC Participant (and
thereafter the Administrative Agent will promptly distribute to such RC LC
Participant) its pro rata share thereof; provided, however, that in the event
that any such payment received by the Issuing Lender shall be required to be
returned by the Issuing Lender, such RC LC Participant shall return to the
Administrative Agent for the account of the Issuing Lender (and thereafter the
Administrative Agent shall promptly return to the Issuing Lender) the portion
thereof previously distributed by the Issuing Lender.

                  (d)      Each RC LC Participant's obligation to purchase
participating interests pursuant to Section 3.4(a) shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right that such RC LC
Participant or the Borrower may have against the Issuing Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Lender; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.

                  3.5.     Tranche A LC Participations. (a) The Issuing Lender
irrevocably agrees to grant and hereby grants to each Tranche A Lender, and, to
induce the Issuing Lender to issue Tranche A Letters of Credit hereunder, each
Tranche A Lender irrevocably agrees to accept and purchase and hereby accepts

                                       39

<PAGE>

and purchases from the Issuing Lender, on the terms and conditions hereinafter
stated, for such Tranche A Lender's own account and risk an undivided interest
equal to such Tranche A Lender's Tranche A Percentage in the Issuing Lender's
obligations and rights under each Tranche A Letter of Credit (including, for the
avoidance of doubt, any portion of an Existing Letter of Credit deemed to be a
Tranche A Letter of Credit in accordance with Section 3.1 and as indicated on
Schedule 1.1) issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder. Each Tranche A Lender unconditionally and irrevocably agrees
with the Issuing Lender that, if a draft is paid under any Tranche A Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such Tranche A Lender shall pay to
the Administrative Agent for the account of the Issuing Lender upon demand at
the Administrative Agent's address for notices specified herein (and thereafter
the Administrative Agent shall promptly pay to the Issuing Lender) an amount
equal to such Tranche A Lender's Tranche A Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed.

                  (b)      If any amount required to be paid by any Tranche A
Lender to the Issuing Lender pursuant to Section 3.5(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Tranche
A Letter of Credit is paid to the Issuing Lender within three Business Days
after the date such payment is due, the Issuing Lender shall so notify the
Administrative Agent, who shall promptly notify the Tranche A Lenders, and each
such Tranche A Lender shall pay to the Administrative Agent, for the account of
the Issuing Lender, on demand (and thereafter the Administrative Agent shall
promptly pay to the Issuing Lender) an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any Tranche A Lender pursuant to Section 3.5(a) is not made available to
the Administrative Agent for the account of the Issuing Lender by such Tranche A
Lender within three Business Days after the date such payment is due, the
Administrative Agent on behalf of the Issuing Lender shall be entitled to
recover from such Tranche A Lender, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR Loans
under the Tranche A LC Facility. A certificate of the Administrative Agent
submitted on behalf of the Issuing Lender to any Tranche A Lender with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.

                  (c)      Whenever, at any time after the Issuing Lender has
made payment under any Tranche A Letter of Credit and has received from the
Administrative Agent any Tranche A Lender's pro rata share of such payment in
accordance with Section 3.5(a), the Issuing Lender receives any payment related
to such Tranche A Letter of Credit (whether directly from the Borrower or
otherwise, including proceeds of Collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will
distribute to the Administrative Agent for the account of such Tranche A Lender
(and thereafter the Administrative Agent will promptly distribute to such
Tranche A Lender) its pro rata share thereof; provided, however, that in the
event that any such payment received by the Issuing Lender shall be required to
be returned by the Issuing Lender, such Tranche A Lender shall return to the
Administrative Agent for the account of the Issuing Lender (and thereafter the
Administrative Agent shall promptly return to the Issuing Lender) the portion
thereof previously distributed by the Issuing Lender.

                  (d)      Each Tranche A Lender's obligation to purchase
participating interests pursuant to Section 3.5(a) shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right that such Tranche A
Lender or the Borrower may have against the Issuing Lender, the Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or

                                       40

<PAGE>

otherwise) of the Borrower; (iv) any breach of this Agreement or any other Loan
Document by the Borrower, any other Loan Party or any other Lender; or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

                  3.6.     Reimbursement Obligation of the Borrower. (a) The
Borrower agrees to reimburse the Issuing Lender in accordance with this Section
upon notification to the Borrower of the date and amount of a draft presented
under any Letter of Credit and paid by the Issuing Lender for the amount of (i)
such draft so paid and (ii) any taxes, fees, charges or other reasonable costs
or expenses incurred by the Issuing Lender in connection with such payment.

                  (b)      In the case of RC Letters of Credit and Tranche A
Letters of Credit, if the Borrower is notified as provided in the immediately
preceding sentence by 2:00 P.M., New York City time, on any day, then the
Borrower shall so reimburse the Issuing Lender by 12:00 Noon, New York City
time, on the next succeeding Business Day, and, if so notified after 2:00 P.M.,
New York City time, on any day, the Borrower shall so reimburse the Issuing
Lender by 12:00 Noon, New York City time, on the second succeeding Business Day.

                  (c)      Each drawing under an RC Letter of Credit or Tranche
A Letter of Credit shall (unless an event of the type described in Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures set forth in Sections 3.4 and 3.5 for the funding of
participations shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing, in the amount of such drawing, (x) in the
case of a drawing under an RC Letter of Credit, of ABR Revolving Loans pursuant
to Section 2.5 (or, at the option of the Administrative Agent and the Swingline
Lender in their sole discretion, a borrowing of Swingline Loans pursuant to
Section 2.6) and (y) in the case of a drawing under a Tranche A Letter of
Credit, of ABR Loans from the Tranche A Lenders ("Tranche A Loans"). The
Borrowing Date with respect to any such borrowing shall be (i) in the case of
Revolving Loans or Swingline Loans, the first date on which a borrowing of
Revolving Loans (or, if applicable, Swingline Loans) could be made pursuant to
Section 2.5 (or, if applicable, Section 2.7) if the Administrative Agent had
received a notice of such borrowing at the time of such drawing under such RC
Letter of Credit and (ii) in the case of Tranche A Loans, if such drawing
occurred prior to 12:00 noon, New York City time, on the following Business Day
and if such drawing occurred at or after 12:00 noon, New York City time, on the
second following Business Day. Section 2.5(b) shall apply to borrowings of
Tranche A Loans, mutatis mutandis.

                  (d)      Each payment under this Section 3.6 shall be made to
the Issuing Lender at its address for notices specified herein in lawful money
of the United States and in immediately available funds. Interest shall be
payable on any and all amounts remaining unpaid by the Borrower under this
Section from the date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full in the case of RC Letters of
Credit and Tranche A Letters of Credit, at the rate set forth in (i) until the
second Business Day following the date of payment of the applicable drawing,
Section 2.14(b) and (ii) thereafter, Section 2.14(c), in each case payable on
demand.

                  3.7.     Obligations Absolute. The Borrower's obligations
under this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with the Issuing Lender that the Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.6 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower

                                       41

<PAGE>

against any beneficiary of such Letter of Credit or any such transferee. The
Issuing Lender shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions constituting gross negligence or willful misconduct of the Issuing
Lender. The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and,
to the extent not inconsistent therewith, the Uniform Commercial Code of the
State of New York, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.

                  3.8.     Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower and the Administrative Agent of the date and amount
thereof. The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.

                  3.9.     Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.

                           SECTION 4. REPRESENTATIONS AND WARRANTIES

                  To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:

                  4.1.     Financial Condition. The audited consolidated balance
sheet of the Borrower as at December 31, 2002, and the related consolidated
statements of operations, stockholder's equity and cash flows for the fiscal
year ended on such date, reported on by and accompanied by an unqualified report
from Grant Thornton LLP, present fairly the consolidated financial condition of
the Borrower as at such date, and the consolidated results of its operations and
its consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Borrower as at March 31, 2003, and the related
unaudited consolidated and consolidating statements of income and cash flows for
the three-month period ended on such date, present fairly the consolidated
financial condition of the Borrower as at such date, and the consolidated
results of its operations and its consolidated and consolidating cash flows for
the three-month period then ended (subject to normal year-end audit adjustments
and the absence of footnotes). Such financial statements have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). The Borrower and its Subsidiaries do not have any material Guarantee
Obligations, contingent liabilities or liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the financial statements referred to
in this paragraph. During the period from March 31, 2003 to and including the
date hereof there has been no Disposition by the Borrower or any Subsidiary of
any material part of its business or property.

                  4.2.     No Change. Since December 31, 2002 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.

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<PAGE>

                  4.3.     Existence; Compliance with Law. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing, if applicable, under the laws of the jurisdiction of its organization,
(b) has the power (corporate or otherwise) and authority, and the legal right,
to own and operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly qualified
as a foreign corporation or other entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the extent that
the failure to be so qualified and in good standing could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

                  4.4.     Power; Authorization; Enforceable Obligations. Each
Loan Party has the power (corporate or otherwise) and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party
and, in the case of the Borrower, to borrow hereunder. Each Loan Party has taken
all necessary action (corporate or otherwise) to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and, in
the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii) the
filings referred to in Section 4.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

                  4.5.     No Legal Bar. The execution, delivery and performance
of this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any material Contractual Obligation of the
Borrower or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Requirement of Law
or Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.

                  4.6.     Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.

                  4.7.     No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.

                                       43

<PAGE>

                  4.8.     Ownership of Property; Liens. Each of the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its material real property, and good title to, or a valid leasehold
interest in, all its other material property, and none of such property is
subject to any Lien except as permitted by Section 7.3.

                  4.9.     Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted. No material claim has
been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. The
use of Intellectual Property by the Borrower and its Subsidiaries does not
infringe on the rights of any Person in any material respect.

                  4.10.    Taxes. The Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other material tax returns
that are required to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority to the extent due and payable (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Subsidiaries, as the
case may be); no material tax Lien has been filed, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge, except to the extent that the validity thereof is being contested in
good faith pursuant to appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or its Subsidiaries, as the case may be.

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

                  4.12.    Labor Matters. Except as set forth on Schedule 4.6
and as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect: (a) there are no strikes or other labor disputes against the
Borrower or any of its Subsidiaries pending or, to the knowledge of the
Borrower, threatened; (b) hours worked by and payment made to employees of the
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance have been paid or accrued as
a liability on the books of the Borrower or the relevant Subsidiary.

                  4.13.    ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien against the Borrower or any Commonly Controlled Entity and in favor
of the PBGC or a Plan has arisen, during such five-year period. The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither the Borrower nor any Commonly Controlled

                                       44

<PAGE>

Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.

                  4.14.    Investment Company Act; Other Regulations. No Loan
Party is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.

                  4.15.    Subsidiaries. Except as disclosed to the
Administrative Agent by the Borrower in writing from time to time, (a) Schedule
4.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees, independent contractors or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary, except as created by the Loan Documents or as set
forth on Schedule 4.15.

                  4.16.    Use of Proceeds. The proceeds of the Term Loans shall
be used as set forth in Section 6.11, and the proceeds of the Revolving Loans
and the Swingline Loans, and the Letters of Credit, shall be used for general
corporate purposes.

                  4.17.    Environmental Matters. Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:

                  (a)      the facilities and properties owned, leased or
         operated by the Borrower or any of its Subsidiaries (the "Properties")
         do not contain, and have not previously contained, any Materials of
         Environmental Concern in amounts or concentrations or under
         circumstances that constitute or constituted a violation by Borrower or
         its Subsidiaries of, or could give rise to liability of Borrower or its
         Subsidiaries under, any Environmental Law;

                  (b)      neither the Borrower nor any of its Subsidiaries has
         received any notice of, or is otherwise aware of, any violation,
         alleged violation, non-compliance, liability or potential liability
         regarding environmental matters or compliance with Environmental Laws
         with regard to any of the Properties or the business presently or
         formerly operated by the Borrower or any of its Subsidiaries (the
         "Business"), nor does the Borrower have knowledge or reason to believe
         that any such notice will be received or is being threatened;

                  (c)      Materials of Environmental Concern have not been
         transported or disposed of by or on behalf of the Borrower or its
         Subsidiaries from the Properties or otherwise in connection with the
         Business, in violation of, or in a manner or to a location that could
         give rise to liability under, any Environmental Law, nor have any
         Materials of Environmental Concern been generated, treated, stored, or
         disposed of, or have otherwise come to be located at, on or under any
         of the Properties in violation of, or in a manner that could give rise
         to liability under, any applicable Environmental Law;

                  (d)      no judicial proceeding or governmental or
         administrative action is pending or, to the knowledge of the Borrower,
         threatened, under any Environmental Law to which the Borrower or any
         Subsidiary is or will be named as a party with respect to the
         Properties or the Business, nor

                                       45

<PAGE>

         are there any consent decrees or other decrees, consent orders,
         administrative orders or other orders, or other administrative or
         judicial requirements outstanding under any Environmental Law with
         respect to the Properties or the Business;

                  (e)      there has been no release or threat of release of
         Materials of Environmental Concern at, to, on, under or from the
         Properties or arising from or related to the operations of the Borrower
         or any Subsidiary in connection with the Properties or otherwise in
         connection with the Business, in violation of or in amounts or in a
         manner that could give rise to liability of Borrower or its
         Subsidiaries under Environmental Laws;

                  (f)      the Borrower, its Subsidiaries, the Business, the
         Properties and all operations at the Properties are in compliance and
         have in the last five years been in compliance with all applicable
         Environmental Laws, and there is no contamination at, under or about
         the Properties or violation of any Environmental Law with respect to
         the Properties or the Business; and

                  (g)      neither the Borrower nor any of its Subsidiaries has,
         by contract or by operation of law, assumed any liability of any other
         Person or agreed to indemnify any other person for liability under
         Environmental Laws.

                  4.18.    Accuracy of Information, etc. (a) No statement or
information contained in this Agreement, any other Loan Document or any other
document, certificate or statement furnished by or on behalf of any Loan Party
to the Administrative Agent or the Lenders, or any of them, for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. There is no fact known to any Loan Party that could reasonably
be expected to have a Material Adverse Effect that has not been expressly
disclosed herein, in the other Loan Documents or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.

                  (b)      The Borrower's Annual Report on Form 10-K for the
year ended December 31, 2002 and the Borrower's Quarterly Report on Form 10-Q
for the quarter ended March 31, 2003 (collectively the "Borrower's SEC Reports")
as of their respective filing dates complied in all material respects with the
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder applicable to the Borrower's
SEC Reports. None of the Borrower's SEC Reports at the time of filing contained
any untrue statements of material fact or omitted a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Forward looking
statements and other statements contained in the Borrower's SEC Reports are
subject to the cautionary language and risk factors contained in the Borrower's
SEC Reports.

                  4.19.    Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described in Section 3 thereof and proceeds of such
Collateral. In the case of (i) the Pledged Equity Interests described in the
Guarantee and Collateral

                                       46

<PAGE>

Agreement, when stock certificates representing such certificated Pledged Equity
Interests are delivered to the Administrative Agent or when financing statements
in appropriate form are filed in the offices specified on Schedule 4.19(a) and
(ii) the other Collateral described in the Guarantee and Collateral Agreement,
when financing statements and other filings specified on Schedule 4.19(a) (or
otherwise notified to the Administrative Agent) in appropriate form are filed in
the offices specified on Schedule 4.19(a) (or otherwise notified to the
Administrative Agent), the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral (other than Vehicles (as defined in the
Guarantee and Collateral Agreement), Deposit Accounts (as defined in the
Guarantee and Collateral Agreement), and leasehold estates in real property) and
the proceeds thereof, as security for the Obligations (as defined in the
Guarantee and Collateral Agreement), in each case prior and superior in right to
any other Person (except, in the case of Collateral other than Pledged Equity
Interests, Liens permitted by Section 7.3).

                  (b)      Each of the Mortgages is effective to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable Lien on the Mortgaged Properties described therein and
proceeds thereof and constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Mortgaged
Properties and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other
Person except Liens permitted by Section 7.3.

                  4.20.    Solvency. Each Loan Party is on the Closing Date
(after giving effect to the transactions contemplated by this Agreement), and
will continue to be, Solvent.

                  4.21.    Senior Indebtedness. The Obligations constitute
"Senior Indebtedness" of the Borrower under and as defined in each Senior
Subordinated Note Indenture. The obligations of each Subsidiary Guarantor under
the Guarantee and Collateral Agreement constitute "Guarantor Senior
Indebtedness" of such Subsidiary Guarantor under and as defined in each Senior
Subordinated Note Indenture.

                  4.22.    Regulation H. No Mortgage encumbers improved real
property that is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.

                  4.23.    Insurance. Each of the Borrower and its Subsidiaries
is insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged; and none of the Borrower or any of its
Subsidiaries (i) has received notice from any insurer or agent of such insurer
that substantial capital improvements or other material expenditures will have
to be made in order to continue such insurance or (ii) has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers at a
cost that could not reasonably be expected to have a Material Adverse Effect.

                  4.24.    Lease Payments. Each of the Borrower and its
Subsidiaries has paid all payments required to be made by it within any
specified grace periods under leases of real property where any of the
Collateral is or may be located from time to time (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the Borrower or such Subsidiary, as the case may be),
except as could not reasonably be expected to have a Material Adverse Effect; no
landlord Lien has been filed, and, to the knowledge of the Borrower, no claim is
being asserted, with respect to any such payments, in each case that could, when
taken together with any other such liens or

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claims, reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary owns any real property in fee simple.

                         SECTION 5. CONDITIONS PRECEDENT

                  5.1.     Conditions to Effectiveness. The effectiveness of
this Agreement is subject to the satisfaction, prior to or concurrently with the
making of the Term Loans on the Closing Date, of the following conditions
precedent:

                  (a)      Loan Documents. The Administrative Agent shall have
         received (i) this Agreement, executed and delivered by a duly
         authorized officer of the Borrower, (ii) the Guarantee and Collateral
         Agreement, executed and delivered by a duly authorized officer of the
         Borrower and each Subsidiary Guarantor, (iii) each Note requested by
         any Lender, (iv) the Subordinated Intercompany Note and (v) the
         Intellectual Property Security Agreement.

                  (b)      Closing Certificate. The Administrative Agent shall
         have received, with a counterpart for each Lender, a certificate of the
         Borrower and each Subsidiary Guarantor, dated the Closing Date,
         substantially in the form of Exhibit C, with appropriate insertions and
         attachments.

                  (c)      Approvals. All governmental and third party approvals
         necessary or, in the discretion of the Administrative Agent, advisable
         in connection with the continuing operations of the Borrower and its
         Subsidiaries and the transactions contemplated hereby shall have been
         obtained and be in full force and effect, and all applicable waiting
         periods shall have expired without any action being taken or threatened
         by any competent authority which would restrain, prevent or otherwise
         impose adverse conditions on the financing contemplated hereby.

                  (d)      Termination of Existing Credit Facilities. The
         Administrative Agent shall have received evidence satisfactory to the
         Administrative Agent that all amounts under the Existing Credit
         Agreement shall be paid in full on the Closing Date (except that the
         Existing Letters of Credit shall remain in effect and shall become
         Letters of Credit hereunder) and arrangements satisfactory to the
         Administrative Agent shall have been made for the termination of Liens
         and security interests granted in connection therewith.

                  (e)      Fees. The Lenders, the Arrangers and each Agent shall
         have received all fees required to be paid, and all expenses for which
         invoices have been presented (including, without limitation, the
         reasonable fees, disbursements and other charges of counsel to the
         Agents), on or before the Closing Date. All such amounts will be paid
         with proceeds of Loans made on the Closing Date and will be reflected
         in the funding instructions given by the Borrower to the Administrative
         Agent on or before the Closing Date.

                  (f)      Lien Searches. The Administrative Agent shall have
         received the results of a recent lien search in each of the
         jurisdictions or offices (including, without limitation, in the United
         States Patent and Trademark Office and the United States Copyright
         Office) requested by the Administrative Agent in which UCC financing
         statements or other filings or recordations should be made (or would
         have been made under the UCC as in effect immediately prior to July 1,
         2001) to evidence or perfect (with the priority required under the Loan
         Documents) security interests in the Collateral, and such search shall
         reveal no Liens on any of the assets of the Borrower or its
         Subsidiaries except for Liens permitted by Section 7.3.

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<PAGE>

                  (g)      Other Certifications. The Administrative Agent shall
         have received the following:

                           (i)      a copy of the charter of the Borrower and
                  each Subsidiary Guarantor and each amendment thereto,
                  certified (as of a date reasonably near the Closing Date) as
                  being a true and correct copy thereof by the Secretary of
                  State or other applicable Governmental Authority of the
                  jurisdiction in which each such Loan Party is organized;

                           (ii)     a copy of a certificate of the Secretary of
                  State or other applicable Governmental Authority of the
                  jurisdiction in which each such Loan Party is organized, dated
                  reasonably near the Closing Date, listing the charter of such
                  Loan Party and each amendment thereto on file in such office
                  and certifying that (A) such amendments are the only
                  amendments to such Person's charter on file in such office,
                  (B) such Person has paid all franchise taxes to the date of
                  such certificate and (C) such Person is duly organized and in
                  good standing under the laws of such jurisdiction;

                           (iii)    a telephonic confirmation from the Secretary
                  of State or other applicable Governmental Authority of each
                  jurisdiction in which each such Person is organized certifying
                  that the Borrower and each Subsidiary Guarantor is duly
                  organized and in good standing under the laws of such
                  jurisdiction on the Closing Date, together with a written
                  confirmatory report in respect thereof prepared by, or on
                  behalf of, a filing service acceptable to the Administrative
                  Agent; and

                           (iv)     a copy of a certificate of the Secretary of
                  State or other applicable Governmental Authority of each
                  jurisdiction reasonably requested by the Administrative Agent,
                  dated reasonably near the Closing Date, stating that the
                  Borrower and each of its Subsidiaries is duly qualified and in
                  good standing as a foreign corporation or entity in each such
                  jurisdiction and has filed all annual reports required to be
                  filed to the date of such certificate, provided that the
                  failure to be so duly qualified in any particular jurisdiction
                  shall not constitute a failure of this condition precedent
                  unless such failure, when taken together with any other such
                  failure in any other applicable jurisdiction, could reasonably
                  be expected to have a Material Adverse Effect.

                  (h)      Legal Opinions. The Administrative Agent shall have
         received the executed legal opinion of Winstead Sechrest & Minick P.C.,
         counsel to the Borrower and its Subsidiaries, substantially in the form
         of Exhibit F.

                  (i)      Pledged Equity Interests; Stock Power; Pledged Notes.
         The Administrative Agent shall have received (i) all originals of the
         certificates representing the shares of Capital Stock pledged pursuant
         to the Guarantee and Collateral Agreement, together with an undated
         stock power or other power of transfer for each such certificate
         executed in blank by a duly authorized officer of the pledgor thereof
         and (ii) all originals of each promissory note, if any, pledged to the
         Administrative Agent pursuant to the Guarantee and Collateral Agreement
         endorsed (without recourse) in blank (or accompanied by an executed
         transfer form in blank satisfactory to the Administrative Agent) by the
         pledgor thereof.

                  (j)      Filings, Registrations and Recordings. Each document
         (including, without limitation, any UCC financing statement) required
         by the Security Documents or under law or reasonably requested by the
         Administrative Agent to be filed, registered or recorded in order to
         create in favor of the Administrative Agent, for the benefit of the
         Secured Parties, a perfected Lien on, and security interest in, the
         Collateral described therein, prior and superior in right to any

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<PAGE>

         other Person (other than Liens permitted by Section 7.3), shall have
         been duly prepared for filing, registration or recordation, as
         applicable, and delivered to the Administrative Agent and shall be in
         form and substance reasonably satisfactory to the Administrative Agent.

                  (k)      Insurance. The Administrative Agent shall have
         received insurance certificates satisfying the requirements of Section
         5.3 of the Guarantee and Collateral Agreement.

                  (l)      Miscellaneous. The Administrative Agent shall have
         received such other documents, agreements, certificates and information
         as it shall reasonably request.

                  5.2.     Conditions to Each Extension of Credit. The agreement
of each Lender to make any extension of credit requested to be made by it on any
date (including its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:

                  (a)      Representations and Warranties. Each of the
         representations and warranties made by any Loan Party in or pursuant to
         the Loan Documents shall be true and correct in all material respects
         on and as of such date as if made on and as of such date (unless such
         representations expressly relate to an earlier date, in which case they
         shall be true and correct in all material respects on and as of such
         earlier date).

                  (b)      No Default. No Default or Event of Default shall have
         occurred and be continuing on such date or after giving effect to the
         extensions of credit requested to be made on such date.

Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.

                        SECTION 6.  AFFIRMATIVE COVENANTS

                  The Borrower hereby agrees that, so long as any Commitment
remains in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to:

                  6.1.     Financial Statements. Furnish to the Administrative
Agent with sufficient copies for each Lender (and the Administrative Agent shall
promptly provide to each Lender, by posting to Intralinks or otherwise):

                  (a)      as soon as available, but in any event within 90 days
         after the end of each fiscal year of the Borrower, a copy of the
         audited consolidated balance sheet of the Borrower and its consolidated
         Subsidiaries as at the end of such year and the related audited
         consolidated statements of income and of cash flows for such year,
         setting forth in each case in comparative form the figures for the
         previous year, reported on without a "going concern" or like
         qualification or exception, or qualification arising out of the scope
         of the audit, by Grant Thornton LLP or other independent certified
         public accountants of nationally recognized standing; and

                  (b)      as soon as available, but in any event not later than
         45 days after the end of each of the first three quarterly periods of
         each fiscal year of the Borrower, the unaudited consolidated balance
         sheet of the Borrower and its consolidated Subsidiaries as at the end
         of such quarter and the related unaudited consolidated statements of
         income and of cash flows for such quarter and the portion of the fiscal
         year through the end of such quarter, setting forth in each case in

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<PAGE>

         comparative form the figures for the previous year, certified by a
         Responsible Officer as being fairly stated in all material respects
         (subject to normal year-end audit adjustments and the absence of notes
         thereto).

All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

                  6.2.     Certificates; Other Information. Furnish to the
Administrative Agent with sufficient copies for each Lender (or, in the case of
clause (g), to the relevant Lender):

                  (a)      concurrently with the delivery of the financial
         statements referred to in Section 6.1(a), a certificate of the
         independent certified public accountants reporting on such financial
         statements stating that in making the examination necessary therefor no
         knowledge was obtained of any Default or Event of Default, except as
         specified in such certificate;

                  (b)      concurrently with the delivery of any financial
         statements pursuant to Section 6.1, (i) a certificate of a Responsible
         Officer stating that such Responsible Officer has obtained no knowledge
         of any Default or Event of Default except as specified in such
         certificate and (ii) (x) a Compliance Certificate containing all
         information and calculations necessary for determining compliance by
         the Borrower and its Subsidiaries with the provisions of this Agreement
         referred to therein as of the last day of the fiscal quarter or fiscal
         year of the Borrower, and (y) to the extent not previously disclosed to
         the Administrative Agent, a report describing each new Subsidiary of
         any Loan Party, any change in the name or jurisdiction of organization
         of any Loan Party and any new fee owned real property or material
         Intellectual Property acquired by any Loan Party since the date of the
         most recent report delivered pursuant to this clause (y);

                  (c)      as soon as available, and in any event no later than
         45 days after the end of each fiscal year of the Borrower, a detailed
         consolidated budget for the following fiscal year (including a
         projected consolidated balance sheet of the Borrower and its
         Subsidiaries as of the end of the following fiscal year, the related
         consolidated statements of projected cash flow, projected changes in
         financial position and projected income, resulting applicable financial
         covenant ratios and a description of the underlying assumptions
         applicable thereto), and, as soon as available, significant revisions,
         if any, of such budget and projections with respect to such fiscal year
         (collectively, the "Projections"), which Projections shall in each case
         be accompanied by a certificate of a Responsible Officer stating that
         such Projections are based on reasonable estimates, information and
         assumptions and that such Responsible Officer has no reason to believe
         that such Projections are incorrect or misleading in any material
         respect;

                  (d)      within 45 days after the end of each of the first
         three fiscal quarters of each fiscal year of the Borrower, a narrative
         discussion and analysis of the financial condition and results of
         operations of the Borrower and its Subsidiaries for such fiscal quarter
         and for the period from the beginning of the then current fiscal year
         to the end of such fiscal quarter, as compared to the portion of the
         Projections covering such periods and to the comparable periods of the
         previous year; provided that delivery of the Report on Form 10-Q filed
         with the SEC with respect to such fiscal quarter shall be deemed to
         satisfy the foregoing requirement;

                  (e)      no later than five Business Days prior to the
         effectiveness thereof, copies of substantially final drafts of any
         proposed amendment, supplement, waiver or other modification

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<PAGE>

         with respect to the Senior Subordinated Note Indenture if the
         effectiveness thereof requires the approval of any percentage of the
         holders of Indebtedness thereunder;

                  (f)      within five Business Days after the same are sent,
         copies of all financial statements and reports that the Borrower sends
         to the holders of any class of its debt securities or public equity
         securities and, within five Business Days after the same are filed,
         copies of all financial statements and reports that the Borrower may
         make to, or file with, the SEC; and

                  (g)      promptly, such additional financial and other
         information as any Lender may from time to time reasonably request.

                  6.3.     Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.

                  6.4.     Maintenance of Existence; Compliance. (a) (i)
Preserve, renew and keep in full force and effect its corporate (or other)
existence and (ii) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 7.4 and except, in the
case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

                  6.5.     Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption expense coverage) as are
usually insured against in the same general area by companies engaged in the
same or a similar business.

                  6.6.     Inspection of Property; Books and Records;
Discussions. (a) Keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and activities
and (b) subject to the provisions of Section 10.14, permit representatives of
any Lender, upon reasonable prior notice, to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.

                  6.7.     Notices. Promptly give notice to the Administrative
Agent with sufficient copies for each Lender (and the Administrative Agent shall
promptly provide such notice to each Lender, by posting to Intralinks or
otherwise) of:

                  (a)      the occurrence of any Default or Event of Default;

                  (b)      any (i) default or event of default under any
         Contractual Obligation of the Borrower or any of its Subsidiaries or
         (ii) litigation, investigation or proceeding that may exist at any time
         between the Borrower or any of its Subsidiaries and any Governmental
         Authority, that

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<PAGE>

         in either case, if not cured or if reasonably expected to be adversely
         determined, as the case may be, could reasonably be expected to have a
         Material Adverse Effect;

                  (c)      any litigation or proceeding affecting the Borrower
         or any of its Subsidiaries in which (x) the amount claimed is (i)
         $20,000,000 or more and (ii) not covered by insurance or (y) injunctive
         or similar relief is sought which could reasonably be expected to be
         granted and which, if granted, could reasonably be expected to have a
         Material Adverse Effect;

                  (d)      the following events, as soon as possible and in any
         event within 30 days after the Borrower knows or has reason to know
         thereof: (i) the occurrence of any Reportable Event with respect to any
         Plan, a failure to make any required contribution to a Plan, the
         creation of any Lien in favor of the PBGC or a Plan or any withdrawal
         from, or the termination, Reorganization or Insolvency of, any
         Multiemployer Plan or (ii) the institution of proceedings or the taking
         of any other action by the PBGC or the Borrower or any Commonly
         Controlled Entity or any Multiemployer Plan with respect to the
         withdrawal from, or the termination, Reorganization or Insolvency of,
         any Single Employer Plan or Multiemployer Plan; and

                  (e)      any development or event that has had or could
         reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.

                  6.8.     Environmental Laws. Except as could not reasonably be
expected to have a Material Adverse Effect:

                  (a)      comply with, and contractually require compliance by
         all tenants and subtenants, if any, with, all applicable Environmental
         Laws, and obtain and comply with and maintain, and contractually
         require that all tenants and subtenants obtain and comply with and
         maintain, any and all licenses, approvals, notifications, registrations
         or permits required by applicable Environmental Laws; and

                  (b)      conduct and complete all investigations, studies,
         sampling and testing, and all remedial, removal and other actions
         required under Environmental Laws and promptly comply with all lawful
         orders and directives of all Governmental Authorities regarding
         Environmental Laws.

                  6.9.     Additional Collateral, etc. (a) With respect to any
property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (w) any vehicles and any immaterial inventory and
equipment, (x) any property described in paragraph (b), (c) or (d) below, (y)
any property subject to a Lien expressly permitted by Section 7.3(g) or (j) and
(z) property acquired by any Specified Subsidiary) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in such property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in such property, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.

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<PAGE>

                  (b)      With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $750,000
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than (x) any such real property subject to a Lien expressly permitted by
Section 7.3(g) or (j) and (z) real property acquired by any Specified
Subsidiary), promptly (i) execute and deliver a first priority Mortgage, in
favor of the Administrative Agent, for the benefit of the Secured Parties,
covering such real property, (ii) if requested by the Administrative Agent,
provide the Lenders with (x) title and extended coverage insurance covering such
real property in an amount at least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
Mortgage, each of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.

                  (c)      With respect to any new Subsidiary (other than an
Excluded Foreign Subsidiary) created or acquired after the Closing Date by the
Borrower or any of its Subsidiaries (which, for the purposes of this paragraph
(c), shall include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary but shall exclude Legacy Trust and the Insurance Subsidiary),
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (except Capital Stock constituting Investments permitted under
Section 7.8(g) or (j)), (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock (or
other transfer) powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, and (iii) cause
such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest in the Collateral described in the Guarantee and
Collateral Agreement with respect to such new Subsidiary, including the filing
of Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent and (C) to deliver to the Administrative
Agent a certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments.

                  (d)      With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by the Borrower or any of
its Subsidiaries (provided that in no event shall more than 65% of the total
outstanding voting Capital Stock of any such new Subsidiary be required to be so
pledged), and (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock (or other transfer)
powers, in blank, executed and delivered by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, and take such other action as
may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Administrative Agent's security interest therein.

                  6.10.    Permitted Acquisitions and Permitted Foreign
Acquisitions. (a) Deliver to the Lenders, within ten Business Days following
the closing date of any Permitted Acquisition or Permitted Foreign Acquisition
involving a Purchase Price less than $35,000,000 (other than any such
acquisition

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<PAGE>

that, together with any related acquisition, involves less than thirty stores),
each of the following: (i) a description of the property, assets and/or equity
interest being purchased, in reasonable detail; and (ii) a copy of the purchase
agreement pursuant to which such acquisition was consummated or a term sheet or
other description setting forth the essential terms and the basic structure of
such acquisition.

                  (b)      Deliver to the Lenders, not less than ten Business
Days prior to the closing date of any Permitted Acquisition or Permitted Foreign
Acquisition involving a Purchase Price greater than or equal to $35,000,000,
each of the following: (A) a description of the property, assets and/or equity
interest being purchased, in reasonable detail; (B) a copy of the purchase
agreement pursuant to which such acquisition was or is to be consummated or a
term sheet or other description setting forth the essential terms and the basic
structure of such acquisition; (C) projected statements of income for the entity
that is being acquired (or the assets, if an acquisition of assets) for at least
a two-year period following such acquisition (including a summary of assumptions
or pro forma adjustments for such projections); (D) to the extent made available
to the Borrower, historical financial statements for the entity that is being
acquired (or the assets, if an acquisition of assets) (including balance sheets
and statements of income, retained earnings and cash flows for at least a
two-year period prior to such acquisition); and (E) confirmation, supported by
detailed calculations, that the Borrower and its Subsidiaries would have been in
compliance with all the covenants in Section 7.1 for the fiscal quarter ending
immediately prior to the consummation of such acquisition, with such compliance
determined on a pro forma basis as if such acquisition had been consummated on
the first day of the Reference Period ending on the last day of such fiscal
quarter.

                  6.11.    Use of Proceeds. Apply the proceeds of the Term Loans
advanced on the Closing Date to repay in full all outstanding obligations of RAC
East under the Existing Credit Agreement, and, on each subsequent Borrowing Date
of Term Loans, apply the proceeds of such Term Loans (i) to the repurchase of
the Borrower's Capital Stock pursuant to the equity tender offer dated April 28,
2003, (ii) to the repurchase of the Borrower's Capital Stock from the Sponsor
pursuant to an agreement dated as of April 25, 2003, (iii) to open market
repurchases of the Borrower's Capital Stock otherwise permitted by this
Agreement and (iv) for general corporate purposes.

                  6.12.    Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may reasonably request, for the purposes of implementing or effectuating
the provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Secured
Parties with respect to the Collateral (or with respect to any additions thereto
or replacements or proceeds or products thereof or with respect to any other
property or assets hereafter acquired by the Borrower or any Subsidiary which
may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the
exercise by the Administrative Agent or any Secured Party of any power, right,
privilege or remedy pursuant to this Agreement or the other Loan Documents which
requires any consent, approval, recording, qualification or authorization of any
Governmental Authority, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Administrative Agent or such Lender may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.

                         SECTION 7.  NEGATIVE COVENANTS

                  The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:

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<PAGE>

                  7.1.     Financial Condition Covenants.

                  (a)      Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending on or after June 30, 2003 to exceed 2.75 to
1.00.

                  (b)      Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter during any period set
forth below to be less than the ratio set forth below opposite such period:

<TABLE>
<CAPTION>
                                                            Consolidated
          Period                                       Interest Coverage Ratio
          ------                                       -----------------------
<S>                                                    <C>
Fiscal year 2003                                            3.50 to 1.00
Fiscal year 2004 and thereafter                             4.00 to 1.00
</TABLE>

                  (c)      Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such period:

<TABLE>
<CAPTION>
                                                            Consolidated
          Period                                     Fixed Charge Coverage Ratio
          ------                                     ---------------------------
<S>                                                  <C>
On or prior to June 30, 2008                                1.50 to 1.00
September 30, 2008                                          1.25 to 1.00
December 31, 2008 and thereafter                            1.00 to 1.00
</TABLE>

                  7.2.     Indebtedness. Create, issue, incur, assume, become
liable in respect of or suffer to exist any Indebtedness, except:

                  (a)      Indebtedness of any Loan Party pursuant to any Loan
         Document;

                  (b)      (i) Indebtedness of the Borrower to any Subsidiary
         and of any Wholly Owned Subsidiary Guarantor to the Borrower or any
         other Subsidiary; provided, that such Indebtedness owing by any Loan
         Party shall be subordinated to the obligations of such Loan Party under
         the Loan Documents as set forth in the Subordinated Intercompany Note
         and (ii) Indebtedness of the Borrower and any Subsidiary to the
         Insurance Subsidiary in an aggregate amount not to exceed $35,000,000
         at any time outstanding that cannot be subordinated to the obligations
         of such Loan Party under the Loan Documents for regulatory reasons or
         would cause the carrying value for regulatory valuation purposes to be
         decreased;

                  (c)      Guarantee Obligations incurred in the ordinary course
         of business by the Borrower or any of its Subsidiaries of obligations
         of any Wholly Owned Subsidiary Guarantor;

                  (d)      Indebtedness (other than the Indebtedness referred to
         in Section 7.2(b), (e), (f) and (h)) outstanding on the Closing Date
         and listed on Schedule 7.2(d) and any refinancings,

                                       56

<PAGE>

         refundings, renewals or extensions thereof (without increasing, or
         shortening the maturity of, the principal amount thereof);

                  (e)      Indebtedness (including, without limitation, Capital
         Lease Obligations) secured by Liens permitted by Section 7.3(g) in an
         aggregate principal amount not to exceed $15,000,000 at any one time
         outstanding;

                  (f)      (i) Indebtedness of the Borrower (and, with respect
         to not more than $89,455,000 of the amount referred to in clause (x)
         below, RAC East) in respect of the Senior Subordinated Notes in an
         aggregate principal amount not to exceed (x) during the period from and
         including the Closing Date to but excluding August 16, 2003,
         $389,455,000 and (y) thereafter, $300,000,000 and any refinancings
         thereof (without increasing, or shorting the maturity of, the principal
         amount thereof) with other unsecured subordinated notes of the Borrower
         that have terms (other than the interest rate) no less favorable to the
         Borrower and its Subsidiaries (taken as a whole) and, in the judgment
         of the Administrative Agent, to the Lenders (taken as a whole) than the
         notes being so refinanced and an interest rate thereon not exceeding
         the then applicable market interest rate, (ii) Guarantee Obligations of
         any Subsidiary Guarantor in respect of such Indebtedness and Guarantee
         Obligations of the Borrower in respect of Indebtedness of RAC East
         specified in clause (x) above, provided that such Guarantee Obligations
         are subordinated to the same extent as the obligations of the Borrower
         in respect of the Senior Subordinated Notes or any notes issued
         pursuant to a refinancing permitted pursuant to clause (i) above and
         (iii) additional unsecured subordinated notes of the Borrower not
         permitted pursuant to clause (i) above that have terms (other than the
         interest rate) no less favorable to the Borrower and its Subsidiaries
         (taken as a whole) and, in the judgment of the Administrative Agent, to
         the Lenders (taken as a whole) than the Senior Subordinated Notes and
         an interest rate thereon not exceeding the then applicable market
         interest rate provided that all Net Cash Proceeds of such unsecured
         subordinated notes are applied to the prepayment of the Term Loans
         except that, notwithstanding the foregoing, $175,000,000 of such Net
         Cash Proceeds that constitute Qualified Net Cash Debt Proceeds may be
         applied to Permitted Acquisitions or Permitted Foreign Acquisitions;

                  (g)      Assumed Indebtedness incurred pursuant to Permitted
         Acquisitions or Permitted Foreign Acquisitions consummated after the
         Closing Date in an aggregate amount not to exceed $100,000,000 at any
         time outstanding;

                  (h)      Guarantee Obligations of the Borrower or any
         Subsidiary in respect of Indebtedness of franchisees not to exceed
         $75,000,000 at any one time outstanding; and

                  (i)      additional Indebtedness of the Borrower or any of its
         Subsidiaries in an aggregate principal amount (for the Borrower and all
         Subsidiaries) not to exceed $35,000,000 at any one time outstanding.

                  7.3.     Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, whether now owned or hereafter acquired, except
for:

                  (a)      Liens for taxes not yet due or that are being
         contested in good faith by appropriate proceedings, provided that
         adequate reserves with respect thereto are maintained on the books of
         the Borrower or its Subsidiaries, as the case may be, in conformity
         with GAAP;

                  (b)      carriers', warehousemen's, mechanics', materialmen's,
         repairmen's, landlords' or other like Liens arising in the ordinary
         course of business that are not overdue for a period of more than 30
         days or that are being contested in good faith by appropriate
         proceedings and for

                                       57

<PAGE>

         which adequate reserves with respect thereto are maintained on the
         books of the Borrower or its Subsidiaries, as the case may be, in
         conformity with GAAP;

                  (c)      pledges or deposits in connection with workers'
         compensation, unemployment insurance and other social security
         legislation;

                  (d)      deposits to secure the performance of bids, trade
         contracts (other than for borrowed money), leases, statutory
         obligations, surety and appeal bonds, performance bonds and other
         obligations of a like nature incurred in the ordinary course of
         business;

                  (e)      easements, rights-of-way, restrictions and other
         similar encumbrances incurred in the ordinary course of business that,
         in the aggregate, are not substantial in amount and that do not in any
         case 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 of its Subsidiaries;

                  (f)      Liens in existence on the Closing Date listed on
         Schedule 7.3(f), securing Indebtedness permitted by Section 7.2(d),
         provided that no such Lien is spread to cover any additional property
         after the Closing Date (other than "products" and "proceeds" thereof,
         as each such term is defined in the Uniform Commercial Code of the
         State of New York) and that the amount of Indebtedness secured thereby
         is not increased;

                  (g)      Liens securing Indebtedness of the Borrower or any of
         its Subsidiaries incurred pursuant to Section 7.2(e) to finance the
         acquisition of fixed or capital assets, provided that (i) such Liens
         shall be created substantially simultaneously with the acquisition of
         such fixed or capital assets, (ii) such Liens do not at any time
         encumber any property other than the property financed by such
         Indebtedness (including the "products" and "proceeds" thereof, as each
         such term is defined in the Uniform Commercial Code of the State of New
         York) and (iii) the amount of Indebtedness secured thereby is not
         increased;

                  (h)      Liens created pursuant to the Security Documents;

                  (i)      any interest or title of a lessor under any lease
         entered into by the Borrower or any other Subsidiary in the ordinary
         course of its business and covering only the assets so leased;

                  (j)      Liens on the property or assets of an Acquired
         Business or Acquired Foreign Business occurring or arising after the
         Closing Date and securing Assumed Indebtedness in an amount not to
         exceed $50,000,000, provided that such Liens (i) were not incurred in
         contemplation of the Permitted Acquisition or the Permitted Foreign
         Acquisition consummated in conjunction with the assumption of such
         Assumed Indebtedness and (ii) do not encumber any property other than
         the property acquired pursuant to such acquisition;

                  (k)      Liens of securities intermediaries and depository
         banks on the accounts held by them to secure the payment of fees and
         expenses payable to them in respect of the maintenance of such
         accounts; and

                  (l)      Liens not otherwise permitted by this Section so long
         as neither (i) the aggregate outstanding principal amount of the
         obligations secured thereby nor (ii) the aggregate fair market value
         (determined as of the date such Lien is incurred) of the assets subject
         thereto exceeds (as to the Borrower and all Subsidiaries) $25,000,000
         at any one time.

                                       58

<PAGE>

                  7.4.     Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or substantially all
of its property or business, except that:

                  (a)      any Subsidiary of the Borrower may be merged or
         consolidated with or into the Borrower (provided that the Borrower
         shall be the continuing or surviving corporation) or with or into any
         Wholly Owned Subsidiary Guarantor (provided that the Wholly Owned
         Subsidiary Guarantor shall be the continuing or surviving corporation);

                  (b)      any Subsidiary of the Borrower may Dispose of any or
         all of its assets (upon voluntary liquidation or otherwise) to the
         Borrower or any Wholly Owned Subsidiary Guarantor; and

                  (c)      any Permitted Acquisition and any Permitted Foreign
         Acquisition may be structured as a merger with or into the Borrower
         (provided that the Borrower shall be the continuing or surviving
         corporation) or with or into any Wholly Owned Subsidiary Guarantor
         (provided that such Wholly Owned Subsidiary Guarantor shall be the
         continuing or surviving corporation).

                  7.5.     Disposition of Property. Dispose of any of its
property, whether now owned or hereafter acquired, or, in the case of any
Subsidiary of the Borrower, issue or sell any shares of such Subsidiary's
Capital Stock to any Person, except:

                  (a)      the Disposition of obsolete or worn out property in
         the ordinary course of business;

                  (b)      the sale of inventory in the ordinary course of
         business;

                  (c)      Dispositions (i) by the Borrower of any of its assets
         to any Wholly Owned Subsidiary Guarantor and (ii) by any Subsidiary of
         the Borrower of any of its assets (upon voluntary liquidation or
         otherwise) to the Borrower or any Wholly Owned Subsidiary Guarantor;

                  (d)      the sale or issuance of any Subsidiary's Capital
         Stock to the Borrower or any Wholly Owned Subsidiary Guarantor;

                  (e)      the Disposition of other property having a fair
         market value not to exceed $50,000,000 for any fiscal year of the
         Borrower; provided, that the requirements of Section 2.11(c) are
         complied with in connection therewith; and

                  (f)      Dispositions referred to in Sections 7.8(f), (g) and
         (h);

                  (g)      Dispositions to or by Legacy Trust or the Insurance
         Subsidiary of Capital Stock of the Borrower;

                  (h)      Dispositions to or by Legacy Trust or the Insurance
         Subsidiary of Indebtedness described in Section 7.2(b) to the Borrower
         or any Wholly Owned Subsidiary Guarantor;

                  (i)      Dispositions by the Borrower to Legacy Trust of cash
         in an amount not to exceed (when taken together with the amount of
         Restricted Payments made pursuant to Section 7.6(e)) the amount
         necessary to pay operating costs and expenses of Legacy Trust incurred
         in the ordinary course of business (not to exceed $150,000 per fiscal
         year of the Borrower) and to make

                                       59

<PAGE>

         payments to Third Party Beneficiaries (as defined in the Trust
         Agreement) pursuant to and in accordance with the Trust Agreement as in
         effect on the date hereof and Dispositions by Legacy Trust of such cash
         to such Third Party Beneficiaries; and

                  (j)      Dispositions by the Insurance Subsidiary effected
         solely for the purpose of liquidating assets in order to permit the
         Insurance Subsidiary to pay expenses and to make payments on insurance
         claims of the Borrower and/or any of its Subsidiaries with the proceeds
         of such Dispositions.

                  7.6.     Restricted Payments. Declare or pay any dividend
(other than dividends payable solely in (i) common stock of the Person making
such dividend or (ii) the same class of Capital Stock of the Person making such
dividend on which such dividend is being declared or paid, other than, in any
such case, Disqualified Stock) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of
the Borrower or any Subsidiary, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower or any Subsidiary
(collectively, "Restricted Payments"), except that:

                  (a)      any Subsidiary may make Restricted Payments to the
         Borrower or any Wholly Owned Subsidiary Guarantor;

                  (b)      so long as no Default or Event of Default shall have
         occurred and be continuing, the Borrower may purchase the Borrower's
         common stock or common stock options, provided, (i) that the aggregate
         amount of payments under this paragraph (b) after the Closing Date
         shall not exceed $1,000,000 (excluding any such purchases permitted
         pursuant to the following clause (ii)) and (ii) the Borrower may
         consummate such purchases pursuant to the equity tender offer dated
         April 28, 2003, pursuant to a purchase agreement with the Sponsor dated
         April 25, 2003 or pursuant to open market bids, provided that the
         purchases permitted by this clause (ii) shall not exceed $212,000,000
         (the "Repurchase Amount") in the aggregate and shall be consummated on
         or prior to August 5, 2003;

                  (c)      so long as no Default or Event of Default shall have
         occurred and be continuing or would result therefrom, the Borrower may
         declare and pay dividends on the Preferred Stock on and after August 5,
         2003;

                  (d)      (1) so long as (i) no Default or Event of Default
         shall have occurred and be continuing or would result therefrom and
         (ii) after giving effect thereto, the Consolidated Leverage Ratio is
         less than 2.50 to 1.00, (x) the Borrower may pay dividends on its
         Capital Stock or repurchase the Borrower's Capital Stock or the
         Insurance Subsidiary may repurchase the Borrower's Capital Stock
         (collectively, "Stock Payments") so long as the aggregate amount so
         expended pursuant to this clause (x), when added to the aggregate
         amount expended to repurchase Senior Subordinated Notes pursuant to
         clause (x) of Section 7.9(a), does not exceed the sum of (A)
         $75,000,000 and (B) following August 5, 2003, any portion of the
         Repurchase Amount which was not used to purchase the Borrower's common
         stock or common stock options pursuant to clause (ii) of Section 7.6(b)
         on or prior to August 5, 2003 and (y) in addition, the Borrower may
         make Stock Payments so long as (I) such payments are made after the
         basket set forth in clause (x) above has been fully utilized and (II)
         the aggregate amount so expended pursuant to this clause (y), when
         added to the aggregate amount expended to repurchase, repay or prepay
         Senior Subordinated Notes pursuant to clause (y) of Section 7.9(a),
         does not exceed 25% of the Consolidated Net Income Amount, and (2) so
         long as (i) no Default or Event of Default shall have occurred and be
         continuing or would result therefrom and (ii) after giving effect

                                       60

<PAGE>

         thereto, the Consolidated Leverage Ratio is less than 1.25 to 1.00, the
         Borrower may make Stock Payments (in addition to the Stock Payments
         permitted in clause 1 above) so long as the aggregate amount expended
         pursuant to this clause (2), when added to the aggregate amount
         expended to repurchase Senior Subordinated Notes pursuant to clause (2)
         of Section 7.9(a), does not exceed $55,000,000;

                  (e)      the Borrower may repurchase shares of its common
         stock from Legacy Trust in an amount not to exceed (when taken together
         with the amount of cash Dispositions made pursuant to Section 7.5(i))
         the amount necessary to pay operating costs and expenses of Legacy
         Trust incurred in the ordinary course of business (not to exceed
         $150,000 per fiscal year of the Borrower) and to make payments to Third
         Party Beneficiaries (as defined in the Trust Agreement) pursuant to and
         in accordance with the Trust Agreement as in effect on the date hereof;

                  (f)      the Borrower may repurchase shares of its common
         stock from the Insurance Subsidiary in an amount not to exceed (when
         taken together with the amount of Dispositions made pursuant to Section
         7.5(j)) the amount necessary to (i) pay operating costs and expenses of
         the Insurance Subsidiary incurred in the ordinary course of business
         (not to exceed $250,000 per fiscal year of the Borrower) and (ii)
         permit the Insurance Subsidiary to make payments on insurance claims of
         the Borrower and/or any of its Subsidiaries with the proceeds of such
         repurchase; and

                  (g)      the Insurance Subsidiary may purchase shares of the
         common stock of the Borrower from the Borrower or any Subsidiary.

                  7.7.     Capital Expenditures(a) . (a) Make or commit to make
any Capital Expenditure (Maintenance), except (i) Capital Expenditures
(Maintenance) of the Borrower and its Subsidiaries not exceeding $60,000,000 in
the aggregate during fiscal year 2003, $65,000,000 in the aggregate during
fiscal year 2004, $70,000,000 in the aggregate during fiscal year 2005 and
$75,000,000 in the aggregate during fiscal year 2006 and each fiscal year
thereafter; provided, that (A) up to $15,000,000 of any such amount, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (B) Capital Expenditures
(Maintenance) made pursuant to this clause (i) during any fiscal year shall be
deemed made, first, in respect of the amount initially permitted for such fiscal
year as provided above and, second, in respect of amounts carried over from the
prior fiscal year pursuant to subclause (A) above and (ii) Capital Expenditures
(Maintenance) made with the proceeds of any Reinvestment Deferred Amount.

                  (b)      Make or commit to make any Capital Expenditure
(Expansion), except (i) Capital Expenditures (Expansion) of the Borrower and its
Subsidiaries not exceeding in the aggregate for any fiscal year $30,000,000;
provided, that (A) up to $15,000,000 of such amount, if not so expended in the
fiscal year for which it is permitted, may be carried over for expenditure in
the next succeeding fiscal year and (B) Capital Expenditures (Expansion) made
pursuant to this clause (i) during any fiscal year shall be deemed made, first,
in respect of the $30,000,000 initially permitted for such fiscal year as
provided above and, second, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (A) above and (ii) Capital Expenditures
(Expansion) made with the proceeds of any Reinvestment Deferred Amount.

                  7.8.     Investments. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
other Person (all of the foregoing, "Investments"), except:

                                       61

<PAGE>

                  (a)      extensions of trade credit in the ordinary course of
         business;

                  (b)      investments in Cash Equivalents;

                  (c)      Guarantee Obligations permitted by Section 7.2;

                  (d)      loans and advances to employees of the Borrower or
         any Subsidiary of the Borrower in the ordinary course of business
         (including for travel, entertainment and relocation expenses) in an
         aggregate amount for the Borrower and its Subsidiaries not to exceed
         $5,000,000 at any one time outstanding;

                  (e)      intercompany Investments by the Borrower or any of
         its Subsidiaries in the Borrower or any Person that, prior to and after
         giving effect to such Investment and any related transactions, is a
         Wholly Owned Subsidiary Guarantor;

                  (f)      Investments made on or after the Closing Date in the
         Insurance Subsidiary to the extent required to meet regulatory capital
         guidelines, policies or rules in an amount not to exceed $25,000,000 in
         the aggregate;

                  (g)      Investments in the Insurance Subsidiary or Legacy
         Trust consisting of the contribution of common stock of the Borrower
         and Investments by the Insurance Subsidiary or Legacy Trust in the
         common stock of the Borrower;

                  (h)      in addition to Investments otherwise expressly
         permitted by this Section, Investments by the Borrower or any of its
         Subsidiaries in an aggregate amount (valued at cost) not to exceed
         $10,000,000 (net of the amount of any Net Cash Proceeds received by the
         Borrower and its Subsidiaries in respect of a Disposition of any such
         Investment; provided, that such amount shall be calculated from the
         Closing Date and not exceed the original amount of such Investment)
         during the term of this Agreement;

                  (i)      additional Investments constituting Permitted
         Acquisitions or Permitted Foreign Acquisitions;

                  (j)      Investments by the Insurance Subsidiary or Legacy
         Trust in indebtedness of the Borrower and the Wholly Owned Subsidiary
         Guarantors described in Section 7.2(b);

                  (k)      Investments in Legacy Trust described in Section
         7.5(i); and

                  (l)      Investments in the Insurance Subsidiary in amounts
         not to exceed, in any fiscal year of the Borrower, the lesser of (x)
         $75,000,000 and (y) the amount that will appear as an expense for
         self-insurance costs on the Borrower's consolidated income statement.

                  7.9.     Payments and Modifications of Certain Debt
Instruments and Preferred Stock(a) . (a) Make or offer to make any payment,
prepayment, repurchase or redemption of or otherwise defease or segregate funds
with respect to the Senior Subordinated Notes, other than interest payments
expressly required by the terms thereof and other than pursuant to prepayments
or repayments thereof with the proceeds of other Senior Subordinated Notes,
provided, that, (1) so long as (i) no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (ii) after giving
effect thereto, the Consolidated Leverage Ratio is less than 2.50 to 1.00, (x)
the Borrower may repurchase, repay or prepay Senior Subordinated Notes so long
as the aggregate amount so expended pursuant to this clause (x), when added to
the aggregate amount expended to make Stock Payments pursuant to clause (x)

                                       62

<PAGE>

of Section 7.6(d), does not exceed $75,000,000 and (y) in addition, the Borrower
may repurchase, repay or prepay Senior Subordinated Notes so long as (I) such
repurchase, repayment or prepayment is made after the basket set forth in clause
(x) above has been fully utilized and (II) the aggregate amount so expended
pursuant to this clause (y), when added to the aggregate amount expended to make
Stock Payments pursuant to clause (y) of Section 7.6(d), does not exceed 25% of
the Consolidated Net Income Amount, (2) so long as (i) no Default or Event of
Default shall have occurred and be continuing or would result therefrom and (ii)
after giving effect thereto, the Consolidated Leverage Ratio is less than 1.25
to 1.00, the Borrower may repurchase, repay or prepay Senior Subordinated Notes
(in addition to the repurchases, repayments or prepayments permitted in clause 1
above) so long as the aggregate amount so expended pursuant to this clause (2),
when added to the aggregate amount expended to make Stock Payments pursuant to
clause (2) of Section 7.6(d), does not exceed $55,000,000 and (3) RAC East may
repurchase, repay or prepay up to $85,000,000 in aggregate principal amount of
its Senior Subordinated Notes prior to August 16, 2003 in accordance with the
terms thereof, (b) amend, modify, waive or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
the Senior Subordinated Notes or the Senior Subordinated Note Indenture (other
than any such amendment, modification, waiver or other change that (i) (x) would
extend the maturity or reduce the amount of any payment of principal thereof or
reduce the rate or extend any date for payment of interest thereon or (y) does
not materially adversely affect the interests of the Lenders and (ii) does not
involve the payment of a consent fee, other than a consent fee not to exceed
2.0% of the principal amount of Senior Subordinated Notes held by consenting
holders in connection with consents solicited in conjunction with the prepayment
of such Senior Subordinated Notes) (it being understood that amendments designed
to permit an additional issuance of Senior Subordinated Notes incurred in
accordance with Section 7.2(f) shall not be restricted by this clause (b)), (c)
amend, modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Preferred Stock
if the effect thereof is to bring forward the scheduled redemption date or
increase the amount of any scheduled redemption payment or increase the rate or
bring forward any date for payment of dividends thereon or (d) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as "Designated Senior Indebtedness" (howsoever defined) for the
purposes of the Senior Subordinated Note Indenture.

                  7.10.    Transactions with Affiliates. Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than the Borrower or any Wholly Owned Subsidiary
Guarantor) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of the Borrower or such
Subsidiary, as the case may be, and (c) upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person that is not an
Affiliate, provided that the foregoing limitation shall not apply to (i)
Investments, Dispositions or Restricted Payments involving the Insurance
Subsidiary or Legacy Trust to the extent expressly permitted by this Agreement
or (ii) Restricted Payments made to the Sponsor that are permitted by Section
7.6 hereof.

                  7.11.    Sales/Leaseback Transactions. Enter into any
Sale/Leaseback Transaction.

                  7.12.    Changes in Fiscal Periods. Permit the fiscal year of
the Borrower to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters.

                  7.13.    Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement that prohibits or limits the ability of
the Borrower or any of its Subsidiaries (other than the Insurance Subsidiary and
Legacy Trust) to create, incur, assume or suffer to exist any Lien upon any of
its property or revenues, whether now owned or hereafter acquired, other than
(a) this Agreement and the other Loan Documents, (b) any agreement governing any
purchase money Liens or Capital Lease

                                       63

<PAGE>

Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby) and (c)
any agreement acquired pursuant to a Permitted Acquisition or a Permitted
Foreign Acquisition that restricts assignment of such acquired agreement,
provided that such restrictions on assignment were not entered into in
contemplation of or in connection with such Permitted Acquisition or Permitted
Foreign Acquisition.

                  7.14.    Clauses Restricting Subsidiary Distributions. Enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower, (b) make loans or advances to, or other Investments in, the Borrower
or any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, (ii) restrictions in effect on the Closing Date and
listed on Schedule 7.14, (iii) in the case of clause (c) above, customary
non-assignment clauses in leases and other contracts entered into in the
ordinary course of business, (iv) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement that has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary, (v) restrictions with respect to a Subsidiary acquired pursuant
to a Permitted Acquisition (provided that such restrictions were not entered
into in contemplation of or in connection with such Permitted Acquisition) and
restrictions with respect to a Foreign Subsidiary arising under applicable law
and (vi) consensual arrangements with insurance regulators with respect to the
Insurance Subsidiary .

                  7.15.    Lines of Business(a) . (a) In the case of the
Borrower and its Subsidiaries (other than the Insurance Subsidiary and Legacy
Trust), enter into any business, either directly or through any Subsidiary,
except for those businesses in which the Borrower and its Subsidiaries are
engaged on the Closing Date or that are reasonably related or incidental
thereto.

                  (b)      In the case of the Insurance Subsidiary, enter into
any business, except for providing insurance services to the Borrower and its
Subsidiaries and activities reasonably related thereto.

                  (c)      In the case of Legacy Trust, enter into any activity
not expressly contemplated by the terms of the Trust Agreement as in effect on
the date hereof.

                          SECTION 8.  EVENTS OF DEFAULT

                  If any of the following events shall occur and be continuing:

                  (a)      the Borrower shall fail to pay any principal of any
         Loan or Reimbursement Obligation when due in accordance with the terms
         hereof; or the Borrower shall fail to pay any interest on any Loan or
         Reimbursement Obligation, or any Loan Party shall fail to pay any other
         amount payable hereunder or under any other Loan Document, within five
         days after any such interest or other amount becomes due in accordance
         with the terms hereof; or

                  (b)      any representation or warranty made or deemed made by
         any Loan Party herein or in any other Loan Document or that is
         contained in any certificate, document or financial or other statement
         furnished by it at any time under or in connection with this Agreement
         or any such other Loan Document shall prove to have been inaccurate in
         any material respect on or as of the date made or deemed made; or

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                  (c)      any Loan Party shall default in the observance or
         performance of any agreement contained in clause (i) or (ii) of Section
         6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7
         of this Agreement or Section 5.8(b) of the Guarantee and Collateral
         Agreement; or

                  (d)      any Loan Party shall default in the observance or
         performance of any other agreement contained in this Agreement or any
         other Loan Document (other than as provided in paragraphs (a) through
         (c) of this Section), and such default shall continue unremedied for a
         period of 30 days after notice to the Borrower from the Administrative
         Agent or the Required Lenders; or

                  (e)      the Borrower or any of its Subsidiaries shall (i)
         default in making any payment of any principal of any Indebtedness
         (including any Guarantee Obligation, but excluding the Loans) on the
         scheduled or original due date with respect thereto; or (ii) default in
         making any payment of any interest on any such Indebtedness beyond the
         period of grace, if any, provided in the instrument or agreement under
         which such Indebtedness was created; or (iii) default in the observance
         or performance of any other agreement or condition relating to any such
         Indebtedness or contained in any instrument or agreement evidencing,
         securing or relating thereto, or any other event shall occur or
         condition exist, the effect of which default or other event or
         condition is to cause, or to permit the holder or beneficiary of such
         Indebtedness (or a trustee or agent on behalf of such holder or
         beneficiary) to cause, with the giving of notice if required, such
         Indebtedness to become due prior to its stated maturity or (in the case
         of any such Indebtedness constituting a Guarantee Obligation) to become
         payable; provided, that a default, event or condition described in
         clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
         constitute an Event of Default unless, at such time, one or more
         defaults, events or conditions of the type described in clauses (i),
         (ii) and (iii) of this paragraph (e) shall have occurred and be
         continuing with respect to Indebtedness the outstanding principal
         amount of which exceeds in the aggregate $20,000,000; or

                  (f)      (i) the Borrower or any of its Subsidiaries shall
         commence any case, proceeding or other action (A) under any existing or
         future law of any jurisdiction, domestic or foreign, relating to
         bankruptcy, insolvency, reorganization or relief of debtors, seeking to
         have an order for relief entered with respect to it, or seeking to
         adjudicate it a bankrupt or insolvent, or seeking reorganization,
         arrangement, adjustment, winding-up, liquidation, dissolution,
         composition or other relief with respect to it or its debts, or (B)
         seeking appointment of a receiver, trustee, custodian, conservator or
         other similar official for it or for all or any substantial part of its
         assets, or the Borrower or any of its Subsidiaries shall make a general
         assignment for the benefit of its creditors; or (ii) there shall be
         commenced against the Borrower or any of its Subsidiaries any case,
         proceeding or other action of a nature referred to in clause (i) above
         that (A) results in the entry of an order for relief or any such
         adjudication or appointment or (B) remains undismissed, undischarged or
         unbonded for a period of 60 days; or (iii) there shall be commenced
         against the Borrower or any of its Subsidiaries any case, proceeding or
         other action seeking issuance of a warrant of attachment, execution,
         distraint or similar process against all or any substantial part of its
         assets that results in the entry of an order for any such relief that
         shall not have been vacated, discharged, or stayed or bonded pending
         appeal within 60 days from the entry thereof; or (iv) the Borrower or
         any of its Subsidiaries shall take any action in furtherance of, or
         indicating its consent to, approval of, or acquiescence in, any of the
         acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower
         or any of its Subsidiaries shall generally not, or shall be unable to,
         or shall admit in writing its inability to, pay its debts as they
         become due; or

                  (g)      (i) any Person shall engage in any non-exempt
         "prohibited transaction" (as defined in Section 406 and 408 of ERISA or
         Section 4975 of the Code) involving any Plan, (ii) any "accumulated
         funding deficiency" (as defined in Section 302 of ERISA), whether or
         not

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         waived, shall exist with respect to any Plan or any Lien in favor of
         the PBGC or a Plan shall arise on the assets of the Borrower or any
         Commonly Controlled Entity, (iii) a Reportable Event shall occur with
         respect to, or proceedings shall commence under Title IV of ERISA to
         have a trustee appointed, or a trustee shall be appointed under Title
         IV of ERISA, to administer or to terminate, any Single Employer Plan,
         which Reportable Event or commencement of proceedings or appointment of
         a trustee is, in the reasonable opinion of the Required Lenders, likely
         to result in the termination of such Plan for purposes of Title IV of
         ERISA, (iv) any Single Employer Plan shall terminate in a "distress
         termination" or an "involuntary termination", as such terms are defined
         in Title IV of ERISA, (v) the Borrower or any Commonly Controlled
         Entity shall, or in the reasonable opinion of the Required Lenders is
         likely to, incur any liability in connection with a withdrawal from, or
         the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
         other event or condition shall occur or exist with respect to a Plan;
         and in each case in clauses (i) through (vi) above, such event or
         condition, together with all other such events or conditions, if any,
         could, in the sole judgment of the Required Lenders, reasonably be
         expected to have a Material Adverse Effect; or

                  (h)      one or more judgments or decrees shall be entered
         against the Borrower or any of its Subsidiaries involving in the
         aggregate a liability (not paid or fully covered by insurance as to
         which the relevant insurance company has acknowledged coverage) of
         $20,000,000 or more, and all such judgments or decrees shall not have
         been vacated, discharged, satisfied, stayed or bonded pending appeal
         within 30 days from the entry thereof; or

                  (i)      any of the Security Documents shall cease, for any
         reason, to be in full force and effect, or any Loan Party or any
         Affiliate of any Loan Party shall so assert, or any Lien created by any
         of the Security Documents shall cease to be enforceable and of the same
         effect and priority purported to be created thereby; or

                  (j)      the guarantee contained in Section 2 of the Guarantee
         and Collateral Agreement shall cease, for any reason (other than, with
         respect to the guarantee of a Subsidiary, (i) as a result of a merger
         of such Subsidiary into the Borrower in accordance with the terms of
         this Agreement or (ii) as a result of a release pursuant to Section
         8.15(b) of the Guarantee and Collateral Agreement), to be in full force
         and effect or any Loan Party or any Affiliate of any Loan Party shall
         so assert; or

                  (k)      (i) 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 (the "Exchange Act")), excluding the Permitted Investors, shall
         at any time become, or obtain rights (whether by means of warrants,
         options or otherwise) to become, the "beneficial owner" (as defined in
         Rules 13(d) 3 and 13(d) 5 under the Exchange Act), directly or
         indirectly, of a percentage equal to 35% or more of the Voting Stock of
         the Borrower; (ii) the board of directors of the Borrower shall cease
         to consist of a majority of Continuing Directors; (iii) a Specified
         Change of Control shall occur or (iv) the Borrower shall cease to own,
         directly or indirectly, 100% of the Voting Stock of RAC East or
         Rent-A-Center West, Inc.; or

                  (l)      the Senior Subordinated Notes or the guarantees
         thereof shall cease, for any reason, to be validly subordinated to the
         Obligations or the obligations of the Subsidiary Guarantors under the
         Guarantee and Collateral Agreement, as the case may be, as provided in
         the Senior Subordinated Note Indenture, or any Loan Party, any
         Affiliate of any Loan Party, the trustee in respect of the Senior
         Subordinated Notes or the holders of at least 25% in aggregate
         principal amount of the Senior Subordinated Notes shall so assert; or

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                  (m)      the Trust Agreement shall be amended, modified or
         supplemented without the prior written consent of the Required Lenders,
         other than any such amendment, modification or supplement that the
         Borrower is permitted to make in accordance with Section 8.3 of the
         Trust Agreement as in effect on the date hereof and that does not
         otherwise violate obligations of the Borrower and its Subsidiaries
         under this Agreement;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Revolving Commitments and Term Loan Commitments (and the
Lenders' obligations to make Tranche A Loans to the Borrower) shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of LC Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Revolving Commitments and Term Loan
Commitments (and the Lenders' obligations to make Tranche A Loans to the
Borrower) to be terminated forthwith, whereupon the Revolving Commitments and
Term Loan Commitments (and the Lenders' obligations to make Tranche A Loans to
the Borrower) shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of LC Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent and the Lenders
shall be entitled to exercise any and all remedies available under the Security
Documents, including, without limitation, the Guarantee and Collateral Agreement
and the Mortgages, or otherwise available under applicable law or otherwise.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit, and the Borrower hereby grants
to the Administrative Agent, for the ratable benefit of the Secured Parties, a
continuing security interest in all amounts at any time on deposit in such cash
collateral account to secure the undrawn and unexpired amount of such Letters of
Credit and all other Obligations. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Loan Parties hereunder and under the
other Loan Documents. After all such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Loan Parties hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind (other
than notices expressly required pursuant to this Agreement and any other Loan
Document) are hereby expressly waived by the Borrower.

                             SECTION 9.  THE AGENTS

                  9.1.     Appointment. Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such

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action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

                  9.2.     Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.

                  9.3.     Exculpatory Provisions. Neither any Agent nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

                  9.4.     Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

                  9.5.     Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the

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Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

                  9.6.     Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its extensions of credit hereunder
and enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon any Agent 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 analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

                  9.7.     Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.

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                  9.8.     Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.

                  9.9.     Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 10 days' notice to the Lenders and
the Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.

                  9.10.    Authorization to Release Guarantees and Liens.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the Administrative Agent is hereby irrevocably authorized by each of
the Lenders (without requirement of notice to or vote or consent of any Lender,
except as expressly required by Section 10.1, or any affiliate of any Lender
that is a party to any Specified Hedge Agreement) to take any action requested
by the Borrower having the effect of releasing any Collateral or guarantee
obligations to the extent necessary to permit consummation of any transaction
not prohibited by any Loan Document or that has been consented to in accordance
with Section 10.1 and the Administrative Agent shall do so if so requested.

                  9.11.    Documentation Agent, Syndication Agents and Managing
Agents. Neither the Documentation Agent, the Syndication Agents nor the Managing
Agents shall have any duties or responsibilities hereunder in their respective
capacities as such.

                           SECTION 10.  MISCELLANEOUS

                  10.1.    Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such

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instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) forgive, reduce, extend or waive the principal amount or extend or
waive the final scheduled date of maturity of any Loan or Reimbursement
Obligation, extend or waive the scheduled date of any amortization payment in
respect of any Term Loan, reduce the stated rate of any interest or fee payable
hereunder or extend or waive the scheduled date of any payment thereof, increase
the amount or extend the expiration date of any Lender's Commitment, amend,
modify or waive any provision of Section 10.6 that would have the effect of
further restricting assignments thereunder or modify Section 2.17(a), (b) or
(c), in each case without the written consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section 10.1 or
reduce any percentage specified in the definition of Required Lenders or
Required Prepayment Lenders, consent to the assignment or transfer by any Loan
Party of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release
any Subsidiary Guarantor which accounts for at least 20% of Consolidated EBITDA
or 20% of the consolidated revenue of the Borrower and its Subsidiaries from its
obligations under the Guarantee and Collateral Agreement, in each case without
the written consent of all Lenders; (iii) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility without the
written consent of all Lenders under such Facility; (iv) amend, modify or waive
any provision of Section 9 without the written consent of the Administrative
Agent; (v) amend, modify or waive any provision of Section 2.3 or 2.6 without
the written consent of the Swingline Lender; or (vi) amend, modify or waive any
provision of Section 3 without the written consent of the Issuing Lender. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.

                  10.2.    Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in a Lender Addendum or Assignment and
Acceptance (as applicable) in the case of the Lenders, or to such other address
as may be hereafter notified by the respective parties hereto:

         The Borrower:                      Rent-A-Center, Inc.
                                            5700 Tennyson Parkway
                                            Third Floor
                                            Plano, Texas 75024
                                            Attention: Robert D. Davis
                                            Telecopy: (972) 943-0113
                                            Telephone: (972) 801-1200

                   with a copy to:          Winstead Sechrest & Minick P.C.
                                            1201 Elm Street
                                            5400 Renaissance Tower
                                            Dallas, Texas 75270
                                            Attention: Thomas W. Hughes
                                            Telecopy: (214) 745-5390
                                            Telephone: (214) 745-5201

                                       71

<PAGE>

            The Administrative Agent:       Lehman Commercial Paper Inc.
                                            745 Seventh Avenue
                                            New York, New York 10019
                                            Attention: Francis Chang
                                            Telecopy: (646) 758-3864
                                            Telephone: (212) 526-5390

                   with a copy to:          Latham & Watkins LLP
                                            885 Third Avenue
                                            New York, New York 10022
                                            Attention: Michele O. Penzer
                                            Telecopy: (212) 751-4864
                                            Telephone: (212) 906-1245

              The Issuing Lender:           JPMorgan Chase Bank
                                            2200 Ross Avenue, 3rd Floor
                                            Dallas, Texas 75201
                                            Attention: Brian McDougal
                                            Telecopy: (214) 965-2044
                                            Telephone: (214) 965-3849

                   with a copy to:          JPMorgan Chase Bank
                                            Loan and Agency Services
                                            1111 Fanin, Floor 10
                                            Houston, Texas 77002
                                            Attention: Christie Tran
                                            Telecopy: (713) 750-2892
                                            Telephone: (713) 750-2352

provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.

                  10.3.    No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

                  10.4.    Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.

                  10.5.    Payment of Expenses and Taxes. The Borrower agrees
(a) to pay or reimburse the Administrative Agent and each Arranger for all its
out-of-pocket costs and expenses incurred in connection with the syndication of
the Facilities, the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel

                                       72

<PAGE>

to the Administrative Agent and filing and recording fees and expenses and the
charges of IntraLinks, in each case from time to time on a quarterly basis or
such other periodic basis as the Administrative Agent shall deem appropriate,
(b) to pay or reimburse each Lender and the Administrative Agent (in the case of
each Lender, after the occurrence and during the continuance of an Event of
Default) for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including the fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel (but not
both outside and in-house counsel)) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and each Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective officers,
directors, trustees, employees, affiliates, agents, controlling persons and
investment advisors who manage a Lender (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower or any
of its Subsidiaries or any of the Properties or the use by unauthorized persons
of information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such persons
without the consent of the Indemnitee and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence or willful misconduct of such Indemnitee. Without limiting
the foregoing, and to the extent permitted by applicable law, the Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby
waives and agrees to cause its Subsidiaries to so waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and expenses
of whatever kind or nature, under or related to Environmental Laws, that any of
them might have by statute or otherwise against any Indemnitee. All amounts due
under this Section 10.5 shall be payable not later than 10 Business Days after
written demand therefor. Statements payable by the Borrower pursuant to this
Section 10.5 shall be submitted to Robert D. Davis (Telephone No. 972-801-1204)
(Telecopy No. 972-943-0113), at the address of the Borrower set forth in Section
10.2, or to such other Person or address as may be hereafter designated by the
Borrower in a written notice to the Administrative Agent. The agreements in this
Section 10.5 shall survive repayment of the Loans and all other amounts payable
hereunder.

                  10.6.    Successors and Assigns; Participations and
Assignments. (a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Agents, all future holders of the Loans and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.

                  (b)      Any Lender may, without the consent of the Borrower,
in accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any

                                       73

<PAGE>

such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.18, 2.19 and 2.20 with respect to its
participation in the Commitments and the Loans outstanding and other amounts due
hereunder from time to time as if it was a Lender; provided that, in the case of
Section 2.19, such Participant shall have complied with the requirements of said
Section and provided, further, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.

                  (c)      Any Lender (an "Assignor") may, in accordance with
applicable law, at any time and from time to time assign to any Lender, any
affiliate thereof or an Approved Fund or, with the consent of the Borrower and
the Administrative Agent (which, in each case, shall not be unreasonably
withheld or delayed), to an additional bank, financial institution or other
entity (an "Assignee") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, executed by (i) such
Assignee, (ii) such Assignor, (iii) the Administrative Agent, (iv) with respect
to assignments of rights and obligations under the Revolving Credit Facility,
the Swingline Lender, (v) with respect to assignments of rights and obligations
under the Revolving Credit Facility or the Tranche A LC Facility, the Issuing
Lender and (v) the Borrower (which consent of the Borrower shall not be
unreasonably delayed or withheld), and delivered to the Administrative Agent for
its acceptance and recording in the Register; provided that no such assignment
to an Assignee (other than any Lender, any affiliate thereof or an Approved
Fund) shall be in an aggregate principal amount of less than $1,000,000, in each
case other than in the case of an assignment of all of a Lender's interests
under this Agreement, unless otherwise agreed by the Borrower and the
Administrative Agent. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with a Commitment and Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto, provided
that such Assignor shall continue to be entitled to the benefits of the
indemnity provisions hereunder for the period prior to the assignment).
Notwithstanding any provision of this Section 10.6, (i) the consent of the
Borrower shall not be required for any assignment of funded Term Loans or for
any assignment that occurs when an Event of Default shall have occurred and be
continuing

                                       74

<PAGE>

and (ii) the consent of the Borrower and the Administrative Agent shall not be
required for any assignment to a Lender, an Affiliate of a Lender or an Approved
Fund.

                  (d)      The Administrative Agent shall, on behalf of the
Borrower, maintain at its address referred to in Section 10.2 a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Revolving
Commitment of, the principal amount of the Loans and Reimbursement Obligations
of the Borrower owing to each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, each other Loan Party, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of the
Loans and any Notes evidencing the Loans recorded therein for all purposes of
this Agreement. Any assignment of any Loan, whether or not evidenced by a Note,
shall be effective only upon appropriate entries with respect thereto being made
in the Register (and each Note shall expressly so provide).

                  (e)      Upon its receipt of an Assignment and Acceptance
executed by an Assignor, an Assignee and any other Person whose consent is
required by Section 10.6(c), together with payment to the Administrative Agent
of a registration and processing fee of $3,500 (with only one such fee payable
in connection with simultaneous assignments to or by two or more Approved
Funds), the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) record the information contained therein in the Register on
the effective date determined pursuant thereto; provided, however, that no such
fee shall be payable in the case of an assignment by a Lender to an affiliate of
such Lender or an Approved Fund with respect to such Lender; and provided,
further, that, in the case of contemporaneous assignments by a Lender to more
than one fund managed by the same investment advisor (which funds are not then
Lenders hereunder), only a single such fee shall be payable for all such
contemporaneous assignments.

                  (f)      For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including any pledge or assignment by a
Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law. In the case of any Lender that is a fund that invests in bank
loans, such Lender may, without the consent of the Borrower or the
Administrative Agent, assign or pledge all or ay portion of its rights under
this Agreement, including the Loans and Notes or any other instrument evidencing
its rights as a Lender under this Agreement, to any holder of, to any trustee
for or any other representative of holders of, obligations owed or securities
issued, by such fund, as security for such obligations or securities; provided
that any foreclosure or similar action by such trustee or representative shall
be subject to the provisions of this Section 10.6 regarding assignments.

                  (g)      The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.

                  10.7.    Adjustments; Setoff. (a) Except to the extent that
this Agreement expressly provides for payments to be allocated to a particular
Lender or to the Lenders under a particular Facility, if any Lender (a
"Benefitted Lender") shall at any time receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, pursuant to events or proceedings of
the nature referred to in Section 8(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause

                                       75

<PAGE>

such Benefitted Lender to share the excess payment or benefits of such
collateral ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.

                  (b)      In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.

                  10.8.    Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.

                  10.9.    Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                  10.10.   Integration. This Agreement and the other Loan
Documents represent the agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.

                  10.11.   GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                  10.12.   Submission To Jurisdiction; Waivers. The Borrower
hereby irrevocably and unconditionally:

                  (a)      submits for itself and its property in any legal
         action or proceeding relating to this Agreement and the other Loan
         Documents to which it is a party, or for recognition and enforcement of
         any judgment in respect thereof, to the non-exclusive general
         jurisdiction of the courts of the State of New York, the courts of the
         United States for the Southern District of New York, and appellate
         courts from any thereof;

                                       76

<PAGE>

                  (b)      consents that any such action or proceeding may be
         brought in such courts and waives any objection that it may now or
         hereafter have to the venue of any such action or proceeding in any
         such court or that such action or proceeding was brought in an
         inconvenient court and agrees not to plead or claim the same;

                  (c)      agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail), postage
         prepaid, to it at its address set forth in Section 10.2 or at such
         other address of which the Administrative Agent shall have been
         notified pursuant thereto;

                  (d)      agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other jurisdiction; and

                  (e)      waives, to the maximum extent not prohibited by law,
         any right it may have to claim or recover in any legal action or
         proceeding referred to in this Section any special, exemplary, punitive
         or consequential damages.

                  10.13.   Acknowledgements. The Borrower hereby acknowledges
that:

                  (a)      it has been advised by counsel in the negotiation,
         execution and delivery of this Agreement and the other Loan Documents;

                  (b)      neither the Administrative Agent nor any Lender has
         any fiduciary relationship with or duty to the Borrower arising out of
         or in connection with this Agreement or any of the other Loan
         Documents, and the relationship between the Administrative Agent and
         Lenders, on one hand, and the Borrower, on the other hand, in
         connection herewith or therewith is solely that of debtor and creditor;
         and

                  (c)      no joint venture is created hereby or by the other
         Loan Documents or otherwise exists by virtue of the transactions
         contemplated hereby among the Lenders or among the Borrower and the
         Lenders.

                  10.14.   Confidentiality. Each of the Administrative Agent and
each Lender agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate or Approved Fund of
any Lender, (b) to any participant or assignee or prospective participant or
assignee that agrees to comply with the provisions of this Section, (c) to its
employees, directors, trustees, agents, attorneys, accountants, investment
advisors and other professional advisors or those of any of its affiliates, (d)
upon the request or demand of any Governmental Authority, (e) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required to do
so in connection with any litigation or similar proceeding, provided that in the
case of any such request or requirement, the Administrative Agent or Lender (as
applicable) so requested or required to make such disclosure shall as soon as
practicable notify the Borrower thereof, (g) that has been publicly disclosed,
(h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender, or (i) in connection with the exercise of
any remedy hereunder or under any other Loan Document.

                                       77

<PAGE>

                  10.15.   Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.

                  10.16.   WAIVERS OF JURY TRIAL. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

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<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                        RENT-A-CENTER, INC.

                                        By: /S/ MARK E. SPEESE
                                            ------------------------------------
                                            Name:  Mark E. Speese
                                            Title: Chairman of the Board and
                                                   Chief Executive Officer

                                        LEHMAN COMMERCIAL PAPER INC.,
                                            as Administrative Agent

                                        By: /s/ FRANCES CHANG
                                            ------------------------------------
                                            Name:  Frances Chang
                                            Title: Authorized Signatory

<PAGE>

                                                                         Annex A

                        PRICING GRID FOR REVOLVING LOANS,
                        SWINGLINE LOANS, TRANCHE A LOANS
                          AND REVOLVING COMMITMENT FEES

<TABLE>
<CAPTION>
====================================================================
                                           Applicable
 Consolidated        Applicable Margin     Margin for     Commitment
Leverage Ratio     for Eurodollar Loans    ABR Loans       Fee Rate
--------------------------------------------------------------------
<S>                <C>                     <C>            <C>
>or=2.0 to 1.0             2.50               1.50          0.50%
--------------------------------------------------------------------
<2.0 to 1.0 and            2.25               1.25          0.50%
>or=1.5 to 1.0
--------------------------------------------------------------------
<1.5 to 1.0 and            2.00               1.00          0.50%
>or=1.0 to 1.0
--------------------------------------------------------------------
<1.0 to 1.0 and            1.75               0.75         0.375%
>or=0.75 to 1.0
--------------------------------------------------------------------
<0.75 to 1.0               1.50               0.50         0.375%
====================================================================
</TABLE>

                           PRICING GRID FOR TERM LOANS

<TABLE>
<CAPTION>
=============================================================================
 Consolidated              Applicable Margin          Applicable Margin
Leverage Ratio           for Eurodollar Loans          for ABR Loans
-----------------------------------------------------------------------------
<S>                      <C>                          <C>
 >or=2.0 to 1.0                    2.50                     1.50
-----------------------------------------------------------------------------
 <2.0 to 1.0                       2.25                     1.25
=============================================================================
</TABLE>

Changes in the Applicable Margin or in the Commitment Fee Rate resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the "Adjustment Date") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 2.0 to 1.0. In addition, at all times
while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio shall for the purposes of this definition be deemed
to be greater than 2.0 to 1.0. Each determination of the Consolidated Leverage
Ratio pursuant to this definition shall be made with respect to the period of
four consecutive fiscal quarters of the Borrower ending at the end of the period
covered by the relevant financial statements.<PAGE>

                                                                  EXECUTION COPY

                                                                   EXHIBIT 10.6

                       GUARANTEE AND COLLATERAL AGREEMENT

                                     made by

                               Rent-A-Center, Inc.

                         and certain of its Subsidiaries

                                   in favor of

                          LEHMAN COMMERCIAL PAPER INC.,
                             as Administrative Agent

                            Dated as of May 28, 2003

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    PAGE
                                                                                                                    ----
<S>                                                                                                                 <C>
SECTION 1. DEFINED TERMS.........................................................................................     1

         1.1.     Definitions....................................................................................     1
         1.2.     Other Definitional Provisions..................................................................     7

SECTION 2. GUARANTEE.............................................................................................     8

         2.1.     Guarantee......................................................................................     8
         2.2.     Rights of Reimbursement, Contribution and Subrogation..........................................     8
         2.3.     Amendments, etc. with respect to the Borrower Obligations......................................    10
         2.4.     Guarantee Absolute and Unconditional...........................................................    10
         2.5.     Reinstatement..................................................................................    11
         2.6.     Payments.......................................................................................    11

SECTION 3. GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL....................................     11

SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................    12

         4.1.     Representations in Credit Agreement............................................................    12
         4.2.     Title; No Other Liens..........................................................................    13
         4.3.     Perfected First Priority Liens.................................................................    13
         4.4.     Name; Jurisdiction of Organization, Etc........................................................    13
         4.5.     Acquisition of Equity Interests or Assets......................................................    14
         4.6.     Inventory and Equipment........................................................................    14
         4.7.     Farm Products..................................................................................    14
         4.8.     Investment Property............................................................................    14
         4.9.     Receivables....................................................................................    15
         4.10.    Contracts......................................................................................    15
         4.11.    Intellectual Property..........................................................................    16
         4.12.    Letter of Credit Rights........................................................................    17
         4.13.    Commercial Tort Claims.........................................................................    17

SECTION 5. COVENANTS.............................................................................................    17

         5.1.     Covenants in Credit Agreement..................................................................    18
         5.2.     Delivery and Control of Instruments, Chattel Paper, Negotiable Documents and
                  Investment Property............................................................................    18
         5.3.     Maintenance of Insurance.......................................................................    18
         5.4.     Payment of Obligations.........................................................................    19
         5.5.     Maintenance of Perfected Security Interest; Further Documentation..............................    19
         5.6.     Changes in Locations, Name, Jurisdiction of Incorporation, Etc.................................    19
         5.7.     Notices........................................................................................    20
         5.8.     Investment Property............................................................................    20
         5.9.     Receivables....................................................................................    21
         5.10.    Contracts......................................................................................    21
         5.11.    Intellectual Property..........................................................................    22
</TABLE>

                                       i

<PAGE>
<TABLE>
<CAPTION>
                                                                                                                    PAGE
                                                                                                                    ----
<S>                                                                                                                 <C>
SECTION 6. REMEDIAL PROVISIONS...................................................................................    24

         6.1.     Certain Matters Relating to Receivables........................................................    24
         6.2.     Communications with Obligors; Grantors Remain Liable...........................................    24
         6.3.     Pledged Securities.............................................................................    25
         6.4.     Proceeds to be Turned Over To Administrative Agent.............................................    25
         6.5.     Application of Proceeds........................................................................    26
         6.6.     Code and Other Remedies........................................................................    26
         6.7.     Registration Rights............................................................................    28
         6.8.     Waiver; Deficiency.............................................................................    29

SECTION 7. THE ADMINISTRATIVE AGENT..............................................................................    29

         7.1.     Administrative Agent's Appointment as Attorney-in-Fact, Etc....................................    29
         7.2.     Duty of Administrative Agent...................................................................    30
         7.3.     Execution of Financing Statements..............................................................    30
         7.4.     Authority of Administrative Agent..............................................................    31
         7.5.     Appointment of Co-Collateral Agents............................................................    31

SECTION 8. MISCELLANEOUS.........................................................................................    31

         8.1.     Amendments in Writing..........................................................................    31
         8.2.     Notices........................................................................................    31
         8.3.     No Waiver by Course of Conduct; Cumulative Remedies............................................    31
         8.4.     Enforcement Expenses; Indemnification..........................................................    32
         8.5.     Successors and Assigns.........................................................................    32
         8.6.     Set-Off. 35
         8.7.     Counterparts...................................................................................    33
         8.8.     Severability...................................................................................    33
         8.9.     Section Headings...............................................................................    33
         8.10.    Integration....................................................................................    33
         8.11.    GOVERNING LAW..................................................................................    33
         8.12.    Submission to Jurisdiction; Waivers............................................................    33
         8.13.    Acknowledgments................................................................................    34
         8.14.    Additional Grantors............................................................................    34
         8.15.    Releases.......................................................................................    34
         8.16.    WAIVER OF JURY TRIAL...........................................................................    35
</TABLE>

                                       ii

<PAGE>

SCHEDULES:

Schedule 1        Notice Addresses of Guarantors

Schedule 2        Description of Pledged Investment Property

Schedule 3        Filings and Other Actions Required to Perfect Security
                  Interests

Schedule 4        Exact Legal Name, Jurisdiction of Organization and Location of
                  Chief Executive Office

Schedule 5        Location of Inventory and Equipment

Schedule 6        Copyrights, Patents, Trademarks, Intellectual Property
                  Licenses, Other Intellectual Property

Schedule 7        Acquisitions

Schedule 8        Letters of Credit

Schedule 9        Contracts

EXHIBITS:

Exhibit A         Form of Acknowledgment and Consent

Exhibit B-1       Form of Intellectual Property Security Agreement

Exhibit B-2       Form of After-Acquired Intellectual Property Security
                  Agreement

Exhibit C         Form of Control Agreement (Uncertificated Securities)

ANNEX:

Annex 1           Assumption Agreement

                                       i

<PAGE>

                       GUARANTEE AND COLLATERAL AGREEMENT

                  GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 28, 2003,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of LEHMAN
COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, the
"Administrative Agent") for (i) the banks and other financial institutions or
entities (the "Lenders") from time to time parties to the Credit Agreement,
dated as of May 28, 2003 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among RENT-A-CENTER, INC., a Delaware
corporation (the "Borrower"), Lenders, MORGAN STANLEY SENIOR FUNDING INC., as
documentation agent (in such capacity, the "Documentation Agent"), JPMORGAN
CHASE BANK and BEAR, STEARNS & CO. INC., each as syndication agent (in such
capacity, the "Syndication Agents"), WACHOVIA BANK, NATIONAL ASSOCIATION, UBS
WARBURG LLC, UNITED OVERSEAS BANK AND CREDIT LYONNAIS, each as managing agent
(in such capacity, the "Managing Agents") and the Administrative Agent, and (ii)
the other Secured Parties (as hereinafter defined).

                              W I T N E S S E T H:

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

                  WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;

                  WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;

                  WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and

                  WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Secured
Parties;

                  NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the ratable benefit of the Secured Parties, as follows:

                            SECTION 1.  DEFINED TERMS

                  1.1.     Definitions. (a) Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement, and the following terms which are defined
in the Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Account Debtor, Authenticate,
Certificated Security, Chattel Paper, Commodity Account, Commodity Contract,
Commodity Intermediary,

<PAGE>

Documents, Electronic Chattel Paper, Entitlement Order, Equipment, Farm
Products, Financial Asset, Fixtures, Goods, Instruments, Inventory, Letter of
Credit Rights, Money, Payment Intangibles, Securities Account, Securities
Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible
Chattel Paper and Uncertificated Security.

                  (b)      The following terms shall have the following
         meanings:

                  "After-Acquired Intellectual Property": as defined in Section
         5.11(k).

                  "Agreement": this Guarantee and Collateral Agreement, as the
         same may be amended, supplemented, replaced or otherwise modified from
         time to time.

                  "Borrower Obligations": all Obligations (as defined in the
         Credit Agreement) of the Borrower.

                  "Collateral": as defined in Section 3.

                  "Collateral Account": (i) any collateral account established
         by the Administrative Agent as provided in Section 6.1 or 6.4 or (ii)
         any cash collateral account established as provided in Section 8 of the
         Credit Agreement.

                  "Contracts": the contracts and agreements listed in Schedule
         9, as the same may be amended, supplemented or otherwise modified from
         time to time, including, without limitation, (i) all rights of any
         Grantor to receive moneys due and to become due to it thereunder or in
         connection therewith, (ii) all rights of any Grantor to damages arising
         thereunder and (iii) all rights of any Grantor to perform and to
         exercise all remedies thereunder.

                  "Copyright Licenses": any written agreement naming any Grantor
         as licensor or licensee (including, without limitation, those listed in
         Schedule 6), granting any right under any Copyright, including, without
         limitation, the grant of rights to manufacture, distribute, exploit and
         sell materials derived from any Copyright, other than licenses to use
         products of third parties accepted in ordinary course in connection
         with purchases of software and similar items the absence of which would
         not have a Material Adverse Effect on the Grantors taken as a whole.

                  "Copyrights": (i) all domestic and foreign copyrights, whether
         or not the underlying works of authorship have been published,
         including but not limited to copyrights in software and databases, all
         Mask Works (as defined in 17 U.S.C. 901 of the U.S. Copyright Act) and
         all works of authorship and other intellectual property rights therein,
         all copyrights of works based on, incorporated in, derived from or
         relating to works covered by such copyrights, all right, title and
         interest to make and exploit all derivative works based on or adopted
         from works covered by such copyrights, and all copyright registrations
         and copyright applications, and any renewals or extensions thereof,
         including, without limitation, each registration and application
         identified in Schedule 6, (ii) the rights to print, publish and
         distribute any of the foregoing, (iii) the right to sue or otherwise
         recover for any and all past, present and future infringements and
         misappropriations thereof, (iv) all income, royalties, damages and
         other payments now and hereafter due and/or payable with respect
         thereto (including, without limitation, payments under all Copyright
         Licenses entered into in connection therewith, payments arising out of
         any other sale, lease, license or other disposition thereof and damages
         and payments for past, present or future infringements thereof), and
         (v) all other rights of any kind whatsoever accruing thereunder or
         pertaining thereto.

                                       2

<PAGE>

                  "Deposit Account": (i) all "deposit accounts" as defined in
         Article 9 of the UCC and (ii) all other accounts maintained with any
         financial institution (other than Securities Accounts or Commodity
         Accounts), together, in each case, with all funds held therein and all
         certificates or instruments representing any of the foregoing.

                  "Excluded Assets": any lease, license, contract, property
         right or agreement (other than any Contract) to which any Grantor is a
         party or any of its rights or interests thereunder if and only for so
         long as the grant of a security interest hereunder shall constitute or
         result in a breach, termination or default under any such lease,
         license, contract, property right or agreement (other than to the
         extent that any such term would be rendered ineffective pursuant to
         Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant
         jurisdiction or any other applicable law or principles of equity);
         provided, however, that such security interest shall attach immediately
         to any portion of such lease, license, contract, property rights or
         agreement that does not result in any of the consequences specified
         above.

                  "Excluded Foreign Subsidiary Voting Stock": the voting Capital
         Stock of any Excluded Foreign Subsidiary.

                  "General Intangibles": all "general intangibles" as such term
         is defined in Section 9-102(a)(42) of the Uniform Commercial Code in
         effect in the State of New York on the date hereof and, in any event,
         including, without limitation, with respect to any Grantor, all rights
         of such Grantor to receive any tax refunds, all Hedge Agreements and
         all contracts, agreements, instruments and indentures and all licenses,
         permits, concessions, franchises and authorizations issued by
         Governmental Authorities in any form, and portions thereof, to which
         such Grantor is a party or under which such Grantor has any right,
         title or interest or to which such Grantor or any property of such
         Grantor is subject, as the same may from time to time be amended,
         supplemented, replaced or otherwise modified, including, without
         limitation, (i) all rights of such Grantor to receive moneys due and to
         become due to it thereunder or in connection therewith, (ii) all rights
         of such Grantor to receive proceeds of any insurance, indemnity,
         warranty or guaranty with respect thereto, (iii) all rights of such
         Grantor to damages arising thereunder, and (iv) all rights of such
         Grantor to terminate and to perform, compel performance and to exercise
         all remedies thereunder.

                  "Guarantor Obligations": with respect to any Guarantor, all
         obligations and liabilities of such Guarantor which may arise under or
         in connection with this Agreement (including, without limitation,
         Section 2) or any other Loan Document to which such Guarantor is a
         party, in each case whether on account of guarantee obligations,
         reimbursement obligations, fees, indemnities, costs, expenses or
         otherwise (including, without limitation, all fees and disbursements of
         counsel to any Secured Party that are required to be paid by such
         Guarantor pursuant to the terms of this Agreement or any other Loan
         Document).

                  "Guarantors": the collective reference to each Grantor other
         than the Borrower.

                  "Intellectual Property": the collective reference to all
         rights, priorities and privileges relating to intellectual property,
         whether arising under United States, multinational or foreign laws or
         otherwise, including, without limitation, the Copyrights, the Copyright
         Licenses, the Patents, the Patent Licenses, the Trademarks, the
         Trademark Licenses, the Trade Secrets and the Trade Secret Licenses,
         and all rights to sue at law or in equity for any infringement or other
         impairment thereof, including the right to receive all proceeds and
         damages therefrom.

                                       3

<PAGE>

                  "Intellectual Property Collateral": all Intellectual Property
         of the Loan Parties, now owned or hereafter acquired, upon which a Lien
         is purported to be created by the Intellectual Property Security
         Agreement or this Agreement.

                  "Intellectual Property Security Agreement": all Intellectual
         Property Security Agreements to be executed and delivered by the Loan
         Parties, each substantially in the form of Exhibit B-1 to this
         Agreement, as the same may be amended, supplemented, replaced or
         otherwise modified from time to time in accordance with this Agreement.

                  "Insurance" shall mean all insurance policies covering any or
         all of the Collateral (regardless of whether the Administrative Agent
         is the loss payee thereof).

                  "Intercompany Note": any promissory note evidencing loans made
         by any Grantor to the Borrower or any of its Subsidiaries, including,
         without limitation, the Subordinated Intercompany Note.

                  "Investment Property": the collective reference to (i) all
         "investment property" as such term is defined in Section 9-102(a)(49)
         of the Uniform Commercial Code in effect in the State of New York on
         the date hereof including, without limitation, all Certificated
         Securities and Uncertificated Securities, all Security Entitlements,
         all Securities Accounts, all Commodity Contracts and all Commodity
         Accounts (other than any Excluded Foreign Subsidiary Voting Stock
         excluded from the definition of "Pledged Equity Interests"), (ii)
         security entitlements, in the case of any United States Treasury
         book-entry securities, as defined in 31 C.F.R. section 357.2, or, in
         the case of any United States federal agency book-entry securities, as
         defined in the corresponding United States federal regulations
         governing such book-entry securities, and (iii) whether or not
         constituting "investment property" as so defined, all Pledged Notes,
         all Pledged Equity Interests, all Pledged Security Entitlements and all
         Pledged Commodity Contracts.

                  "Issuers": the collective reference to each issuer of a
         Pledged Security.

                  "New York UCC": the Uniform Commercial Code as from time to
         time in effect in the State of New York.

                  "Obligations": (i) in the case of the Borrower, the Borrower
         Obligations, and (ii) in the case of each Guarantor, its Guarantor
         Obligations.

                  "Patent License": all agreements, whether written or oral,
         providing for the grant by or to any Grantor of any right to
         manufacture, use or sell any invention covered in whole or in part by a
         Patent, including, without limitation, any of the foregoing referred to
         in Schedule 6.

                  "Patents": (i) all domestic and foreign patents, patent
         applications and patentable inventions, including, without limitation,
         each issued patent and patent application identified in Schedule 6, all
         certificates of invention or similar property rights, (ii) all
         inventions and improvements described and claimed therein, (iii) the
         right to sue or otherwise recover for any and all past, present and
         future infringements and misappropriations thereof, (iv) all income,
         royalties, damages and other payments now and hereafter due and/or
         payable with respect thereto (including, without limitation, payments
         under all Patent Licenses entered into in connection therewith,
         payments arising out of any other sale, lease, license or other
         disposition thereof and damages and payments for past, present or
         future infringement thereof), and (v) all reissues, divisions,
         continuations, continuations-in-part, substitutes, renewals, and
         extensions thereof, all

                                       4

<PAGE>

         improvements thereon and all other rights of any kind whatsoever
         accruing thereunder or pertaining thereto.

                  "Permitted Liens" the collective reference to (i) in the case
         of Collateral other than Pledged Equity Interests, Liens permitted by
         Section 7.3 of the Credit Agreement and (ii) in the case of Collateral
         consisting of Pledged Equity Interests, non-consensual Liens permitted
         by Section 7.3 of the Credit Agreement to the extent arising by
         operation of law and Liens permitted by Section 7.3(h) of the Credit
         Agreement.

                  "Pledged Alternative Equity Interests" shall mean all
         interests of any Grantor in participation or other interests in any
         equity or profits of any business entity and the certificates, if any,
         representing such interests and all dividends, distributions, cash,
         warrants, rights, options, instruments, securities and other property
         or proceeds from time to time received, receivable or otherwise
         distributed in respect of or in exchange for any or all of such
         interests and any other warrant, right or option to acquire any of the
         foregoing; provided, however, that Pledged Alternative Equity Interests
         shall not include any Pledged Stock, Pledged Partnership Interests,
         Pledged LLC Interests and Pledged Trust Interests.

                  "Pledged Commodity Contracts": all commodity contracts listed
         on Schedule 2 (as such Schedule may be amended from time to time) and
         all other commodity contracts to which any Grantor is party from time
         to time.

                  "Pledged Debt Securities": all debt securities now owned or
         hereafter acquired by any Grantor, including, without limitation, the
         debt securities listed on Schedule 2, (as such Schedule may be amended
         from time to time) together with any other certificates, options,
         rights or security entitlements of any nature whatsoever in respect of
         the debt securities of any Person that may be issued or granted to, or
         held by, any Grantor while this Agreement is in effect.

                  "Pledged Equity Interests" shall mean all Pledged Stock,
         Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust
         Interests and Pledged Alternative Equity Interests.

                  "Pledged LLC Interests" shall mean all interests of any
         Grantor now owned or hereafter acquired in any limited liability
         company including, without limitation, all limited liability company
         interests listed on Schedule 2 hereto under the heading "Pledged LLC
         Interests" (as such schedule may be amended from time to time) and the
         certificates, if any, representing such limited liability company
         interests and any interest of such Grantor on the books and records of
         such limited liability company and all dividends, distributions, cash,
         warrants, rights, options, instruments, securities and other property
         or proceeds from time to time received, receivable or otherwise
         distributed in respect of or in exchange for any or all of such limited
         liability company interests and any other warrant, right or option to
         acquire any of the foregoing.

                  "Pledged Notes": all promissory notes now owned or hereafter
         acquired by any Grantor (other than promissory notes issued in
         connection with extensions of trade credit by any Grantor in the
         ordinary course of business) including, without limitation, those
         listed on Schedule 2 (as such Schedule may be amended from time to
         time) and all Intercompany Notes at any time issued to any Grantor.

                  "Pledged Partnership Interests" shall mean all interests of
         any Grantor now owned or hereafter acquired in any general partnership,
         limited partnership, limited liability partnership or other partnership
         including, without limitation, all partnership interests listed on
         Schedule 2 hereto under the heading "Pledged Partnership Interests" (as
         such schedule may be amended from

                                       5

<PAGE>

         time to time) and the certificates, if any, representing such
         partnership interests and any interest of such Grantor on the books and
         records of such partnership and all dividends, distributions, cash,
         warrants, rights, options, instruments, securities and other property
         or proceeds from time to time received, receivable or otherwise
         distributed in respect of or in exchange for any or all of such
         partnership interests and any other warrant, right or option to acquire
         any of the foregoing.

                  "Pledged Securities": the collective reference to the Pledged
         Debt Securities, the Pledged Notes and the Pledged Equity Interests.

                  "Pledged Security Entitlements": all security entitlements
         with respect to the financial assets listed on Schedule 2 (as such
         Schedule may be amended from time to time) and all other security
         entitlements of any Grantor.

                  "Pledged Stock" shall mean all shares of capital stock now
         owned or hereafter acquired by such Grantor, including, without
         limitation, all shares of capital stock described on Schedule 2 hereto
         under the heading "Pledged Stock" (as such schedule may be amended from
         time to time), and the certificates, if any, representing such shares
         and any interest of such Grantor in the entries on the books of the
         issuer of such shares and all dividends, distributions, cash, warrants,
         rights, options, instruments, securities and other property or proceeds
         from time to time received, receivable or otherwise distributed in
         respect of or in exchange for any or all of such shares and any other
         warrant, right or option to acquire any of the foregoing; provided,
         however, that in no event shall (i) more than 65% of the total
         outstanding Excluded Foreign Subsidiary Voting Stock be required to be
         pledged hereunder and (ii) the capital stock of the Insurance
         Subsidiary be required to be pledged hereunder.

                  "Pledged Trust Interests" shall mean all interests of any
         Grantor now owned or hereafter acquired in a Delaware business trust or
         other trust including, without limitation, all trust interests listed
         on Schedule 2 hereto under the heading "Pledged Trust Interests" (as
         such schedule may be amended from time to time) and the certificates,
         if any, representing such trust interests and any interest of such
         Grantor on the books and records of such trust or on the books and
         records of any securities intermediary pertaining to such interest and
         all dividends, distributions, cash, warrants, rights, options,
         instruments, securities and other property or proceeds from time to
         time received, receivable or otherwise distributed in respect of or in
         exchange for any or all of such trust interests and any other warrant,
         right or option to acquire any of the foregoing; provided, however,
         that in no event shall the interests of any Grantor in Legacy Trust be
         required to be pledged hereunder.

                  "Proceeds": all "proceeds" as such term is defined in Section
         9-102(a)(64) of the New York UCC on the date hereof and, in any event,
         shall include, without limitation, all dividends or other income from
         the Pledged Securities, collections thereon or distributions or
         payments with respect thereto.

                  "Receivable": all Accounts and any other any right to payment
         for goods or other property sold, leased, licensed or otherwise
         disposed of or for services rendered, whether or not such right is
         evidenced by an Instrument or Chattel Paper or classified as a Payment
         Intangible and whether or not it has been earned by performance.
         References herein to Receivables shall include any Supporting
         Obligation or collateral securing such Receivable.

                  "Securities Act": the Securities Act of 1933, as amended.

                                       6

<PAGE>

                  "Specified Collateral": all Collateral other than Collateral
         referred to in Section 3(xv) and the Proceeds and products thereof.

                  "Trademark License": any agreement, whether written or oral,
         providing for the grant by or to any Grantor of any right to use any
         Trademark, including, without limitation, any of the foregoing referred
         to in Schedule 6.

                  "Trademarks": (i) all domestic and foreign trademarks, service
         marks, trade names, corporate names, company names, business names,
         trade dress, trade styles, logos, or other indicia of origin or source
         identification, Internet domain names, trademark and service mark
         registrations, and applications for trademark or service mark
         registrations and any renewals thereof, including, without limitation,
         each registration and application identified in Schedule 6, (ii) the
         right to sue or otherwise recover for any and all past, present and
         future infringements and misappropriations thereof, (iii) all income,
         royalties, damages and other payments now and hereafter due and/or
         payable with respect thereto (including, without limitation, payments
         under all Trademark Licenses entered into in connection therewith, and
         damages and payments for past, present or future infringements
         thereof), and (iv) all other rights of any kind whatsoever accruing
         thereunder or pertaining thereto, together in each case with the
         goodwill of the business connected with the use of, and symbolized by,
         each of the above.

                  "Trade Secret License": any agreement, whether written or
         oral, providing for the grant by or to any Grantor of any right to use
         any Trade Secret.

                  "Trade Secrets": (i) all trade secrets and all confidential
         and proprietary information, including know-how, manufacturing and
         production processes and techniques, inventions, research and
         development information, technical data, financial, marketing and
         business data, pricing and cost information, business and marketing
         plans, and customer and supplier lists and information, (ii) the right
         to sue or otherwise recover for any and all past, present and future
         infringements and misappropriations thereof, (iii) all income,
         royalties, damages and other payments now and hereafter due and/or
         payable with respect thereto (including, without limitation, payments
         arising out of the sale, lease, license, assignment or other
         disposition thereof, and damages and payments for past, present or
         future infringements thereof), and (iv) all other rights of any kind
         whatsoever of any Grantor accruing thereunder or pertaining thereto.

                  1.2.     Other Definitional Provisions. (a) The words
"hereof", "herein", "hereto" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section and Schedule references are
to this Agreement unless otherwise specified.

                  (b)      The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

                  (c)      Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.

                  (d)      The expressions "payment in full," "paid in full" and
any other similar terms or phrases when used herein with respect to the Borrower
Obligations or the Guarantor Obligations shall mean the unconditional, final and
irrevocable payment in full, in immediately available funds, of all of the
Borrower Obligations or the Guarantor Obligations, as the case may be.

                                       7

<PAGE>

                              SECTION 2.  GUARANTEE

                  2.1.     Guarantee.

                  (a)      Each of the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

                  (b)      If and to the extent required in order for the
Obligations of any Guarantor to be enforceable under applicable federal, state
and other laws relating to the insolvency of debtors, the maximum liability of
such Guarantor hereunder shall be limited to the greatest amount which can
lawfully be guaranteed by such Guarantor under such laws, after giving effect to
any rights of contribution, reimbursement and subrogation arising under Section
2.2.

                  (c)      Each Guarantor agrees that Borrower Obligations may
at any time and from time to time be incurred or permitted in an amount
exceeding the maximum liability of such Guarantor under Section 2.1(b) without
impairing the guarantee contained in this Section 2 or affecting the rights and
remedies of any Secured Party hereunder.

                  (d)      The guarantee contained in this Section 2 shall
remain in full force and effect until payment in full of the Obligations,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Borrower Obligations.

                  (e)      No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
any Secured Party from the Borrower, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Borrower Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower Obligations), remain
liable for the Borrower Obligations up to the maximum liability of such
Guarantor hereunder until the Borrower Obligations (other than Obligations in
respect of any Hedge Agreement) are paid in full, no Letter of Credit shall be
outstanding and the Commitments are terminated or have expired.

                  2.2.     Rights of Reimbursement, Contribution and
Subrogation. In case any payment is made on account of the Obligations by any
Grantor or is received or collected on account of the Obligations from any
Grantor or its property:

                  (a)      If such payment is made by the Borrower or from its
property, then, if and to the extent such payment is made on account of
Obligations arising from or relating to a Loan made to the Borrower or a Letter
of Credit issued for account of the Borrower, the Borrower shall not be entitled
(A) to demand or enforce reimbursement or contribution in respect of such
payment from any other Grantor or (B) to be subrogated to any claim, interest,
right or remedy of any Secured Party against any other Person, including any
other Grantor or its property; and

                  (b)      If such payment is made by a Guarantor or from its
property, such Guarantor shall be entitled, subject to and upon payment in full
of the Obligations, (A) to demand and enforce

                                       8

<PAGE>

reimbursement for the full amount of such payment from the Borrower and (B) to
demand and enforce contribution in respect of such payment from each other
Guarantor which has not paid its fair share of such payment, as necessary to
ensure that (after giving effect to any enforcement of reimbursement rights
provided hereby) each Guarantor pays its fair share of the unreimbursed portion
of such payment. For this purpose, the fair share of each Guarantor as to any
unreimbursed payment shall be determined based on an equitable apportionment of
such unreimbursed payment among all Guarantors based on the relative value of
their assets and any other equitable considerations deemed appropriate by a
court of competent jurisdiction.

                  (c)      If and whenever (after payment in full of the
Obligations) any right of reimbursement or contribution becomes enforceable by
any Grantor against any other Grantor under Sections 2.2(a) and 2.2(b), such
Grantor shall be entitled, subject to and upon payment in full of the
Obligations, to be subrogated (equally and ratably with all other Grantors
entitled to reimbursement or contribution from any other Grantor as set forth in
this Section 2.2) to any security interest that may then be held by the
Administrative Agent upon any Collateral granted to it in this Agreement. Such
right of subrogation shall be enforceable solely against the Grantors, and not
against the Secured Parties, and neither the Administrative Agent nor any other
Secured Party shall have any duty whatsoever to warrant, ensure or protect any
such right of subrogation or to obtain, perfect, maintain, hold, enforce or
retain any Collateral for any purpose related to any such right of subrogation.
If subrogation is demanded by any Grantor, then (after payment in full of the
Obligations) the Administrative Agent shall deliver to the Grantors making such
demand, or to a representative of such Grantors or of the Grantors generally, an
instrument satisfactory to the Administrative Agent transferring, on a quitclaim
basis without any recourse, representation, warranty or obligation whatsoever,
whatever security interest the Administrative Agent then may hold in whatever
Collateral may then exist that was not previously released or disposed of by the
Administrative Agent.

                  (d)      All rights and claims arising under this Section 2.2
or based upon or relating to any other right of reimbursement, indemnification,
contribution or subrogation that may at any time arise or exist in favor of any
Grantor as to any payment on account of the Obligations made by it or received
or collected from its property shall be fully subordinated in all respects to
the prior payment in full of all of the Obligations. Until payment in full of
the Obligations, no Grantor shall demand or receive any collateral security,
payment or distribution whatsoever (whether in cash, property or securities or
otherwise) on account of any such right or claim. If any such payment or
distribution is made or becomes available to any Grantor in any bankruptcy case
or receivership, insolvency or liquidation proceeding, such payment or
distribution shall be delivered by the person making such payment or
distribution directly to the Administrative Agent, for application to the
payment of the Obligations. If any such payment or distribution is received by
any Grantor, it shall be held by such Grantor in trust, as trustee of an express
trust for the benefit of the Secured Parties, and shall forthwith be transferred
and delivered by such Grantor to the Administrative Agent, in the exact form
received and, if necessary, duly endorsed.

                  (e)      The obligations of the Grantors under the Loan
Documents, including their liability for the Obligations and the enforceability
of the security interests granted thereby, are not contingent upon the validity,
legality, enforceability, collectibility or sufficiency of any right of
reimbursement, contribution or subrogation arising under this Section 2.2. The
invalidity, insufficiency, unenforceability or uncollectibility of any such
right shall not in any respect diminish, affect or impair any such obligation or
any other claim, interest, right or remedy at any time held by any Secured Party
against any Grantor or its property. The Secured Parties make no representations
or warranties in respect of any such right and shall have no duty to assure,
protect, enforce or ensure any such right or otherwise relating to any such
right.

                                       9

<PAGE>

                  (f)      Each Grantor reserves any and all other rights of
reimbursement, contribution or subrogation at any time available to it as
against any other Grantor, but (i) the exercise and enforcement of such rights
shall be subject to Section 2.2(d) and (ii) neither the Administrative Agent nor
any other Secured Party shall ever have any duty or liability whatsoever in
respect of any such right, except as provided in Section 2.2(c).

                  2.3.     Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Guarantor and without notice
to or further assent by any Guarantor, any demand for payment of any of the
Borrower Obligations made by any Secured Party may be rescinded by such Secured
Party and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, increased,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by any Secured Party, and the Credit Agreement and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent (or the Required Lenders under the Credit Agreement or
all Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by any
Secured Party for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. No Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.

                  2.4.     Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by any Secured
Party upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Borrower or any of the Guarantors with respect to the
Borrower Obligations. Each Guarantor understands and agrees that the guarantee
contained in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment and performance without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by any Secured Party, (b) any defense, set-off or counterclaim (other
than a defense of payment or performance hereunder) which may at any time be
available to or be asserted by the Borrower or any other Person against any
Secured Party, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Borrower or such Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower for
the Borrower Obligations, or of such Guarantor for its Guarantor Obligations, in
bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, any
Secured Party may, but shall be under no obligation to, make a similar demand on
or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by any Secured Party to make any such demand,
to pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person

                                       10

<PAGE>

or any such collateral security, guarantee or right of offset, shall not relieve
any Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of any Secured Party against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.

                  2.5.     Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any of the Borrower Obligations
is rescinded or must otherwise be restored or returned by any Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.

                  2.6.     Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars in immediately available funds at the office of the
Administrative Agent located at the Payment Office specified in the Credit
Agreement.

                     SECTION 3.  GRANT OF SECURITY INTEREST;
                      CONTINUING LIABILITY UNDER COLLATERAL

                  (a)      Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in, all of the
personal property of such Grantor, including, without limitation, the following
property, in each case, wherever located and now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:

                           (i)      all Accounts;

                           (ii)     all Chattel Paper;

                           (iii)    all Contracts;

                           (iv)     all Deposit Accounts;

                           (v)      all Documents;

                           (vi)     all Equipment;

                           (vii)    all General Intangibles;

                           (viii)   all Instruments;

                           (ix)     Insurance

                           (x)      all Intellectual Property;

                           (xi)     all Inventory;

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<PAGE>

                           (xii)    all Investment Property;

                           (xiii)   all Letter of Credit Rights;

                           (xiv)    all Money;

                           (xv)     all Goods not otherwise described above;

                           (xvi)    any Collateral Account;

                           (xvii)   all books, records, ledger cards, files,
         correspondence, customer lists, blueprints, technical specifications,
         manuals, computer software, computer printouts, tapes, disks and other
         electronic storage media and related data processing software and
         similar items that at any time evidence or contain information relating
         to any of the Collateral or are otherwise necessary or helpful in the
         collection thereof or realization thereupon;

                           (xviii)  the commercial tort claims set forth on
         Schedule 10; and

                           (xix)    to the extent not otherwise included, all
         other property of the Grantor and all Proceeds and products accessions,
         rents and profits of any and all of the foregoing and all collateral
         security, Supporting Obligations and guarantees given by any Person
         with respect to any of the foregoing.

                  Notwithstanding anything to the contrary in this Agreement,
none of the Excluded Assets shall constitute Collateral.

                  (b)      Notwithstanding anything herein to the contrary, (i)
each Grantor shall remain liable for all obligations under the Collateral and
nothing contained herein is intended or shall be a delegation of duties to the
Administrative Agent or any Secured Party, (ii) each Grantor shall remain liable
under and each of the agreements included in the Collateral, including, without
limitation, any Receivables, any Contracts and any agreements relating to
Pledged Partnership Interests or Pledged LLC Interests, to perform all of the
obligations undertaken by it thereunder all in accordance with and pursuant to
the terms and provisions thereof and neither the Administrative Agent nor any
Secured Party shall have any obligation or liability under any of such
agreements by reason of or arising out of this Agreement or any other document
related thereto nor shall the Administrative Agent nor any Secured Party have
any obligation to make any inquiry as to the nature or sufficiency of any
payment received by it or have any obligation to take any action to collect or
enforce any rights under any agreement included in the Collateral, including,
without limitation, any agreements relating to any Receivables, any Contracts,
Pledged Partnership Interests or Pledged LLC Interests and (iii) the exercise by
the Administrative Agent of any of its rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral.

                   SECTION 4.  REPRESENTATIONS AND WARRANTIES

                  To induce the Agents and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Secured Parties that:

                  4.1.     Representations in Credit Agreement. In the case of
each Guarantor, the representations and warranties set forth in Section 4 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby

                                       12

<PAGE>

incorporated herein by reference, are true and correct in all material respects,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date, and the
Secured Parties shall be entitled to rely on each of them as if they were fully
set forth herein, provided that each reference in each such representation and
warranty to the Borrower's knowledge shall, for the purposes of this Section
4.l, be deemed to be a reference to such Guarantor's knowledge.

                  4.2.     Title; No Other Liens. Such Grantor owns each item of
the Collateral free and clear of any and all Liens or claims, including, without
limitation, liens arising as a result of such Grantor becoming bound (as a
result of merger or otherwise) as Grantor under a security agreement entered
into by another Person, except for Permitted Liens. No financing statement,
mortgage or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties pursuant to this Agreement or as are permitted by the Credit
Agreement and financing statements for which duly authorized termination
statements have been delivered to the Administrative Agent on or prior to the
Closing Date.

                  4.3.     Perfected First Priority Liens. (a) The security
interests granted pursuant to this Agreement (i) upon completion of the filings
and other actions specified on Schedule 3 (all of which, in the case of all
filings and other documents referred to on such Schedule, have been delivered to
the Administrative Agent in duly completed and duly executed form, as
applicable, and may be filed by the Administrative Agent at any time) and
payment of all filing fees, will constitute valid fully perfected security
interests in all of the Specified Collateral (other than Collateral consisting
of Deposit Accounts, Commercial Tort Claims and the Proceeds thereof, leasehold
interests in real property and immaterial foreign Copyrights, immaterial foreign
Trademarks and immaterial foreign Patents, except to the extent such immaterial
foreign Copyrights, immaterial foreign Trademarks and immaterial foreign Patents
can be perfected by UCC filings) in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, as collateral security for such
Grantor's Obligations, enforceable in accordance with the terms hereof and (ii)
are prior to all other Liens on the Collateral except for Permitted Liens.
Without limiting the foregoing, each Grantor has taken all actions necessary or
desirable, including without limitation those specified in Section 5.2 to: (i)
establish the Administrative Agent's "control" (within the meanings of Sections
8-106 and 9-106 of the UCC) over any portion of the Investment Property
constituting Certificated Securities and Uncertificated Securities (each as
defined in the UCC), (ii) establish the Administrative Agent's "control" (within
the meaning of Section 9-107 of the UCC) over all Letter of Credit Rights, (iii)
establish the Administrative Agent's control (within the meaning of Section
9-105 of the UCC) over all Electronic Chattel Paper and (v) establish the
Administrative Agent's "control" within the meaning of Section 16 of the Uniform
Electronic Transaction Act as in effect in the applicable jurisdiction (the
"UETA") over all "transferable records" (as defined in UETA).

                  4.4.     Name; Jurisdiction of Organization, Etc. On the date
hereof, such Grantor's exact legal name (as indicated on the public record of
such Grantor's jurisdiction of formation or organization), jurisdiction of
organization, organizational i.d. number, if any, and the location of such
Grantor's chief executive office or sole place of business are specified on
Schedule 4. Each Grantor is organized solely under the law of the jurisdiction
so specified and has not filed any certificates of domestication, transfer or
continuance in any other jurisdiction. Except as specified on Schedule 4, such
Grantor has not changed its name, jurisdiction of organization, chief executive
office or sole place of business or its corporate structure in any way (e.g. by
merger, consolidation, change in corporate form or otherwise) within the past
five years and has not within the last five years become bound (whether as a
result of merger or otherwise) as Grantor under a security agreement entered
into by another Person, which has not heretofore been terminated, provided that
no representation is made to changes in locations of any Grantor prior to the
acquisition of such Grantor by any other Grantor.

                                       13

<PAGE>

                  4.5.     Acquisition of Equity Interests or Assets. Within the
five years preceding execution of this Agreement, none of the Grantors has
acquired the equity interests of another Person or the assets of another Person
with a value in excess of $15,000,000 except as otherwise disclosed on Schedule
7.

                  4.6.     Inventory and Equipment.(a) (a) On the date hereof,
the Inventory and the Equipment (other than mobile goods) are kept at the
locations (including addresses) listed on Schedule 5.

                  (b)      None of the Inventory or Equipment is in the
possession of an issuer of a negotiable document (as defined in Section 7-104 of
the UCC) therefor or is otherwise in the possession of any bailee or
warehouseman.

                  4.7.     Farm Products. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.

                  4.8.     Investment Property. (a) Schedule 2 hereto (as such
schedule may be amended from time to time) sets forth under the headings
"Pledged Stock, "Pledged LLC Interests," "Pledged Partnership Interests" and
"Pledged Trust Interests," respectively, all of the Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests owned by
any Grantor and such Pledged Equity Interests constitute the percentage of
issued and outstanding shares of stock, percentage of membership interests,
percentage of partnership interests or percentage of beneficial interest of the
respective issuers thereof indicated on such Schedule. Schedule 2 hereto (as
such schedule may be amended from time to time) sets forth under the heading
"Pledged Debt Securities" or "Pledged Notes" all of the Pledged Debt Securities
and Pledged Notes owned by any Grantor and all of such Pledged Debt Securities
and Pledged Notes has been duly authorized, authenticated or issued, and
delivered and is the legal, valid and binding obligation of the issuers thereof
enforceable in accordance with their terms and is not in default and constitutes
all of the issued and outstanding inter-company indebtedness evidenced by an
instrument or certificated security of the respective issuers thereof owing to
such Grantor. No Grantor has consented to, and no Grantor is otherwise aware of,
any Person (other than the Administrative Agent pursuant hereto) having
"control" (within the meanings of Sections 8-106, 9-106 and 9-104 of the UCC)
over, or any other interest in, any such Securities Account, Commodity Account
or Deposit Account or any securities, commodities or other property credited
thereto other than the securities intermediary or depository bank in respect
thereof which may have a lien on any such account being held by it to secure
only the payment of fees and expenses owed to it in respect of the maintenance
of such account.

                  (b)      The shares of Pledged Equity Interests pledged by
such Grantor hereunder constitute all of the issued and outstanding shares of
all classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Excluded Foreign Subsidiary Voting Stock, if less, 65% of the
outstanding Excluded Foreign Subsidiary Voting Stock of each relevant Issuer.

                  (c)      All the shares of the Pledged Equity Interests have
been duly and validly issued and are fully paid and nonassessable.

                  (d)      The terms of any uncertificated Pledged LLC Interests
and Pledged Partnership Interests do not provide that they are securities
governed by Article 8 of the Uniform Commercial Code in effect in any
jurisdiction.

                  (e)      The terms of any certificated Pledged LLC Interests
and Pledged Partnership Interests do not provide that they are securities
governed by Article 8 of the Uniform Commercial Code in effect in any
jurisdiction.

                                       14

<PAGE>

                  (f)      Such Grantor is the record and beneficial owner of,
and has good and marketable title to, the Investment Property and Deposit
Accounts pledged by it hereunder, free of any and all Liens or options in favor
of, or claims of, any other Person, except Permitted Liens, and there are no
outstanding warrants, options or other rights to purchase, or shareholder,
voting trust or similar agreements outstanding with respect to, or property that
is convertible into, or that requires the issuance or sale of, any Pledged
Equity Interests except as described on Schedule 4.15 to the Credit Agreement.

                  (g)      Each Issuer which is an Affiliate of the Borrower
that is not a Grantor hereunder has executed and delivered to the Administrative
Agent an Acknowledgment and Agreement, in substantially the form of Exhibit A,
to the pledge of the Pledged Securities pursuant to this Agreement.

                  4.9.     Receivables. (a) No amount payable to such Grantor
under or in connection with any Receivable is evidenced by any Instrument or
Tangible Chattel Paper which has not been delivered to the Administrative Agent
or constitutes Electronic Chattel Paper that has not been subjected to the
control (within the meaning of Section 9-105 of the UCC) of the Administrative
Agent.

                  (b)      The amounts represented by such Grantor to the
Lenders from time to time as owing to such Grantor in respect of the Receivables
will at such times be accurate, except for immaterial errors.

                  4.10.    Contracts. (a) Schedule 9 sets forth all Contracts of
any Grantor on the date hereof.

                  (b)      No Contract prohibits assignment or requires or
purports to require, consent of any party (other than such Grantor) to any
Contract in connection with the execution, delivery and performance of this
Agreement including, without limitation, the exercise of remedies by the
Administrative Agent with respect to such Contract.

                  (c)      Each Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the parties thereto,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law).

                  (d)      Neither such Grantor nor (to the best of such
Grantor's knowledge) any of the other parties to the Contracts is in default in
the performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

                  (e)      The right, title and interest of such Grantor in, to
and under the Contracts are not subject to any defenses, offsets, counterclaims
or claims that, in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

                  (f)      Such Grantor has delivered to the Administrative
Agent a complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.

                  (g)      No amount payable to such Grantor under or in
connection with any Contract is evidenced by any Instrument or Tangible Chattel
Paper which has not been delivered to the Administrative Agent or constitutes
Electronic Chattel Paper that is not under the Control of the Administrative
Agent.

                  (h)      None of the parties to any Contract is a Governmental
Authority.

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<PAGE>

                  4.11.    Intellectual Property. (a) Schedule 6 lists all
Intellectual Property (other than Trade Secrets) owned by such Grantor in its
own name on the date hereof. Except as set forth in Schedule 6, such Grantor is
the exclusive owner of the entire and unencumbered right, title and interest in
and to such Intellectual Property and is otherwise entitled to use all such
Intellectual Property, without limitation, subject only to the license terms of
the licensing or franchise agreements referred to in paragraph (c) below.

                  (b)      On the date hereof, all material Intellectual
Property is valid, subsisting, unexpired and enforceable, has not been abandoned
and does not materially infringe the intellectual property rights of any other
Person in any material respect.

                  (c)      Except as set forth in Schedule 6, on the date hereof
(i) none of the Intellectual Property is the subject of any licensing or
franchise agreement pursuant to which such Grantor is the licensor or
franchisor, and (ii) there are no other obligations, orders or judgments which
affect the use of any material Intellectual Property.

                  (d)      The rights of such Grantor in or to the Intellectual
Property do not conflict with or infringe upon the rights of any third party,
and no claim has been asserted that the use of such Intellectual Property does
or may infringe upon the rights of any third party, in either case, which
conflict or infringement could reasonably be expected to have a Material Adverse
Effect. There is currently no infringement or unauthorized use of any item of
Intellectual Property that could reasonably be expected to have a Material
Adverse Effect.

                  (e)      No holding, decision or judgment has been rendered by
any Governmental Authority which would limit, cancel or question the validity or
enforceability of, or such Grantor's rights in, any Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse Effect.
With respect to any item of Intellectual Property the invalidity or
unenforceability of which could reasonably be expected to have a Material
Adverse Effect, such Grantor is not aware of any uses of any item of
Intellectual Property that could reasonably be expected to lead to such item
becoming invalid or unenforceable, including, without limitation, unauthorized
uses by third parties and uses which were not supported by the goodwill of the
business connected with Trademarks and Trademark Licenses.

                  (f)      No action or proceeding is pending, or, to the
knowledge of such Grantor, threatened, on the date hereof (i) seeking to limit,
cancel or question the validity of any material Intellectual Property or such
Grantor's ownership interest therein, (ii) alleging that any services provided
by, processes used by, or products manufactured or sold by such Grantor infringe
any patent, trademark, copyright, or any other right of any third party, (iii)
alleging that any material Intellectual Property is being licensed, sublicensed
or used in violation of any patent, trademark, copyright or any other right of
any third party, or (iv) which, if adversely determined, would have a material
adverse effect on the value of any Collateral taken as a whole. To the knowledge
of such Grantor, no Person is engaging in any activity that infringes upon the
Intellectual Property or upon the rights of such Grantor therein which could
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 6 hereto, such Grantor has not granted any license, release, covenant
not to sue, non-assertion assurance, or other right to any person with respect
to any material part of the Intellectual Property. The consummation of the
transactions contemplated by this Agreement will not result in the termination
or impairment of any of the Intellectual Property.

                  (g)      With respect to each Copyright License, Trademark
License and Patent License: (i) such license is valid and binding and in full
force and effect and represents the entire agreement between the respective
licensor and licensee with respect to the subject matter of such license; (ii)
such license will not cease to be valid and binding and in full force and effect
on terms identical to those

                                       16

<PAGE>

currently in effect as a result of the rights and interests granted herein, nor
will the grant of such rights and interests constitute a breach or default under
such license or otherwise give the licensor or licensee a right to terminate
such license; (iii) such Grantor has not received any notice of termination or
cancellation under such license; (iv) such Grantor has not received any notice
of a breach or default under such license, which breach or default has not been
cured; (v) such Grantor has not granted to any other third party any rights,
adverse or otherwise, under such license; and (vi) such Grantor is not in breach
or default in any material respect, and no event has occurred that, with notice
and/or lapse of time, would constitute such a breach or default or permit
termination, modification or acceleration under such license.

                  (h)      Except as set forth in Schedule 6, such Grantor has
performed all acts and has paid all required fees and taxes to maintain each and
every item of material Intellectual Property in full force and effect and to
protect and maintain its interest therein. Such Grantor has used proper
statutory notice in connection with its use of each material Patent, Trademark
and Copyright included in the Intellectual Property.

                  (i)      To the knowledge of such Grantor, none of the
material Trade Secrets of such Grantor has been used, divulged, disclosed or
appropriated to the detriment of such Grantor for the benefit of any other
Person; no employee, independent contractor or agent of such Grantor has
misappropriated any trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent contractor or agent
of such Grantor; and no employee, independent contractor or agent of such
Grantor is in default or breach of any term of any employment agreement,
non-disclosure agreement, assignment of inventions agreement or similar
agreement or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor's material Intellectual Property.

                  (j)      Such Grantor has made all filings and recordations
necessary to adequately protect its interest in its material Intellectual
Property including, without limitation, recordation of its interests in the
Patents and Trademarks with the United States Patent and Trademark Office and in
corresponding national and international patent offices, and recordation of any
of its interests in the Copyrights with the United States Copyright Office and
in corresponding national and international copyright offices.

                  (k)      Such Grantor is not subject to any settlement,
consent, judgment, injunction, order, decree, covenant not to sue, non-assertion
assurance or release that would impair the validity or enforceability of, or
such Grantor's rights in, any material Intellectual Property.

                  4.12.    Letter of Credit Rights. No Grantor is a beneficiary
or assignee under any letter of credit other than the letters of credit
described on Schedule 8 (as such schedule may be amended from time to time)
hereto. Each Grantor has caused all issuers and nominated persons under letters
of credit in which the Grantor is the beneficiary or assignee to consent to the
assignment provisions of such letter of credit to the Administrative Agent and
has agreed that upon the occurrence of an Event of Default it will cause all
payments thereunder to be made to the Collateral Account.

                  4.13.    Commercial Tort Claims. No Grantor has any commercial
tort claims in excess of $25,000 individually or $250,000 in the aggregate other
than described in Schedule 10.

                              SECTION 5.  COVENANTS

                  Each Grantor covenants and agrees with the Secured Parties
that, from and after the date of this Agreement until the Obligations (other
than Obligations in respect of any Hedge Agreement) shall have been paid in
full, no Letter of Credit shall be outstanding and the Commitments shall have
terminated or expired:

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                  5.1.     Covenants in Credit Agreement. Each Guarantor shall
take, or shall refrain from taking, as the case may be, each action that is
necessary to be taken or not taken, as the case may be, so that no Default or
Event of Default is caused by the failure to take such action or to refrain from
taking such action by such Guarantor or any of its Subsidiaries.

                  5.2.     Delivery and Control of Instruments, Chattel Paper,
Negotiable Documents and Investment Property. (a) If any of the Collateral with
a value in excess of $25,000 individually is or shall become evidenced or
represented by any Instrument, Certificated Security, Negotiable Document or
Tangible Chattel Paper, such Instrument (other than checks received in the
ordinary course of business), Certificated Security, Negotiable Documents or
Tangible Chattel Paper shall be immediately delivered to the Administrative
Agent, duly endorsed in a manner satisfactory to the Administrative Agent, to be
held as Collateral pursuant to this Agreement.

                  (b)      If any of the Collateral with a value in excess of
$25,000 individually or $200,000 in the aggregate is or shall become "Electronic
Chattel Paper" such Grantor shall ensure that (i) a single authoritative copy
exists which is unique, identifiable, unalterable (except as provided in clauses
(iii), (iv) and (v) of this paragraph), (ii) such authoritative copy identifies
the Administrative Agent as the assignee and is communicated to and maintained
by the Administrative Agent or its designee, (iii) copies or revisions that add
or change the assignee of the authoritative copy can only be made with the
participation of the Administrative Agent, (iv) each copy of the authoritative
copy and any copy of a copy is readily identifiable as a copy and not the
authoritative copy and (v) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.

                  (c)      If any of the Collateral is or shall become evidenced
or represented by an Uncertificated Security, such Grantor shall cause the
Issuer thereof either (i) to register the Administrative Agent as the registered
owner of such Uncertificated Security, upon original issue or registration of
transfer or (ii) to agree in writing with such Grantor and the Administrative
Agent that such Issuer will comply with instructions with respect to such
Uncertificated Security originated by the Administrative Agent without further
consent of such Grantor, such agreement to be in substantially the form of
Exhibit C.

                  (d)      In addition to and not in lieu of the foregoing, if
any Issuer of any Investment Property is organized under the law of, or has its
chief executive office in, a jurisdiction outside of the United States, each
Grantor shall take such additional actions, including, without limitation,
causing the issuer to register the pledge on its books and records, as may be
necessary or as may be reasonably requested by the Administrative Agent, under
the laws of such jurisdiction to insure the validity, perfection and priority of
the security interest of the Administrative Agent.

                  5.3.     Maintenance of Insurance. (a) Such Grantor will
maintain, with financially sound and reputable insurance companies, insurance on
all its property (including, without limitation, all Inventory, Equipment and
Vehicles) in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies engaged in the
same or a similar business, and furnish to the Administrative Agent with copies
for each Secured Party, upon written request, full information as to the
insurance carried. All insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof and (ii) be reasonably satisfactory in all other respects
to the Administrative Agent. The Administrative Agent shall be named as
additional insured on all such liability insurance policies of such Grantor and
the Administrative Agent shall be named as loss payee on all property and
casualty insurance policies of such Grantor.

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<PAGE>

                  (b)      The Borrower shall deliver annually to the
Administrative Agent and the Lenders a certificate of a reputable insurance
broker with respect to such insurance as promptly as practicable upon receipt
thereof from such insurance broker and such supplemental reports with respect
thereto as the Administrative Agent may from time to time reasonably request.

                  5.4.     Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all material taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all material claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any material interest therein.

                  5.5.     Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.

                  (b)      Such Grantor will furnish to the Administrative Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the assets and property
of such Grantor as the Administrative Agent may reasonably request, all in
reasonable detail.

                  (c)      At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly authorize, execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby.

                  5.6.     Changes in Locations, Name, Jurisdiction of
Incorporation, Etc. (a) Such Grantor will not, except upon 15 days' prior
written notice to the Administrative Agent and delivery to the Administrative
Agent of duly authorized and, where required, executed copies of all additional
financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for herein:

                  (i)      without limiting the prohibitions on mergers
         involving the Grantors contained in the Credit Agreement, change its
         legal name, jurisdiction of organization or the location of its chief
         executive office or sole place of business from that referred to in
         Section 4.4; or

                  (ii)     change its legal name, identity or structure to such
         an extent that any financing statement filed by the Administrative
         Agent in connection with this Agreement would become seriously
         misleading.

                  (b)      Schedule 5 sets forth all locations where Inventory
or Equipment is located on the date hereof other than Inventory or Equipment in
transit or out on lease.

                                       19

<PAGE>

                  (c)      Such Grantor shall promptly, and in any event, within
30 days thereof, notify the Administrative Agent of new locations which
individually or in the aggregate contain material amounts of Inventory or
Equipment not previously set forth on Schedule 5, at which Inventory or
Equipment will be located (other than Inventory or Equipment in transit or out
on lease).

                  5.7.     Notices. Such Grantor will advise the Administrative
Agent promptly, in reasonable detail, of:

                  (a)      any Lien (other than any Permitted Lien) on any
material portion of the Collateral which would adversely affect the ability of
the Administrative Agent to exercise any of its remedies hereunder; and

                  (b)      the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby taken as a whole.

                  5.8.     Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock or other ownership certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock or other Pledged Equity Interest of
any Issuer, whether in addition to, in substitution of, as a conversion of, or
in exchange for, any shares of or other ownership interests in the Pledged
Securities, or otherwise in respect thereof, such Grantor shall accept the same
as the agent of the Secured Parties, hold the same in trust for the Secured
Parties and deliver the same forthwith to the Administrative Agent in the exact
form received, duly endorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Pledged Securities or any property shall be distributed upon or with respect to
the Pledged Securities pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Secured Parties, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.

                  (b)      Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock, partnership interests,
limited liability company interests or other equity securities of any nature or
to issue any other securities convertible into or granting the right to purchase
or exchange for any stock, partnership interests, limited liability company
interests or other equity securities of any nature of any Issuer, (ii) sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, any of the Investment Property or Proceeds thereof or any interest
therein (except, in each case, pursuant to a transaction expressly permitted by
the Credit Agreement), (iii) create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the Investment
Property or Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement, (iv) enter into

                                       20

<PAGE>

any agreement or undertaking restricting the right or ability of such Grantor or
the Administrative Agent to sell, assign or transfer any of the Investment
Property or Proceeds thereof or any interest therein or (v) without (a) the
prior written notice to the Administrative Agent and (b) such Grantor taking all
steps necessary or advisable to establish the Administrative Agent's "control"
thereof, cause or permit any Issuer of any Pledged Partnership Interests or
Pledged LLC Interests which are not securities (for purposes of the UCC) on the
date hereof to elect or otherwise take any action to cause such Pledged
Partnership Interests or Pledged LLC Interests to be treated as securities for
purposes of the UCC.

                  (c)      In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it. In addition, each Grantor which
is either an Issuer or an owner of any Pledged Security hereby consents to the
grant by each other Grantor of the security interest hereunder in favor of the
Administrative Agent and to the transfer of any Pledged Security to the
Administrative Agent or its nominee upon the occurrence or during the
continuation of an Event of Default and to the substitution of the
Administrative Agent or its nominee as a partner, member or shareholder of the
Issuer of the related Pledged Security. The Administrative Agent agrees to
notify any Grantor before transferring the Pledged Securities pledged by such
Grantor into the name of the Administrative Agent pursuant to this section.

                  5.9.     Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could materially adversely affect the
value thereof.

                  (b)      Such Grantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of outstanding Receivables
constituting a material portion of the Collateral.

                  5.10.    Contracts. (a) If requested by the Administrative
Agent in its sole discretion, such Grantor will cause each counterparty to a
Contract to which such Grantor is a party to consent to the collateral
assignment thereof of Grantor's rights, if any, to the Administrative Agent for
the benefit of the Secured Parties.

                  (b)      Such Grantor will perform and comply in all material
respects with all its obligations under the Contracts.

                  (c)      Such Grantor will not amend, modify, terminate, waive
or fail to enforce any provision of any Contract in any manner which could
reasonably be expected to materially adversely affect the value of such Contract
as Collateral or otherwise have a Material Adverse Effect.

                  (d)      Such Grantor will exercise promptly and diligently
each and every material right which it may have under each Contract (other than
any right of termination).

                  (e)      Such Grantor will deliver to the Administrative Agent
a copy of each material demand, notice or document received by it relating in
any way to any Contract.

                                       21

<PAGE>

                  5.11.    Intellectual Property. (a) Such Grantor (either
itself or through licensees) will (i) continue to use each material Trademark on
each and every trademark class of goods applicable to its current line as
reflected in its current catalogs, brochures and price lists in order to
maintain such Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark and take all necessary steps to ensure that all
licensed users of such Trademark maintain as in the past such quality, (iii) use
such Trademark with the appropriate notice of registration and all other notices
and legends required by applicable Requirements of Law, (iv) not adopt or use
any mark which is confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of the Secured Parties,
shall obtain a perfected security interest in such mark pursuant to this
Agreement and the Intellectual Property Security Agreement, and (v) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or impaired in any way.

                  (b)      Such Grantor (either itself or through licensees)
will not do any act, or omit to do any act, whereby any material Patent may
become forfeited, abandoned or dedicated to the public.

                  (c)      Such Grantor (either itself or through licensees) (i)
will employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.

                  (d)      Such Grantor (either itself or through licensees)
will not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.

                  (e)      Except with respect to any Patent, Trademark or
Copyright the invalidity of which would not have a Material Adverse Effect, such
Grantor (either itself or through licensees) will use proper statutory notice in
connection with the use of each Patent, Trademark and Copyright included in the
Intellectual Property.

                  (f)      Such Grantor will notify the Administrative Agent as
promptly as practicable if it knows, or has reason to know, that any application
or registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.

                  (g)      As promptly as practicable upon such Grantor's
acquisition or creation of any copyrightable work, invention, trademark or other
similar property that is material to the business of Grantor, apply for
registration thereof with the United States Copyright Office, the United States
Patent and Trademark Office and any other appropriate office. Whenever such
Grantor, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Intellectual Property with
the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof, such Grantor shall report such filing to the Administrative
Agent within five Business Days after the last day of the fiscal quarter in
which such filing occurs. Upon request of the Administrative Agent, such Grantor
shall execute and deliver, and have recorded, any and all agreements,
instruments, documents, and papers as the Administrative Agent may request to
evidence the Secured Parties' security interest in any

                                       22

<PAGE>

Copyright, Patent, Trademark or other Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.

                  (h)      Except as provided in Section 5.11(i), such Grantor
will take all reasonable and necessary steps, including, without limitation, in
any proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of
material Intellectual Property, including, without limitation, the payment of
required fees and taxes, the filing of responses to office actions issued by the
United States Patent and Trademark Office and the United States Copyright
Office, the filing of applications for renewal or extension, the filing of
affidavits of use and affidavits of incontestability, the filing of divisional,
continuation, continuation-in-part, reissue, and renewal applications or
extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings.

                  (i)      Such Grantor (either itself or through licensees)
will not, without the prior written consent of the Administrative Agent,
discontinue use of or otherwise abandon any Intellectual Property, or abandon
any application or any right to file an application for letters patent,
trademark, or copyright, unless such Grantor shall have previously determined
that such use or the pursuit or maintenance of such Intellectual Property is no
longer desirable in the conduct of such Grantor's business and that the loss
thereof could not reasonably be expected to have a Material Adverse Effect.

                  (j)      In the event that any material Intellectual Property
is infringed, misappropriated or diluted by a third party, such Grantor shall
(i) take such actions as such Grantor shall reasonably deem appropriate under
the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, take such actions as are
reasonably appropriate under the circumstances, including, as appropriate, sue
for infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution and promptly notify the Administrative Agent after
it takes any action to sue for infringement, misappropriation or dilution, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or promptly notify the
Administrative Agent of any decision not to pursue or take any such action.

                  (k)      Such Grantor agrees that, should it obtain an
ownership interest in any item of intellectual property which is not now a part
of the Intellectual Property Collateral (the "After-Acquired Intellectual
Property"), (i) the provisions of Section 3 shall automatically apply thereto,
(ii) any such After-Acquired Intellectual Property, and in the case of
trademarks, the goodwill of the business connected therewith or symbolized
thereby, shall automatically become part of the Intellectual Property
Collateral, (iii) it shall give prompt (and, in any event within five Business
Days after the last day of the fiscal quarter in which such Grantor acquires
such ownership interest) written notice thereof to the Administrative Agent in
accordance herewith, and (iv) it shall provide the Administrative Agent promptly
(and, in any event within five Business Days after the last day of the fiscal
quarter in which such Grantor acquires such ownership interest) with an amended
Schedule 6 hereto and take the actions specified in Section 5.11(m).

                  (l)      Such Grantor agrees to execute an Intellectual
Property Security Agreement with respect to its Intellectual Property in
substantially the form of Exhibit B-1 in order to record the security interest
granted herein to the Administrative Agent for the ratable benefit of the
Secured Parties with the United States Patent and Trademark Office, the United
States Copyright Office, and any other applicable Governmental Authority.

                                       23

<PAGE>

                  (m)      Such Grantor agrees to execute an After-Acquired
Intellectual Property Security Agreement with respect to its After-Acquired
Intellectual Property in substantially the form of Exhibit B-2 in order to
record the security interest granted herein to the Administrative Agent for the
ratable benefit of the Secured Parties with the United States Patent and
Trademark Office, the United States Copyright Office, and any other applicable
Governmental Authority.

                  (n)      Such Grantor shall take all steps reasonably
necessary to protect the secrecy of all material Trade Secrets, including,
without limitation, entering into confidentiality agreements with employees and
labeling and restricting access to secret information and documents.

                         SECTION 6. REMEDIAL PROVISIONS

                  6.1.     Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the Administrative Agent may require in connection with such test verifications.
After an Event of Default has occurred and is continuing, at any time and from
time to time, upon the Administrative Agent's request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the Administrative
Agent reports showing reconciliations, aging and test verifications of, and
trial balances for, the Receivables.

                  (b)      The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, and each Grantor hereby agrees to
continue to collect all amounts due or to become due to such Grantor under the
Receivables and any Supporting Obligation and diligently exercise each material
right it may have under any Receivable and any Supporting Obligation, in each
case, at its own expense; provided, however, that the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of an Event of Default. If required by the Administrative Agent
at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Secured Parties only as provided
in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.

                  6.2.     Communications with Obligors; Grantors Remain Liable.
(a) The Administrative Agent in its own name or in the name of others may at any
time during reasonable business hours after the occurrence and during the
continuance of an Event of Default communicate with obligors under the
Receivables and parties to the Contracts to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables or Contracts.

                  (b)      If an Event of Default shall have occurred and be
continuing, the Administrative Agent may at any time notify, or require any
Grantor to so notify, the Account Debtor or counterparty on any Receivable or
Contract of the security interest of the Administrative Agent therein. In
addition, after the occurrence and during the continuance of an Event of
Default, the Administrative Agent may upon written notice to the applicable
Grantor, notify, or require any Grantor to notify, the Account Debtor or
counterparty to make all payments under the Receivables and/or Contracts
directly to the Administrative Agent.

                                       24

<PAGE>

                  (c)      Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. No Secured Party shall have any obligation or liability
under any Receivable (or any agreement giving rise thereto) or Contract by
reason of or arising out of this Agreement or the receipt by any Secured Party
of any payment relating thereto, nor shall any Secured Party be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

                  6.3.     Pledged Securities. (a) Unless an Event of Default
shall have occurred and be continuing and the Administrative Agent shall have
given notice to the relevant Grantor of the Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall
be permitted to receive all cash dividends paid in respect of the Pledged Equity
Interests and all payments made in respect of the Pledged Notes, in each case
paid in the normal course of business of the relevant Issuer and consistent with
past practice, to the extent permitted in the Credit Agreement, and to exercise
all voting and corporate rights with respect to the Pledged Securities not
inconsistent with the purposes of this Agreement; provided, however, that no
vote shall be cast or corporate or other ownership right exercised or other
action taken which, in the Administrative Agent's reasonable judgment, would
materially impair the Collateral or which would be inconsistent with or result
in any violation of any provision of the Credit Agreement, this Agreement or any
other Loan Document.

                  (b)      If an Event of Default shall occur and be continuing
and the Administrative Agent shall give notice of its intent to invoke the
provisions of this Section 6.3(b) to the relevant Grantor(s): (i) all rights of
each Grantor to exercise or refrain from exercising the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
hereto shall cease and all such rights shall thereupon become vested in the
Administrative Agent who shall thereupon have the sole right, but shall be under
no obligation, to exercise or refrain from exercising such voting and other
consensual rights and (ii) the Administrative Agent shall have the right to
transfer all or any portion of the Investment Property to its name or the name
of its nominee or agent. In addition, the Administrative Agent shall have the
right at any time to exchange any certificates or instruments representing any
Investment Property for certificates or instruments of smaller or larger
denominations. In order to permit the Administrative Agent to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions which it may be
entitled to receive hereunder each Grantor shall promptly execute and deliver
(or cause to be executed and delivered) to the Administrative Agent all proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request and each Grantor acknowledges that the
Administrative Agent may utilize the power of attorney set forth herein.

                  (c)      Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.

                  6.4.     Proceeds to be Turned Over To Administrative Agent.
In addition to the rights of the Secured Parties specified in Section 6.1 with
respect to payments of Receivables, if an Event of

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<PAGE>

Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, Cash Equivalents, checks and other near-cash items shall be
held by such Grantor in trust for the Secured Parties, segregated from other
funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be
turned over to the Administrative Agent in the exact form received by such
Grantor (duly endorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Collateral Account maintained under its
sole dominion and control. All Proceeds while held by the Administrative Agent
in a Collateral Account (or by such Grantor in trust for the Secured Parties)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 6.5.

                  6.5.     Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the Administrative
Agent's election, the Administrative Agent may, notwithstanding the provisions
of Section 2.11 of the Credit Agreement, apply all or any part of the net
Proceeds (after deducting fees and expenses as provided in Section 6.6)
constituting Collateral realized through the exercise by the Administrative
Agent of its remedies hereunder, whether or not held in any Collateral Account,
and any proceeds of the guarantee set forth in Section 2, in payment of the
Obligations in the following order:

                  First, to the Administrative Agent, to pay incurred and unpaid
         fees and expenses of the Secured Parties under the Loan Documents
         permitted under Section 10.5 of the Credit Agreement or Section 8.4
         hereof;

                  Second, to the Administrative Agent, for application by it
         towards payment of amounts then due and owing and remaining unpaid in
         respect of the Obligations, pro rata among the Secured Parties
         according to the amounts of the Obligations then due and owing and
         remaining unpaid to the Secured Parties;

                  Third, to the Administrative Agent, for application by it
         towards prepayment of the Obligations, pro rata among the Lenders
         according to the amounts of the Obligations then held by the Lenders;
         and

                  Fourth, any balance of such Proceeds remaining after the
         Obligations shall have been paid in full, no Letters of Credit shall be
         outstanding and the Commitments shall have terminated or expired shall
         be paid over to the Borrower or to whomsoever may be lawfully entitled
         to receive the same.

                  6.6.     Code and Other Remedies. (a) If an Event of Default
shall occur and be continuing, the Administrative Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the New York UCC (whether or not the New York UCC applies
to the affected Collateral) or its rights under any other applicable law or in
equity. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Grantor or any other Person (all and each of which
demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, license,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of any Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem

                                       26

<PAGE>

best, for cash or on credit or for future delivery without assumption of any
credit risk. Each Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in any Grantor, which right or equity is hereby
waived and released. Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by applicable law) all
rights of redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or hereafter
enacted. Each Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten (10) days notice to such Grantor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Administrative Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The Administrative Agent may sell the Collateral without giving any
warranties as to the Collateral. The Administrative Agent may specifically
disclaim or modify any warranties of title or the like. This procedure will not
be considered to adversely effect the commercial reasonableness of any sale of
the Collateral. Each Grantor agrees that it would not be commercially
unreasonable for the Administrative Agent to dispose of the Collateral or any
portion thereof by using Internet sites that provide for the auction of assets
of the types included in the Collateral or that have the reasonable capability
of doing so, or that match buyers and sellers of assets. Each Grantor hereby
waives any claims against the Administrative Agent arising by reason of the fact
that the price at which any Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
the Administrative Agent accepts the first offer received and does not offer
such Collateral to more than one offeree. Each Grantor further agrees, at the
Administrative Agent's request, to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Administrative Agent shall have the right to enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process.

                  (b)      The Administrative Agent shall apply the net proceeds
of any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Secured Parties hereunder,
including, without limitation, reasonable attorneys' fees and disbursements, to
the payment in whole or in part of the Obligations and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-615(a) of the New York UCC, need the Administrative Agent account for the
surplus, if any, to any Grantor. If the Administrative Agent sells any of the
Collateral upon credit, the Grantor will be credited only with payments actually
made by the purchaser and received by the Administrative Agent and applied to
indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, the Administrative Agent may resell the Collateral and the Grantor
shall be credited with proceeds of the sale. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against any Secured Party arising out of the exercise by them of any
rights hereunder.

                  (c)      In the event of any Disposition of any of the
Intellectual Property and if an Event of Default shall have occurred and be
continuing, the goodwill of the business connected with and symbolized by any
Trademarks subject to such Disposition shall be included, and the applicable
Grantor shall supply the Administrative Agent or its designee with such
Grantor's know-how and expertise, and with documents and things embodying the
same, relating to the manufacture, distribution, advertising and sale of
products or the provision of services relating to any Intellectual Property
subject to such Disposition, and such Grantor's customer lists and other records
and documents relating to such

                                       27

<PAGE>

Intellectual Property and to the manufacture, distribution, advertising and sale
of such products and services.

                  6.7.     Registration Rights. (a) If the Administrative Agent
shall determine to exercise its right to sell any or all of the Pledged Equity
Interests or the Pledged Debt Securities pursuant to Section 6.6, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the
Pledged Equity Interests or the Pledged Debt Securities, or that portion thereof
to be sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Equity Interests or the Pledged Debt Securities, or that
portion thereof to be sold, under the provisions of the Securities Act, (ii) use
its best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Equity Interests or the Pledged Debt
Securities, or that portion thereof to be sold, provided, that the
Administrative Agent shall furnish to the relevant Grantor such information
regarding the Administrative Agent as shall be required in connection with such
registration and requested by such Grantor in writing, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the SEC
applicable thereto. Each Grantor agrees to cause such Issuer to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the Administrative Agent shall designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.

                  (b)      Each Grantor recognizes that the Administrative Agent
may be unable to effect a public sale of any or all the Pledged Equity Interests
or the Pledged Debt Securities, by reason of certain prohibitions contained in
the Securities Act and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no obligation to
delay a sale of any of the Pledged Equity Interests or the Pledged Debt
Securities for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

                  (c)      Each Grantor agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Equity Interests or the Pledged Debt
Securities pursuant to this Section 6.7 valid and binding and in compliance with
any and all other applicable Requirements of Law. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 6.7 will cause
irreparable injury to the Secured Parties, that the Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is
continuing under the Credit Agreement or a defense of payment.

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<PAGE>

                  6.8.     Waiver; Deficiency. Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by any Secured Party to collect such
deficiency.

                      SECTION 7. THE ADMINISTRATIVE AGENT

                  7.1.     Administrative Agent's Appointment as
Attorney-in-Fact, Etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, 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 such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, 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 Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:

                           (i)      in the name of such Grantor or its own name,
         or otherwise, take possession of and endorse and collect any checks,
         drafts, notes, acceptances or other instruments for the payment of
         moneys due under any Receivable or with respect to any other Collateral
         and file any claim or take any other action or proceeding in any court
         of law or equity or otherwise deemed appropriate by the Administrative
         Agent for the purpose of collecting any and all such moneys due under
         any Receivable or with respect to any other Collateral whenever
         payable;

                           (ii)     in the case of any Intellectual Property,
         execute and deliver, and have recorded, any and all agreements,
         instruments, documents and papers as the Administrative Agent may
         request to evidence the Secured Parties' security interest in such
         Intellectual Property and the goodwill and general intangibles of such
         Grantor relating thereto or represented thereby;

                           (iii)    pay or discharge taxes and Liens levied or
         placed on or threatened against the Collateral, effect any repairs or
         any insurance called for by the terms of this Agreement and pay all or
         any part of the premiums therefor and the costs thereof;

                           (iv)     execute, in connection with any sale
         provided for in Section 6.6 or 6.7, any endorsements, assignments or
         other instruments of conveyance or transfer with respect to the
         Collateral; and

                           (v)      (1) direct any party liable for any payment
         under any of the Collateral to make payment of any and all moneys due
         or to become due thereunder directly to the Administrative Agent or as
         the Administrative Agent shall direct; (2) ask or demand for, collect,
         and receive payment of and receipt for, any and all moneys, claims and
         other amounts due or to become due at any time in respect of or arising
         out of any Collateral; (3) sign and endorse any invoices, freight or
         express bills, bills of lading, storage or warehouse receipts, drafts
         against debtors, assignments, verifications, notices and other
         documents in connection with any of the Collateral; (4) commence and
         prosecute any suits, actions or proceedings at law or in equity in any
         court of competent jurisdiction to collect the Collateral or any
         portion thereof and to enforce any other right in respect of any
         Collateral; (5) defend any suit, action or proceeding brought against
         such Grantor with respect to any Collateral; (6) settle, compromise or
         adjust any such suit, action or proceeding and, in connection
         therewith, give such discharges or releases as the Administrative Agent
         may deem appropriate; (7) assign any Copyright, Patent or Trademark
         (along with the goodwill of the business to which any such Copyright,
         Patent or Trademark

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<PAGE>

         pertains), throughout the world for such term or terms, on such
         conditions, and in such manner, as the Administrative Agent shall in
         its sole discretion determine; and (8) generally, sell, transfer,
         pledge and make any agreement with respect to or otherwise deal with
         any of the Collateral as fully and completely as though the
         Administrative Agent were the absolute owner thereof for all purposes,
         and do, at the Administrative Agent's option and such Grantor's
         expense, at any time, or from time to time, all acts and things which
         the Administrative Agent deems necessary to protect, preserve or
         realize upon the Collateral and the Secured Parties' security interests
         therein and to effect the intent of this Agreement, all as fully and
         effectively as such Grantor might do.

                  Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that, except as provided in
Section 7.1(b), it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.

                  (b)      If any Grantor fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement; provided, however, that unless
and Event of Default has occurred and is continuing or time is of the essence,
the Administrative Agent shall not exercise this power without first making
demand on the Grantor and the Grantor failing to immediately comply therewith.

                  (c)      The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Loans that are Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.

                  (d)      Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

                  7.2.     Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the New
York UCC or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar property for its own account. Neither
the Administrative Agent, nor any other Secured Party nor any of their
respective officers, directors, partners, employees, agents, attorneys and other
advisors, attorneys-in-fact or affiliates shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Secured Parties hereunder are solely to protect the Secured
Parties' interests in the Collateral and shall not impose any duty upon any
Secured Party to exercise any such powers. The Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
partners, employees, agents, attorneys and other advisors, attorneys-in-fact or
affiliates shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

                  7.3.     Execution of Financing Statements. Each Grantor
hereby authorizes the Administrative Agent to file or record financing or
continuation statements, and amendments thereto, and

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<PAGE>

other filing or recording documents or instruments with respect to the
Collateral in such form and in such offices as the Administrative Agent
reasonably determines appropriate to perfect or maintain the perfection of the
security interests of the Administrative Agent under this Agreement. Each
Grantor agrees that such financing statements may describe the collateral in the
same manner as described in the Security documents or as "all assets" or "all
personal property" of the undersigned, whether now owned or hereafter existing
or acquired by the undersigned or such other description as the Administrative
Agent, in its sole judgment, determines is necessary or advisable. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction. Each Grantor hereby ratifies any such
financing statement filed prior to the date hereof by the Administrative Agent,
if any.

                  7.4.     Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.

                  7.5.     Appointment of Co-Collateral Agents. At any time or
from time to time and upon written notice to the Grantors, in order to comply
with any Requirement of Law, the Administrative Agent may appoint another bank
or trust company or one of more other persons, either to act as co-agent or
agents on behalf of the Secured Parties with such power and authority as may be
necessary for the effectual operation of the provisions hereof and which may be
specified in the instrument of appointment (which may, in the discretion of the
Administrative Agent, include provisions for indemnification and similar
protections of such co-agent or separate agent).

                            SECTION 8. MISCELLANEOUS

                  8.1.     Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 10.1 of the Credit Agreement.

                  8.2.     Notices. All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 10.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.

                  8.3.     No Waiver by Course of Conduct; Cumulative Remedies.
No Secured Party shall by any act (except by a written instrument pursuant to
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of any
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Secured Party of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which such Secured Party would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative,

                                       31

<PAGE>

may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.

                  8.4.     Enforcement Expenses; Indemnification. (a) Each
Grantor agrees to pay or reimburse each Lender and the Administrative Agent (in
the case of each Lender, after the occurrence and during the continuance of an
Event of Default) for all its costs and expenses incurred in collecting against
such Grantor under the guarantee contained in Section 2 or otherwise enforcing
or preserving any rights under this Agreement and the other Loan Documents to
which such Grantor is a party, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel (but not both outside and in-house counsel)) to each Secured Party and
of counsel to the Administrative Agent.

                  (b)      Each Grantor agrees to pay, and to save the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.

                  (c)      Each Grantor agrees to pay, and to save the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 10.5 of the Credit Agreement.

                  (d)      The agreements in this Section shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.

                  (e)      Each Grantor agrees that the provisions of Section
2.19 of the Credit Agreement are hereby incorporated herein by reference,
mutatis mutandis, and each Secured Party shall be entitled to rely on each of
them as if they were fully set forth herein.

                  8.5.     Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Secured Parties and their successors and assigns; provided that
no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Administrative
Agent.

                  8.6.     Set-Off. Each Grantor hereby irrevocably authorizes
each Secured Party at any time and from time to time while an Event of Default
pursuant to Section 8(a) of the Credit Agreement shall have occurred and be
continuing, without notice to such Grantor or any other Grantor, any such notice
being expressly waived by each Grantor, to set-off and appropriate and apply any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Secured Party to or for the credit
or the account of such Grantor, or any part thereof in such amounts as such
Secured Party may elect, against and on account of the obligations and
liabilities of such Grantor to such Secured Party hereunder and claims of every
nature and description of such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as such Secured Party may elect, whether or not any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by
such Secured Party of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and

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<PAGE>

application. The rights of each Secured Party under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) which such Secured Party may have.

                  8.7.     Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

                  8.8.     Severability. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  8.9.     Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

                  8.10.    Integration. This Agreement and the other Loan
Documents represent the agreement of the Grantors, the Administrative Agent and
the other Secured Parties with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by any
Secured Party relative to subject matter hereof and thereof not expressly set
forth or referred to herein or in the other Loan Documents.

                  8.11.    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN APPLICATION
OF A DIFFERENT GOVERNING LAW.

                  8.12.    Submission to Jurisdiction; Waivers. Each Grantor
hereby irrevocably and unconditionally:

                  (a)      submits for itself and its property in any legal
         action or proceeding relating to this Agreement and the other Loan
         Documents to which it is a party, or for recognition and enforcement of
         any judgment in respect thereof, to the non-exclusive general
         jurisdiction of the Courts of the State of New York, the courts of the
         United States of America for the Southern District of New York, and
         appellate courts from any thereof;

                  (b)      consents that any such action or proceeding may be
         brought in such courts and waives any objection that it may now or
         hereafter have to the venue of any such action or proceeding in any
         such court or that such action or proceeding was brought in an
         inconvenient court and agrees not to plead or claim the same;

                  (c)      agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail), postage
         prepaid, to such Grantor at its address referred to in Section 8.2 or
         at such other address of which the Administrative Agent shall have been
         notified pursuant thereto;

                  (d)      agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other jurisdiction; and

                                       33

<PAGE>

                  (e)      waives, to the maximum extent not prohibited by law,
         any right it may have to claim or recover in any legal action or
         proceeding referred to in this Section any special, exemplary, punitive
         or consequential damages.

                  8.13.    Acknowledgments. Each Grantor hereby acknowledges
that:

                  (a)      it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents to which
it is a party;

                  (b)      no Secured Party has any fiduciary relationship with
or duty to any Grantor arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between the Grantors, on
the one hand, and the Secured Parties, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and

                  (c)      no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Grantors and the Secured Parties.

                  8.14. Additional Grantors. Each Subsidiary of the Borrower
that is required to become a party to this Agreement pursuant to Section 6.9 of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.

                  8.15.    Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than Obligations in
respect of any Hedge Agreement) shall have been paid in full, the Commitments
have been terminated or expired and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.

                  (b)      If any of the Collateral shall be Disposed of by any
Grantor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be Disposed of in a
transaction permitted by the Credit Agreement; provided that the Borrower shall
have delivered to the Administrative Agent, at least ten Business Days prior to
the date of the proposed release, a written request for release identifying the
relevant Subsidiary Guarantor and the terms of the Disposition in reasonable
detail, including the price thereof and any expenses in connection therewith,
together with a certification by the Borrower stating that such transaction is
in compliance with the Credit Agreement and the other Loan Documents and that
the Proceeds of such Disposition will be applied in accordance therewith.

                  (c)      Each Grantor acknowledges that it is not authorized
to file any financing statement or amendment or termination statement with
respect to any financing statement originally filed

                                       34

<PAGE>

in connection herewith without the prior written consent of the Administrative
Agent subject to such Grantor's rights under Section 9-509(d)(2) of the New York
UCC.

                  8.16.    WAIVER OF JURY TRIAL. EACH GRANTOR AND THE
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                                       35

<PAGE>
                  IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.

                                    RENT-A-CENTER, INC.

                                    By: /s/ MARK E. SPEESE
                                        ----------------------------------------
                                        Name:  Mark E. Speese
                                        Title: Chairman of the Board and
                                               Chief Executive Officer

                                    RENT-A-CENTER EAST, INC.

                                    By: /s/ MARK E. SPEESE
                                        ----------------------------------------
                                        Name:  Mark E. Speese
                                        Title: President

                                    COLORTYME, INC.

                                    By: /s/ MITCHELL E. FADEL
                                        ----------------------------------------
                                        Name:  Mitchell E. Fadel
                                        Title: Vice President

                                    RENT-A-CENTER WEST, INC.

                                    By: /s/ MITCHELL E. FADEL
                                        ----------------------------------------
                                        Name:  Mitchell E. Fadel
                                        Title: Vice President

                                    REMCO AMERICA, INC.

                                    By: /s/ MITCHELL E. FADEL
                                        ----------------------------------------
                                        Name:  Mitchell E. Fadel
                                        Title: Vice President

                                    GET IT NOW, LLC

                                    By: /s/ MITCHELL E. FADEL
                                        ----------------------------------------
                                        Name:  Mitchell E. Fadel
                                        Title: Vice President

                         [Signatures continued on the next page]

                                       36

<PAGE>
                                    RENT-A-CENTER TEXAS, L.P.

                                    By: /s/ MITCHELL E. FADEL
                                        ----------------------------------------
                                        Name:  Mitchell E. Fadel
                                        Title: President and Chief Operating
                                               Officer

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

                                    By: /s/ JAMES ASHWORTH
                                        ----------------------------------------
                                        Name:  James Ashworth
                                        Title: President

                     [Signatures continued on the next page]

                                       37

<PAGE>

                                    LEHMAN COMMERCIAL PAPER INC.,
                                    as Administrative Agent

                                    By: /s/ FRANCIS CHANG
                                        ----------------------------------------
                                        Name:  Francis Chang
                                        Title: Authorized Signatory

                                       38

<PAGE>

                                                                      Schedule 1

                         NOTICE ADDRESSES OF GUARANTORS

                                      1-1

<PAGE>

                                                                      Schedule 2

                   DESCRIPTION OF PLEDGED INVESTMENT PROPERTY

PLEDGED STOCK:

<TABLE>
<CAPTION>
                                Issuer's Jurisdiction
                                   Under New York
                                   UCC Section 9-                        Stock Certificate    Percentage of
     Grantor          Issuer         305(a)(2)          Class of Stock          No.              Shares         No. of Shares
------------------   --------   ---------------------   --------------   -----------------   ----------------   -------------
<S>                  <C>        <C>                     <C>              <C>                 <C>                <C>
</TABLE>

PLEDGED NOTES:

<TABLE>
<CAPTION>
     Grantor          Issuer      Payee     Principal Amount
------------------   --------   ---------   ----------------
<S>                  <C>        <C>         <C>
</TABLE>

PLEDGED DEBT SECURITIES:

<TABLE>
<CAPTION>
                                Issuer's Jurisdiction
                                  Under New York UCC
     Grantor          Issuer     Section 9-305(a)(2)      Payee       Principal Amount
------------------   --------   ---------------------   ----------    ----------------
<S>                  <C>        <C>                     <C>           <C>
</TABLE>

                                      2-1

<PAGE>

PLEDGED SECURITY ENTITLEMENTS:

<TABLE>
<CAPTION>
                                                             Securities                                 Securities Intermediary's
                        Issuer of      Description of       Intermediary       Securities Account    Jurisdiction Under New York UCC
      Grantor        Financial Asset   Financial Asset   (Name and Address)   (Number and Location)        Section 9-305(a)(3)
------------------   ---------------   ---------------   ------------------   ---------------------  -------------------------------
<S>                  <C>               <C>               <C>                  <C>                    <C>
</TABLE>

PLEDGED COMMODITY CONTRACTS:

<TABLE>
<CAPTION>
                                                                                           Commodity Intermediary's
                                                                                            Jurisdiction Under New
                       Description of     Commodity Intermediary     Commodity Account       York UCC Section 9-
     Grantor         Commodity Contract     (Name and Address)     (Number and Location)          305(a)(4)
------------------   ------------------   ----------------------   ---------------------   ------------------------
<S>                  <C>                  <C>                      <C>                     <C>
</TABLE>

PLEDGED PARTNERSHIP INTERESTS:

<TABLE>
<CAPTION>
                                 Type of
                          Partnership Interest
                            (e.g., General or    Certificated   Certificate No.   % of Outstanding Partnership
    Grantor      Issuer         Limited)             (Y/N)         (if any)       Interests of the Partnership
--------------   ------   --------------------   ------------   ---------------   ----------------------------
<S>              <C>      <C>                    <C>            <C>               <C>
</TABLE>

                                      2-2

<PAGE>

PLEDGED LLC INTERESTS:

<TABLE>
<CAPTION>
                          Certificated   Certificate No.      No. of       % of Outstanding LLC Interests
    Grantor      Issuer       (Y/N)         (if any)       Pledged Units           of the Issuer
--------------   ------   ------------   ---------------   -------------   ------------------------------
<S>              <C>      <C>            <C>               <C>             <C>
</TABLE>

PLEDGED TRUST INTERESTS:

<TABLE>
<CAPTION>
                          Class of Trust   Certificated   Certificate No.   % of Outstanding Trust
    Grantor      Issuer      Interests         (Y/N)         (if any)       Interests of the Issuer
--------------   ------   --------------   ------------   ---------------   -----------------------
<S>              <C>      <C>              <C>            <C>               <C>
</TABLE>

DEPOSIT ACCOUNTS:

<TABLE>
<CAPTION>
                     Name of
    Grantor      Depositary Bank   Account Number   Account Name
--------------   ---------------   --------------   ------------
<S>              <C>               <C>              <C>
</TABLE>

                                      2-3

<PAGE>

                                                                      Schedule 3

                            FILINGS AND OTHER ACTIONS
                     REQUIRED TO PERFECT SECURITY INTERESTS

                         Uniform Commercial Code Filings

          [List each office where a financing statement is to be filed]

                     Copyright, Patent and Trademark Filings

                               [List all filings]

                   Actions with respect to Investment Property

   [Describe all actions required to obtain "control" of Investment Property]

                                  Other Actions

                      [Describe other actions to be taken]

                                      3-1

<PAGE>

                                                                      Schedule 4

      EXACT LEGAL NAME, JURISDICTION OF ORGANIZATION AND LOCATION OF CHIEF
                                EXECUTIVE OFFICE

<TABLE>
<CAPTION>
                                                                        Location of
                                                                           Chief
                                                                        Executive
Exact Legal Name    Jurisdiction of Organization  Organizational I.D.     Office
----------------    ----------------------------  -------------------   -----------
<S>                 <C>                           <C>                   <C>
</TABLE>

                                      4-1

<PAGE>

                                                                      Schedule 5

                       LOCATION OF INVENTORY AND EQUIPMENT

<TABLE>
<CAPTION>
Grantor                                                               Locations
-------                                                               ---------
<S>                                                                   <C>
</TABLE>

                                      5-1

<PAGE>

                                                                      Schedule 6

                                   COPYRIGHTS

                                     PATENTS

                                   TRADEMARKS

                         INTELLECTUAL PROPERTY LICENSES

                           OTHER INTELLECTUAL PROPERTY

                                      6-1

<PAGE>

                                                                      Schedule 7

                                  ACQUISITIONS

                                      7-1

<PAGE>

                                                                      Schedule 8

                                LETTERS OF CREDIT

                                      8-1

<PAGE>

                                                                      Schedule 9

                                    CONTRACTS

                                       9-1

<PAGE>

                                                                     Schedule 10

                             COMMERCIAL TORT CLAIMS

                                      2-2

<PAGE>

                                                                    Exhibit A to
                                              Guarantee and Collateral Agreement

                       FORM OF ACKNOWLEDGMENT AND CONSENT

                  The undersigned hereby acknowledges receipt of a copy of the
Guarantee and Collateral Agreement dated as of May 28, 2003 (the "Agreement";
capitalized terms used but not defined herein have the meanings given such terms
therein), made by the Grantors parties thereto for the benefit of Lehman
Commercial Paper Inc., as administrative agent (in such capacity, the
"Administrative Agent") under the Credit Agreement dated as of May 28, 2003 (as
amended, supplemented or modified from time to time, the "Credit Agreement"),
among Rent-A-Center, Inc., a Delaware corporation, the several banks and other
financial institutions or entities from time to time parties to the Credit
Agreement, Morgan Stanley Senior Funding Inc., as documentation agent, JPMorgan
Chase Bank and Bear, Sterns & Co., Inc., each as syndication agent, Wachovia
Bank, National Association, UBS Warburg LLC, United Overseas Bank and Credit
Lyonnais, each as managing agent, and the Administrative Agent. The undersigned
agrees for the benefit of the Administrative Agent and the Secured Parties as
follows:

                  1.       The undersigned will be bound by the terms of the
Agreement and will comply with such terms insofar as such terms are applicable
to the undersigned.

                  2.       The undersigned confirms the statements made in the
Agreement with respect to the undersigned including, without limitation, in
Section 4.8 and Schedule 2.

                  3.       The undersigned will notify the Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) of the Agreement.

                  4.       The terms of Sections 5.8(c), 6.3(c) and 6.7 of the
Agreement shall apply to it, mutatis mutandis, with respect to all actions that
may be required of it pursuant to Section 5.8(c), 6.3(c) or 6.7 of the
Agreement.

                                           [NAME OF ISSUER]

                                           By __________________________________
                                                Name:
                                                Title:

                                           Address for Notices:
                                           _____________________________________
                                           _____________________________________

                                           Fax: ________________________________

                                      A-1

<PAGE>

                                                                  Exhibit B-1 to
                                              Guarantee and Collateral Agreement

                FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

                  This INTELLECTUAL PROPERTY SECURITY AGREEMENT, dated as of May
[__], 2003 (as amended, supplemented or otherwise modified from time to time,
the "Intellectual Property Security Agreement"), is made by each of the
signatories hereto (collectively, the "Grantors") in favor of Lehman Commercial
Paper Inc., as administrative agent (in such capacity, the "Administrative
Agent") for the Secured Parties (as defined in the Credit Agreement referred to
below).

                  WHEREAS, Rent-A-Center, Inc., a Delaware corporation (the
"Borrower") has entered into a Credit Agreement dated as of May 28, 2003 (as
amended, supplemented or modified from time to time, the "Credit Agreement"),
among the Borrower, the several banks and other financial institutions or
entities from time to time parties to the Credit Agreement, Morgan Stanley
Senior Funding Inc., as documentation agent, JPMorgan Chase Bank and Bear,
Sterns & Co., Inc., each as syndication agent, Wachovia Bank, National
Association, UBS Warburg LLC, United Overseas Bank and Credit Lyonnais, each as
managing agent, and the Administrative Agent. Capitalized terms used and not
defined herein have the meanings given such terms in the Credit Agreement.

                  WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered that
certain Guarantee and Collateral Agreement, dated as of May 28, 2003 in favor of
the Administrative Agent for the benefit of the Secured Parties (as amended,
supplemented, replaced or otherwise modified from time to time, the "Guarantee
and Collateral Agreement").

                  WHEREAS, under the terms of the Guarantee and Collateral
Agreement, the Grantors have granted a security interest in certain property,
including, without limitation, certain Intellectual Property of the Grantors to
the Administrative Agent for the ratable benefit of the Secured Parties, and
have agreed as a condition thereof to execute this Intellectual Property
Security Agreement for recording with the United States Patent and Trademark
Office, the United States Copyright Office, and other applicable Governmental
Authorities.

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Grantors agree as
follows:

                  SECTION 1. Grant of Security. Each Grantor hereby grants to
the Administrative Agent for the ratable benefit of the Secured Parties a
security interest in and to all of such Grantor's right, title and interest in
and to the following (the "Intellectual Property Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:

                  (a)      (i) all trademarks, service marks, trade names,
corporate names, company names, business names, trade dress, trade styles,
logos, or other indicia of origin or source identification, trademark and
service mark registrations, and applications for trademark or service mark
registrations and any new renewals thereof, including, without limitation, each
registration and application identified in Schedule 1, (ii) the right to sue or
otherwise recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (iv) all other rights of any kind whatsoever of such Grantor
accruing thereunder or

                                      B-1

<PAGE>

pertaining thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each of the above (collectively,
the "Trademarks");

                  (b)      (i) all patents, patent applications and patentable
inventions, including, without limitation, each issued patent and patent
application identified in Schedule 1, (ii) all inventions and improvements
described and claimed therein, (iii) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (iv) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof), and
(v) all reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon and all other rights
of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto
(collectively, the "Patents");

                  (c)      (i) all copyrights, whether or not the underlying
works of authorship have been published, and all works of authorship and other
intellectual property rights therein, all copyrights of works based on,
incorporated in, derived from or relating to works covered by such copyrights,
all right, title and interest to make and exploit all derivative works based on
or adopted from works covered by such copyrights, and all copyright
registrations and copyright applications, and any renewals or extensions
thereof, including, without limitation, each registration and application
identified in Schedule 1, (ii) the rights to print, publish and distribute any
of the foregoing, (iv) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (iv) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (v) all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto
("Copyrights");

                  (d)      (i) all trade secrets and all confidential and
proprietary information, including know-how, manufacturing and production
processes and techniques, inventions, research and development information,
technical data, financial, marketing and business data, pricing and cost
information, business and marketing plans, and customer and supplier lists and
information, (ii) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iii) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (iv) all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto
(collectively, the "Trade Secrets");

                  (e)      (i) all licenses or agreements, whether written or
oral, providing for the grant by or to any Grantor of: (A) any right to use any
Trademark or Trade Secret, (B) any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, and (C) any right under any
Copyright including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright including,
without limitation, any of the foregoing identified in Schedule 1, (ii) the
right to sue or otherwise recover for any and all past, present and future
infringements and misappropriations of any of the foregoing, (iii) all income,
royalties, damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all licenses
entered into in connection therewith, and damages and payments for past, present
or future infringements thereof), and (iv) all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto; and

                  (f)      any and all proceeds of the foregoing.

                                     B-1-2

<PAGE>

                  SECTION 2. Recordation. Each Grantor authorizes and requests
that the Register of Copyrights, the Commissioner of Patents and Trademarks and
any other applicable government officer record this Intellectual Property
Security Agreement.

                  SECTION 3. Execution in Counterparts. This Agreement may be
executed in any number of counterparts (including by telecopy), each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  SECTION 4. Governing Law. This Intellectual Property Security
Agreement shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

                  SECTION 5. Conflict Provision. This Intellectual Property
Security Agreement has been entered into in conjunction with the provisions of
the Guarantee and Collateral Agreement and the Credit Agreement. The rights and
remedies of each party hereto with respect to the security interest granted
herein are without prejudice to and are in addition to those set forth in the
Guarantee and Collateral Agreement and the Credit Agreement, all terms and
provisions of which are incorporated herein by reference. In the event that any
provisions of this Intellectual Property Security Agreement are in conflict with
the Guarantee and Collateral Agreement or the Credit Agreement, the provisions
of the Guarantee and Collateral Agreement or the Credit Agreement shall govern.

                                     B-1-3

<PAGE>

                  IN WITNESS WHEREOF, each of the undersigned has caused this
Intellectual Property Security Agreement to be duly executed and delivered as of
the date first above written.

                                         [NAME OF GRANTOR]

                                          By: __________________________________
                                                Name:
                                                Title:

                                     B-1-4

<PAGE>

                                                                      Schedule 1

                                   COPYRIGHTS

                                     PATENTS

                                   TRADEMARKS

                         INTELLECTUAL PROPERTY LICENSES

<PAGE>

                                                                  Exhibit B-2 to
                                              Guarantee and Collateral Agreement

        FORM OF AFTER-ACQUIRED INTELLECTUAL PROPERTY SECURITY AGREEMENT

                          ([FIRST] SUPPLEMENTAL FILING)

                  This INTELLECTUAL PROPERTY SECURITY AGREEMENT ([FIRST]
SUPPLEMENTAL FILING), dated as of _____ __, 200_ (as amended, supplemented or
otherwise modified from time to time, the "[First] Supplemental Intellectual
Property Security Agreement"), is made by each of the signatories hereto
(collectively, the "Grantors") in favor of Lehman Commercial Paper Inc., as
administrative agent (in such capacity, the "Administrative Agent") for the
Secured Parties (as defined in the Credit Agreement referred to below).

                  WHEREAS, Rent-A-Center, Inc., a Delaware corporation (the
"Borrower"), has entered into a Credit Agreement dated as of May 28, 2003 (as
amended, supplemented or modified from time to time, the "Credit Agreement"),
among the Borrower, the several banks and other financial institutions or
entities from time to time parties to the Credit Agreement, Morgan Stanley
Senior Funding Inc., as documentation agent, JPMorgan Chase Bank and Bear,
Sterns & Co., Inc., each as syndication agent, Wachovia Bank, National
Association, UBS Warburg LLC, United Overseas Bank and Credit Lyonnais, each as
managing agent, and the Administrative Agent. Capitalized terms used and not
defined herein have the meanings given such terms in the Credit Agreement.

                  WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered that
certain Guarantee and Collateral Agreement, dated as of May 28, 2003, in favor
of the Administrative Agent for the benefit of the Secured Parties (as amended,
supplemented, replaced or otherwise modified from time to time, the "Guarantee
and Collateral Agreement").

                  WHEREAS, under the terms of the Guarantee and Collateral
Agreement, the Grantors have granted a security interest in certain property,
including, without limitation, certain Intellectual Property, including but not
limited to After-Acquired Intellectual Property of the Grantors to the
Administrative Agent for the ratable benefit of the Secured Parties, and have
agreed as a condition thereof to execute this [First] Supplemental Intellectual
Property Security Agreement for recording with the United States Patent and
Trademark Office, the United States Copyright Office, and other applicable
Governmental Authorities.

                  WHEREAS, the Intellectual Property Security Agreement was
recorded against certain United States Intellectual Property at [INSERT
REEL/FRAME NUMBER] [IF SECOND OR LATER SUPPLEMENTAL, ADD PRIOR REEL/FRAME
NUMBERS].

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Grantors agree as
follows:

                  SECTION 1. Grant of Security. Each Grantor hereby grants to
the Administrative Agent for the ratable benefit of the Secured Parties a
security interest in and to all of such Grantor's right, title and interest in
and to the following (the "Intellectual Property Collateral"), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of such Grantor's
Obligations:

                                     B-2-1

<PAGE>

                  (a)      (i) all trademarks, service marks, trade names,
corporate names, company names, business names, trade dress, trade styles,
logos, or other indicia of origin or source identification, trademark and
service mark registrations, and applications for trademark or service mark
registrations and any new renewals thereof, including, without limitation, each
registration and application identified in Schedule 1, (ii) the right to sue or
otherwise recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past, present or future infringements
thereof), and (iv) all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto, together in each case with the
goodwill of the business connected with the use of, and symbolized by, each of
the above (collectively, the "Trademarks");

                  (b)      (i) all patents, patent applications and patentable
inventions, including, without limitation, each issued patent and patent
application identified in Schedule 1, (ii) all inventions and improvements
described and claimed therein, (iii) the right to sue or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (iv) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection therewith,
and damages and payments for past, present or future infringements thereof), and
(v) all reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon and all other rights
of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto
(collectively, the "Patents");

                  (c)      (i) all copyrights, whether or not the underlying
works of authorship have been published, and all works of authorship and other
intellectual property rights therein, all copyrights of works based on,
incorporated in, derived from or relating to works covered by such copyrights,
all right, title and interest to make and exploit all derivative works based on
or adopted from works covered by such copyrights, and all copyright
registrations and copyright applications, and any renewals or extensions
thereof, including, without limitation, each registration and application
identified in Schedule 1, (ii) the rights to print, publish and distribute any
of the foregoing, (iii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (iv) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (v) all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto
("Copyrights");

                  (d)      (i) all trade secrets and all confidential and
proprietary information, including know-how, manufacturing and production
processes and techniques, inventions, research and development information,
technical data, financial, marketing and business data, pricing and cost
information, business and marketing plans, and customer and supplier lists and
information, (ii) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iii) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for
past, present or future infringements thereof), and (iv) all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto
(collectively, the "Trade Secrets");

                  (e)      (i) all licenses or agreements, whether written or
oral, providing for the grant by or to any Grantor of: (A) any right to use any
Trademark or Trade Secret, (B) any right under any Patent, and (C) any right
under any Copyright, (ii) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations of any of the
foregoing, (iii) all income, royalties,

                                     B-2-2

<PAGE>

damages and other payments now and hereafter due and/or payable with respect
thereto (including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past, present or future
infringements thereof), and (iv) all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto; and

                  (f)      any and all proceeds of the foregoing.

                  SECTION 2. Recordation. Each Grantor authorizes and requests
that the Register of Copyrights, the Commissioner of Patents and Trademarks and
any other applicable government officer record this [First] Supplemental
Intellectual Property Security Agreement.

                  SECTION 3. Execution in Counterparts. This Agreement may be
executed in any number of counterparts (including by telecopy), each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  SECTION 4. Governing Law. This [First] Supplemental
Intellectual Property Security Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

                  SECTION 5. Conflict Provision. This [First] Supplemental
Intellectual Property Security Agreement has been entered into in conjunction
with the provisions of the Guarantee and Collateral Agreement and the Credit
Agreement. The rights and remedies of each party hereto with respect to the
security interest granted herein are without prejudice to, and are in addition
to those set forth in the Guarantee and Collateral Agreement and the Credit
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this [First] Supplemental
Intellectual Property Security Agreement are in conflict with the Guarantee and
Collateral Agreement or the Credit Agreement, the provisions of the Guarantee
and Collateral Agreement or the Credit Agreement shall govern.

                                     B-2-3

<PAGE>

                  IN WITNESS WHEREOF, each of the undersigned has caused this
[First] Supplemental Intellectual Property Security Agreement to be duly
executed and delivered as of the date first above written.

                                                    [NAME OF GRANTOR]

                                                     By: _______________________
                                                         Name:
                                                         Title:

                                     B-2-4

<PAGE>

                                                                      Schedule 1

                                   COPYRIGHTS

                                     PATENTS

                                   TRADEMARKS

                         INTELLECTUAL PROPERTY LICENSES

<PAGE>

                                                                    Exhibit C to
                                              Guarantee and Collateral Agreement

                            FORM OF CONTROL AGREEMENT

                  This CONTROL AGREEMENT (as amended, supplemented or otherwise
modified from time to time, the "Control Agreement") dated as of _______ ___,
200_, is made by and among _______________, a __________ (the "Grantor"), Lehman
Commercial Paper Inc., as administrative agent (in such capacity, the
"Administrative Agent") for the Secured Parties (as defined in the Guarantee and
Collateral Agreement referred to below), and ____________, a ____________ (the
"Issuer").

                  WHEREAS, the Grantor has granted to the Administrative Agent
for the benefit of the Secured Parties a security interest in the uncertificated
securities of the Issuer owned by the Grantor from time to time (collectively,
the "Pledged Securities"), and all additions thereto and substitutions and
proceeds thereof (collectively, with the Pledged Securities, the "Collateral")
pursuant to a Guarantee and Collateral Agreement, dated as of May 28, 2003 (as
amended, supplemented, replaced or otherwise modified from time to time, the
"Guarantee and Collateral Agreement"), among the Grantor and the other persons
party thereto as grantors in favor of the Administrative Agent for the benefit
of the Secured Parties.

                  WHEREAS, the following terms which are defined in Articles 8
and 9 of the Uniform Commercial Code in effect in the State of New York on the
date hereof (the "UCC") are used herein as so defined: Adverse Claim, Control,
Instruction, Proceeds and Uncertificated Security.

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

                  SECTION 1. Notice of Security Interest. The Grantor, the
Administrative Agent and the Issuer are entering into this Control Agreement to
perfect, and to confirm the priority of, the Administrative Agent's security
interest in the Collateral. The Issuer acknowledges that this Control Agreement
constitutes written notification to the Issuer of the Administrative Agent's
security interest in the Collateral. The Issuer agrees to promptly make all
necessary entries or notations in its books and records to reflect the
Administrative Agent's security interest in the Collateral and, upon request by
the Administrative Agent, to register the Administrative Agent as the registered
owner of any or all of the Pledged Securities. The Issuer acknowledges that the
Administrative Agent has control over the Collateral.

                  SECTION 2. Collateral. The Issuer hereby represents and
warrants to, and agrees with the Grantor and the Administrative Agent that (i)
the terms of any limited liability company interests or partnership interests
included in the Collateral from time to time shall expressly provide that they
are securities governed by Article 8 of the Uniform Commercial Code in effect
from time to time in the State of [__________], (ii) the Pledged Securities are
uncertificated securities, (iii) the issuer's jurisdiction is, and during the
term of this Control Agreement shall remain, the State of [____________], (iv)
Schedule 1 contains a true and complete description of the Pledged Securities as
of the date hereof and (v) except for the claims and interests of the
Administrative Agent and the Grantor in the Collateral, the Issuer does not know
of any claim to or security interest or other interest in the Collateral.

                  SECTION 3. Control. The Issuer hereby agrees, upon written
direction from the Administrative Agent who shall have provided the Grantor with
written notice to such written direction to the Issuer, and without further
consent from the Grantor, (a) to comply with all instructions and directions

                                      C-1

<PAGE>

of any kind originated by the Administrative Agent concerning the Collateral, to
liquidate or otherwise dispose of the Collateral as and to the extent directed
by the Administrative Agent and to pay over to the Administrative Agent all
proceeds without any setoff or deduction, and (b) except as otherwise directed
by the Administrative Agent, not to comply with the instructions or directions
of any kind originated by the Grantor or any other person.

                  SECTION 4. Other Agreements. The Issuer shall notify promptly
the Administrative Agent and the Grantor if any other person asserts any lien,
encumbrance, claim (including any adverse claim) or security interest in or
against any of the Collateral. In the event of any conflict between the
provisions of this Control Agreement and any other agreement governing the
Pledged Securities or the Collateral, the provisions of this Control Agreement
shall control.

                  SECTION 5. Protection of Issuer. The Issuer may rely and shall
be protected in acting upon any notice, instruction or other communication that
it reasonably believes to be genuine and authorized.

                  SECTION 6. Termination. This Control Agreement shall terminate
automatically upon receipt by the Issuer of written notice executed by the
Administrative Agent.

                  SECTION 7. Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, to the Grantor's and the Administrative Agent's addresses
as set forth in the Guarantee and Collateral Agreement, and to the Issuer's
address as set forth below, or to such other address as any party may give to
the others in writing for such purpose:

                  [Name of Issuer]
                  [Address of Issuer]
                  Attention: ________________________
                  Telephone: (_____) _____- _________
                  Telecopy: (_____) _____- _________

                  SECTION 8. Amendments in Writing. None of the terms or
provisions of this Control Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the parties
hereto.

                  SECTION 9. Entire Agreement. This Control Agreement and the
Guarantee and Collateral Agreement constitute the entire agreement and supersede
all other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.

                  SECTION 10. Execution in Counterparts. This Control Agreement
may be executed in any number of counterparts (including by telecopy), each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  SECTION 11. Successors and Assigns. This Control Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Grantor may not assign,
transfer or delegate any of its rights or obligations under this Control
Agreement without the prior written consent of the Administrative Agent.

                                      C-2

<PAGE>

                  SECTION 12. Governing Law and Jurisdiction. This Control
Agreement has been delivered to and accepted by the Administrative Agent and
will be deemed to be made in the State of New York. THIS CONTROL AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK. Each of the parties hereto submits for itself and its
property in any legal action or proceeding relating to this Control Agreement,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof.

                  SECTION 13. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS CONTROL AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.

                                      C-3

<PAGE>

                  IN WITNESS WHEREOF, each of the undersigned has caused this
Control Agreement to be duly executed and delivered as of the date first above
written.

                           [NAME OF GRANTOR]

                           By: _________________________________________________
                               Name:
                               Title:

                           LEHMAN COMMERCIAL PAPER INC., as
                           Administrative Agent

                           By: _________________________________________________
                               Name:
                               Title:

                           [NAME OF ISSUER]

                           By: _________________________________________________
                               Name:
                               Title:

                                      C-4

<PAGE>

                                                                      Annex 1 to
                                              Guarantee and Collateral Agreement

                  ASSUMPTION AGREEMENT, dated as of ____________, 200__, made by
______________________, a _______________ (the "Additional Grantor"), in favor
of Lehman Commercial Paper Inc., as administrative agent (in such capacity, the
"Administrative Agent") for (i) the banks and other financial institutions and
entities (the "Lenders") parties to the Credit Agreement referred to below, and
(ii) the other Secured Parties (as defined in the Guarantee and Collateral
Agreement (as hereinafter defined)). All capitalized terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.

                              W I T N E S S E T H:

                  WHEREAS, Rent-A-Center, Inc. (the "Borrower"), the Lenders and
the Administrative Agent have entered into a Credit Agreement dated as of May
28, 2003 (as amended, supplemented or modified from time to time, the "Credit
Agreement"), among the Borrower, the Lenders, Morgan Stanley Senior Funding
Inc., as documentation agent, JPMorgan Chase Bank and Bear, Sterns & Co., Inc.,
each as syndication agent, Wachovia Bank, National Association, UBS Warburg LLC,
United Overseas Bank and Credit Lyonnais, each as managing agent, and the
Administrative Agent;

                  WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of its Subsidiaries (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of May 28, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Secured Parties;

                  WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and

                  WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;

                  NOW, THEREFORE, IT IS AGREED:

                  1.       Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor and Guarantor thereunder
with the same force and effect as if originally named therein as a Grantor and
Guarantor and, without limiting the generality of the foregoing, hereby
expressly assumes all obligations and liabilities of a Grantor and Guarantor
thereunder. The information set forth in Annex 1-A hereto is hereby added to the
information set forth in Schedules 1 to 8 to the Guarantee and Collateral
Agreement. The Additional Grantor hereby represents and warrants that each of
the representations and warranties contained in Section 4 of the Guarantee and
Collateral Agreement is true and correct on and as the date hereof (after giving
effect to this Assumption Agreement) as if made on and as of such date (except
for representations and warranties expressly stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date).

                  2.       GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

<PAGE>

                  IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.

                                                     [ADDITIONAL GRANTOR]

                                                     By: _______________________
                                                         Name:
                                                         Title:

                                       2

<PAGE>

                                                                       Annex 1-A

                            SUPPLEMENTAL INFORMATION

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