FIRST AMENDMENT TO FRANCHISEE FINANCING AGREEMENT

Exhibit 10.7

FIRST AMENDMENT TO FRANCHISEE FINANCING AGREEMENT

     This First Amendment to Franchisee Financing Agreement (“ Amendment ”) is made and entered into by and among Texas Capital Bank, National Association (“ Lender ”), ColorTyme, Inc., a Texas corporation (“ ColorTyme ”), and Rent-A-Center East, Inc., a Delaware corporation formerly known as Rent-A-Center, Inc. (“ RAC ”).

RECITALS

     A. Lender, ColorTyme and RAC entered into that certain Franchisee Financing Agreement dated April 30, 2002 (as the same has been amended, modified, restated or supplemented from time to time, the “ Agreement ”).

     B. Lender, ColorTyme and RAC desire to amend the Agreement in accordance with the terms of this Amendment.

AGREEMENT

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

     1.  Definitions . All capitalized terms not defined herein shall be construed to have the meaning and definition set forth in the Agreement.

     2.  Amendment to Recital A . Effective as of the date hereof, paragraph A of the Recitals of the Agreement is hereby amended and restated to read in its entirety as follows:

      A. ColorTyme is a franchisor of “rent-to-own” stores (each such store is referred to herein as an “ RTO Store ”) operated by franchisees licensed by ColorTyme (each such franchisee is herein referred to individually as a “ Franchisee ” and collectively as the “ Franchisees ”), offering various home entertainment equipment, household equipment, and consumer products and parts, accessories, and other goods used in connection therewith (all such goods are referred to herein as “ Inventory ”), and certain Franchisees may open new stores for the origination and/or processing of payday loans and the other services incident to the foregoing (each such store is referred to herein as a “ PayDay Store ”). PayDay Stores may be located within existing RTO Stores or in separate locations attached to an RTO Store and owned and operated by a Franchisee (or its affiliate).

     3.  Amendment to Recital B . Effective as of the date hereof, paragraph C of the Recitals of the Agreement is hereby amended and restated to read in its entirety as follows:

      C. ColorTyme desires a source of financing for its Franchisees for the purposes described herein.

     4.  Amendment to Article I . Effective as of the date hereof, Article I of the Agreement is hereby amended and restated to read in its entirety as follows:

Article I

     1.1 Credit Facility . Bank shall provide a credit facility for Franchisees on the terms and subject to the conditions set forth in this Agreement. The amount of the credit facility shall be up to, but not in excess of, Twenty Million and No/100 Dollars ($20,000,000.00) in the aggregate; provided, however, that (i) up to, but not in excess of, Fifteen Million and No/100 Dollars ($15,000,000.00) of such credit facility may be utilized for Inventory Lines of Credit (as defined below) and/or RTO Term Loans (as defined below), and (ii) up to, but not in excess of, Five Million and No/100 Dollars ($5,000,000.00) of such credit facility may be utilized for Pay Day Lines of Credit (as defined below) and/or PDL Term Loans (as defined below). Bank will not finance any transaction or transactions which would cause the amount financed by Bank pursuant to this Agreement to exceed any of the limitations set forth in the preceding sentence. Each credit facility extended by Bank to a Franchisee shall be secured by a first priority security interest in (x) all of the Franchisee’s inventory, goods, chattel paper, accounts, contract rights, documents, instruments, note receivables, franchise rights, and general intangibles (specifically including leases and rental contracts), (y) 100% of the stock or equity interest in such Franchisee, and (z) such additional collateral as Bank may require, and shall be fully guaranteed by each of such Franchisee’s principal owners.

     5.  Amendment to Article II . Effective as of the date hereof, Article II of the Agreement is amended and restated to read in its entirety as follows:

Article II

     2.1 Financing Procedures . The following procedures shall be employed in determining the availability of financing for Franchisees under this Agreement:

     (a) In the event a Franchisee shall indicate an interest in obtaining financing for any of the purposes described in Section 2.5 , ColorTyme shall provide the Franchisee with a credit application and other credit documentation, to be developed by Bank and approved by ColorTyme, and shall assist the Franchisee in completing such credit application and other credit documents.

     (b) After the Franchisee has completed the credit application and provided the other credit documents specified by Bank, if such credit application and other credit documents are acceptable to ColorTyme, ColorTyme shall promptly forward the executed credit application and other credit documents to Bank at its office in Dallas, Texas or any other such location Bank may designate in writing to ColorTyme.

     (c) If, following completion of its review of such credit application and other credit documents and its credit investigation, Bank determines that it will provide the financing requested, it shall so notify the Franchisee and ColorTyme and, upon receipt of such additional closing documents and satisfaction of such

closing conditions as Bank determines to be necessary for the approval and documentation of the credit in its sole discretion, Bank shall establish one or more of the following: (i) a revolving line of credit for the Franchisee in accordance with the terms of this Agreement for such Franchisee’s acquisition of Inventory and/or such Franchisee’s acquisition or conversion of an RTO Store (an “ Inventory Line of Credit ”), (ii) a revolving line of credit for the Franchisee in accordance with the terms of this Agreement for such Franchisee’s funding or extension of payday loans (a “ PayDay Line of Credit ”), (iii) a term loan facility for such Franchisee’s acquisition of Inventory and/or such Franchisee’s acquisition or conversion of an RTO Store (an “ RTO Term Loan ”), and/or (iv) a term loan facility for such Franchisee in order to build and equip a PayDay Store (a “ PDL Term Loan ”). For purposes of this Agreement, the resulting obligation of a Franchisee to Bank pursuant to any of the credit facilities described above is referred to as a “ Receivable ”.

     2.2 Interest Rates . Unless otherwise agreed in writing by Bank and ColorTyme, the interest rate on each Receivable shall be in accordance with the following schedule: (i) for each Inventory Line of Credit with a Credit Limit (as that term is hereinafter defined) of $1,000,000 or less, the rate will be the Prime Rate plus 3.75%; (ii) for each Inventory Line of Credit with a Credit Limit of more than $1,000,000, the rate will be the Prime Rate plus 2.75%; (iii) for each RTO Term Loan, the rate will be the same as the rate applicable to the Franchisee’s Inventory Line of Credit on the date of such RTO Term Loan; (iv) for each PayDay Line of Credit, the rate will be the Prime Rate plus 4.75%; and (v) for each PDL Term Loan, the rate will be the Prime Rate plus 4.75%. For purposes of this subparagraph, the term “ Prime Rate ” shall mean the “ Wall Street Prime Rate ” as announced and published and so designated in the Money Rates Section of the Wall Street Journal (Southwest Region), as such rates may change from time to time, ColorTyme hereby acknowledging that the “Wall Street Prime Rate” may not be the lowest rate offered by Bank to its customers. If such Prime Rate shall cease to be published or is published infrequently or sporadically, then the Prime Rate shall be determined by reference to another Prime Rate or similar lending rate index, generally accepted on a national basis, as selected by Bank in its sole and absolute discretion. Fluctuations in the Prime Rate shall become effective on the last business day of the calendar month during which such changes in the Prime Rate occur. Interest will be calculated on the basis of a 360-day year.

     2.3 Credit Limits . Upon approval of an application for financing submitted by or on behalf of a Franchisee pursuant to this Agreement, Bank shall establish a credit limit for such Franchisee in an amount agreed upon from time to time by Bank, ColorTyme and such Franchisee (the credit limit established for each Franchisee with respect to any credit facility extended to such Franchisee is referred to herein as a “ Credit Limit ”). The amount of any Credit Limit may be adjusted from time to time upon written agreement by Bank, ColorTyme and such Franchisee. It is contemplated that (i) the Credit Limit for PayDay Lines of Credit will not exceed $85,000, and (ii) the Credit Limit for PDL Term Loans will not exceed $15,000 (provided that exceptions to this general rule may be agreed to by ColorTyme and Bank from time to time in their sole and absolute discretion).

2.4 Advance Limits .

     (a)  Advance Limits for RTO Stores . Notwithstanding the amount of the Franchisee’s applicable Credit Limit(s), the total amount of credit available under a Franchisee’s Inventory Line of Credit and RTO Term Loan (collectively, the “ RTO Receivables ”) shall be limited to the product of the Franchisee’s Average Monthly Revenue multiplied by five (such advance limit established for each Franchisee is referred to herein as its “ RTO Advance Limit ”). For purposes of this Agreement, a Franchisee’s “ Average Monthly Revenue ” shall mean the average monthly total revenue (exclusive of sales tax and any fees or other income directly attributable to a PayDay Store) of the Franchisee from the sale, lease or rental of Inventory and other fees, calculated in accordance with generally accepted accounting principles applied on a consistent basis, for the three (3) calendar months preceding the most recent review of such Franchisee’s RTO Receivables. Notwithstanding anything in this section to the contrary, if the RTO Advance Limit established pursuant to this section would otherwise be an amount that is less than the then outstanding balance of such RTO Receivables (each such RTO Receivable is referred to herein as an “ Overline Receivable ”), the RTO Advance Limit for such Overline Receivable will be set at the then outstanding balance thereof, and such Overline Receivable will continue to be administered as provided herein, unless Bank and ColorTyme agree otherwise. The provisions of this section shall not apply to any RTO Receivable until the RTO Store for which the financing was provided under the RTO Receivable has been open for business for one (1) year.

     (b)  Notwithstanding the amount of the Franchisee’s applicable Credit Limit(s), the amount of credit available under a Franchisee’s PayDay Line of Credit shall be limited to the product of the Franchisee’s Applicable PDL Ratio (as defined below) multiplied by its PDL Balance at the end of the immediately preceding month (such advance limit established for such Franchisee is referred to herein as its “ PDL Advance Limit ”). For purposes of this Agreement, (i) a Franchisee’s “ Applicable PDL Ratio ” shall mean, as applicable, a percentage equal to, 100% during the first six-month period following the initial extension of credit under a PayDay Line of Credit, 90% during the second six-month period following the initial extension of credit under a PayDay Line of Credit, 80% during the third six-month period following the initial extension of credit under a PayDay Line of Credit, 70% during the fourth six-month period following the initial extension of credit under a Pay Day Line of Credit, 70% during the fifth six-month period following the initial extension of credit under a Pay Day Line of Credit, 70% during the sixth six-month period following the initial extension of credit under a Pay Day Line of Credit, and 50% at any time thereafter, provided, that Pay Day Lines of Credit shall mature and be fully due and payable thirty-six (36) months following the initial extension of credit thereunder (unless the maturity thereof is extended with the written consent of both Bank and ColorTyme), (ii) a Franchisee’s “ PDL Balance ” shall mean, as of any date of determination, the outstanding principal balance of all of its Eligible PayDay Loans (as defined below), plus the amount of fees incurred and payable

thereunder, and (iii) the term “ Eligible PayDay Loans ” means, with respect to a Franchisee, each payday loan owing by a borrower thereunder (each such borrower hereinafter referred to as a “ PayDay Borrower ”) to such Franchisee which meets the following requirements at the time it comes into existence and continues to meet the same until such payday loan is paid in full:

     (1) it is a valid, legally enforceable and unconditional obligation of such PayDay Borrower;

     (2) it is evidenced by credit documents subject to a security interest in favor of Bank and conspicuously stamped with a notation indicating such document