EX-10.3 AMENDED & RESTATED LOAN FACILITY AGREEMENT



 


Exhibit 10.3




Execution Version




AMENDED AND RESTATED LOAN FACILITY AGREEMENT

AND GUARANTY




by and among




AARON RENTS, INC.,




SUNTRUST BANK, as Servicer




and




EACH OF THE PARTICIPANTS PARTY HERETO




Dated as of May 23, 2008














 





Table of Contents




	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	1	 
	1.2. Accounting Terms and Determination
	 	 	24	 
	1.3 Other Definitional Terms
	 	 	25	 
	1.4 Exhibits and Schedules
	 	 	25	 
	 
	 	 	 	 
	ARTICLE II LOAN FACILITY
	 	 	25	 
	 
	 	 	 	 
	2.1 Establishment of Commitments; Terms of Loans
	 	 	25	 
	2.2 Conveyance of Participant’s Interest
	 	 	28	 
	2.3 Funding of Advances; Swing Line; Funding of Participant’s Interest in Loans
	 	 	29	 
	2.4 Commitment Fees
	 	 	31	 
	2.5 Interest on Funded Participant’s Interest
	 	 	31	 
	2.6 Default Interest
	 	 	32	 
	2.7 Voluntary Reduction of the Unutilized Commitment
	 	 	32	 
	2.8 Extension of Commitments
	 	 	32	 
	2.9 Wind-Down Events
	 	 	34	 
	2.10 Reserve Requirements; Change in Circumstances; Change in Lending Offices
	 	 	34	 
	2.11 Pro Rata Treatment
	 	 	36	 
	2.12 Payments
	 	 	36	 
	2.13 Sharing of Setoffs
	 	 	36	 
	 
	 	 	 	 
	ARTICLE III SERVICER’S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS
	 	 	37	 
	 
	 	 	 	 
	3.1 Servicer’s Obligations with Respect to Loans; Collateral; Non-Recourse
	 	 	37	 
	3.2 Application of Payments
	 	 	38	 
	3.3 Servicing Report and Borrower Status Report
	 	 	40	 
	 
	 	 	 	 
	ARTICLE IV LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND
	 	 	40	 
	 
	 	 	 	 
	4.1 Notice Of Loan Default
	 	 	40	 
	4.2. Waiver or Cure By The Sponsor of Covenant Defaults and Loan Payment Defaults
	 	 	40	 
	4.3. Obligations of Sponsor With Respect to Established Franchisee Loans
	 	 	41	 
	4.4. Rights during Response Period
	 	 	42	 
	4.5. Rights after Response Period and for Loan Defaults other than Loan Payment Defaults
	 	 	42	 
	 
	 	 	 	 
	5. REPRESENTATIONS AND WARRANTIES
	 	 	42	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES
	 	 	42	 
	 
	 	 	 	 
	5.1. Existence; Power
	 	 	43	 
	5.2. Organizational Power; Authorization
	 	 	43	 
	5.3. Governmental Approvals; No Conflicts
	 	 	43	 
	5.4. Financial Statements
	 	 	43	 
	5.5. Litigation and Environmental Matters
	 	 	44	 
	5.6. Compliance with Laws and Agreements
	 	 	44	 
	5.7. Investment Company Act, Etc.
	 	 	44	 
	5.8. Taxes
	 	 	44	 
	5.9. Reserved

	 	 	45	 
	
5.10. ERISA
	 	 	45	 
	5.11. Ownership of Property
	 	 	45	 
	5.12. Disclosure
	 	 	45	 
	5.13. Labor Relations
	 	 	45	 
	5.14. Subsidiaries
	 	 	46	 






(i)









 






	 	 	 	 	 
	5.15. Representations and Warranties with Respect to Specific Loans
	 	 	46	 
	5.17. Patriot Act
	 	 	47	 
	 
	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS
	 	 	47	 
	 
	 	 	 	 
	6.1. Financial Statements and Other Information
	 	 	47	 
	6.2. Notices of Material Events
	 	 	49	 
	6.3. Existence; Conduct of Business
	 	 	49	 
	6.4. Compliance with Laws, Etc.
	 	 	50	 
	6.5. Payment of Obligations
	 	 	50	 
	6.6. Books and Records
	 	 	50	 
	6.7. Visitation, Inspection, Etc.
	 	 	50	 
	6.8. Maintenance of Properties; Insurance
	 	 	50	 
	6.9. Use of Proceeds and Letters of Credit
	 	 	51	 
	6.10.  Additional Subsidiaries
	 	 	51	 
	 
	 	 	 	 
	ARTICLE VII FINANCIAL COVENANTS
	 	 	52	 
	 
	 	 	 	 
	7.1. Total Debt to EBITDA Ratio
	 	 	52	 
	7.2. Total Adjusted Debt to Total Adjusted Capital Ratio
	 	 	52	 
	7.3. Fixed Charge Coverage Ratio
	 	 	52	 
	7.4. Minimum Consolidated Net Worth
	 	 	52	 
	 
	 	 	 	 
	ARTICLE VIII NEGATIVE COVENANTS
	 	 	52	 
	 
	 	 	 	 
	8.1. Indebtedness
	 	 	53	 
	8.2. Negative Pledge
	 	 	54	 
	8.3. Fundamental Changes
	 	 	55	 
	8.4. Investments, Loans, Etc.
	 	 	56	 
	8.5. Restricted Payments
	 	 	57	 
	8.6. Sale of Assets
	 	 	57	 
	8.7. Transactions with Affiliates
	 	 	57	 
	8.8. Restrictive Agreements
	 	 	57	 
	8.9. Sale and Leaseback Transactions
	 	 	58	 
	8.10. Amendment to Material Documents
	 	 	58	 
	8.11. Accounting Changes
	 	 	58	 
	8.12. Activities of Aaron Rents Puerto Rico
	 	 	58	 
	 
	 	 	 	 
	ARTICLE IX CREDIT EVENTS AND REMEDIES
	 	 	59	 
	 
	 	 	 	 
	ARTICLE X GUARANTY
	 	 	62	 
	 
	 	 	 	 
	10.1 Unconditional Guaranty
	 	 	62	 
	10.3. Continuing Guaranty
	 	 	62	 
	10.4 Waivers

	 	 	62	 
	
10.5 Additional Actions
	 	 	63	 
	10.6 Additional Waivers
	 	 	63	 
	10.7 Postponement of Obligations
	 	 	64	 
	10.8 Effect on Additional Guaranties
	 	 	64	 
	10.9 Reliance on Guaranty and Purchase Obligation; Disclaimer of Liability
	 	 	64	 
	10.10 Reinstatement of Obligations
	 	 	65	 
	10.11 Right to Bring Separate Action
	 	 	65	 
	10.12 Subordination of Liens
	 	 	65	 
	10.13 Exercise of Remedies With Respect to Collateral
	 	 	66	 
	10.14 Rights Of Sponsor Upon Payment; Cooperation By Servicer
	 	 	67	 






(ii)









 






	 	 	 	 	 
	ARTICLE XI INDEMNIFICATION
	 	 	68	 
	 
	 	 	 	 
	11.1 Indemnification
	 	 	68	 
	11.2 Notice Of Proceedings; Right To Defend
	 	 	69	 
	11.3 Third Party Beneficiaries
	 	 	70	 
	 
	 	 	 	 
	ARTICLE XII SURVIVAL OF LOAN FACILITY
	 	 	70	 
	 
	 	 	 	 
	ARTICLE XIII CONDITIONS PRECEDENT
	 	 	70	 
	 
	 	 	 	 
	13.1 Receipt of Documents
	 	 	70	 
	13.2.  Effect of Amendment and Restatement
	 	 	72	 
	 
	 	 	 	 
	ARTICLE XIV THE SERVICER
	 	 	73	 
	 
	 	 	 	 
	14.1 Appointment of Servicer as Agent
	 	 	73	 
	14.2 Nature of Duties of Servicer
	 	 	73	 
	14.3 Lack of Reliance on the Servicer
	 	 	73	 
	14.4 Certain Rights of the Servicer
	 	 	74	 
	14.5 Reliance by Servicer
	 	 	74	 
	14.6 Indemnification of Servicer
	 	 	74	 
	14.7 The Servicer in its Individual Capacity
	 	 	74	 
	14.8 Holders of Participation Certificates
	 	 	75	 
	 
	 	 	 	 
	ARTICLE XV MISCELLANEOUS
	 	 	75	 
	 
	 	 	 	 
	15.1 Notices

	 	 	75	 
	
15.2 Amendments, Etc
	 	 	75	 
	15.3 No Waiver; Remedies Cumulative
	 	 	76	 
	15.4 Payment of Expenses, Etc.
	 	 	76	 
	15.5 Right of Setoff
	 	 	77	 
	15.6 Benefit of Agreement; Assignments; Participations
	 	 	77	 
	15.7 Governing Law; Submission to Jurisdiction
	 	 	79	 
	15.8 Counterparts
	 	 	79	 
	15.9 Severability
	 	 	79	 
	15.10 Independence of Covenants
	 	 	80	 
	15.11 No Joint Venture
	 	 	80	 
	15.12 Repurchase Right
	 	 	80	 
	15.13 Confidentiality
	 	 	80	 
	15.14 Headings Descriptive; Entire Agreement
	 	 	81	 






EXHIBITS




Exhibit A — Form of Assignment and Acceptance Agreement

Exhibit B — Form of Established Franchisee Loan Agreement

Exhibit C — Form of Guaranty Agreement

Exhibit D — Form of Participation Certificate

Exhibit E — Form of Startup Franchisee Loan Agreement

Exhibit F — Form of Monthly Servicing Report




(iii)









 





SCHEDULES




Schedule 1.1(a) — Pricing Grid

Schedule 1.1(b) —  Participant Commitments

Schedule 5.5(a) —  Litigation

Schedule 5.5(b) — Environmental Matters

Schedule 5.14  — Subsidiaries

Schedule 8.1 — Outstanding Indebtedness

Schedule 8.2 — Existing Liens

Schedule 8.4 – Existing Investments




(iv)









 





AMENDED AND RESTATED LOAN FACILITY AGREEMENT AND GUARANTY




     THIS AMENDED AND RESTATED LOAN FACILITY AGREEMENT AND GUARANTY (the “Agreement”) made as of
this 23rd day of May, 2008, by and among AARON RENTS, INC., a Georgia corporation having its
principal place of business and chief executive office at 1100 Aaron Building, 309 East Paces Ferry
Road, N.E., Atlanta, Georgia 30305 (“Sponsor”), SUNTRUST BANK (“SunTrust”) and each of the other
lending institutions listed on the signature pages hereto (SunTrust, such lenders, together with
any assignees thereof becoming “Participants” pursuant to the terms of this Agreement, the
“Participants”) and SUNTRUST BANK, a banking corporation organized and existing under the laws of
Georgia having its principal office in Atlanta, Georgia, as Servicer (in such capacity, the
“Servicer”).



W I T N E S S E T H:




     WHEREAS, the Sponsor, the Participants and the Servicer are parties to that certain Loan
Facility Agreement dated as of May 28, 2004, as amended or modified prior to the date hereof (the
"Existing Loan Facility Agreement”);



     WHEREAS, Sponsor has requested that the Servicer and Participants make certain modifications
to the Existing Loan Facility Agreement, which the Servicer and Participants are willing to do
subject to the terms and conditions hereof;



     WHEREAS, Sponsor is willing, subject to the limitations set forth herein, to repurchase such
loans upon the occurrence of certain events, all as more fully set forth below;



     THEREFORE, upon the terms and conditions hereinafter stated, and in consideration of the
mutual premises set forth above and other adequate consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties, intending to be legally bound, hereby agree the Existing
Loan Facility Agreement is amended and restated as follows:



ARTICLE I

DEFINITIONS




          Section 1.1. Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):




     “Aaron Rents Puerto Rico” shall mean Aaron Rents, Inc. Puerto Rico, a Puerto Rico corporation.



     “Aaron’s Proprietary System” shall mean the Sponsor’s proprietary point of sale software
system, as modified from time to time, used by the Sponsor and its franchisees.



 









 





     “Acquisition” means any transaction in which the Sponsor or any of its Subsidiaries directly
or indirectly (i) acquires any property with which an ongoing business is conducted or is to be
conducted, (ii) acquires all or substantially all of the assets of any Person or division thereof,
whether through a purchase of assets, merger or otherwise, (iii) acquires (in one transaction or as
the most recent transaction in a series of transactions) control of at least a majority of the
voting stock of a corporation, other than the acquisition of voting stock of a wholly-owned
Subsidiary solely in connection with the organization and capitalization of that Subsidiary by the
Sponsor or another Guarantor, or (iv) acquires control of more than 50% ownership interest in any
partnership, joint venture or limited liability company.



     “Adjusted LIBO Rate” shall mean, with respect to each Payment Period, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:




			
	                “Adjusted LIBO Rate” =	 	     LIBOR          

     1.00 - LIBOR Reserve Percentage




As used herein, LIBOR Reserve Percentage shall mean, for any Payment Period for any Funded
Participant’s Interest outstanding hereunder, the reserve percentage (expressed as a decimal) equal
to the then stated maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or
against any successor category of liabilities as defined in Regulation D).




     “Advance” shall mean a funding of a loan to a Borrower by the Servicer pursuant to such
Borrower’s Loan Commitment.



     Affiliate” shall mean, as to any Person, any other Person that directly, or indirectly through
one or more intermediaries, Controls, is Controlled by, or is under common Control with, such
Person. For purposes of this definition “Control” shall mean the power, directly or indirectly,
either to (i) vote 10% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct or cause the
direction of the management and policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. The terms “Controlling”, “Controlled by”, and “under common
Control with” have meanings correlative thereto.



     “Agreement” shall mean this Loan Facility Agreement and Guaranty, as amended, restated,
supplemented or modified from time to time.



     “Amortization Period” shall mean (x) 18 months with respect to any Advance to a Startup
Franchisee Borrower other than an Electronic Equipment Advance and (y) 24 months with respect to
any Electronic Equipment Advance; provided, however, in the event any Startup
Franchisee Loan Commitment to a Startup Franchisee Borrower is terminated upon 90 days’



 









 







notice from the Servicer, all amounts due and payable with respect to Electronic Equipment
Advances shall be due and payable in full no later than the 18-month anniversary of the termination
of the Startup Franchisee Loan Commitment.



     “Applicable Margin” shall mean, with respect to all Funded Participant’s Interest, as of any
date, the percentage per annum determined by reference to the applicable Total Debt to EBITDA Ratio
in effect on such date for Loans as set forth on Schedule 1.1(a) attached hereto; provided,
that a change in the Applicable Margin resulting from a change in the Total Debt to EBITDA Ratio
shall be effective on the second day after which the Sponsor has delivered the financial statements
required by Section 6.1(a) or (b) and the compliance certificate required by
Section 6.1(c); provided, further, that if at any time the Sponsor shall
have failed to deliver such financial statement and such certificate, the Applicable Margin shall
be at Level IV until such time as such financial statements and certificates are delivered, at
which time the Applicable Margin shall be determined as provided above. Notwithstanding the
foregoing, the Applicable Margin from the Effective Date until the financial statement and
compliance certificate for the fiscal quarter ending on June 30, 2008 are delivered shall be at
Level II.



     “Applicable Percentage” shall mean, with respect to the Commitment Fee, as of any date, the
percentage per annum determined by reference to the applicable Total Debt to EBITDA Ratio in effect
on such date as set forth on Schedule 1.1(a) attached hereto; provided, that a change in
the Applicable Percentage resulting from a change in the Total Debt to EBITDA Ratio shall be
effective on the second day after which the Sponsor has delivered the financial statements required
by Section 6.1(a) or (b) and the compliance certificate required by Section
6.1(c); provided, further, that if at any time the Sponsor shall have failed to
deliver such financial statement and such certificate, the Applicable Percentage shall be at Level
IV until such time as such financial statements and certificates are delivered, at which time the
Applicable Percentage shall be determined as provided above. Notwithstanding the foregoing, the
Applicable Percentage from the Effective Date until the financial statement and compliance
certificate for the fiscal quarter ending on June 30, 2008 are delivered shall be at Level II.



     “Asset Disposition” shall mean (i) all sales of Merchandise; (ii) all Rental/Purchase
Contracts with respect to Merchandise with a “same as cash option” regardless of term (i.e., 90,
120, 180 days); (iii) all Merchandise which is determined to have been stolen; (iv) all Merchandise
that is destroyed, lost or otherwise removed from the premises of a Borrower other than pursuant to
a Rental/Purchase Contract or by outright sale or for repair work; and (v) all “skipped”
Merchandise which is Merchandise subject to a Rental/Purchase Contract.



     “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a
Participant and an Eligible Assignee in accordance with the terms of this Agreement and
substantially in the form of Exhibit A.



 









 





     “Authorized Signatory” shall mean each officer of Sponsor specified from time to time in an
appropriate certificate to the Servicer as authorized to execute Funding Approval Notices and other
such documents relating to the Loan Documents.



     “Bankruptcy Code” shall mean The Bankruptcy Code of 1978, as amended and in effect from time
to time (11 U.S.C. §101 et seq.).



     “Borrower” shall mean either an Established Franchisee Borrower or a Startup Franchisee
Borrower, as the case may be.



     “Borrower Group” shall mean, for any Borrower, collectively, such Borrower and each other
Person directly or indirectly controlling, controlled by, or under common control with, such
Borrower, whether through the ownership of voting securities, by contract or otherwise. For
purposes of this definition, “control” of any person or entity means the possession, directly or
indirectly, of the right to vote at least 25% of the issued and outstanding shares of voting
securities policies of that person or entity.



     “Borrower Rate” shall mean, with respect to each Loan, the Prime Rate per annum plus any
additional margin per annum specified for such Loan by Sponsor in the applicable Funding Approval
Notice, such margin not to exceed ten percent (10.0%) per annum calculated based upon the actual
number of days elapsed in a 360 day year; provided that, at no time may there be more than two
different Borrower Rates applicable to the Startup Franchisee Loans or more than two different
Borrower Rates applicable to the Established Franchisee Loans.



     “Business Day” shall mean (i) any day other than a Saturday, Sunday or other day on which
commercial banks in Atlanta, Georgia are authorized or required by law to close and (ii) if such
day relates to Adjusted LIBOR, any day on which dealings in Dollars are carried on in the London
interbank market.



     “Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay
rent or other amounts under any lease (or other arrangement conveying the right to use) real or
personal 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 the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.



     “Change in Control” shall mean the occurrence of one or more of the following events: (a) any
sale, lease, exchange or other transfer (in a single transaction or a series of related
transactions) of all or substantially all of the assets of the Sponsor to any Person or “group”
(within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder in effect on the date hereof), (b) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof) other than the Loudermilk Family of 331/3 %
or more



 









 







of the total voting power of shares of stock entitiled to vote in the election of directors of
the Sponsor; or (c) occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Sponsor by Persons who were neither (i) nominated by the current board of
directors or (ii) appointed by directors so nominated.



     “Closing Date” shall mean, for any Loan, the date upon which the Loan Documents with respect
to such Loan are executed and delivered and the Loan Commitment is established thereunder.



     “Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to
time.



     “Collateral” shall mean, with respect to any Loan, all property of the Borrower and all
guarantors obligated with respect to such Loan that secures such Loan, which property shall be
designated by the Sponsor and may include all accounts receivable, inventory, Rental/Purchase
Contracts and other business assets of such Borrower and guarantors.



     “Collateral Agreement” shall mean an agreement executed by a Borrower and any other Persons
primarily or secondarily liable for all or part of the Loan or granting a security interest to the
Servicer in specified Collateral as security for such Loan, including without limitation, any Loan
Agreements and any Personal Guaranties.



     “Commitments” shall mean, collectively, the Startup Franchisee Commitment and the Established
Franchisee Commitment.



     “Commitment Fee” shall have the meaning set forth in Section 2.4.



     “Commitment Termination Date” shall have the meaning set forth in Section 2.1(a).



     “Consolidated Companies” shall mean, collectively, Sponsor and all of its Subsidiaries.



     “Consolidated EBITDA” shall mean, for the Sponsor and its Subsidiaries for any period, an
amount equal to the sum of (a) Consolidated Net Income for such period plus (b) to the extent
deducted in determining Consolidated Net Income for such period, (i) Consolidated Interest Expense,
(ii) income tax expense, (iii) depreciation (excluding depreciation of rental merchandise) and
amortization and (iv) all other non-cash charges, determined on a consolidated basis in accordance
with GAAP in each case for such period.



     “Consolidated EBITDAR” shall mean, for the Sponsor and its Subsidiaries for any period, an
amount equal to the sum of (a) Consolidated EBITDA and (b) Consolidated Lease Expense.



 









 





     “Consolidated Fixed Charges” shall mean, for the Sponsor and its Subsidiaries for any period,
the sum (without duplication) of (a) Consolidated Interest Expense paid or payable for such period
and (b) Consolidated Lease Expense paid or payable for such period.



     “Consolidated Interest Expense” shall mean, for the Sponsor and its Subsidiaries for any
period determined on a consolidated basis in accordance with GAAP, total cash interest expense,
including without limitation the interest component of any payments in respect of Capital Leases
Obligations capitalized or expensed during such period (whether or not actually paid during such
period).



     “Consolidated Lease Expense” shall mean, for any period, the aggregate amount of fixed and
contingent rentals payable by the Sponsor and its Subsidiaries with respect to leases of real and
personal property (excluding Capital Lease Obligations) determined on a consolidated basis in
accordance with GAAP for such period.



     “Consolidated Net Income” shall mean, for any period, the net income (or loss) of the Sponsor
and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP,
but excluding therefrom (to the extent otherwise included therein) (i) any extraordinary gains or
losses, (ii) any gains attributable to write-ups of assets and (iii) any equity interest of the
Sponsor or any Subsidiary of the Sponsor in the unremitted earnings of any Person that is not a
Subsidiary and (iv) any income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Sponsor or any Subsidiary on the date that
such Person’s assets are acquired by the sponsor or any Subsidiary.



     “Consolidated Net Worth” shall mean, as of any date of determination, the Sponsor’s total
shareholders’ equity, determined in accordance with GAAP.



     “Consolidated Total Adjusted Capital” shall mean, as of any date of determination with respect
to the Sponsor, the sum of (i) Consolidated Total Adjusted Debt as of such date and (ii)
Consolidated Net Worth as of such date.



     “Consolidated Total Adjusted Debt” shall mean, as of any date of determination, (i)
Consolidated Total Debt, plus (ii) to the extent not included in clause (i), all operating lease
obligations of Sponsor and its Subsidiaries measured at the present value of such obligations
(using a 10% discount rate).



     “Consolidated Total Debt” shall mean, at any time, all then currently outstanding obligations,
liabilities and indebtedness of the Sponsor and its subsidiaries on a consolidated basis of the
types described in the definition of Indebtedness.



     “Credit Event” shall have the meaning set forth in Article IX of this Agreement.



     “Credit Parties” shall mean, collectively, each of the Sponsor and the Guarantors.



 









 





     “Default Waiver Letter” shall mean a waiver letter sent by Sponsor to the Servicer which such
waiver letter shall (i) waive and cure a Loan Payment Default or (ii) waive a covenant default with
respect to a Loan that does not constitute a Loan Default, such waiver letter to be substantially
in the form required in the Servicing Agreement.



     “Defaulted Borrower” shall mean a Borrower under a Defaulted Loan.



     “Defaulted Loan” shall mean a Loan evidenced by Loan Documents under the terms of which exist
one or more Loan Defaults that have not been cured or waived as permitted herein.



     “Dollar” and “U.S. Dollar” and the sign “$” shall mean lawful money of the United
States of America.



     “Domestic Subsidiary” means any Subsidiary that is incorporated or organized under the laws of
any State of the United States, the District of Columbia or Puerto Rico.



     “Effective Date” shall mean the date upon which all conditions precedent to the effectiveness
of this Agreement have been satisfied.



     “Electronic Equipment” shall mean all computers, computer equipment, big screen televisions
and any other types of inventory designated by the Sponsor from time to time.



     “Electronic Equipment Advances” shall mean all advances under Startup Franchisee Loan
Commitments made to purchase Electronic Equipment for which the Sponsor and the Startup Franchisee
Borrower have agreed that the Amortization Period shall be 24 months.



     “Electronic Equipment Asset Dispositions” shall mean all Asset Dispositions of Electronic
Equipment for which the Sponsor and the Startup Franchisee Borrower have agreed that the
Amortization Period shall be 24 months.



     “Electronic Rental Revenue” shall mean, with respect to any Borrower for any period, the gross
revenues of such Borrower from rentals to the public of such Borrower’s Electronic Equipment,
including without limitation, all customer deposits, advance rental payments, waiver fees, late
fees, delivery fees, nonsufficient funds fees, reinstatement fees, but excluding all retail sales
proceeds and sales taxes.



     “Eligible Assignee” shall mean (i) a commercial bank organized under the laws of the United
States or any state thereof having total assets in excess of $1,000,000,000.00 or any commercial
finance or asset-based lending Affiliate of any such commercial bank and (ii) any Participant.



     “Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment,



 









 







preservation or reclamation of natural resources, the management, Release or threatened
Release of any Hazardous Material or to health and safety matters.



     “Environmental Liability” shall mean any liability, contingent or otherwise (including any
liability for damages, costs of environmental investigation and remediation, costs of
administrative oversight, fines, natural resource damages, penalties or indemnities), of the
Sponsor or any Subsidiary directly or indirectly resulting from or based upon (a) any actual or
alleged violation of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to
any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e)
any contract, agreement or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any successor statute.



     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated), which,
together with the Sponsor, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for the purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.



     “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Sponsor or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Sponsor or any ERISA Affiliate from the PBGC or a
plan administrator appointed by the PBGC of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Sponsor or
any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Sponsor or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Sponsor or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of
ERISA.



     “Established Franchisee” shall mean a Franchisee that (x) has been a Franchisee for at least
18 months; (y) has had at least two Aaron Rents’ stores open for a minimum of 12 months; and (z)
has at least four Aaron Rents’ stores open or under executed area development agreements.



 









 





     “Established Franchisee Borrower” shall mean an Established Franchisee who is primarily liable
for repayment of an Established Franchisee Loan as a result of having executed Loan Documents as
maker, or its permitted assignee.



     “Established Franchisee Borrowing Base” shall mean, with respect to each Established
Franchisee Borrower, on any date of determination, the sum of:




     (i) $300,000 for each Aaron Rents franchisee store operated by such Borrower where less
than 7 calendar months have elapsed since the Opening Date of such store, plus




     (ii) an amount equal to 5.5 multiplied by the sum of (x) the Rental Revenue from the
most recently ended calendar month for all Aaron Rents franchisee stores operated by such
Borrower where at least 6 calendar months but less than 12 calendar months have elapsed
since the Opening Date of each such store, plus (y) the average monthly Rental Revenue for
the three most recently ended calendar months from all Aaron Rents franchisee stores
operated by such Borrower where at least 12 calendar months have elapsed since the Opening
Date of each such store, in each case as reported to Servicer by Sponsor pursuant to the
Servicing Agreement, plus




     (iii) an amount equal to 11.0 multiplied by the sum of (x) the Electronic Rental
Revenues from the most recently ended calendar month for all franchisee stores operated by
such Borrower where at least 6 calendar months but less than 12 calendar months have elapsed
since the Opening Date of each such store, plus (y) the average monthly Electronic Rental
Revenues for the three most recently ended calendar months from all Aaron Rents franchisee
stores operated by such Borrower where at least 12 calendar months have elapsed since the
Opening Date of such store, in each case as reported to Servicer by Sponsor pursuant to the
Servicing Agreement.



     “Established Franchisee Commitment” shall have the meaning set forth in Section 2.1(b).



     “Established Franchisee Line of Credit Commitment” shall mean a commitment to make Established
Franchisee Line of Credit Loans to an Established Franchisee Borrower pursuant to an Established
Franchisee Loan Agreement.



     “Established Franchisee Line of Credit Loans” shall mean Advances made to an Established
Franchisee Borrower pursuant to an Established Franchisee Line of Credit Commitment.



     “Established Franchisee Loan” shall mean either an Established Franchisee Term Loan or an
Established Franchisee Line of Credit Loan, as the case may be.



 









 





     “Established Franchisee Loan Agreement” shall mean a Loan and Security Agreement setting forth
the terms and conditions, as between an Established Franchisee Borrower and the Servicer, under
which the Servicer has established a Loan Commitment to make Advances to such Established
Franchisee Borrower pursuant to the Established Franchisee Loan Commitment, substantially in the
form of Exhibit B, with such changes as the Sponsor and the Servicer shall agree to;
provided, however, that any Established Franchisee Loan Agreement executed prior to the Effective
Date shall be substantially in the form required under the Existing Facility Agreement.



     “Established Franchisee Loan Commitment” shall mean, either, an Established Franchisee Line of
Credit Commitment or an Established Franchisee Term Loan Commitment, as the case may be.



     “Established Franchisee Master Line of Credit Note” shall mean that certain Master Line of
Credit Note, executed by an Established Franchisee Borrower in favor of the Servicer, evidencing
such Established Franchisee Borrower’s obligation to repay all Established Franchisee Line of
Credit Loans made to it pursuant to an Established Franchisee Line of Credit Commitment,
substantially in the form of Exhibit A-1 to the Established Franchisee Loan Agreement, with such
changes as the Sponsor and the Servicer shall agree to from time to time.



     “Established Franchisee Master Note” shall mean collectively, the Established Franchisee
Master Term Notes and the Established Franchisee Master Line of Credit Notes; provided that
any Established Franchisee Master Note executed prior to the Effective Date shall be substantially
in the form required under the Existing Loan Facility Agreement.



     “Established Franchisee Master Term Note” shall mean that certain Master Term Note, executed
by an Established Franchisee Borrower in favor of the Servicer, evidencing such Established
Franchisee Borrower’s obligation to repay all Established Franchisee Term Loans made to it pursuant
to an Established Franchisee Term Loan Commitment, substantially in the form of Exhibit A-2 to the
Established Franchisee Loan Agreement, with such changes as the Sponsor and the Servicer shall
agree to from time to time.



     “Established Franchisee Term Loan Commitment” shall mean a commitment to make Established
Franchisee Term Loans to an Established Franchisee Borrower pursuant to an Established Franchisee
Loan Agreement.



     “Established Franchisee Term Loans” shall mean Advances made to an Established Franchisee
Borrower pursuant to an Established Franchisee Term Loan Commitment.



     “Existing Commitments” means any of the commitments to make loans made by the Servicer
pursuant to the Existing Loan Facility Agreement as in effect from time to time.



     “Existing Loan Facility Agreement” shall have the meaning set forth in the recitals hereof.



 









 





     “Existing Loan” means any of the loans made by the Servicer pursuant to the Existing Loan
Facility Agreement as in effect from time to time.



     “Existing Note” means any of the promissory notes from the Borrowers to the Servicer
substantially in the form attached to the Existing Loan Facility Agreement as in effect from time
to time.



     “Facility” shall mean either the loan facility established pursuant to the Startup Franchisee
Commitment or the loan facility established pursuant to the Established Franchisee Commitment, as
the case may be.



     “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if
necessary, to the next 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal Reserve System arranged by
Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding
Business Day or if such rate is not so published for any Business Day, the Federal Funds Rate for
such day shall be the average rounded upwards, if necessary, to the next 1/100th of 1% of the
quotations for such day on such transactions received by the Servicer from three Federal funds
brokers of recognized standing selected by the Servicer.



     “Fee Letter” shall mean that certain letter agreement dated as of even date herewith, by and
between the Sponsor and the Servicer, setting forth certain fees applicable to the loan facility
described herein, either as originally executed or as hereafter amended or modified.



     “Final Termination Date” shall mean the date that is ninety (90) days after the last Maturity
Date of the Loans.



     “Financing Statement” shall mean, with respect to a Loan, a document that among other things,
describes the Sponsor and the Collateral, the proper filing of which perfects a security interest
in the Collateral described therein under the laws of the state in which such document is filed.



     “Fiscal Year” shall mean a fiscal year of the Sponsor; references to a Fiscal Year with a
number corresponding to any calendar year (e.g., the “Fiscal Year 2008”) refers to the
Fiscal Year ending during such calendar year.



     “Fixed Charge Coverage Ratio” shall mean, at any date, the ratio of (a) Consolidated EBITDAR
for the four consecutive fiscal quarters of the Sponsor ending on such date to (b) Consolidated
Fixed Charges for the four consecutive fiscal quarters of the Sponsor ending on such date.



     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.



 









 





     “Franchise Agreement” shall mean the written agreement between Sponsor and a Franchisee
whereby the Franchisee is authorized to establish an “Aaron’s Rental Purchase” franchise.



     “Franchisee” shall mean those certain rental store operators across the United States that own
and operate rental stores under the “Aaron’s Sale and Lease Ownership” franchise.



     “Franchisee Loan Program” shall mean the transaction evidenced by (i) this Agreement wherein
the Sponsor has guaranteed, to the extent set forth herein, certain obligations of Franchisees of
the Sponsor, and (ii) the other Operative Documents executed in connection herewith and therewith.



     “Funded Participant’s Interest” shall mean, with respect to any Participant, the aggregate
outstanding amount of Advances made by a Participant hereunder with respect to the Startup
Franchisee Loans and the Established Franchisee Loans, and shall include, with respect to SunTrust,
the aggregate outstanding amount of Swing Line Advances made with respect to Startup Franchisee
Loans and Established Franchisee Loans.



     “Funding Approval Notice” shall mean a written notice to the Servicer from Sponsor setting
forth the conditions of a proposed Loan Commitment, consistent with the requirements therefor as
set forth in this Agreement, and containing such information and in substantially such form as
shall be agreed to by Servicer and Sponsor pursuant to the Servicing Agreement.



     “GAAP” shall mean generally accepted accounting principles in the United States applied on a
consistent basis and subject to the terms of Section 1.2.



     “Governmental Authority” shall mean the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.



     “Guarantee” of or by any Person (the “guarantor”) shall mean any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly and including any obligation, direct or indirect, of the guarantor (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or letter of guaranty
issued in support of such Indebtedness or obligation; provided, that the term



 









 





“Guarantee” shall not include endorsements for collection or deposits in the ordinary course
of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which Guarantee is made or, if not so
stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such Person in good faith. The term
“Guarantee” used as a verb has a corresponding meaning.



     “Guaranteed Obligations” shall mean the aggregate amount of all Loan Indebtedness of all
Borrowers outstanding under all Loan Documents to include, without limitation (i) all principal,
interest and commitment fees due with respect to all Loans, including post-petition interest in any
proceeding under federal bankruptcy laws, (ii) all fees, expenses, and amounts payable by all
Borrowers for reimbursement or indemnification under the terms of all Loan Agreements and all other
Loan Documents executed in connection with the Loan to such Borrower, (iii) all amounts advanced by
Servicer to protect or preserve the value of any security for the Loans, and (iv) all renewals,
extensions, modifications, and refinancings (in whole or in part) of any of the amounts referred to
in clauses (i) and (ii) above).



     “Guarantors” shall mean, collectively, Aaron Investment Company and all other subsidiaries of
the Sponsor that from time to time become parties to the Guaranty Agreement and their respective
successors and permitted assigns.



     “Guaranty Agreement” shall mean the Guaranty Agreement executed by each of the Subsidiaries of
the Sponsor in favor of the Servicer and the Participants, substantially in the form of
Exhibit C, as the same may be amended, restated, supplemented or otherwise modified from
time to time



     “Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



     “Indebtedness” of any Person shall mean, without duplication (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in respect of the deferred
purchase price of property or services (other than trade payables incurred in the ordinary course
of business; provided, that for purposes of Section 9.6, trade payables overdue by
more than 120 days shall be included in this definition except to the extent that any of such trade
payables are being disputed in good faith and by appropriate measures), (iv) all obligations of
such Person under any conditional sale or other title retention agreement(s) relating to property
acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi) all obligations,
contingent or otherwise, of such Person in respect of letters of credit, acceptances or similar
extensions of credit, (vii) all Guarantees of such Person of the type of Indebtedness described in
clauses (i) through (vi) above, (viii) all Indebtedness of a third party secured by any Lien on
property



 









 







owned by such Person, whether or not such Indebtedness has been assumed by such Person, (ix)
all obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any common stock of such Person, and (x) Off-Balance Sheet Liabilities. The
Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, except to the extent that the terms of
such Indebtedness provide that such Person is not liable therefor.



     “Indemnity and Contribution Agreement” shall mean the Indemnity, Subrogation and Contribution
Agreement, substantially in the form of Exhibit H, among the Sponsor, the Guarantors and
the Servicer, as amended, restated, supplemented or otherwise modified from time to time.



     “LIBOR” shall mean, for any Payment Period the offered rate for deposits in U.S. Dollars, for
a period of one month and in an amount comparable to the aggregate outstanding Funded Participant’s
Interests as of the first day of such Payment Period, appearing on the display designated on
Reuters Screen LIBOR01 Page (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London, England time) on the day that is two
Business Days prior to the first day of the Interest Period; provided, that if the Servicer
determines that the relevant foregoing sources are unavailable for the relevant Payment Period,
LIBOR shall mean the rate of interest determined by the Servicer to be the average (rounded upward,
if necessary, to the nearest 1/100th of 1%) of the rates per annum at which deposits in
Dollars are offered to the Servicer two (2) Business Days preceding the first day of such Interest
Period by leading banks in the London interbank market as of 10:00 a.m. for delivery on the first
day of such Payment Period, for the number of days comprised therein and in an amount comparable to
the amount of the Funded Participant’s Interest of the Servicer.



     “Lien” shall mean any mortgage, pledge, security interest, lien (statutory or otherwise),
charge, encumbrance, hypothecation, assignment, deposit arrangement, or other arrangement having
the practical effect of the foregoing 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 the same economic effect as any of the
foregoing). A covenant not to grant a Lien or a “Negative Pledge” shall not be determined a Lien
for purposes of this Agreement.



     “Loan” shall mean either a Startup Franchisee Loan, an Established Franchisee Loan or an
Existing Loan, as the case may be.



     “Loan Agreement” shall mean either a Startup Franchisee Loan Agreement or an Established
Franchisee Loan Agreement as the case may be.



     “Loan Commitment” shall mean the commitment to make Advances established by the Servicer in
favor of any Borrower in the amount not exceeding, and upon the terms described in, the applicable
Funding Approval Notice and the applicable Loan Documents, which Loan



 









 







Commitment may be either a Startup Franchisee Loan Commitment or an Established Franchisee
Loan Commitment.



     “Loan Default” shall mean the occurrence of one or more of the following events with respect
to any Loan: (i) a Loan Payment Default, (ii) the bankruptcy or insolvency of the Borrower or any
Guarantor of such Loan, or the appointment of a receiver, trustee, custodian or similar fiduciary
for such Borrower or Guarantor, or the assignment for the benefit of creditors by such Borrower or
Guarantor, or the offering of settlement or composition to the unsecured creditors of such Borrower
or Guarantor generally or (iii) the termination of (or failure to renew) the Franchise Agreement to
which the Borrower of such Loan is a party.



     “Loan Documents” shall mean, with respect to any Loan, the Loan Agreement, the Master Note,
any Personal Guaranty, any Spousal Consent, the Collateral Agreements, in each case relating to
such Loan, any other documents relating to such Loan delivered by any Borrower or any guarantor or
surety thereof to the Servicer and any amendments thereto (provided that such amendments are made
with the consent of Sponsor, where such consent is required under this Agreement).



     “Loan Indebtedness” shall mean all amounts due and payable by a Borrower under the terms of
the Loan Documents governing the Loan to such Borrower, including, without limitation, outstanding
principal, accrued interest, any commitment fees, and all reasonable costs and expenses of any
legal proceeding brought by the Servicer to collect any of the foregoing (including without
limitation, reasonable attorneys’ fees actually incurred).



     “Loan Payment Default” shall mean the failure of a Borrower to make a payment of principal,
accrued interest thereon or any other amounts, within the cure period following the due date
therefor, as provided under the applicable Loan Documents.



     “Loan Term” shall mean, with respect to any Loan, the prescribed term of the Loan Commitment
relating to such Loan, as documented in the applicable Loan Documents, and any term-out period
thereafter; provided, however, that the Loan Term shall not exceed (x) in the case
of any Startup Franchisee Loan Commitment, one (1) year subject to extension in accordance with the
terms of the applicable Startup Franchisee Loan Agreement, plus, in the event that the Startup
Franchisee Loan Commitment is terminated upon ninety (90) days’ prior notice from the Servicer, the
Amortization Period and (y) in the case of an Established Franchisee Loan Commitment, four (4)
years.



     “Loudermilk Family” shall mean, collectively, Robert Charles Loudermilk, Sr., his spouse, his
children, his grandchildren and any trust which may be now or hereafter established for the sole
benefit of any of the foregoing persons.



     “Margin Regulations” shall mean Regulation T, Regulation U and Regulation X of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time to time.



 









 





     “Master Note” shall mean either a Startup Franchisee Master Note or an Established Franchisee
Master Note, as the case may be.



     “Material Adverse Effect” shall mean, with respect to any event, act, condition or occurrence
of whatever nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singularly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or occurrences whether or not
related, a material adverse change in, or a material adverse effect on, (i) the business, results
of operations, financial condition, assets, liabilities or prospects of the Sponsor and its
Subsidiaries taken as a whole, (ii) the ability of Sponsor or the Credit Parties taken as a whole
to perform any of their respective obligations under the Operative Documents (iii) the rights and
remedies of the Servicer and the Participants under any of the Operative Documents or (iv) the
legality, validity or enforceability of any of the Operative Documents.



     “Material Indebtedness” shall mean Indebtedness of any one or more of the Sponsor and the
Subsidiaries in an aggregate principal amount exceeding $5,000,000.



     “Maturity Date” shall mean, with respect to any Loan, the date set forth under the applicable
Loan Documents when the related Loan Commitment has terminated and all principal and interest with
respect to such Loan shall become due and payable in full; provided that, each Maturity
Date shall be a Payment Date.



     “Maximum Commitment Amount” shall mean $125,000,000, as such amount may be reduced pursuant to
Section 2.7, Section 2.8 or Section 15.2.



     “Merchandise” shall mean goods distributed or sold to Franchisees through Sponsor.



     “Minimum Purchase Price” shall mean, with respect to any Established Franchisee Loan, the
lesser of (x) the outstanding Loan Indebtedness thereof and (y) the sum of (i) the Established
Franchisee Borrowing Base in effect on the date of the occurrence of the relevant Loan Default, or
if greater, during the last full calendar month preceding the date of the occurrence of the
relevant Loan Default, plus (ii) all advances made between the date that such Established
Franchisee Borrowing Base is reported to the Servicer by the Sponsor and the date which is two
Business Days thereafter.



     “Monthly Servicing Report” shall have the meaning set forth in Section 3.3.



     “Moody’s” shall mean Moody’s Investors Service, Inc.



     “Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.



     “Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by such Person,



 









 







other than indemnity obligations for any breach of any representation or warranty which are
customary in non-recourse sales of such assets, (ii) any liability of such Person under any sale
and leaseback transactions which do not create a liability on the balance sheet of such Person,
(iii) any liability of such Person under any so-called “synthetic” lease transaction or (iv) any
obligation arising with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the balance sheet of such
Person.



     “Opening Date” shall mean, with respect to each store location, the date determined by the
Sponsor to be the opening date of such location in accordance with its standard practice, as
notified to the Servicer in accordance with the terms hereof.



     “Operative Documents” shall mean this Agreement, the Guaranty Agreement, the Indemnity,
Subrogation and Contribution Agreement, the Servicing Agreement, the Fee Letter and any other
documents delivered by Sponsor or any Guarantor to the Servicer or the Participants in connection
herewith or therewith.



     “Participant” shall mean SunTrust, the other lending institutions listed on the signature
pages hereof and each assignee thereof, if any, pursuant to the terms hereof.



     “Participating Commitment” shall mean the commitment of each Participant to fund its Pro Rata
Share of outstanding Loans in an amount not to exceed such Participant’s Participating Commitment
Amount.



     “Participating Commitment Amount” shall mean the amount set forth opposite each Participant’s
name on Schedule 1.1(b) attached hereto, as such amount may be modified by assignment
pursuant to the terms hereof; provided, that, following the termination of the Commitments,
each Participant’s Participating Commitment Amount shall be deemed to be its Pro Rata Share of the
aggregate principal amount of all Loan Commitments.



     “Participant Funding” shall mean a funding by the Participants of their respective Pro Rata
Shares of Advances or Loans outstanding under either or both Facilities.



     “Participant’s Interest” shall have the meaning set forth in Section 2.2.



     “Participant’s Unused Commitment” shall mean, with respect to any Participant, the difference
between such Participant’s Participating Commitment Amount and such Participant’s Funded
Participant’s Interest.



     “Participation Certificate” shall mean a certificate issued by the Servicer to a Participant,
substantially in the form of Exhibit D attached hereto, evidencing such Participant’s
ownership interest conveyed hereunder.



     “Payment Date” shall mean the last day of each calendar month; provided,
however, if



 









 





such day is not a Business Day, the next succeeding Business Day




     “Payment Period” shall mean a period of one (1) month; provided that (i) the
first day of a Payment Period must be a Business Day, (ii) any Payment Period that would otherwise
end on a day that is not a Business Day shall be extended to the next succeeding Business Day,
(iii) the first Payment Period hereunder shall commence on the date hereof and shall end on the
last day of the next succeeding calendar month and (iv) the first day of any succeeding Payment
Period shall be the last day of the preceding Payment Period and shall end on the last day of the
next succeeding calendar month.



     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA,
and any successor entity performing similar functions.



     “Permitted Acquisition” shall mean any Acquisition so long as (a) immediately before and after
giving effect to such Acquisition, no Credit Event is in existence, (b) such Acquisition has been
approved by the board of directors of the Person being acquired prior to any public announcement
thereof, (c) the total consideration (including all cash, debt, stock and other property, and
assumption of obligations for borrowed money) of any single Acquisition or series of related
Acquisitions does not exceed $75,000,000, (d) the total consideration (including all cash, debt,
stock and other property, and assumption of obligations for borrowed money) of all Acquisitions
during any fiscal year does not exceed $150,000,000 and (e) immediately after giving effect to such
Acquisition, the Sponsor and its Subsidiaries will not be engaged in any business other than
businesses of the type conducted by the Sponsor and its Subsidiaries on the Closing Date and
businesses reasonably related thereto. As used herein, Acquisitions will be considered related
Acquisitions if the sellers under such Acquisitions are the same Person or any Affiliate thereof.



     “Permitted Encumbrances” shall mean




     (i) Liens imposed by law for taxes not yet due or which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;




     (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being maintained in accordance with GAAP;




     (iii) pledges and deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other social security laws or regulations;



 









 






     (iv) deposits to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;




     (v) judgment and attachment liens not giving rise to a Credit Event or Liens created
by or existing from any litigation or legal proceeding that are currently being contested in
good faith by appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and




     (vi) easements, zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the affected property
or materially interfere with the ordinary conduct of business of the Sponsor and its
Subsidiaries taken as a whole;




     (vii) other Liens incidental to the conduct of its business or the ownership of its
property and assets which were not incurred in connection with the borrowing of money or the
obtaining of advances or credit, and which do not in the aggregate materially detract from
the value of its property or assets or materially impair the use thereof in the operation of
its business; and




     (viii) Liens on insurance policies owned by the Sponsor on the lives of its officers
securing policy loans obtained from the insurers under such policies, provided that (A) the
aggregate amount borrowed on each policy shall not exceed the loan value thereof, and (B)
the Sponsor shall not incur any liability to repay any such loan;




provided, that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.




“Permitted Investments” shall mean:




     (i) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the United States), in each case
maturing within one year from the date of acquisition thereof;




     (ii) commercial paper having an A or better rating, at the time of acquisition thereof,
of S&P or Moody’s and in either case maturing within one year from the date of acquisition
thereof;




     (iii) certificates of deposit, bankers’ acceptances and time deposits maturing within
one year of the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States or any state thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;



 









 






     (iv) fully collateralized repurchase agreements with a term of not more than 30 days
for securities described in clause (i) above and entered into with a financial institution
satisfying the criteria described in clause (iii) above; and




     (v) mutual funds investing solely in any one or more of the Permitted Investments
described in clauses (i) through (iv) above.



     “Person” shall mean any individual, partnership, firm, corporation, association, joint
venture, limited liability company, trust or other entity, or any Governmental Authority.



     “Personal Guaranty” shall mean any guaranty from a principal of a Borrower substantially in
the form required by the Servicing Agreement.



     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to
the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Sponsor or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.



     “Prime Rate” shall mean the per annum rate of interest designated from time to time by
SunTrust to be its prime rate. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate of interest that is being offered by SunTrust to its borrowers.



     “Pro Rata Share” shall mean, with respect to each of the Participants at any time, the
percentage determined by dividing such Participant’s Participating Commitment at such time by the
total principal amount of all Participating Commitments at such time.



     “Quarterly Date” shall have the meaning set forth in Section 2.4.



     “RBC Loan Facility Agreement” shall mean the credit facility agreement among the Sponsor,
Royal Bank of Canada and any other parties thereto dated on or about the date hereof, whereby the
Sponsor and any Subsidiary may, among other things, guarantee loans made to Canadian franchise
operators and owners of the Sponsor pursuant to the terms thereof as amended, restated,
supplemented, replaced, refinanced or otherwise modified from time to time.



     “Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time.



     “Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit,
disposal, discharge, dispersal, leaching or migration into the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or within any building, structure,
facility or fixture.



 









 





     “Rental/Purchase Contract” shall mean a contract between a Franchisee and a customer to rent
Merchandise in the form approved by the Sponsor (and which may included purchase options).



     “Rental Revenue” shall mean, with respect to any Borrower for any period, the gross revenues
of such Borrower from rentals to the public of such Borrower’s furniture inventory and rental
equipment, including without limitation, all customer deposits, advance rental payments, waiver
fees, late fees, delivery fees, nonsufficient funds fees, reinstatement fees, but excluding all
Electronic Rental Revenues, all retail sales proceeds and sales taxes.



     “Reportable Event” shall have the meaning assigned to such term in ERISA.



     “Required Participants” shall mean (x) at any time prior to termination of the Commitments,
Participants holding at least 66 2/3% of the sum of (x) the aggregate Funded Participant’s
Interests, plus (y) the Participant’s Unused Commitments, and (y) at any time on and after
the termination of the Commitments, Participants holding at least 66 2/3% of the aggregate
outstanding Funded Participant’s Interests at such time.



     “Requirement of Law” for any person shall mean the articles or 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.



     “Response Period” shall mean (i) with respect to any Startup Franchise Loan, a period of
seventy (70) days commencing on the day next succeeding the day on which the Sponsor receives a
notice from the Servicer that a Loan Payment Default has occurred and is continuing, and (ii) with
respect to any Established Franchisee Loan, a period of five (5) Business Days commencing on the
day next succeeding the day on which the Sponsor receives a notice from the Servicer that a Loan
Payment Default has occurred and is continuing, provided, however, that the
Response Period for any Established Franchisee Loan shall automatically extend by an additional 60
days if the Sponsor assumes operation of the stores operated by the Defaulted Borrower during the
initial five (5) Business Day Response Period; provided, further, no Response
Period for any Loan shall extend beyond the Final Termination Date.



     “Responsible Officer” shall mean any of the president, the chief executive officer, the chief
operating officer, the chief financial officer, the treasurer, the controller or a vice president
of the Sponsor or such other representative of the Sponsor as may be designated in writing by any
one of the foregoing with the consent of the Servicer; and, with respect to the financial covenants
only, the chief financial officer, the treasurer or the controller of the Sponsor.



     “Restricted Payment” shall have the meaning given to such term in Section 8.5.



 









 





     “Revolving Credit Agreement” shall mean that certain Revolving Credit Agreement, dated as of
the date hereof, by and among Sponsor, the lenders from time to time parties thereto and SunTrust
Bank as Administrative Agent, as amended, restated, modified or supplemented from time to time.



     “Revolving Credit Documents” shall mean, collectively, the Revolving Credit Agreement and any
and all other instruments, agreements, documents and writings executed in connection with the
foregoing.



     “RIMCO Loan Facility Agreement” shall mean that certain Loan Facility Agreement and Guaranty
dated as of May 29, 2007 by and between the Sponsor, and the Servicer as amended, restated,
supplemented or otherwise modified from time to time.



     “RIMCO Loan Facility Documents” shall mean, collectively, the RIMCO Loan Facility Agreement
and any and all other instruments, agreements, documents and writings executed in connection with
the foregoing.



     “Rosey Rentals Loan Facility Agreement” shall mean the Amended and Restated Loan and Security
Agreement dated as of May 5, 2004 by and among Rosey Rentals, L.P. and Wachovia Bank, N.A. (as
successor to SouthTrust Bank) as amended, restated, supplemented, replaced, refinanced or otherwise
modified from time to time.



     “S&P” shall mean Standard & Poor’s



     “Servicing Agreement” shall mean that certain Servicing Agreement, dated as of May 28, 2004,
by and between the Sponsor and the Servicer, as amended, restated, supplemented or otherwise
modified from time to time.



     “Servicing Fee” shall mean the fee payable to the Servicer pursuant to the terms of the
Servicing Agreement.



     “Servicer” shall mean SunTrust Bank and its successors and assigns.



     “Sponsor’s Fee” shall have the meaning set forth in the Servicing Agreement.



     “Spousal Consent” shall mean any agreement provided by the spouse of any Person executing a
Guaranty to the extent such spouse has not personally executed a Guaranty, to be substantially in
the form provided by the Servicer.



     “Startup Franchisee Borrower” shall mean a Franchisee who is primarily liable for repayment of
a Startup Franchisee Loan as a result of having executed Loan Documents as maker, or its permitted
assignee.



     “Startup Franchisee Commitment” shall have the meaning set forth in Section 2.1(a).



 









 





     “Startup Franchisee Loan” shall mean the aggregate Advances made to a Startup Franchisee
Borrower under its Startup Franchisee Loan Commitment.



     “Startup Franchisee Loan Agreement” shall mean a Line of Credit and Security Agreement setting
forth the terms and conditions, as between a Startup Franchisee Borrower and the Servicer, under
which the Servicer has established a Startup Franchisee Loan Commitment to make Advances to the
Startup Franchisee Borrower, substantially in the form of Exhibit E, with such changes as
the Sponsor and the Servicer shall agree to, subject to Section 3.1(b); provided,
however, that any Startup Franchisee Loan Agreement executed prior to the Effective Date
shall be substantially in the form required under the Existing Loan Facility Agreement.



     “Startup
Franchisee Loan Commitment” shall mean a commitment to make Startup
Franchisee Loans extended to a Startup Franchisee Borrower pursuant to a Startup Franchisee Loan
Agreement.



     “Startup Franchisee Master Note” shall mean that certain Master Note, executed by a Startup
Franchisee Borrower in favor of the Servicer, evidencing such Startup Franchisee Borrower’s
obligation to repay all Advances made to it pursuant to a Startup Franchisee Loan Commitment,
substantially in the form of Exhibit A to the Startup Franchisee Loan Agreement, with such changes
as the Sponsor and the Servicer shall agree to, subject to Section 3.1(b); provided,
however, that any Startup Franchisee Master Note executed prior to the Effective Date shall
be substantially in the form required under the Existing Facility Agreement.



     “Store Opening Information Sheet” shall have the meaning assigned to such term in the
Servicing Agreement.



     “Subordinated Debt” shall have the meaning set forth in Section 10.7.



     “Subsidiary” shall mean, with respect to any Person (the “parent”), any corporation,
partnership, joint venture, limited liability company, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability company, association
or other entity of which securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power, or in the case of a partnership, more than
50% of the general partnership interests are, as of such date, owned, controlled or held, by the
parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean a
Subsidiary of the Sponsor.



     “Swing Line Advances” shall have the meaning set forth in Section 2.3.



 









 





     “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.



     “Total Adjusted Debt to Total Adjusted Capital Ratio” shall mean, at any date of
determination, the ratio of (a) Consolidated Total Adjusted Debt as of such date to (b)
Consolidated Total Adjusted Capital as of such date.



     “Total Debt to EBITDA Ratio” shall mean, at any date of determination, the ratio of (a)
Consolidated Total Debt as of such date to (b) Consolidated EBITDA for the four consecutive fiscal
quarters of the Sponsor ending on such date.



     “Transaction Documents” shall mean, collectively, the Operative Documents and the Revolving
Credit Documents.



     “2002 Note Agreement” shall mean that certain Note Purchase Agreement, dated as of August 15,
2002, by and among Sponsor, the other Loan Parties party thereto, The Prudential Insurance Company
of America and the other purchasers signatory thereto, as such Note Purchase Agreement may be
amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time in
accordance with the terms of this Agreement.



     “2005 Note Agreement” shall mean that certain Note Purchase Agreement, dated as of July 27,
2005, by and among Sponsor, the other Loan Parties party thereto, The Prudential Insurance Company
of America and the other purchasers signatory thereto as such Note Purchase Agreement may be
amended, supplemented, restated, refinanced, replaced or otherwise modified from time to time in
accordance with the terms of this Agreement



     “Unmatured Credit Event” shall mean any condition or event which, with notice or the passage
of time or both, would constitute a Credit Event.



     “Wind-Down Event” shall mean the event that the Commitments are not extended for any reason
and the Commitment Termination Date occurs.



     “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle
E of Title IV of ERISA.



          Section 1.2. Accounting Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent with the most recent audited consolidated financial statement of the Sponsor
delivered pursuant to Section 6.1(a); provided, that if the Sponsor
notifies the Servicer that the Sponsor wishes to amend any covenant in Article VII to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the Servicer notifies the
Sponsor that the




 









 




Required Participants wish to amend Article VII for such purpose), then the Sponsor’s
compliance with such covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Sponsor and the Required Participants.




          Section 1.3. Other Definitional Terms. 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 Article, Section, Schedule, Exhibit and
like references are to this Agreement unless otherwise specified.




          Section 1.4. Exhibits and Schedules. All Exhibits and Schedules attached hereto are by
reference made a part hereof.




ARTICLE II

LOAN FACILITY




          Section 2.1. Establishment of Commitments; Terms of Loans.




          (a) Startup Franchisee Commitment. Subject to and upon the terms and conditions set
forth in this Agreement and the other Operative Documents, and in reliance upon the guaranty and
other obligations of the Sponsor set forth herein, the Servicer hereby establishes a commitment to
the Sponsor to establish Startup Franchisee Loan Commitments and to make Advances thereunder to
such Startup Franchisee Borrowers as may be designated by the Sponsor in its Funding Approval
Notices during a period commencing on the date hereof and ending on May 23, 2009 (as such period
may be extended for one or more subsequent 364-day periods pursuant to Section 2.8, the “Commitment
Termination Date”) in an aggregate committed amount at any one time outstanding not to exceed ONE
HUNDRED AND TWENTY FIVE MILLION AND NO/100 DOLLARS ($125,000,000) (the “Startup Franchisee
Commitment”); provided that, notwithstanding any provision of this Agreement to the
contrary, at no time shall the sum of aggregate committed amounts of all Loan Commitments
outstanding pursuant to the Commitments, or, following the termination of any such Loan Commitment,
Advances outstanding thereunder, exceed the Maximum Commitment Amount.




          (b) Established Franchisee Commitment. Subject to and upon the terms and conditions
set forth in this Agreement and the other Operative Documents, and in reliance upon the guaranty
and other obligations of the Sponsor set forth herein, the Servicer hereby establishes a commitment
to the Sponsor to establish Established Franchisee Loan Commitments and to make Advances thereunder
to such Established Franchisees as may be designated by the Sponsor in its Funding Approval Notices
during a period commencing on the date hereof and ending on the Commitment Termination Date in an
aggregate committed amount at any one time outstanding not to exceed ONE HUNDRED AND TWENTY FIVE
MILLION AND NO/100




 









 




DOLLARS ($125,000,000) (the “Established Franchisee Commitment”); provided
that, notwithstanding any provision of this Agreement to the contrary, at no time shall the
sum of aggregate committed amounts of all Loan Commitments outstanding pursuant to the Commitments,
or, following the termination of any such Loan Commitment, Advances outstanding thereunder, exceed
the Maximum Commitment Amount.




          (c) Authorization of Loan Commitments Pursuant to Startup Franchisee Commitment; Loan
Terms. Within the limits of the Startup Franchisee Commitment and in accordance with the
procedures set forth in this Agreement and the Servicing Agreement, the Sponsor may authorize the
Servicer to establish a Startup Franchisee Loan Commitment pursuant to the Startup Franchisee
Commitment in favor of a Franchisee who meets the credit criteria established by the Sponsor. The
amount of each Startup Franchisee Loan Commitment shall be determined by the Sponsor but shall not
be less than $100,000 for any Franchisee. Pursuant to the Startup Franchisee Loan Commitment, the
Servicer shall agree to make Advances to the Startup Franchisee Borrower thereunder. Each Startup
Franchisee Loan shall bear interest at the Borrower Rate designated by Sponsor in the applicable
Funding Approval Notice, and interest shall be payable on each Payment Date and on the Maturity
Date of such Startup Franchisee Loan when all principal and interest shall be due and payable in
full. Each Startup Franchisee Loan may be prepaid in full or in part on any Business Day, without
premium or penalty. The Loan Term of each Startup Franchisee Loan Commitment shall be, initially,
one year, but shall automatically renew unless terminated by ninety (90) days’ prior written notice
by Servicer to the Startup Franchisee Borrower prior to the first anniversary date and may
thereafter be terminated at any time by Servicer upon ninety (90) days’ prior written notice by
Servicer to the Startup Franchisee Borrower; provided that the amounts outstanding
thereunder shall be allowed to term out over the Amortization Period as provided below. The
proceeds of each Advance made pursuant to the Startup Franchisee Loan Commitments shall be used
solely to purchase inventory, and to the extent permitted by Sponsor, to pay state sales and use
taxes and freight charges. At the end of each month, the aggregate Advances (other than Electronic
Equipment Advances) made to each Startup Franchisee Borrower during such month (net of any
prepayments during such month other than Electronic Equipment Asset Disposition proceeds to the
extent applied to offset Electronic Equipment Advances as provided below) shall be amortized (in
accordance with a straight-line amortization schedule) over the Amortization Period. At the end of
the month, the aggregate Electronic Equipment Advances made to each Startup Franchisee Borrower
during such month (net of proceeds of Electronic Equipment Asset Dispositions received during such
month) shall be amortized (in accordance with a straight-line amortization schedule) over the
Amortization Period. In the event that the Startup Franchisee Loan Commitment of any Startup
Franchisee Borrower is terminated by the Servicer as provided above, such Startup Franchisee
Borrower shall, notwithstanding the other provisions of this Section 2.1(c), amortize all
outstanding Advances over the Amortization Period (in accordance with a straight-line amortization
schedule), with all Electronic Equipment Advances due and payable in full no later than 18 months
after termination. In the event that the Startup Franchisee Borrower terminates the Startup
Franchisee Loan Commitment, all amounts advanced to such Startup Franchisee Borrower shall be due
and payable in full on the termination date, together with all accrued and unpaid interest thereon.
Each Startup Franchisee Borrower shall agree to




 









 




pay a commitment fee on its unused Startup Franchisee Loan Commitment in an amount to be
determined by the Sponsor but in any event not to exceed 1.00% per annum, such commitment fee to be
paid quarterly, in arrears.




          (d) Authorization of Loan Commitments Pursuant to Established Franchisee Commitment; Loan
Terms.





     (i) Within the limits of the Established Franchisee Commitment and in accordance with
the procedures set forth in this Agreement and the Servicing Agreement, the Sponsor may
authorize the Servicer to establish an Established Franchisee Line of Credit Commitment
and/or an Established Franchisee Term Loan Commitment pursuant to the Established Franchisee
Commitment in favor of an Established Franchisee who meets the credit criteria established
by the Sponsor.




     (ii) The amount of each Established Franchisee Line of Credit Commitment shall be
determined by the Sponsor, but shall not be less than $100,000. Pursuant to the Established
Franchisee Line of Credit Commitment, the Servicer shall agree to make Advances to the
Established Franchisee Borrower thereunder. Each Established Franchisee Line of Credit Loan
shall bear interest at the Borrower Rate designated by Sponsor in the applicable Funding
Approval Notice, and interest shall be payable on each Payment Date and on the Maturity Date
of such Established Franchisee Line of Credit Loan when all principal and interest shall be
due and payable in full. Each Established Franchisee Line of Credit Loan may be prepaid in
full or in part on any Business Day, without premium or penalty. The Loan Term of each
Established Franchisee Line of Credit Loan shall not exceed four years. The proceeds of
each Advance made pursuant to the Established Franchisee Line of Credit Commitments shall be
used for general corporate purposes. Each Established Franchisee Borrower shall agree to
pay a commitment fee on the unused Established Franchisee Line of Credit Commitment in an
amount to be determined by the Sponsor but in any event not to exceed 1.00% per annum, such
commitment fee to be paid quarterly, in arrears. At no time, except as otherwise provided
in the form of Established Franchisee Loan Agreement, shall the aggregate outstanding
principal amount of any and all Established Franchisee Loans made to any Borrower exceed the
Established Franchisee Borrowing Base of such Borrower as in effect at such time.




     (iii) The amount of each Established Franchisee Term Loan Commitment shall be
determined by the Sponsor, but shall not be less than $100,000. Pursuant to the Established
Franchisee Term Loan Commitment, the Servicer shall agree to make Established Franchisee
Term Loans to the Established Franchisee Borrower thereunder. Each Established Franchisee
Term Loan shall bear interest at the Borrower Rate designated by Sponsor in the applicable
Funding Approval Notice, and interest shall be payable on each Payment Date and on the
Maturity Date of such Established Franchisee Term Loan. Principal on each Established
Franchisee Term Loan shall be payable on each Payment Date and shall be amortized over a
period of no more than 7 years with the



 









 







balance of all outstanding principal due and payable in full on the Maturity Date with
respect to such Established Franchisee Term Loan. Each Established Franchisee Term Loan may
be prepaid in full or in part on any Business Day, without premium or penalty. The Loan
Term of each Established Franchisee Term Loan shall not exceed four years. The proceeds of
each Established Franchisee Term Loan shall be used for general corporate purposes.



          (e) Conditions to Obligation of Servicer to Establish Loan Commitments. Servicer’s
obligation to establish each Loan Commitment under the Operative Documents is subject to the
fulfillment of the following conditions as of the Closing Date of such Loan:





     (i) this Agreement and each of the other Operative Documents shall be in full force and
effect;




     (ii) the representations and warranties of the Sponsor contained in Article 5 shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on the Closing Date of such Loan;




     (iii) the Servicer shall have received from the Sponsor a Funding Approval Notice
authorizing such Loan Commitment and a Store Opening Information Sheet;




     (iv) all conditions precedent to the Loan Commitment specified in the Servicing
Agreement, together with such additional conditions precedent as may, at Sponsor’s election,
be included in the applicable Funding Approval Notice, shall have been completed to the
Servicer’s reasonable satisfaction; and




     (v) no Credit Event, Unmatured Credit Event, Change of Control or Wind-Down Event shall
have occurred and be continuing.



          Section 2.2. Conveyance of Participant’s Interest.




          (a) The Servicer hereby sells, assigns, transfers and conveys to the Participants, without
recourse or warranty, and each Participant hereby purchases from the Servicer, an undivided
percentage ownership interest (which percentage shall be equal to each Participant’s Pro Rata
Share) in (i) the Commitments, (ii) the Loan Commitments, including, without limitation, the
Existing Loan Commitments, (iii) the Loans, including, without limitation, the Existing Loans, (iv)
the Collateral, (v) all rights against any guarantor of any Loan, including the Sponsor, (vi) the
Loan Documents, (vii) all rights pursuant to the Guaranty Agreement and (viii) all right, title
and interest to any payment or right to receive payment with respect to the foregoing
(collectively, the “Participant’s Interest”). Notwithstanding the foregoing, each Participant’s
right to receive payments of interest, commitments fees or other fees with respect to the
Commitment, the Loan Commitments and the Loans shall not exceed the amounts which such Participant
is entitled to receive pursuant to the terms of this Agreement.




 









 





          (b) In consideration of the entry by each Participant into this Agreement and the obligation
of each Participant hereunder, the Servicer shall issue to each Participant on the Closing Date, a
Participation Certificate. Each Participation Certificate shall be in an amount equal to the
relevant Participant’s Participating Commitment Amount, and the Funded Participant’s Interest
outstanding thereunder shall bear interest as hereinafter set forth and shall be payable as
hereinafter set forth.




          (c) In accordance with the terms and conditions hereof, and in consideration of the sale of
the Participant’s Interest to such Participant, each Participant severally agrees from time to
time, during the period commencing on the Effective Date and ending on the Final Termination Date,
to fund its Pro Rata Share of outstanding Loans made by the Servicer to the Borrowers in accordance
with the terms hereof in an aggregate amount at any one outstanding not to exceed such
Participant’s Participating Commitment Amount (subject to each Participant’s obligations pursuant
to Section 2.3(d)).




          Section 2.3. Funding of Advances; Swing Line; Funding of Participant’s Interest in
Loans.




          (a) Funding of Advances. The Servicer shall fund Advances requested by the Borrowers
in accordance with the terms of the applicable Loan Documents and the Servicing Agreement. On the
date of any such funding, the Servicer shall elect whether or not to require the Participants to
fund their respective Pro Rata Share of the Advances to be made on such date. In the event that
the Servicer elects not to require the Participants to fund their Pro Rata Share of the Advances to
be made on such date, the Servicer shall make such Advances (each, a “Swing Line Advance”) to the
Borrowers for the account of the Servicer; provided that the aggregate amount of Swing Line
Advances outstanding on any date shall not exceed $8,000,000 and further provided
the sum of (x) the aggregate outstanding Swing Line Advances plus (y) the aggregate outstanding
Funded Participant’s Interests (exclusive of the Swing Line Advances) shall not exceed the Maximum
Commitment Amount. If (i) any Credit Event, Change of Control or Wind-Down Event shall have
occurred, (ii) after giving effect to any requested Advance, the aggregate Swing Line Advances
outstanding hereunder would exceed $8,000,000, or (iii) the Servicer otherwise determines in its
sole discretion to request a Participant Funding hereunder, then the Servicer shall notify the
Participants pursuant to subsection (b) requesting a Participant Funding.




          (b) Notification of Participant Funding. In the event that the Servicer desires that
the Participants fund their respective Pro Rata Shares of Advances or Loans made or outstanding
pursuant to the Loan Documents, the Servicer shall deliver written or telecopy notice to the
Participants (or telephonic notice promptly confirmed in writing or by telecopy) (a “Participant
Funding Request”) by no later than 10:00 a.m. (Atlanta, Georgia time) on the date which is the
requested date of the Participant Funding which shall specify (x) the date of the Participant
Funding, which shall be a Business Day, and (y) each Participant’s Pro Rata Share of the Advances
or Loans outstanding to be funded in connection with such Participant Funding.




 









 





          (c) Each Participant shall make available its Pro Rata Share of the requested Participant
Funding on the proposed date thereof by wire transfer of immediately available funds to the
Servicer in Atlanta, Georgia by not later than 2:00 P.M. (Atlanta, Georgia time). Unless the
Servicer shall have received notice from a Participant prior to the date of any Participant Funding
that such Participant will not make available to the Servicer such Participant’s Pro Rata Share of
such Participant Funding, the Servicer may assume that the Participant has made such portion
available to the Servicer on the date of such Participant Funding in accordance with this
subsection (c) and the Servicer may, in reliance on such assumption, make available to the
Borrowers a corresponding amount or credit the same to Swing Line Advances. If and to the extent
that such Participant shall not have made such portion available to the Servicer, such Participant
and the Sponsor shall severally agree to repay the Servicer forthwith (on demand in the case of the
Participant and within three (3) days of such demand in the case of the Sponsor), without
duplication, such amount with interest at the Federal Funds Rate plus 2% per annum and, until such
time as such Participant has repaid to the Servicer such amount, such Participant shall (i) have no
right to vote regarding any issue on which voting is required or advisable under this Agreement or
the other Operative Documents, and (ii) shall not be entitled to receive any payments of interest,
fees or repayment of the principal amount of such Advance or Loan which the Participant has failed
to pay to the Servicer. If such Participant shall repay to the Servicer such amount, then such
amount shall constitute part of such Participant’s Funded Participant’s Interest.




          (d) Each Participant’s obligations to fund its Pro Rata Share of any requested Participant
Funding shall be absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any setoff, counterclaim, recoupment, defense, or other right
which such Participant may have against the Servicer, the Sponsor, any Borrower or any other Person
for any reason whatsoever, (ii) the occurrence of any Credit Event, Unmatured Credit Event, Change
of Control or Wind-Down Event, (iii) the occurrence of any Loan Default or any other “event of
default” under any Loan Documents, (iv) any adverse change in the condition (financial or
otherwise) of the Sponsor, any other Credit Party or any Borrower, (v) the acceleration or maturity
of any Loan or the Sponsor’s obligations hereunder or the termination of the Commitments, Loan
Commitments or the Participating Commitments after the making of any Swing Line Advance, (vi) any
breach of this Agreement by the Sponsor or any other Participant, or (vii) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.




          (e) Notwithstanding the foregoing provisions of this Section 2.3, no Participant shall be
required to fund its Pro Rata Share of any requested Participant Funding for purposes of refunding
a Swing Line Advance pursuant to subsection (d) above if a Loan Default with respect to the
relevant Loan has occurred and is continuing and, prior to the making by the Servicer of such Swing
Line Advance, the Servicer had received written notice from Sponsor, the relevant Borrower or any
Participant specifying that such Loan Default had occurred and was continuing (and identifying the
same as a Loan Default, as the case may be) which has not been cured or waived; provided
that, in the case of a Loan Default arising from an Unmatured Credit Event or




 









 




Credit Event where the Participants are not pursuing remedies, the Participants will be
obligated to fund their respective Pro Rata Shares of Swing Line Advances.




          Section 2.4. Commitment Fees.




          (a) Each Participant will receive, from amounts paid by the Borrowers under the Loan Documents
and the Sponsor under the Operative Documents, a commitment fee (the “Commitment Fee”) equal to the
average daily amount of its Participant’s Unused Commitment for the period commencing on the
Effective Date and ending on the Final Termination Date, or such earlier date as the Participating
Commitment shall expire or terminate, multiplied by the Applicable Percentage per annum, such
Commitment Fee to be payable in arrears on each third Payment Date (a “Quarterly Date”), commencing
on June 30, 2008, for the preceding Payment Period, calculated on the basis of a 360-day year and
the actual number of days elapsed.




          (b) All Commitment Fees shall be paid on the dates due, in immediately available funds, to the
Participants by the Servicer from amounts received from the Borrowers and Sponsor.




          (c) In the event that the commitment fees received by the Servicer from the Borrowers and the
Sponsor are not sufficient on any Quarterly Date to pay the Commitment Fees to the Participants
required pursuant hereto, the Sponsor shall, upon demand of the Servicer, immediately fund such
difference to the Servicer (with such payment allocated to specific Loan Payment Defaults as agreed
by Sponsor and Servicer, if applicable) and either, at the election of the Sponsor, (x) the
Sponsor shall be reimbursed by the Servicer upon receipt of such amount from a Borrower, (y) the
Loan Indebtedness shall be deemed to be reduced by such amount for purposes of a repayment or
purchase of such Defaulted Loan by Sponsor in accordance with the terms of this Agreement or (z) if
elected by Sponsor and if such amount is sufficient to cure any Loan Payment Default such amount
shall be deemed to have satisfied Sponsor’s obligation to cure such Loan Payment Default hereunder.




          Section 2.5. Interest on Funded Participant’s Interest.




          (a) Funded Participant’s Interest. Subject to the provisions of Section 2.6, each
Participant’s Funded Participant’s Interest shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted
LIBO Rate for the Payment Period in which such Funded Participant’s Interest is outstanding (with
the Adjusted LIBO Rate applicable to all amounts outstanding during any Payment Period being
automatically reset on the first day of each Payment Period regardless of the date of any
Participant Funding hereunder) plus the Applicable Margin then in effect.




          (b) [Reserved].




          (c) Payment of Interest. Interest on each Participant’s Funded Participant’s Interest
shall be payable by the Servicer to the Participants on each Payment Date from interest




 









 




payments received on the Loans under such Facility on such Payment Date for the preceding
Payment Period and from other amounts received from the Sponsor.




          (d) Sponsor’s Obligation. In the event that the interest received by the Servicer
from the Borrowers on any Payment Date is not sufficient to pay the interest to the Participants
required pursuant hereto, the Sponsor shall, upon demand of the Servicer, immediately fund such
difference to the Servicer (with such payment allocated to specific Loan Payment Defaults as agreed
by Sponsor and Servicer) and if such shortfall results from Loan Payment Defaults rather than
interest rate variances, either, at the election of the Sponsor, (x) the Sponsor shall be
reimbursed by the Servicer upon receipt of such amount from the applicable Borrower, (y) the Loan
Indebtedness of such Borrower shall be deemed to be reduced by such amount for purposes of a
repayment or purchase of such Defaulted Loan by Sponsor in accordance with the terms of this
Agreement or (z) if elected by Sponsor and if such amount is sufficient to cure any Loan Payment
Default, such amount shall be deemed to have satisfied Sponsor’s obligation to cure such Loan
Payment Default hereunder.




          (e) In the event that LIBOR is not determinable by the Bank or it becomes impossible or
illegal for the Bank to determine the Funded Participants Interest based upon LIBOR, the parties
agree that in such event the Funded Participants Interest shall bear interest at a rate per annum
equal to the Prime Rate plus a mutually agreed upon spread based upon current market conditions.




          Section 2.6. Default Interest. If any amount payable to the Servicer or the
Participants by the Sponsor under the Operative Documents is not paid on the date due hereunder,
such amount shall bear interest (to the extent permitted by law) for each day from such date up to
(but not including) the date of actual payment (after as well as before judgment) at a rate per
annum (computed on the basis of the actual number of days elapsed over a year of 360 days) equal to
the rate set forth in Section 2.5 for each Facility plus an additional two percent (2.0%) per
annum.




          Section 2.7. Voluntary Reduction of the Unutilized Commitment. Upon at least three
(3) Business Days’ prior telephonic notice (promptly confirmed in writing) to the Servicer, Sponsor
shall have the right, without premium or penalty, to terminate the Commitments, in part or in
whole, provided that (i) any such termination shall apply to proportionately and permanently reduce
each Facility, (ii) any such termination shall apply to proportionately and permanently reduce the
Participating Commitments of each of the Participants, (ii) any partial termination pursuant to
this Section 2.7 shall be in an amount of at least $5,000,000 and integral multiples of $1,000,000,
and (iii) the Commitments may not be reduced if, as a result thereof, the amount of either Facility
is less than the aggregate sum of all outstanding Loan Commitments pursuant to such Facility.






 









 





          Section 2.8. Extension of Commitments.



          (a) The Sponsor may, by written notice to the Servicer (which shall promptly deliver a copy to
each of the Participants), given not more than sixty (60) days prior to any anniversary of the date
of this Agreement while the Commitments are effect, request that the Participants extend the then
scheduled Commitment Termination Date (the “Existing Date”) for an additional 364-day period. Each
Participant shall, by notice to the Sponsor and the Servicer given within fifteen (15) Business
Days after receipt of such request, advise the Sponsor and the Servicer whether or not such
Participant consents to the extension request (and any Participant which does not respond during
such 15-day period shall be deemed to have advised the Sponsor and the Servicer that it will not
agree to such extension).




          (b) In the event that, on the 15th Business Day after receipt of the notice delivered pursuant
to subsection (a) above, all of the Participants shall have agreed to extend their respective
Participating Commitments, the Commitment Termination Date shall be deemed to have been extended,
effective as of the Existing Date, to the date which is 364 days thereafter.




          (c) In the event that, on the 15th Business Day after receipt of the notice delivered pursuant
to subsection (a) above, all of the Participants shall not have agreed to extend their respective
Participating Commitments, the Sponsor and the Servicer shall notify the consenting Participants
(“Consenting Participants”) of the aggregate Participating Commitment Amounts of the non-extending
Participants (“Non-Consenting Participants”) and such Consenting Participants shall, by notice to
the Sponsor and the Servicer given within ten (10) Business Days after receipt of such notice,
advise the Servicer and Sponsor whether or not such Participant wishes to purchase all or a
portion of the Participating Commitments of the Non-Consenting Participants (and any Participant
which does not respond during such 10-Business Day period shall be deemed to have rejected such
offer). In the event that more than one Consenting Participant agrees to purchase all or a portion
of such Participating Commitments, the Sponsor and the Servicer shall allocate such Participating
Commitments among such Consenting Participants so as to preserve, to the extent possible, the
relative pro rata shares of the Consenting Participants of the Participating Commitments prior to
such extension request. If Consenting Participants do not elect to assume all of the Participating
Commitments of the Non-Consenting Participants, the Sponsor shall have the right, subject to the
terms and conditions of Section 15.6, to arrange for one or more banks (any such bank being called
a “New Participant”) to purchase the Participating Commitment of any Non-Consenting Participant.
Each Non-Consenting Participant shall assign its Participating Commitment and its Participant’s
Interest outstanding hereunder to the Consenting Participant or New Participant purchasing such
Participating Commitment in accordance with Section 15.6, in return for payment in full of all
principal, interest and other amounts owing to such Non-Consenting Participant hereunder, on or
before the Existing Date and, as of the effective date of such assignment, shall no longer be a
party hereto, provided that each New Participant shall be subject to the approval of the Servicer
(which approval shall not be unreasonably withheld). If (and only if) Participants (including New
Participants) holding Participating Commitments representing at least an amount equal to the
greater of (x) the sum of all outstanding Loan Commitments under both Facilities and (y) 66 2/3 %
of the aggregate Participating Commitments on the date of such extension request shall have agreed
to such extension by the Existing Date (the “Continuing Participants”), then (i) the




 









 





Commitment Termination Date shall be extended for an additional 364-day period and (ii) the
Participating Commitment of any Non-Consenting Participant which has not been assigned to a
Consenting Participant or a New Participant shall terminate (with the result that the amount of the
Commitments shall be decreased proportionately by the amount of such Participating Commitment), and
all amounts owing to such Non-Consenting Participant, together with all interest accrued thereon
and all other amounts owed to such Non-Consenting Participant hereunder, shall be reallocated to
the remaining Participating Commitments on the Existing Date applicable to such Participant without
giving effect to any extension of the Commitment Termination Date.




          Section 2.9. Wind-Down Events.




          (a) In the event a Wind Down Event occurs, then (x) the Sponsor shall not have the right to
request that any further Loan Commitments be established, and (y) the Servicer shall, within a
reasonable period of time and in any event no later than thirty (30) days after the Commitment
Termination Date, give notice to each of the Startup Franchisee Borrowers terminating the Startup
Franchisee Loan Commitments as of the date which is ninety (90) days after delivery of such notice,
subject, in each case, to the right of the Startup Franchisee Borrowers to term out the amounts
outstanding under their Loan Commitments as set forth in Section 2.1(c); provided, however,
that the occurrence of such Wind-Down Event shall not affect the obligation of (i) the Servicer to
make Advances pursuant to existing Startup Franchisee Loan Commitments, except to the extent that
the Startup Franchisee Loan Commitments are terminated pursuant to clause (y) above, (ii) the
Participants to fund their Participant’s Interest as provided herein, except to the extent that the
Startup Franchisee Loan Commitments are terminated pursuant to clause (y) above or (iii) the Credit
Parties under the Operative Documents.




          (b) In the event that a Wind Down Event occurs, then the Sponsor shall not have the right to
request that any further Established Franchisee Loan Commitments be established; provided,
however, that the occurrence of such Wind-Down Event shall not affect the obligation of (x) the
Servicer to make Advances pursuant to existing Established Franchisee Loan Commitments, (y) the
Participants to fund their Participant’s Interest as provided herein, or (z) the Credit Parties
under the Operative Documents.




          Section 2.10. Reserve Requirements; Change in Circumstances; Change in Lending
Offices.




          (a) Notwithstanding any other provision herein, if, by reason of (i) after the date hereof,
the introduction of or any change (including any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally (whether or not having
the force of law), any reserve (including any imposed by the Federal Reserve Board), special
deposit or similar requirement (including a reserve, special deposit or





 











 




similar requirement that takes the form of a tax) against assets of, deposits with or for the account of, or credit extended
by, any Participant’s office through which it funds its obligations hereunder shall be imposed or
deemed applicable or any other condition affecting its obligation to make or maintain its Funded
Participant’s Interest at a rate based upon the Adjusted LIBO Rate shall be imposed on any
Participant or its office through which it funds its obligations hereunder or the interbank
Eurodollar market; and as a result thereof there shall be any increase in the cost to such
Participant of agreeing to make or making, funding or maintaining funds its obligations hereunder
(except to the extent already included in the determination of the applicable Adjusted LIBO Rate),
or there shall be a reduction in the amount received or receivable by that Participant or its
office through which it funds its obligations hereunder, then the Sponsor shall from time to time,
upon written notice from and demand by the Participant (with a copy of such notice and demand to
the Servicer), pay to the Servicer for the account of that Participant within five Business Days
after the date specified in such notice and demand, additional amounts sufficient to indemnify that
Participant against such increased cost. A certificate as to the amount of such increased cost
submitted to the Sponsor and the Servicer by that Participant, shall, except for manifest error, be
final, conclusive and binding for all purposes.




          (b) If while the Commitments or any Loan Commitments are outstanding, any Participant
(including any the Servicer) determines that the adoption of any law, rule or regulation regarding
capital adequacy or capital maintenance, or any change in any of the foregoing or in the
interpretation or administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by any Participant
(or any lending office of such Participant) or any Participant’s holding company with any request
or directive regarding capital adequacy or capital maintenance (whether or not having the force of
law) of any such authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Participant’s capital or on the capital of such Participant’s
holding company, if any, as a consequence of this Agreement, the Loan Documents or the purchases
made by such Participant pursuant hereto to a level below that which such Participant or such
Participant’s holding company could have achieved but for such adoption, change or compliance
(taking into consideration such Participant’s policies and the policies of such Participant’s
holding company with respect to capital adequacy) by an amount reasonably deemed by such
Participant to be material, then from time to time, within 15 days after written demand by such
Participant, the Sponsor pay to such Participant such additional amount or amounts as will
compensate such Participant or such Participant’s holding company for such reduction. A
certificate as to the amount of any such
additional amount or amounts, submitted to the Sponsor and the Servicer by such Participant,
shall, except for manifest error, be final, conclusive and binding for all purposes.




          (c) Each Participant agrees that, if requested by the Sponsor, it will use reasonable efforts
(subject to overall policy considerations of such Participant) to designate an alternate lending
office with respect to any of its Funded Participant’s Interest affected by the matters or
circumstances described above to reduce the liability of the Sponsor or avoid the results provided
thereunder, so long as such designation is not disadvantageous to such Participant as determined by
such Participant, which determination if made in good faith, shall




 









 




be conclusive and binding on all
parties hereto. Nothing in this Section 2.10(c) shall affect or postpone any of the obligations of
the Sponsor or any right of any Participant provided hereunder.




          Section 2.11. Pro Rata Treatment. Subject to the application of payments pursuant to
Article 3 and except as specifically provided therein, each payment of principal of any Funded
Participant’s Interest, each payment of interest with respect to the Funded Participant’s Interest,
each payment of the Commitment Fees and each reduction of the Commitments shall be allocated pro
rata among the Participants in accordance with their respective applicable Pro Rata Share of the
applicable Facility or Commitments, as appropriate. Each Participant agrees that in computing such
Participant’s portion of any Funded Participant’s Interest to be made hereunder, the Servicer may,
in its discretion, round each Participant’s percentage of such Participant Funding Request to the
next higher or lower whole dollar amount.




          Section 2.12. Payments.




          (a) The Sponsor shall make each payment required to be made by Sponsor hereunder and under any
other Operative Document to any Participant or the Servicer not later than 1:00 p.m. (Atlanta,
Georgia time), on the date when due in dollars to the Servicer at its offices in Atlanta, Georgia
in immediately available funds.




          (b) Whenever any payment hereunder or under any other Operative Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be included in the
computation of interest or Commitment Fees, if applicable.




          Section 2.13. Sharing of Setoffs. Each Participant agrees that if it shall, in
accordance with applicable law, through the exercise of a right of banker’s lien, setoff or
counterclaim against the Sponsor or any Borrower, or pursuant to a secured claim under Section 506
or Title 11 of the United States Code or other security or interest arising from, or in lieu of,
such secured claim, received by the Participant under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Funded Participant’s Interest under this Agreement as a result of which the unpaid
principal portion of its Funded Participant’s Interest shall be proportionately less than the
unpaid principal portion of the Funded Participant’s Interest of any other Participant, it shall be
deemed simultaneously to have purchased from such other Participant at face value, and shall
promptly pay to such other Participant the purchase
price for, a participation in the Funded Participant’s Interest of such other Participant, so
that the aggregate unpaid principal amount of the Funded Participant’s Interest and participations
in Funded Participant’s Interests held by each Participant shall be in the same proportion to the
aggregate unpaid principal amount of all Funded Participant’s Interests then outstanding as the
principal amount of its Purchases prior to such exercise of banker’s lien, setoff or counterclaim
or other event was to the principal amount of all Funded Participant’s Interests outstanding prior
to such exercise of banker’s lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or




 









 




adjustments shall be made pursuant to
this Section and the payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price
or prices or adjustment restored without interest. The Servicer and each Participant hereby further
agrees that any set-off amount received with respect to any Borrower, the Sponsor or any Guarantor
shall first be applied to amounts outstanding under the Franchisee Loan Program prior to
application to any other obligations of any such Person to the Servicer or such Participant. The
Sponsor expressly consents to the foregoing arrangements and agrees, to the extent permitted by
applicable law, that any Participant holding a Funded Participant’s Interest or a participation in
a Funded Participant’s Interest deemed to have been so purchased may exercise any and all rights of
banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Sponsor to
such Participant by reason thereof.




ARTICLE III

SERVICER’S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS




          Section 3.1. Servicer’s Obligations with Respect to Loans; Collateral; Non-Recourse.




          (a) The Servicer shall, for itself and the benefit of all of the Participants and the Sponsor,
(i) document, close, manage, administer and collect the Loans in accordance with the terms of this
Agreement and the Servicing Agreement and exercise all discretionary powers involved in such
management, administration and collection and (ii) shall distribute the funds received with respect
to the Loans and from the Sponsor in accordance with the terms of this Agreement. The Servicer
agrees that it will exercise the same care in administering the Loans as it exercises with respect
to loans of similar size and type and in accordance with the terms of the Servicing Agreement and
Section 10.13 hereto.




          (b) The forms of Loan Agreement and Master Note used by the Servicer as documentation for each
Loan on and after the Effective Date shall be substantially in the forms attached hereto. The
Sponsor shall have the right to direct the Servicer to make modifications to such forms and
amendments thereto from time but the Sponsor may not direct the Servicer to revise or amend such
forms so as to be inconsistent with the terms of Section 2.1 (c) and (d).




          (c) Notwithstanding anything in this Agreement to the contrary, each of the Participants
acknowledges and agrees that the Servicer shall have no obligation to the Participants with respect
to the obtaining or retention of any guaranties required by the Sponsor
(other than to distribute any proceeds therefrom in accordance with the terms of this Article
3). The Participants acknowledge and agree that the Sponsor has the right to release or modify the
terms of, or not require, any Personal Guaranty or any Spousal Consent.




 









 





          (d) In addition, each of the Participants acknowledges and agrees that the obligations of the
Servicer with respect to the Collateral shall be expressly limited to the filing of financing
statements (but not fixture filings) in the locations indicated in the applicable Funding Approval
Notice for each Borrower and filing continuation statements with respect thereto and taking
enforcement action in accordance with Section 10.13 hereto.




          (e) Each of the Participants acknowledges and agrees that all payments made to the
Participants pursuant to this Agreement by the Servicer shall be made solely from amounts received
from the Sponsor, the Borrowers and other obligors or Collateral under the applicable Loan
Documents and the Servicer shall have no personal liability for any amounts payable to the
Participants hereunder. Each of the Participants acknowledges and agrees that the Servicer shall
be relying solely upon the Sponsor for purposes of calculating and ensuring compliance by
Established Franchisee Borrowers with the Established Franchisee Borrowing Base for each
Established Franchisee Loan.




          (f) Each of the Participants acknowledges and agrees that any payments of delinquent payment
fees received from the Borrowers pursuant to the Loan Agreements shall be for the sole account of
the Sponsor and that the Participants shall have no right to receive such payments unless a Credit
Event has occurred and is continuing; provided that, with respect to any payments received from a
Borrower, such payments shall be first applied to pay all accrued but unpaid interest and principal
and other fees due and owing from such Borrower before application of such payment to any
delinquent payment fees.




          (g) Each Participant hereby acknowledges and agrees that the Servicer has no ability to halt
an ACH transfer upon the inputting of such transfer request by Sponsor from the Aaron’s Proprietary
System into the ACH system (other than the ability to retrieve ACH transfers which are sent to the
wrong party or otherwise manifestly erroneous as provided in the ACH Agreement with Sponsor), and
Sponsor hereby accepts full responsibility for any overadvance created by such inputting of
information and shall indemnify the Servicer and the Participants therefor as provided herein.




          Section 3.2. Application of Payments.




          (a) The Servicer and the Sponsor shall instruct each Borrower to make payments with respect to
Loans and the Loan Commitments directly to the Servicer, either by mail, wire transfer or debit
pursuant to an ACH Authorization.




          (b) On each Quarterly Date, all payments of Commitment Fees shall be distributed by the
Servicer to the Participants pro rata in accordance with Section 2.4, with any remainder to be
applied as set forth in the Servicing Agreement.




          (c) On each Payment Date, all payments of interest received by the Servicer from the Borrowers
under each Facility and from the Sponsor pursuant to its guaranty of each Facility
contained herein with respect to the Loans and not previously distributed by the Servicer,
shall be applied to pay all accrued but unpaid interest on the Funded Participant’s Interest under
the




 









 




applicable Facility pursuant to this Agreement, then to pay all accrued but unpaid Servicing
Fees and then to pay the Sponsor’s Fee, in accordance with the terms of the Servicing Agreement and
Fee Letter.




          (d) On any Business Day on which the Servicer shall receive any payment in respect of the
principal amount of any Loan, whether from a Borrower, the Sponsor pursuant to its guaranty
contained herein, or any other obligor with respect thereto, the Servicer may elect, in its sole
discretion to (i) apply such principal payment to fund any requested Advances, (ii) apply such
amount to repay any outstanding Swing Line Advances, or (iii) to either (x) distribute such amount
to the Participants to reduce each Participant’s Funded Participant’s Interest under such Facility
or (y) apply such amount to SunTrust’s Funded Participant’s Interest under such Facility only (with
the understanding that the Funded Participant’s Interest of each Participant shall not be deemed to
have been repaid until such amount is actually received by such Participant); provided
that, in the event that the Servicer elects to apply any repayment to reduce SunTrust’s Funded
Participant’s Interest without a corresponding reduction of the other Participant’s Funded
Participant’s Interest, SunTrust shall be obligated to make a payment to each Participant equal to
such Participant’s Pro Rata Share of such payment upon the earlier of (i) the next Payment Date and
(ii) the occurrence of a Credit Event hereunder.




          (e) If during any period when no Credit Event has occurred and is continuing, amounts received
by Servicer are not capable of being allocated to any specific Loan or, in the case of amounts
allocable to a specific Loan, are not sufficient to repay all obligations then due and owing with
respect thereto, such amounts shall be applied by the Servicer as follows: (i) first, to the
payment of Commitment Fees owing to the Participants hereunder, (ii) second, to the payment of
accrued interest on the Funded Participant’s Interest hereunder, pro rata between the two
Facilities, (iii) third, to the payment of the Servicing Fees owing under the Servicing Agreement,
(iv) fourth, to the repayment of the Funded Participant’s Interests outstanding hereunder pro rata
between the two Facilities, (v) fifth, to the payment of all other amounts owing to the Servicer or
any Participant hereunder, and (vi) sixth, if all obligations of the Sponsor pursuant to the
Operative Documents have been satisfied in full, to the Sponsor.




          (f) During any period when a Credit Event has occurred and is continuing, any amounts received
by Servicer with respect to the Loans shall be applied, after deduction of any expenses incurred in
the collection of any such amounts, as follows (i) first, to the payment of any accrued and unpaid
Servicing Fee, (ii) second, to each Participant in accordance with Pro Rata Share, and (iii)
thereafter, to such Persons as may be legally entitled thereto.




          (g) If not sooner repaid, all amounts due and payable to the Servicer and the Participants
under the Operative Documents shall be due and payable in full on the Final Termination Date.




 









 





          Section 3.3. Monthly Servicing Report. On each Payment Date, the Servicer shall
telecopy to the
Sponsor and each Participant a servicing report in the form of Exhibit F (the “Monthly
Servicing Report”) setting forth the following information with respect the Loans:




          (a) the aggregate principal balance of the Loans under each Facility as of the close of
business on the last day of the preceding Payment Period and on such Payment Date;




          (b) the aggregate amount of Loans repurchased by the Sponsor or amounts collected with respect
to the Collateral for the Loans with respect to each Facility since the last Payment Date;




          (c) the aggregate Loan Commitments under each Facility as of the close of business on the last
Business Day of the preceding Payment Period and on such Payment Date; and




          (d) each Loan which is past due (including the past due amount and the number of days past
due) under each Facility.




ARTICLE IV

LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND




          Section 4.1. Notice Of Loan Default. The Servicer shall notify the Sponsor and the
relevant Borrower of a Loan Payment Default within fifteen (15) Business Days following the
occurrence thereof and of any other Loan Default of which the Servicer has actual knowledge in
accordance with the terms of the Servicing Agreement.




          Section 4.2. Waiver or Cure By The Sponsor of Covenant Defaults and Loan Payment
Defaults.




          (a) Unless a Credit Event or an Unmatured Credit Event has occurred and is continuing, the
Sponsor shall be entitled (but not obligated) to request that the Servicer waive any default by the
Borrower or any Guarantor under the Loan Documents to which it is a party, other than a Loan
Default or a default arising based upon the action or inaction of the Sponsor or any of its
Subsidiaries, by sending to the Servicer for execution a Default Waiver Letter, which Servicer
agrees to execute and mail to the appropriate Borrower if such Default Waiver Letter is in form and
substance satisfactory to the Servicer.




          (b) Notwithstanding the foregoing clause (a), unless a Credit Event or an Unmatured Credit
Event has occurred and is continuing, the Sponsor shall be entitled (but not obligated) to request
that the Servicer waive any Loan Payment Default (including a Loan Payment Default resulting from
the failure of a Borrower to remain in compliance with the borrowing base requirements of the
applicable Established Franchisee Loan Agreement) by sending to the Servicer for execution a
Default Waiver Letter, which Servicer agrees to execute




 









 




and mail to the appropriate Borrower if
such Default Waiver Letter is in form and substance satisfactory to the Servicer, curing such Loan
Payment Default in full; provided, however, that (i) Sponsor shall not waive and
cure more than two (2) consecutive Loan Payment Defaults for
any Loan nor more than a total of four (4) Loan Payment Defaults in any four year period for
any Loan and (ii) such Loan Payment Default must be cured by Sponsor, and the Default Waiver Letter
for such Loan Payment Default received by Servicer, during the Response Period for such Loan.




          Section 4.3. Obligations of Sponsor With Respect to Established Franchisee Loans.




          (a) If Sponsor does not waive and cure any Loan Payment Default with respect to any
Established Franchisee Loan during the Response Period, then Sponsor must use its reasonable
efforts to exercise its rights pursuant to the applicable Franchise Agreement with such Defaulted
Borrower to assume the operation of the stores of such Defaulted Borrower during the five (5)
Business Day Response Period, and during any period that Sponsor operates the stores of any
Defaulted Borrower, Sponsor shall make all payments due and owing to the Servicer pursuant to the
applicable Operative Documents.




          (b) If the Sponsor assumes operation of the stores of any such Defaulted Borrower pursuant to
paragraph (a) above, the Sponsor will use its reasonable efforts to locate a purchaser for such
stores. In the event that the Sponsor has not resold the franchise and inventory of such Defaulted
Borrower within the extended Response Period in accordance with the terms of the applicable
Franchise Agreement for a purchase price equal to or in excess of the Minimum Purchase Price (which
amount shall be paid directly to the Servicer in return for the assignment to the Sponsor of the
Defaulted Loan, the related Loan Commitment and the Liens of the Servicer thereon, and applied by
the Servicer to the Sponsor’s purchase of the outstanding Loan Indebtedness of such Defaulted Loan
and related Loan Commitment, with any deficiency recovered pursuant to the next paragraph), Sponsor
shall purchase the outstanding Loan Indebtedness of such Defaulted Loan and any related Loan
Commitment from the Servicer for the Minimum Purchase Price and any deficiency amount may be
collected by the Servicer, for the benefit of the Participants, pursuant to subsection (c) below.




          (c) In the event that (i) during the initial Response Period for any Established Franchisee
Loan of a Defaulted Borrower, the Sponsor has not waived or cured any Loan Payment Default, and has
not assumed the operation of the stores of the Defaulted Borrower, or (ii) the Sponsor has not
resold the franchise and inventory of the Defaulted Borrower during the extended Response Period in
accordance with the terms of the applicable Franchise Agreement, or has resold the franchise and
inventory for an amount less than the Minimum Purchase Price, then the Sponsor will purchase, upon
demand by the Servicer, the Established Franchisee Loan and the related Loan Commitment of such
Defaulted Borrower for an amount equal to the outstanding Loan Indebtedness of the Defaulted Loan
pursuant to its guaranty set forth in Section 10.1.




 









 





          (d) Notwithstanding the foregoing, to the extent that the Sponsor is prohibited by applicable
law, court order or other legal impediment from exercising the options set forth in subsection (a)
or (b) above, the Servicer may, with the consent of the Required Participants and shall, upon the
written request of the Required Participants, require that the Sponsor promptly purchase the Loan
pursuant to subsection (c) above.




          Section 4.4. Rights during Response Period. Unless a Credit Event or an Unmatured
Credit Event has occurred and is continuing, the Servicer shall refrain during any Response Period
from taking any legal action against the Defaulted Borrower under the Defaulted Loan which is the
subject of such Response Period, and from accelerating payment of the Loan Indebtedness under such
Defaulted Loan but the Servicer shall cease funding any further Advances pursuant to the Loan
Commitment to such Defaulted Borrower. If the Sponsor waives and cures any Loan Payment Default
prior to the expiration of a Response Period, then as to each Loan Payment Default so waived and
cured, the Defaulted Borrower’s and the Servicer’s respective rights and obligations under the Loan
Documents shall be restored to the same status as if such waived Loan Payment Default never
occurred. In addition, if the Sponsor takes over the operation of the business of an Established
Franchisee Borrower as provided in Section 4.3, the Servicer shall refrain from exercising remedies
against such Borrower for as long as the Sponsor is complying with Section 4.3, unless a Credit
Event has occurred and is continuing or the Required Participants otherwise agree.




          Section 4.5. Rights after Response Period and for Loan Defaults other than Loan Payment
Defaults. In the event that any Loan Default other than a Loan Payment Default occurs and is
continuing after the expiration of the Response Period, or that any Loan Payment Default is not
cured during the applicable Response Period, (i) the Servicer shall have the right to (A) demand
that Sponsor comply with its obligations with respect to such Defaulted Loan set forth in Article
10 and (B) administer and enforce such Loan as it deems appropriate, without regard to any
limitations or restrictions set forth herein (but subject to Article 3 in all events) or in any
other Operative Document, and (ii) notwithstanding anything contained in this Article to the
contrary, the Sponsor shall, within five (5) Business Days of its receipt of a written demand from
the Servicer instructing it to do so, (A) purchase the Loan Indebtedness of the Defaulted Loan and
assume the Loan Commitment related thereto, or (B) at the request of the Servicer, made either at
its option or at the request of the Required Participants, exercise any or all of the remedies set
forth in Section 4.3 with respect to such Defaulted Loan except to the extent prohibited by
applicable law in the case of the bankruptcy of the Defaulted Borrower.




ARTICLE V

REPRESENTATIONS AND WARRANTIES




          The Sponsor represents and warrants to the Servicer and each Participant as follows:




 









 





          Section 5.1. Existence; Power. The Sponsor and each of its Subsidiaries (i) is duly
organized, validly existing and in good standing as a corporation under the laws of the
jurisdiction of its organization, (ii) has all requisite power and authority to carry on its
business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in
each jurisdiction where such qualification is required, except where a failure to be so qualified
could not reasonably be expected to result in a Material Adverse Effect.




          Section 5.2. Organizational Power; Authorization. The execution, delivery and
performance by each Credit Party of the Transaction Documents to which it is a party are within
such Credit Party’s organizational powers and have been duly authorized by all necessary
organizational, and if required, stockholder, action. This Agreement has been duly executed and
delivered by the Sponsor, and constitutes, and each other Transaction Document to which any Credit
Party is a party, when executed and delivered by such Credit Party, will constitute, valid and
binding obligations of the Sponsor or such Credit Party (as the case may be), enforceable against
it in accordance with their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’
rights generally and by general principles of equity.




          Section 5.3. Governmental Approvals; No Conflicts. The execution, delivery and
performance by the Sponsor of this Agreement, and by each Credit Party of the other Transaction
Documents to which it is a party (a) do not require any consent or approval of, registration or
filing with, or any action by, any Governmental Authority, except those as have been obtained or
made and are in full force and effect or where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect, (b) will not violate
any applicable law or regulation or the charter, by-laws or other organizational documents of the
Sponsor or any of its Subsidiaries or any judgment or order of any Governmental Authority binding
on the Sponsor or any of its Subsidiaries, (c) will not violate or result in a default under any
indenture, material agreement or other material instrument binding on the Sponsor or any of its
Subsidiaries or any of its assets or give rise to a right thereunder to require any payment to be
made by the Sponsor or any of its Subsidiaries and (d) will not result in the creation or
imposition of any Lien on any asset of the Sponsor or any of its Subsidiaries, except Liens (if
any) created under the Operative Documents.




          Section 5.4. Financial Statements. The Sponsor has furnished to each Participant (i)
the audited consolidated balance sheet of the Sponsor and its Subsidiaries as of December 31, 2007,
and the related consolidated statements of income, shareholders’ equity and cash flows for the
fiscal year then ended prepared by Ernst & Young and (ii) the unaudited consolidated balance sheet
of the Sponsor and its Subsidiaries as of March 31, 2008, and the related unaudited consolidated
statements of income and cash flows for the fiscal quarter and year-to-date period then ending,
certified by a Responsible Officer. Such financial statements fairly present the consolidated
financial condition of the Sponsor and its Subsidiaries as of such dates and the consolidated
results of operations for such periods in conformity with GAAP consistently applied, subject to
year end audit adjustments and the absence of footnotes in the case of the statements referred to
in clause (ii). Since December 31, 2007, there have been no




 









 




changes with respect to the Sponsor and
its Subsidiaries which have had or could reasonably be expected to have, singly or in the
aggregate, a Material Adverse Effect.




          Section 5.5. Litigation and Environmental Matters.




          (a) No litigation, investigation or proceeding of or before any arbitrators or Governmental
Authorities is pending against or, to the knowledge of the Sponsor, threatened against or affecting
the Sponsor or any of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination that could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect or (ii) which in any manner draws into question the validity
or enforceability of this Agreement or any other Transaction Document. Except as set forth on
Schedule 5.5(a), as of the Closing Date, no litigation, investigation or proceeding of or
before any arbitrators or Governmental Authorities is pending against or, to the knowledge of the
Sponsor, threatened against or affecting the Sponsor or any of its Subsidiaries that seeks damages
in excess of $5,000,000.




          (b) Except for the matters set forth on Schedule 5.5(b), neither the Sponsor nor any
of its Subsidiaries (i) has failed to comply in any material respect with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability in excess of $5,000,000,
(iii) has received notice of any claim with respect to any Environmental Liability in excess of
$5,000,000 or (iv) knows of any basis for any Environmental Liability in excess of $5,000,000.




          Section 5.6. Compliance with Laws and Agreements. The Sponsor and each Subsidiary is
in compliance with (a) all applicable laws, rules, regulations and orders of any Governmental
Authority, and (b) all indentures, agreements or other instruments binding upon it or its
properties, except where non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.




          Section 5.7. Investment Company Act, Etc. Neither the Sponsor nor any of its
Subsidiaries is (a) an “investment company”, as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended or (b) otherwise subject to any other regulatory scheme
limiting its ability to incur debt.




          Section 5.8. Taxes. The Sponsor and its Subsidiaries and each other Person for whose
taxes the Sponsor or any Subsidiary could become liable have timely filed or caused to be filed all
Federal income tax returns and all other material tax returns that are required to be filed by
them, and have paid all taxes shown to be due and payable on such returns or on any assessments
made against it or its property and all other taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority, except (i) to the extent the failure to do so would not
have a Material Adverse Effect or (ii) where the same are currently being contested in good faith
by appropriate proceedings and for which the Sponsor or such Subsidiary, as the case may be, has
set aside on its books adequate reserves. The charges, accruals and reserves on




 









 




the books of the
Sponsor and its Subsidiaries in respect of such taxes are adequate, and no tax liabilities that
could be materially in excess of the amount so provided are anticipated.




          Section 5.9. Reserved 




          Section 5.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market
value of the assets of such Plan, and the present value of all accumulated benefit obligations of
all underfunded Plans (based on the assumptions used for purposes of Statement of Financial
Standards No. 87) did not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $5,000,000 the fair market value of the assets of all such underfunded
Plans.




          Section 5.11. Ownership of Property.




          (a) Each of the Sponsor and its Subsidiaries has good title to, or valid leasehold interests
in, all of its real and personal property material to the operation of its business.




          (b) Each of the Sponsor and its Subsidiaries owns, or is licensed, or otherwise has the right,
to use, all patents, trademarks, service marks, tradenames, copyrights and other intellectual
property material to its business, and the use thereof by the Sponsor and its Subsidiaries does not
infringe on the rights of any other Person, except for any such infringements that, individually or
in the aggregate, would not have a Material Adverse Effect.




          Section 5.12. Disclosure. The Sponsor has disclosed to the Participants all
agreements, instruments, and corporate or other restrictions to which the Sponsor or any of its
Subsidiaries is subject, and all other matters known to any of them, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the
reports (including without limitation all reports that the Sponsor is required to file with the
Securities and Exchange Commission), financial statements, certificates or other written
information furnished by or on behalf of the Sponsor to the Servicer or any Participant in
connection with the negotiation or syndication of this Agreement or any other Operative Document or
delivered hereunder or thereunder (as modified or supplemented by any other information so
furnished) contains any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, taken as a whole, in light of the circumstances under which they
were made, not misleading; provided, that with respect to projected financial information, the
Sponsor represents only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.




          Section 5.13. Labor Relations. There are no strikes, lockouts or other material labor
disputes or grievances against the Sponsor or any of its Subsidiaries, or, to the Sponsor’s




 









 




knowledge, threatened against or affecting the Sponsor or any of its Subsidiaries, and no
significant unfair labor practice, charges or grievances are pending against the Sponsor or any of
its Subsidiaries, or to the Sponsor’s knowledge, threatened against any of them before any
Governmental Authority. All payments due from the
Sponsor or any of its Subsidiaries pursuant to the provisions of any collective bargaining
agreement have been paid or accrued as a liability on the books of the Sponsor or any such
Subsidiary, except where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.




          Section 5.14. Subsidiaries. Schedule 5.14 sets forth the name of, the
ownership interest of the Sponsor in, the jurisdiction of incorporation of, and the type of, each
Subsidiary and identifies each Subsidiary that is a Guarantor, in each case as of the Effective
Date.




          Section 5.15. Representations and Warranties with Respect to Specific Loans. The
Sponsor represents and warrants to the Servicer and each Participant with respect to each Loan
Commitment established and each Advance made pursuant to the Operative Documents that:




          (a) The Franchise Agreement, the Master Note, the Loan Agreement and each other Loan Document
executed in connection with such Loan Commitment each constitutes a valid and binding agreement of
each Borrower or guarantor party thereto and is enforceable against each such party in accordance
with its terms.




          (b) The Master Note and accompanying Loan Documents executed in connection with such Loan and
delivered to the Servicer are the only contracts evidencing the transaction described therein and
constitute the entire agreement of the parties thereto with respect to such transaction and Sponsor
has not made any other promises, agreements or representations and warranties with respect to the
transactions evidenced by such Master Note.




          (c) The Master Note and each accompanying Loan Document executed in connection with such Loan
is genuine and all signatures, names, amounts and other facts and statements therein and thereon
are true and correct.




          (d) All disclosures required to be made under applicable federal and state law in connection
with such Loan have been properly and completely made with respect to each Master Note, the other
Loan Documents and the Loan and each such Master Note, other Loan Documents and Loan is in full
compliance with all applicable federal and state laws, including without limitation, applicable
state and federal usury laws and regulations.



The proceeds of each Master Note will be solely for the purpose of financing the acquisition and
expansion of stores franchised by the Sponsor and operated by the relevant Borrower, for the
acquisition of inventory and equipment with respect to the ongoing operations thereof, for
Sponsor-approved payment of state use tax and freight charges and, in the case of Established
Franchisee Borrowers, for Sponsor-approved working capital purposes,
but excluding in all cases any
non-business purposes.





 









 







          Section 5.16. OFAC. Neither the Sponsor nor any of its Subsidiaries (i) is a person
whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of
Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii)
engages in any dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2, or (iii) is a
person on the list of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets
Control regulation or executive order.




          Section 5.17. Patriot Act. Each of the Sponsor and its Subsidiaries is in compliance,
in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the
foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and
(ii) the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as amended.




ARTICLE VI

AFFIRMATIVE COVENANTS




          The Sponsor covenants and agrees that it will, as long as either of the Commitments is in
effect or the Servicer is committed to make Advances under any Loan Documents and thereafter so
long as any Loans remain outstanding under this Agreement or Sponsor has any other unsatisfied
obligations under the Operative Documents:




          Section 6.1. Financial Statements and Other Information. The Sponsor will deliver to
the Servicer and each Participant:




          (a) as soon as available and in any event within 90 days after the end of each fiscal year of
Sponsor, a copy of the annual audited report for such fiscal year for the Sponsor and its
Subsidiaries, containing a consolidated and unaudited consolidating balance sheet of the Sponsor
and its Subsidiaries as of the end of such fiscal year and the related consolidated and unaudited
consolidating statements of income, stockholders’ equity and cash flows (together with all
footnotes thereto) of the Sponsor and its Subsidiaries for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in reasonable detail and
reported on by Ernst & Young or other independent public accountants of nationally recognized




 









 




standing (without a “going concern” or like qualification, exception or explanation and without
any qualification or exception as to scope of such audit) to the effect that such financial
statements present fairly in all material respects the financial condition and the results of
operations of the Sponsor and its Subsidiaries for such fiscal year on a consolidated basis in
accordance with GAAP and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally accepted auditing
standards;




          (b) as soon as available and in any event within 45 days after the end of each fiscal quarter
of each fiscal year of the Sponsor (other than the last fiscal quarter), an unaudited consolidated
and consolidating balance sheet of the Sponsor and its Subsidiaries as of the end of such fiscal
quarter and the related unaudited consolidated and consolidating statements of income and cash
flows of the Sponsor and its Subsidiaries for such fiscal quarter and the then elapsed portion of
such fiscal year, setting forth in each case in comparative form the figures for the corresponding
quarter and the corresponding portion of Sponsor’s previous fiscal year, all certified by the chief
financial officer, treasurer or controller of the Sponsor as presenting fairly in all material
respects the financial condition and results of operations of the Sponsor and its Subsidiaries on a
consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;




          (c) concurrently with the delivery of the financial statements referred to in clauses (a) and
(b) above, a certificate of a Responsible Officer, (i) certifying as to whether there exists a
Credit Event or an Unmatured Credit Event on the date of such certificate, and if a Credit Event or
an Unmatured Credit Event then exists, specifying the details thereof and the action which the
Sponsor has taken or proposes to take with respect thereto, (ii) setting forth in reasonable detail
calculations demonstrating compliance with Article VII and (iii) stating whether any change in GAAP
or the application thereof has occurred since the date of the Sponsor’s audited financial
statements referred to in Section 5.4 and, if any change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate;




          (d) concurrently with the delivery of the financial statements referred to in clause (a)
above, a certificate of the accounting firm that reported on such financial statements stating
whether they obtained any knowledge during the course of their examination of such financial
statements of any Credit Event or Unmatured Credit Event (which certificate may be limited to the
extent required by accounting rules or guidelines);




          (e) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all functions of said Commission, or with any
national securities exchange, or distributed by the Sponsor to its shareholders generally, as the
case may be; and




 









 





          (f) promptly following any request therefor, such other information regarding the results of
operations, business affairs and financial condition of the Sponsor or any Subsidiary as the
Servicer or any Participant may reasonably request; and




          (g) as soon as available and in any event within 30 days after the end of each fiscal year of
the Sponsor, a forecasted income statement, balance sheet, and statement of cash flows for the
following fiscal year.




          Section 6.2. Notices of Material Events. The Sponsor will furnish to the Servicer and
each Participant prompt written notice of the following:




          (a) the occurrence of any Credit Event or Unmatured Credit Event;




          (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator
or Governmental Authority against or, to the knowledge of the Sponsor, affecting the Sponsor or any
Subsidiary which, if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;




          (c) the occurrence of any event or any other development by which the Sponsor or any of its
Subsidiaries (i) fails to comply in any material respect with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any Environmental
Law, (ii) becomes subject to any Environmental Liability in excess of $2,500,000, (iii) receives
notice of any claim with respect to any Environmental Liability in excess of $2,500,000, or (iv)
becomes aware of any basis for any Environmental Liability in excess of $2,500,000 and in each of
the preceding clauses, which individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect;




          (d) the occurrence of any ERISA Event that alone, or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of the Sponsor and its
Subsidiaries in an aggregate amount exceeding $2,500,000; and




          (e) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.




          (f) Each notice delivered under this Section shall be accompanied by a written statement of a
Responsible Officer setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.




          Section 6.3. Existence; Conduct of Business. The Sponsor will, and will cause each of
its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain in
full force and effect its legal existence and its respective rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the conduct of its business
and will continue to engage in the same business as presently conducted or such other businesses
that are reasonably related thereto; provided, that nothing in this Section shall prohibit
any merger, consolidation, liquidation or dissolution permitted under Section 8.3.




 









 





          Section 6.4. Compliance with Laws, Etc. The Sponsor will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and requirements of any Governmental
Authority applicable to its business and properties, including without limitation, all
Environmental Laws, ERISA and OSHA, except where the failure to do so, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse Effect.




          Section 6.5. Payment of Obligations. The Sponsor will, and will cause each of its
Subsidiaries to, pay and discharge at or before maturity, all of its obligations and liabilities
(including without limitation all tax liabilities and claims that could result in a statutory Lien)
before the same shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the Sponsor or such
Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.




          Section 6.6. Books and Records. The Sponsor will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and correct entries
shall be made of all dealings and transactions in relation to its business and activities to the
extent necessary to prepare the consolidated financial statements of Sponsor in conformity with
GAAP.




          Section 6.7. Visitation, Inspection, Etc.




          (a) The Sponsor will, and will cause each of its Subsidiaries to, permit any representative of
the Servicer or any Participant, to visit and inspect its properties, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its affairs, finances and
accounts with any of its officers and with its independent certified public accountants, all at
such reasonable times and as often as the Servicer or any Participant may reasonably request after
reasonable prior notice to the Sponsor; provided, however, if a Credit Event or Unmatured Credit
Event has occurred and is continuing, no prior notice shall be required. All reasonable expenses
incurred by the Servicer and, at any time after the occurrence and during the continuance of a
Credit Event, any Participants in connection with any such visit, inspection, audit, examination
and discussions shall be borne by the Sponsor.




          Section 6.8. Maintenance of Properties; Insurance. The Sponsor will, and will cause
each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear except where the failure to do
so, either individually or it the aggregate, could not reasonably be expected to result in a
Material Adverse Effect and (b) maintain with financially sound and reputable insurance companies,
insurance with respect to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by companies in the
same or similar businesses operating in the same or similar locations. In addition, and not in
limitation of the foregoing, the Sponsor shall maintain and keep in force insurance coverage




 









 




on its
inventory, as is consistent with best industry practices. The Sponsor shall at all times cause the
Servicer to be named as additional insured on all of its casualty and liability policies.




          Section 6.9. Use of Proceeds and Letters of Credit. The Sponsor will use the proceeds
of all Loans to finance working capital needs, to refinance existing debt, to finance Permitted
Acquisitions and
for other general corporate purposes of the Sponsor and its Subsidiaries. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any purpose that would
violate any rule or regulation of the Board of Governors of the Federal Reserve System, including
the Margin Regulations. All Letters of Credit will be used for general corporate purposes.




          Section 6.10. Additional Subsidiaries.




          (a) The Sponsor may, after the Effective Date, acquire or form additional Domestic
Subsidiaries so long as the Sponsor, within ten (10) business days after any such Domestic
Subsidiary is acquired or formed, (i) notifies the Servicer and the Participants thereof and (ii)
causes such Domestic Subsidiary to become a Guarantor by executing agreements in the form of Annex
I to the Guaranty Agreement and Annex I to Indemnity and Contribution Agreement and (iii) causes
such Domestic Subsidiary to deliver simultaneously therewith similar documents applicable to such
Domestic Subsidiary described in Section 13.1 as reasonably requested by the Servicer.




          (b) The Sponsor shall not acquire or form any additional Foreign Subsidiaries; provided,
however, that the Sponsor may acquire or form additional Subsidiaries incorporated under the laws
of Canada so long as the Sponsor, within ten (10) business days after any such Foreign Subsidiary
is acquired or formed, (i) notifies the Servicer and the Participants thereof, (ii) delivers stock
certificates and related pledge agreements, in form satisfactory to a collateral agent acceptable
to the Servicer, evidencing the pledge of 66% (or such greater percentage which would not result
in material adverse tax consequences) of the issued and outstanding capital stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding
capital stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) of
each such Subsidiary directly owned by the Sponsor or any Domestic Subsidiary to secure the
Guaranteed Obligations, (iii) causes such Subsidiary to deliver simultaneously therewith similar
documents applicable to such Foreign Subsidiary described in Section 13.1 as reasonably requested
by the Servicer, and (iv) the Servicer enters into an intercreditor agreement, in form and
substance satisfactory to the Required Participants, with all other creditors of the Sponsor having
a similar covenant with the Sponsor.




 









 





ARTICLE VII

FINANCIAL COVENANTS




     The Sponsor covenants and agrees that so long as either of the Commitments remains outstanding
or any Loans remain outstanding or the Sponsor has any obligations under the Operative Documents,
and until the full and final payment of all indebtedness of all Borrowers incurred pursuant to the
Loan Documents and unless otherwise consented to in writing by the Required Participants:



          Section 7.1. Total Debt to EBITDA Ratio. The Sponsor and its Subsidiaries shall
maintain, as of the last day
of each fiscal quarter of the Sponsor, commencing with the fiscal quarter ending June 30,
2008, a Total Debt to EBITDA Ratio of not greater than 3.00:1.00.




          Section 7.2. Total Adjusted Debt to Total Adjusted Capital Ratio. The Sponsor and its
Subsidiaries shall maintain, as of the last day of each fiscal quarter of the Sponsor, commencing
with the fiscal quarter ending June 30, 2008, a Total Adjusted Debt to Total Adjusted Capital Ratio
of not greater than 0.60:1.00.




          Section 7.3. Fixed Charge Coverage Ratio. The Sponsor and its Subsidiaries shall
maintain, as of the last day of each fiscal quarter of the Sponsor, commencing with the fiscal
quarter ending June 30, 2008, a Fixed Charge Coverage Ratio of not less than 2:00 to 1:00.




          Section 7.4. Minimum Consolidated Net Worth. The Sponsor and its Subsidiaries shall
maintain a Consolidated Net Worth of an amount equal to the sum of (i) $631,391,000, plus (ii) 50%
of cumulative positive Consolidated Net Income accrued during each fiscal quarter ending
thereafter, since the end of such fiscal quarter of the Sponsor, commencing with the fiscal quarter
ending June 30, 2008, plus (iii) 100% of the net proceeds from any public or private offering of
common stock of the Sponsor after the Closing Date, calculated quarterly on the last day of each
fiscal quarter; provided, that if Consolidated Net Income is negative in any fiscal quarter
the amount added for such fiscal quarter shall be zero and such negative Consolidated Net Income
shall not reduce the amount of Consolidated Net Income added from any previous fiscal quarter.
Promptly upon the consummation of any offering of common stock of the Sponsor, the Sponsor shall
notify the Servicer in writing of the amount of the proceeds thereof.




ARTICLE VIII

NEGATIVE COVENANTS




     The Sponsor covenants and agrees that so long as either of the Commitments remains outstanding
or any Loans remain outstanding or the Sponsor has any obligations under the Operative Documents,
and until the full and final payment of all indebtedness of all Borrowers incurred pursuant to the
Loan Documents and unless otherwise consented to in writing by the Required Participants:



 









 





          Section 8.1. Indebtedness. The Sponsor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:




          (a) Indebtedness created pursuant to the Operative Documents;




          (b) Indebtedness existing on the date hereof and set forth on Schedule 8.1 and
extensions, renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof (immediately prior to giving effect to such extension,
renewal or replacement) or shorten the maturity or the weighted average life thereof;




          (c) Indebtedness of the Sponsor or any Subsidiary incurred after the Effective Date to finance
the acquisition, construction or improvement of any fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition thereof; provided, that
such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvements or extensions, renewals, and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof (immediately prior to
giving effect to such extension, renewal or replacement) or shorten the maturity or the weighted
average life thereof; provided further, that the aggregate principal amount of such Indebtedness
does not exceed $30,000,000 at any time outstanding;




          (d) Indebtedness of the Sponsor owing to any Credit Party and of any Credit Party owing to the
Sponsor or any other Credit Party;




          (e) Guarantees by the Sponsor of Indebtedness of any Credit Party and by any Credit Party of
Indebtedness of the Sponsor or any other Credit Party;




          (f) Indebtedness under the Revolving Credit Agreement;




          (g) [Reserved];




          (h) Guarantees by the Sponsor of Indebtedness of certain franchise operators of the Sponsor,
provided such guarantees are given by the Sponsor in connection with (1) loans made pursuant to
the terms of this Agreement, (2) loans made by SunTrust Bank to finance the purchase of equity
interests in certain franchises of the Sponsor in an aggregate principal amount not to exceed
Twenty Million $20,000,000, (3) loans made pursuant to terms of the Rosey Rentals Loan Facility
Agreement in an aggregate principal amount not to exceed Forty Million Dollars ($40,000,000), (4)
loans made pursuant to the terms of the RBC Loan Facility Agreement in an aggregate principal
amount not to exceed Fifty Million Canadian Dollars (Cdn. $50,000,000) and (5) loans made pursuant
to terms of the RIMCO Loan Facility Agreement in an aggregate principal amount not to exceed Seven
Million Five Hundred Thousand Dollars ($7,500,000);




 









 





          (i) endorse negotiable instruments for collection in the ordinary course of business;




          (j) Guarantees by Sponsor of Indebtedness of Foreign Subsidiaries, provided that the amount of
such Guaranteed Indebtedness, together with the principal amount any loans to Foreign Subsidiaries
permitted to be made under clause (l) below, does not exceed $30,000,000 at any time;




          (k) Loans by Sponsor to its Foreign Subsidiaries, provided that the amount of such loans,
together with the amount of Guaranteed Indebtedness permitted to be incurred under clause (j)
above, does not exceed $30,000,000 at any time; and




          (l) Indebtedness as evidenced by (i) the 6.88% Senior Notes of Sponsor in the amount of
$50,000,000 issued pursuant to the 2002 Note Agreement and (ii) the 5.03% Senior Notes of Sponsor
in the amount of $60,000,000 issued pursuant to the 2005 Note Agreement, together with (x)
extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof above $110,000,000 or shorten the maturity or the weighted average life
thereof and (y) Guarantees of such Indebtedness by any Subsidiaries of Sponsor; and




          (m) other unsecured Indebtedness in an aggregate principal amount not to exceed $75,000,000 at
any time outstanding.




          Section 8.2. Negative Pledge. The Sponsor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property
now owned or hereafter acquired or, except:




          (a) Permitted Encumbrances;




          (b) any Liens on any property or asset of the Sponsor or any Subsidiary existing on the
Effective Date set forth on Schedule 8.2; provided, that such Lien shall not apply
to any other property or asset of the Sponsor or any Subsidiary;




          (c) purchase money Liens upon or in any fixed or capital assets to secure the purchase price
or the cost of construction or improvement of such fixed or capital assets or to secure
Indebtedness incurred solely for the purpose of financing the acquisition, construction or
improvement of such fixed or capital assets (including Liens securing any Capital Lease
Obligations); provided, that (i) such Lien secures Indebtedness permitted by Section
8.1(c), (ii) such Lien attaches to such asset concurrently or within 90 days after the
acquisition, improvement or completion of the construction thereof; (iii) such Lien does not extend
to any other asset; and (iv) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets together with all interest, fees
and costs incurred in connection therewith;




 









 





          (d) any Lien (i) existing on any asset of any Person at the time such Person becomes a
Subsidiary of the Sponsor, (ii) existing on any asset of any Person at the time such Person is
merged with or into the Sponsor or any Subsidiary of the Sponsor or (iii) existing on any asset
prior to the acquisition thereof by the Sponsor or any Subsidiary of the Sponsor; provided,
that any such Lien was not created in the contemplation of any of the foregoing and any such Lien
secures only those obligations which it secures on the date that such Person becomes a Subsidiary
or the date of such merger or the date of such acquisition;




          (e) extensions, renewals, or replacements of any Lien referred to in paragraphs (a) through
(d) of this Section; provided, that the principal amount of the Indebtedness secured
thereby is not increased and that any such extension, renewal or replacement is limited to the
assets originally encumbered thereby; and




          (f) [Reserved];




          (g) Liens securing the obligations of the Sponsor under the Revolving Credit Agreement; and




          (h) Liens on shares of stock of any Foreign Subsidiary to the extent that the Guaranteed
Obligations are secured pari passu with any other Indebtedness or obligations secured thereby.




          Section 8.3. Fundamental Changes.




          (a) The Sponsor will not, and will not permit any Subsidiary to, merge into or consolidate
into any other Person, or permit any other Person to merge into or consolidate with it, or sell,
lease, transfer or otherwise dispose of (in a single transaction or a series of transactions) all
or substantially all of its assets (in each case, whether now owned or hereafter acquired) or all
or substantially all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired) or liquidate or dissolve; provided, that if at the time thereof and immediately
after giving effect thereto, no Credit Event shall have occurred and be continuing (i) the Sponsor
or any Subsidiary may merge with a Person if the Sponsor (or such Subsidiary if the Sponsor is not
a party to such merger) is the surviving Person, (ii) any Subsidiary may merge into another
Subsidiary or the Sponsor; provided, however, that if the Sponsor is a party to such merger, the
Sponsor shall be the surviving Person, provided, further, that if any Subsidiary to such merger is
a Guarantor, the Guarantor shall be the surviving Person, (iii) any Subsidiary may sell, transfer,
lease or otherwise dispose of all or substantially all of its assets to the Sponsor or to a
Guarantor, and (iv) any other Subsidiary may liquidate or dissolve if the Sponsor determines in
good faith that such liquidation or dissolution is in the best interests of the Sponsor, is not
materially disadvantageous to the Participants, and such Subsidiary dissolves into another
Guarantor or the Sponsor; provided, that any such merger involving a Person that is not a
wholly-owned Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 8.4.




 









 





          (b) The Sponsor will not, and will not permit any of its Subsidiaries to, engage in any
business other than businesses of the type conducted by the Sponsor and its Subsidiaries on the
date hereof and businesses reasonably related thereto.




          Section 8.4. Investments, Loans, Etc. The Sponsor will not, and will not permit any
of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly-owned Subsidiary prior to such merger), any common stock, evidence of
indebtedness or other securities (including any option, warrant, or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, any obligations of, or make or
permit to exist any investment or any other interest in, any other Person (all of the foregoing
being collectively called “Investments”), or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person that constitute a business unit, or create
or form any Subsidiary, except:




          (a) Investments (other than Permitted Investments) existing on the date hereof and set forth
on Schedule 8.4 (including Investments in Subsidiaries);




          (b) Permitted Investments;




          (c) Permitted Acquisitions;




          (d) Investments made by the Sponsor in or to any other Credit Party and by any other Credit
Party to the Sponsor or in or to another Credit Party;




          (e) loans or advances to employees, officers, directors or stockholders of the Sponsor or any
Subsidiary in the ordinary course of business; provided, however, that the aggregate amount of all
such loans and advances does not exceed $1,000,000 at any time;




          (f) (i) loans to franchise operators and owners of franchises acquired or funded pursuant to
the Loan Facility Agreement, the Rosey Rentals Loan Facility Agreement, the RIMCO Loan Facility
Agreement and the RBC Loan Facility Agreement and (ii) other adequately secured and properly
monitored loans to franchise operators and owners of franchises in an aggregate principal amount
outstanding, together with loans outstanding under clause (i) of this Section 8.4(f), not to exceed
the aggregate facility amounts available for borrowing by franchise operators that the Sponsor is
permitted to guarantee pursuant to Section 8.1;




          (g) acquire and own stock, obligations or securities received in settlement of debts (created
in the ordinary course of business) owing to any Guarantor or any of their Subsidiaries;




          (h) loans to Foreign Subsidiaries to the extent permitted under Section 8.1;




          (i) loans to franchise operators to extent permitted under Section 8.1; and




          (j) other Investments not to exceed $25,000,000 at any time;




 









 





          Section 8.5. Restricted Payments. The Sponsor will not, and will not permit its
Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any dividend on
any class of its stock, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of,
any shares of common stock or Indebtedness subordinated to the Guaranteed Obligations of the
Sponsor or any options, warrants, or other rights to purchase such common stock or such
subordinated Indebtedness, whether now or hereafter outstanding (each, a “Restricted Payment”),
except for (i) dividends payable by the Sponsor solely in shares of any class of its common stock,
(ii) Restricted Payments made by any Guarantor to the Sponsor or to another Guarantor and (iii) so
long as no Credit Event or Unmatured Credit Event has occurred and is continuing at the time such
dividend is paid or redemption or stock purchase is made, dividends, distributions, redemptions and
stock repurchases paid in cash which do not exceed fifty percent (50%) of Consolidated Net Income
of Sponsor (if greater than $0) for the immediately preceding Fiscal Year; provided, that
if the aggregate amount of all such dividends and distributions paid in cash in any Fiscal Year are
less than the amount permitted by clause (iii) above, the excess permitted amount for such year may
be carried forward once to the next succeeding Fiscal Year.




          Section 8.6. Sale of Assets. The Sponsor will not, and will not permit any of its
Subsidiaries to, convey, sell, lease, assign,
transfer or otherwise dispose of, any of its assets, business or property, whether now owned
or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary’s common stock to any Person other than the Sponsor or a Guarantor (or to qualify
directors if required by applicable law), except (a) the sale or other disposition for fair market
value of obsolete or worn out property or other property not necessary for operations disposed of
in the ordinary course of business; (b) the sale of inventory and Permitted Investments in the
ordinary course of business, (c) sales and dispositions permitted under Section 8.3(a) and
sale and leaseback transactions permitted under Section 8.9, (d) sales of assets, business
or property identified in writing to Servicer and approved by Participants in writing prior to the
Closing Date, (e) sales of assets in connection with the sale of a store owned by Sponsor to a
franchisee of Sponsor and (f) other sales of assets made on or after the Closing Date not to exceed
$30,000,000 in book value in the aggregate; provided that with respect to sales permitted under
clauses (d) and (e), no Credit Event shall have occurred and be continuing or result from such
sale.




          Section 8.7. Transactions with Affiliates. The Sponsor will not, and will not permit
any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Sponsor or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among
the Sponsor and its wholly-owned Subsidiaries not involving any other Affiliates and (c) any
Restricted Payment permitted by Section 8.5.




          Section 8.8. Restrictive Agreements. The Sponsor will not, and will not permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement




 









 




that
prohibits, restricts or imposes any condition upon (a) the ability of the Sponsor or any Subsidiary
to create, incur or permit any Lien upon any of its assets or properties, whether now owned or
hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to its common stock, to make or repay loans or advances to the Sponsor or any other
Subsidiary, to Guarantee Indebtedness of the Sponsor or any other Subsidiary or to transfer any of
its property or assets to the Sponsor or any Subsidiary of the Sponsor; provided, that (i)
the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or
any other Transaction Document, the 2002 Note Agreement or the 2005 Note Agreement, (ii) the
foregoing shall not apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only
to the Subsidiary that is sold and such sale is permitted hereunder, (iii) clause (a) shall not
apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions and conditions apply only to the property or
assets securing such Indebtedness, and (iv) clause (a) shall not apply to customary provisions in
leases restricting the assignment thereof.




          Section 8.9. Sale and Leaseback Transactions. The Sponsor will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer
any property, real or personal, used or useful in its business, whether now owned or
hereinafter acquired, and thereafter rent or lease such property or other property that it intends
to use for substantially the same purpose or purposes as the property sold or transferred;
provided, however, the Sponsor may engage in such sale and leaseback transactions so long as the
aggregate fair market value of all assets sold and leased back does not exceed $300,000,000 during
the term of this Agreement.




          Section 8.10. Amendment to Material Documents. The Sponsor will not, and will not
permit any Subsidiary to, amend, modify or waive any of its rights in a manner materially adverse
to the Participants under its certificate of incorporation, bylaws or other organizational
documents.




          Section 8.11. Accounting Changes. The Sponsor will not, and will not permit any
Subsidiary to, make any significant change in accounting treatment or reporting practices, except
as required by GAAP, or change the fiscal year of the Sponsor or of any Subsidiary, except to
change the fiscal year of a Subsidiary to conform its fiscal year to that of the Sponsor.




          Section 8.12. Activities of Aaron Rents Puerto Rico. Unless Aaron Rents Puerto Rico
has become a Guarantor in accordance with the terms of Section 6.10 of this Loan Finance
Agreement, the Sponsor will not permit Aaron Rents Puerto Rico to engage in any business or
activity other than (a) maintaining its existence and/or winding up its affairs and (b) activities
related to the completion of the tax audit ongoing on the Effective Date, and no other Subsidiary
shall make any additional Investment in Aaron Rents Puerto Rico other than in connection with the
businesses and activities set forth in clause (a) and (b) above.




 









 





ARTICLE IX

CREDIT EVENTS AND REMEDIES




     In the event that:



          Section 9.1. the Sponsor shall fail to pay any amount due hereunder; or




          Section 9.2. any representation or warranty made or deemed made by or on behalf of the Sponsor
or any Subsidiary in or in connection with this Agreement or any other Operative Document
(including the Schedules attached thereto) and any amendments or modifications hereof or waivers
hereunder, or in any certificate, report, financial statement or other document submitted to the
Servicer or the Participants by any Credit Party or any representative of any Credit Party pursuant
to or in connection with this Agreement or any other Operative Document shall prove to be incorrect
in any material respect when made or deemed made or submitted; or




          Section 9.3. the Sponsor shall fail to observe or perform any covenant or agreement contained
in Sections 6.1, 6.2, 6.3 (solely with respect to the Sponsor’s existence) or
Articles VII or VIII; or




          Section 9.4. any Credit Party shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those referred to in clauses 9.1, 9.2 and 9.3 above), and
such failure shall remain unremedied for 30 days after the earlier of (i) any officer of the
Sponsor becomes aware of such failure, or (ii) notice thereof shall have been given to the Sponsor
by the Servicer or any Participant; or




          Section 9.5. any event of default (after giving effect to any grace period) shall have
occurred and be continuing under the Revolving Credit Documents or the RIMCO Loan Facility
Agreement, or all or any part of the obligations due and owing under the Revolving Credit Agreement
or the RIMCO Loan Facility Agreement are accelerated, declared to be due and payable or required to
be prepaid or redeemed, in each case prior to the stated maturity thereof;




          Section 9.6. the Sponsor or any Subsidiary (whether as primary obligor or as guarantor or
other surety) shall fail to pay any principal of or premium or interest on any Material
Indebtedness that is outstanding, when and as the same shall become due and payable (whether at
scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement or instrument
evidencing such Indebtedness; or any other event shall occur or condition shall exist under any
agreement or instrument relating to such Indebtedness and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such event or condition
is to accelerate, or permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable; or required to be prepaid or redeemed (other
than by a regularly scheduled required prepayment or redemption),




 









 




purchased or defeased, or any
offer to prepay, redeem, purchase or defease such Indebtedness shall be required to be made, in
each case prior to the stated maturity thereof; or




          Section 9.7. the Sponsor or any Subsidiary shall (i) commence a voluntary case or other
proceeding or file any petition seeking liquidation, reorganization or other relief under any
federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official
of it or any substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described in clause (i) of
this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the Sponsor or any such Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment for the benefit of
creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or




          Section 9.8. an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the Sponsor or any
Subsidiary or its debts, or any substantial part of its assets, under any federal, state or
foreign bankruptcy, insolvency or other similar law now or hereafter in effect or (ii) the
appointment of a custodian, trustee, receiver, liquidator or other similar official for the Sponsor
or any Subsidiary or for a substantial part of its assets, and in any such case, such proceeding
or petition shall remain undismissed for a period of 60 days or an order or decree approving or
ordering any of the foregoing shall be entered; or




          Section 9.9. the Sponsor or any Subsidiary shall become unable to pay, shall admit in writing
its inability to pay, or shall fail to pay, its debts as they become due; or




          Section 9.10. an ERISA Event shall have occurred that when taken together with other ERISA
Events that have occurred, could reasonably be expected to result in liability to the Sponsor and
the Subsidiaries in an aggregate amount exceeding $2,500,000 or otherwise having a Material Adverse
Effect; or




          Section 9.11. judgments and orders for the payment of money in excess of $10,000,000 in the
aggregate, to the extent not covered by insurance for which the insurance carrier has acknowledged
coverage, shall be rendered against the Borrower or any Subsidiary, and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there
shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or




          Section 9.12. any non-monetary judgment or order shall be rendered against the Sponsor or any
Subsidiary that could reasonably be expected to have a Material Adverse Effect, and there shall be
a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or




 









 





          Section 9.13. a Change in Control shall occur or exist; or




          Section 9.14. any provision of any Guaranty Agreement shall for any reason cease to be valid
and binding on, or enforceable against, any Guarantor, or any Guarantor shall so state in writing,
or any Guarantor shall seek to terminate its Guaranty Agreement; or




          Section 9.15. there shall exist or occur any event of default as provided under the terms of
any other Operative Document, or any Operative Document ceases to be in full force and effect or
the validity or enforceability thereof is disaffirmed by or on behalf of Sponsor or any other
Credit Party, or at any time it is or becomes unlawful for Sponsor or any other Credit Party to
perform or comply with its obligations under any Operative Document, or the obligations of Sponsor
or any other Credit Party under any Operative Document are not or cease to be legal, valid and
binding on Sponsor or any such Credit Party;




then upon the occurrence and during the continuation of any such event (each, a “Credit
Event”):



the Servicer may, with the consent of the Required Participants, and upon the written request of
the Required Participants, shall, take any or all of the following actions, without prejudice to
the rights of the Servicer or any Participant to enforce its claims against Sponsor, any other
Credit Party, any Borrower or other obligor with respect to any Loan: (i) declare the Commitments
terminated, whereupon the Commitments shall terminate immediately and any unpaid Commitment Fee
shall forthwith become due and payable without any other notice of any kind (with the express
understanding that such termination of the Commitments shall not result in a termination of the
Participating Commitments of each Participant or of the obligation of the Servicer to fund any Loan
Commitment); (ii) demand that the Sponsor purchase specified or all outstanding Loans and Loan
Commitments by paying to the Servicer the Loan Indebtedness of
each such Loan and assuming the Servicer’s obligations under each Loan Commitment, whereupon such
amount shall become, forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Sponsor (with the express understanding the
limitations on Sponsor’s guaranty obligations set forth in Article 10 shall not apply); and (iii)
take any other action and exercise any other remedy available by contract or at law;
provided, that, if a Credit Event specified in Sections 9.7, 9.8 or 9.9 shall occur, the
result which would occur upon the giving of notice by the Servicer to any Credit Party, shall occur
automatically without the giving of any such notice.



In addition, the Servicer may, with the consent of the Required Participants and shall, upon the
written request of the Required Participants, (A) to the extent authorized to do so pursuant to the
Established Franchisee Loan Agreements (which authorization is limited to certain specified Credit
Events), (x) cease funding further Advances pursuant to the Established Franchisee Loan
Commitments and (y) declare all Loan Indebtedness outstanding pursuant to the Established
Franchisee Loan Commitments to be immediately due and payable in accordance with the terms of the
applicable Operative Documents and exercise all rights and remedies provided under the Operative
Documents, and (B) give notice to the Startup Franchisee Borrowers that the Startup Franchisee Loan
Commitments shall be terminated upon the date which is ninety (90) days after




 









 




receipt by each such
Startup Franchisee Borrower of such notice of termination, subject to such Startup Franchisee
Borrower’s right to term out advances for the Amortization Period.




ARTICLE X

GUARANTY




     In addition to its obligations upon the occurrence of a Credit Event or a Change of Control
and its other obligations pursuant to the Operative Documents, the Sponsor hereby agrees as
follows:



          Section 10.1. Unconditional Guaranty. The Sponsor hereby unconditionally and
irrevocably guarantees to the Servicer, each Participant and any transferee of the Participants,
the full and prompt payment of all of the Guaranteed Obligations relating to the Loans and all
costs, charges and expenses (including reasonable attorneys’ fees) actually incurred or sustained
by the Servicer or any Participant in enforcing the obligations of the Sponsor hereunder or the
obligations of the Borrowers under the applicable Operative Documents. If any portion of the Loan
Indebtedness with respect to any Defaulted Loan is not paid by the date specified herein, Sponsor
hereby agrees to and will immediately pay the same, without resort by Servicer or any Participant
to any other person or party. The obligation of Sponsor to Servicer and the Participants hereunder
is primary, absolute and unconditional, except as may be specifically set forth herein. This is a
guaranty of payment and not of collection. The obligations of the Sponsor pursuant to this Article
10 constitute a guarantee that is continuing in nature.



The Servicer may, with the consent of the Required Participants and shall, upon the written request
of the Required Participants, in the event that the obligations of the Sponsor with respect to a
Defaulted Loan have arisen hereunder, request that the Sponsor purchase the Defaulted Loan and
related Loan Commitment from the Servicer prior to the acceleration of the Defaulted Loan pursuant
to the terms of the applicable Operative Documents for an amount equal to the Loan
Indebtedness with respect to such Defaulted Loan, and Sponsor shall promptly upon receipt of such
request, purchase such Defaulted Loan and assume the Loan Commitment related thereto, and such
purchase by the Sponsor shall be deemed to be a payment hereunder in such amount.




          Section 10.2. [Reserved].




          Section 10.3. Continuing Guaranty. The obligations of the Sponsor pursuant to this
Article 10 constitute a guarantee which is continuing in nature and shall be effective with respect
to the full amount outstanding under all Guaranteed Obligations, now existing or hereafter made or
extended, regardless of the amount.




          Section 10.4. Waivers. The Sponsor hereby waives notice of Servicer’s and each
Participant’s acceptance of this Agreement and the creation, extension or renewal of any Loans or
other Guaranteed Obligations. Sponsor hereby consents and agrees that, at any time or times,
without notice to or further approval from Sponsor, and without in any way affecting the
obligations of Sponsor hereunder, Servicer and the Participants may, with or without




 









 




consideration
(i) release, compromise with, or agree not to sue, in whole or in part, any Borrower or any other
obligor, guarantor, endorser or surety on any Loans or any other Guaranteed Obligations, (ii)
renew, extend, accelerate, or increase or decrease the principal amount of any Loans or other
Guaranteed Obligations, either in whole or in part, (iii) amend, waive, or otherwise modify any of
the terms of any Loans or other Guaranteed Obligations or of any mortgage, deed of trust, security
agreement, or other undertaking of any of the Borrowers or any other obligor, endorser, guarantor
or surety in connection with any Loans or other Guaranteed Obligations, and (iv) apply any payment
received from Borrowers or from any other obligor, guarantor, endorser or surety on the Loans or
other Guaranteed Obligations to any of the liabilities of Borrowers or of such other obligor,
guarantor, endorser, or surety which Servicer may choose, subject, however, to the rights of
Sponsor to bring a separate action for any breach of the Operative Documents pursuant to Section
10.11.




          Section 10.5. Additional Actions. Subject to Section 10.11, Sponsor hereby consents
and agrees that the Servicer may at any time or times, either with or without consideration,
surrender, release or receive any property or other Collateral of any kind or nature whatsoever
held by it or for its account securing any Loans or other Guaranteed Obligations, or substitute any
Collateral so held by Servicer for other Collateral of like or different kind, without notice to or
further consent from Sponsor, and such surrender, receipt, release or substitution shall not in any
way affect the obligations of Sponsor hereunder. Subject to Section 10.11, Servicer shall have
full authority to adjust, compromise, and receive less than the amount due upon any such
Collateral, and may enter into any accord and satisfaction agreement with respect to the same as
Servicer may deem advisable without affecting the obligations of Sponsor hereunder. Servicer shall
be under no duty to undertake to collect upon such Collateral or any part thereof, and Sponsor’s
obligations hereunder shall not be affected by Servicer’s alleged negligence or mistake in judgment
in handling, disposing of, obtaining, or failing to collect upon or perfect a security interest in,
any such Collateral.




          Section 10.6. Additional Waivers. Sponsor hereby waives presentment, demand, protest,
and notice of dishonor of any of the
liabilities guaranteed hereby. Neither Servicer nor any Participant shall have any duty or
obligation (i) to proceed or exhaust any remedy against any Borrower, any other obligor, guarantor,
endorser, or surety on any Loans or other Guaranteed Obligations, or any other security held by
Servicer or any Participant for any Loans or other Guaranteed Obligations, or (ii) to give any
notice whatsoever to Borrowers, Sponsor, or any other obligor, guarantor, endorser, or surety on
any Loans or other Guaranteed Obligations, before bringing suit, exercising rights to any such
security or instituting proceedings of any kind against Sponsor, any Borrower, or any of them, and
Sponsor hereby waives any requirement for such actions by Servicer or any Participant. Upon
default by any Borrower and Servicer’s demand to Sponsor hereunder, Sponsor shall be held and bound
to Servicer and each Participant directly as principal debtor in respect of the payment of the
amounts hereby guaranteed, such liability of Sponsor being joint and several with each Borrower and
all other obligors, guarantors, endorsers and sureties on the Loans or other Guaranteed
Obligations, subject, however, to the rights of Sponsor to bring a separate action for any breach
of the Operative Documents pursuant to Section 10.11.




 









 





          Section 10.7. Postponement of Obligations. Until the Loan and other Guaranteed
Obligations of any Borrower to the Servicer and the Participants have been paid in full (i) all
present and future indebtedness of such Borrower to Sponsor (the “Subordinated Debt”) is hereby
postponed to the present and future indebtedness of such Borrower to Servicer and each Participant,
and all monies received from such Borrower or for its account by Sponsor with respect to such
Subordinated Debt shall be received in trust for Servicer and the Participants, and promptly upon
receipt, shall be paid over to Servicer for distribution to the Participants in accordance herewith
until such Borrower’s indebtedness to Servicer and the Participants is fully paid and satisfied,
all without prejudice to and without in any way affecting the obligations of Sponsor hereunder;
provided that unless a Loan Default or Loan Payment Default has occurred and is
continuing, the Sponsor may accept and retain any payments made by any Borrower to the Sponsor in
the ordinary course of business, and (ii) Sponsor shall not have any rights of subrogation or
otherwise to participate in any security held by the Servicer for any Loan to such Borrower or any
other Guaranteed Obligations arising therefrom, and Sponsor hereby waives such rights until such
time as such Loan and other Guaranteed Obligations have been paid in full to the Servicer and each
Participant (whether by repurchase by the Sponsor, pursuant to this Article 10 or otherwise).




          Section 10.8. Effect on Additional Guaranties. The obligations of the Sponsor
pursuant to this Article 10 are in addition to, and are not intended to supersede or be a
substitute for any other guarantee, suretyship agreement, or instrument which Servicer may hold in
connection with any Loans or other Guaranteed Obligations.




          Section 10.9. Reliance on Guaranty and Purchase Obligation; Disclaimer of Liability
Sponsor expressly acknowledges and agrees that each of the Servicer and the Participants, in making
its credit decision with regard to the funding of the Loans, will rely solely upon the guaranty and
purchase obligation of Sponsor set forth above and that neither the Servicer nor any Participant is
under any obligation or duty to perform any credit analysis or investigation with regard to the
creditworthiness of any Borrower. In addition, the Servicer expressly disclaims any responsibility
or liability for the authenticity of signatures on any of the
Loan Documents (other than the Servicer’s), the authority of the Persons executing the Loan
Documents (other than the Servicer) or the enforceability or compliance with laws of any of the
Loan Documents.





SPONSOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT SPONSOR’S GUARANTY OBLIGATIONS TO PURCHASE
LOANS UNDER THIS AGREEMENT ARE ABSOLUTE AND UNCONDITIONAL. WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, SPONSOR’S OBLIGATION SHALL NOT BE AFFECTED BY THE EXISTENCE OF ANY DEFAULT
BY ANY BORROWER UNDER THE APPLICABLE LOAN DOCUMENTS, ANY EXCHANGE, RELEASE OR NONPERFECTION
OF ANY LIEN WITH RESPECT TO ANY COLLATERAL SECURING PAYMENT OF ANY LOAN, THE SUBSTITUTION OR
RELEASE OF ANY ENTITY PRIMARILY OR SECONDARILY LIABLE FOR ANY LOAN, ANY LACK OF
ENFORCEABILITY OF ANY LOAN DOCUMENT, ANY LAW,



 









 






REGULATION, OR ORDER OF ANY JURISDICTION
AFFECTING ANY LOAN OR LOAN DOCUMENT OR THE RIGHTS OF THE HOLDER THEREOF, ANY CHANGE IN THE
CONDITION OR PROSPECTS OF THE SPONSOR, INCLUDING WITHOUT LIMITATION, INSOLVENCY, BANKRUPTCY,
REORGANIZATION OR SIMILAR PROCEEDING, OR ANY OTHER CIRCUMSTANCE WHICH MIGHT, BUT FOR THE
PROVISIONS OF THIS PARAGRAPH, CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OF SPONSOR’S
OBLIGATIONS HEREUNDER. SPONSOR’S OBLIGATIONS HEREUNDER SHALL NOT BE AFFECTED BY ANY SET-OFF
OR CLAIM WHICH IT MIGHT HAVE AGAINST THE SERVICER OR ANY PARTICIPANT, WHETHER ARISING OUT OF
THIS AGREEMENT OR OTHERWISE, BUT SUBJECT TO SECTION 10.12 BELOW.



          Section 10.10. Reinstatement of Obligations. The obligations of the Sponsor pursuant
to the Operative Documents shall continue to be effective or be reinstated, as the case may be, if
at any time payment or any part thereof, of principal of, interest on or any other amount with
respect to any Loan or any obligation of Sponsor pursuant to the Operative Documents is rescinded
or must otherwise be restored by the Servicer or any Participant upon the bankruptcy or
reorganization of Sponsor, any Borrower or any guarantor or otherwise.




          Section 10.11. Right to Bring Separate Action. Nothing contained in this Article 10
shall be construed to affect any other right that Sponsor may otherwise have under this Agreement,
or any Operative Document or Loan Documents, at law or in equity to institute an action or assert a
claim against the Servicer or any Participant based upon a breach of Servicer’s or such
Participant’s obligations set forth in the Operative Documents or Loan Documents or to assert a
compulsory counterclaim with respect thereto and any waiver of notice or other matter set forth in
this Article 10 shall not affect Sponsor’s right to seek damages arising from the failure of the
Servicer to give such notice otherwise required by the terms of the Operative Documents or Loan
Documents.




          Section 10.12. Subordination of Liens. The Sponsor hereby subordinates the lien and
priority of the Sponsor’s existing and future liens and other interests, if any, in and to the
Collateral to the Servicer’s existing and future
interest in the Collateral under the Loan Documents notwithstanding the time of attachment of
the interests of the Sponsor or the Servicer or the time the Loan Indebtedness or the Subordinated
Debt is incurred. Notwithstanding anything to the contrary contained in this Agreement, under
applicable law or otherwise, in the event that the liens of the Servicer are at any time
unperfected with respect to any or all of the Collateral, the lack of perfection by the Servicer as
to any such Collateral shall not affect the validity, enforceability or priority of any lien on the
Collateral in favor of the Sponsor. In any such event, the liens of the Sponsor shall have
priority over any and all other Liens in favor of any third party with respect to the Collateral
(including, but not limited to any trustee under the Bankruptcy Code) and the Sponsor shall be, and
is hereby constituted, as the Servicer’s agent and bailee for purposes of perfection of the Liens
of the Servicer in the Collateral such that the Lien in favor of the Sponsor shall be held by the
Sponsor for the benefit of the Servicer and the proceeds of any disposition of the Collateral of
any Borrower shall be and are in all respects




 









 




subject to the priority of right to payment and
satisfaction of first, the Loan Indebtedness of such Borrower and then, the Subordinated Debt with
respect to such Borrower. The lien priorities provided in this Section shall not be altered or
otherwise affected by any amendment, modification, supplement, extension, renewal, restatement or
refinancing of either the applicable Loan Indebtedness or the Subordinated Debt, nor by any action
or inaction which either the Servicer or the Borrowers may take or fail to take in respect of the
Collateral, except as otherwise provided above in this subsection.




          Section 10.13. Exercise of Remedies With Respect to Collateral.




          (a) Until the Loan Indebtedness of any Borrower has been fully and indefeasibly paid in cash,
the Sponsor shall not, without the prior written consent of the Servicer, ask, demand, assign,
declare a default under, sue for, liquidate, sell, foreclose, set off, collect, accept a surrender,
petition, commence or otherwise initiate any bankruptcy action (or join any other Person in so
doing) against the Borrower or its assets or otherwise realize or seek to realize upon all or any
part of the Collateral without the prior written consent of the Servicer or as expressly authorized
hereunder. In the event that following the occurrence of a Loan Default, the Servicer may from time
to time execute releases, partial releases, terminations, reconveyances, subordinations or other
documents releasing or otherwise limiting the Servicer’s interests in the Collateral in connection
with the exercise of the Servicer’s remedies or the refinancing of the Defaulted Loan, the Sponsor
agrees to execute and deliver at such time such further documents as the Servicer may require to
effect a corresponding change to the Sponsor’s position in the same Collateral.




          (b) In the event that the Loan Indebtedness of any Defaulted Loan is not repaid or repurchased
by the Sponsor as set forth herein, the Servicer, on behalf of the Participants, shall have the
exclusive right to exercise and enforce all privileges and rights with respect to the Collateral
according to the Servicer’s discretion and the exercise of its business judgment, including,
without limitation, the exclusive right to take or retake control or possession of such Collateral
and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate such Collateral.




          (c) Only the Servicer, acting on behalf of the Participants, shall have the right to restrict
or permit, or approve or disapprove, the sale, transfer or other disposition of Collateral
following the occurrence of a Loan Default where the Loan Indebtedness is not repaid or
repurchased by the Sponsor in accordance with the terms hereof. In the event the Servicer releases
its Liens on all or any part of the Collateral, the Sponsor will, immediately upon the request of
the Servicer, release its Liens upon the same Collateral, but only to the extent such Collateral is
sold or otherwise disposed of by the Borrower with the consent of the Servicer or in a
commercially reasonable manner by the Servicer or its agents. The Sponsor will immediately deliver
such releases, acknowledgments and other documents as the Servicer may require in connection
therewith.




 









 





          (d) (i) In exercising its rights pursuant to this Section 10.13, the Servicer agrees that it
will not release Liens or Collateral or commence enforcement actions under the Loan Documents
without the direction of the Required Participants. The Servicer agrees to administer the Loan
Documents and the Collateral and to make such demands and give such notices thereunder as the
Required Participants may request and to take such action to enforce the Loan Documents and to
realize upon, collect and dispose of the Collateral as the Required Participants may direct. The
Servicer shall not be required to take any action that is, in its opinion, contrary to law or the
terms of the Loan Documents or the Operative Documents or that would, in the opinion of the
Servicer, subject it or any of its officers, employees, agents or directors to liability and the
Servicer shall not be required to take any action unless and until it is indemnified to its
satisfaction by the Participants for any loss, cost or liability resulting from any required
action.




               (ii) The Servicer may at any time request directions from the Required Participants as to
any course of action or other matter relating hereto or relating to any of the Loan Documents.
Except as otherwise provided in this Agreement, directions of the Required Participants shall be
binding on all Participants hereunder.



               (iii) Nothing set forth in this Section 10.13 shall modify the rights of the Servicer set
forth in Section 3.1.



          Section 10.14. Rights Of Sponsor Upon Payment; Cooperation By Servicer. Upon receipt
by the Servicer of payment in full of the Loan Indebtedness of a Defaulted Loan by Sponsor, Sponsor
shall be subrogated to the rights of the Servicer with respect to the Loan and the Servicer shall
be deemed to have assigned to Sponsor, and Sponsor shall, to the extent permitted by applicable
law, automatically, immediately and without further action by any Person, be entitled to, all
rights and remedies that the Servicer may have had against the Defaulted Borrower and any other
Persons primarily or secondarily liable on such Defaulted Loan, including without limitation the
right to resort to any and all Collateral which secures the Defaulted Loan, and the Sponsor shall,
automatically, immediately and without further action, be deemed to have assumed all obligations of
the Servicer under the Loan Commitment and the Operative Documents with respect to such Defaulted
Loan, and the Servicer shall be released from any further obligations with respect thereto. The
Servicer agrees that, upon receipt of payment in full of the Loan Indebtedness, the Servicer shall:




          (a) execute on a timely basis, without recourse, representation or warranty of any kind
(except as to its own title), all such instruments and documents as are reasonably
requested in order to evidence Sponsor’s rights hereunder or permit Sponsor to exercise such
rights;




          (b) permit Sponsor at reasonable times and as often as may be reasonably requested to discuss
with appropriate Servicer employees and officers the Servicer’s experience, relationships, books,
accounts and files and to review the Servicer’s loan files relating to the




 









 




purchased Defaulted Loan
(and Sponsor hereby agrees to keep all such information confidential); and




          (c) otherwise reasonably cooperate with Sponsor in the exercise of Sponsor’s rights.



Sponsor shall reimburse the Servicer for its expenses reasonably and actually incurred in complying
with this Section.




ARTICLE XI

INDEMNIFICATION




          Section 11.1.  Indemnification.




          (a) In addition to the other rights of the Servicer and the Participants hereunder, Sponsor
hereby agrees to protect, indemnify and save harmless the Servicer, each Participant, and the
officers, directors, shareholders, employees, agents and representatives thereof (each an
“Indemnified Party”) from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs (including, without limitation, reasonable attorney
fees and costs actually incurred), expenses or disbursements of any kind or nature whatsoever,
whether direct, indirect, consequential or incidental, with respect to or in connection with or
arising out of (i) the execution and delivery of this Agreement, any other Operative Document or
any agreement or instrument contemplated hereby or thereby, including without limitation, the Loan
Documents, the performance by the parties hereto or thereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated hereby, (ii) the
making or administration of the Loan Commitments, the Loans or any of them, including any violation
of federal or state usury or other laws, provided that with respect to clauses (i) and (ii),
Sponsor shall have no obligation to indemnify the Servicer and all Participants for more than one
(1) counsel’s reasonable fees and expenses, (iii) the enforcement, performance and administration
of this Agreement or the Loan Documents or any powers granted to the Servicer hereunder or under
any Loan Documents, (iv) any misrepresentation of the Sponsor hereunder, (v) any matter arising
pursuant to any Environmental Laws as a result of the Collateral or (vi) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether or not the Indemnified Party is a named party thereto,
except to the extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnified Party or arise solely
from the nonpayment of any Loan Indebtedness notwithstanding the performance by Sponsor of all of
its obligations under the Operative Documents relating to such Loan Indebtedness.




          (b) Without limiting the generality of the foregoing, and separate and apart from any
obligation of Sponsor pursuant to Article 10, Sponsor agrees to indemnify and hold harmless




 









 




each
Indemnified Party from and against, and on demand will pay or reimburse any Indemnified Party for,
any and all (i) liabilities arising from a breach of any representation or warranty made by Sponsor
hereunder (whether or not Sponsor’s obligations under Article 10 have been satisfied), (ii) any
breach by Sponsor of its agreements with the Borrowers, (iii) any overadvance to any Borrower
caused by the transfer of ACH transfer instructions from the Aaron’s Proprietary System to the
Servicer by Sponsor resulting in aggregate advances to such Borrower in excess of the Loan
Commitment to such Borrower, and (iv) any breach by Sponsor of the terms of its MicroACH Service
Agreement with the Servicer or any failure by Sponsor to maintain such agreement in full force and
effect.




          (c) This indemnity shall survive the termination of this Agreement.




          Section 11.2. Notice Of Proceedings; Right To Defend




          (a) Any Person with an indemnification claim (or potential claim) pursuant to Section 11.1
(“Potential Indemnitee”) agrees to notify Sponsor (the “Potential Indemnitor”) in writing within a
reasonable time after receipt by it of written notice of the commencement of any administrative,
legal or other proceeding, suit or action by a Person (other than Indemnitee or an affiliate
thereof), if a claim for indemnification may be made by the Potential Indemnitee against the
Potential Indemnitor under this Article 11.




          (b) Following receipt by the Potential Indemnitor of any such notice from a Potential
Indemnitee, (an “Indemnity Notice”), the Potential Indemnitor shall be entitled at its own cost and
expense to investigate and participate in the proceeding, suit or action referred to in the
Indemnity Notice. At such time as the Potential Indemnitor shall have acknowledged in writing to
the Potential Indemnitee that it will pay any judgment, damages, or losses incurred by the
Potential Indemnitee in the proceeding, suit or action referred to in the Indemnity Notice other
than those for gross negligence or willful misconduct on the part of the Potential Indemnitee (at
which time the “Potential Indemnitor” shall be deemed to be the “Indemnitor” and the “Potential
Indemnitee” shall be deemed to be the “Indemnitee”), the Indemnitor shall be entitled, to the
extent that it shall desire, to assume the defense of such proceeding, suit or action, with counsel
reasonably satisfactory to the Indemnitee. If the Indemnitor shall so assume the defense of such
proceeding, suit or action, the Indemnitor shall conduct such defense with due diligence and at its
own cost and expense.




          (c) In the event that the Indemnitor so assumes the defense of such proceeding, suit or
action, the Indemnitor shall not be entitled to settle such proceeding, suit or action without the
written consent of the Indemnitee, provided that in the event that the Indemnitee does not
consent to such settlement not to be unreasonably withheld or delayed (i) the Indemnitor’s
indemnification liability in connection with such proceeding, suit or action shall not exceed the
amount of such proposed settlement and (ii) Indemnitee shall assume and pay all costs and expenses,
including reasonable attorneys’ fees, incurred by Indemnitor from the date that the Indemnitor
presented the Indemnitee the terms of the proposed settlement. An Indemnitor shall not be liable
to an Indemnitee for any settlement of a claim in any proceeding, suit or other




 









 




action referred to in an Indemnity Notice, consented to by the Indemnitee without the consent
of the Indemnitor.




          (d) A Potential Indemnitor shall be liable to a Potential Indemnitee for a settlement of a
claim in any proceeding, suit or other action referred to in an Indemnity Notice consented to by
such Potential Indemnitee only if (i) such Potential Indemnitor first had a reasonable opportunity
to investigate such claim and participate in such proceeding, suit or action, (ii) the Potential
Indemnitee gave the Potential Indemnitor at least ten (10) Business Days notice of the proposed
terms of such settlement prior to entering into such settlement and (iii) the Potential Indemnitor
did not acknowledge in writing to the Potential Indemnitee, by the expiration of such ten (10)
Business Days period, or such longer period as may be agreed to by the Potential Indemnitee and
Potential Indemnitor that it would pay any judgment, damages or losses incurred by the Potential
Indemnitee in such proceeding suit or action.




          Section 11.3. Third Party Beneficiaries No Persons shall be deemed to be third party
beneficiaries of this Agreement. Except as expressly otherwise provided in this Agreement, this
Agreement is solely for the benefit of Sponsor and the Servicer, the Participants and their
respective successors and permitted assigns, and no other Person shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.




ARTICLE XII

SURVIVAL OF LOAN FACILITY




     The terms of this Loan Facility Agreement shall survive the termination of the Commitments
hereunder and the termination of any Loan Commitment established pursuant the terms hereof until
the indefeasible payment in full of each of the Loans outstanding hereunder and Article 13 shall
survive the termination of this Agreement upon such repayment.



ARTICLE XIII

CONDITIONS PRECEDENT




     This Agreement shall not become effective, the Sponsor shall have no rights under this
Agreement and neither the Servicer nor the Participants shall be obligated to take, fulfill or
perform any action hereunder, until the following conditions have been fulfilled to the
satisfaction of the Servicer:



          Section 13.1. Receipt of Documents.




     The Servicer shall have received the following, each dated as of the Effective Date, in form
and substance satisfactory to the Servicer and (except in the case of the Fee Letter) the
Participants:



 









 





          (a) Duly executed counterparts of this Agreement.




          (b) Duly executed First Amendment to the Servicing Agreement, dated as of May 23, 2008 between
the Sponsor and the Servicer.




          (c) Duly executed counterparts of the Guaranty Agreement and the Fee Letter.




          (d) A duly executed closing certificate of Sponsor, in form and substance satisfactory to the
Servicer and each Participant.




          (e) A duly executed certificate of Sponsor identifying the Authorized Signatories, in form and
substance satisfactory to the Servicer and each Participant;




          (f) Copies of the organizational papers of Sponsor and each Guarantor, certified as true and
correct by the Secretaries of State of their respective States of incorporation, and certificates
from the Secretaries of State of such States of incorporation certifying Sponsor’s and each
Guarantor’s good standing as a corporation in such State.




          (g) A certificate of the Secretary or Assistant Secretary of each of Sponsor and each
Guarantor certifying (i) the names and true signatures of the officers of Sponsor and each
Guarantor authorized to execute the Guaranty Agreement, this Agreement, the Servicing Agreement and
the other Operative Documents to be delivered hereunder to which each is a party, (ii) the bylaws
of Sponsor and each Guarantor, respectively, and (iii) the resolutions of the Board of Directors of
each of Sponsor and each Guarantor, respectively, approving the Operative Documents to which each
is a party and the transactions contemplated hereby.




          (h) A favorable written opinion of Kilpatrick Stockton, LLP, counsel for Sponsor and
Guarantors, in a form satisfactory to the Servicer and each Participant and covering such matters
relating to the transactions contemplated hereby as the Servicer may reasonably request.




          (i) executed counterparts to the Revolving Credit Agreement and the Loan Documents (as defined
in the Revolving Credit Agreement) and the First Amendment to the Loan Facility Agreement and
Guaranty (RIMCO), dated as of May 23, 2008 between the Sponsor and the Servicer, each to become
effective contemporaneously with this Loan Facility Agreement.




          (j) All corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident hereto or delivered in connection
therewith shall be satisfactory in form and substance to the Servicer and the Participants.



In addition, each of the Participants shall have received a duly executed Participation Certificate
from the Servicer.




 









 





          Section 13.2.  Effect of Amendment and Restatement. Upon this Loan Facility Agreement
becoming effective pursuant to Section 13.1 and 13.2, from and after the Effective Date:




          (a) (1) all terms and conditions of the Existing Loan Facility Agreement and any other
Operative Document, as amended by this Agreement and the other Operative Documents being executed
and delivered on the Effective Date, continue in full force and effect, as amended hereby, and
shall constitute the legal, valid, binding and enforceable obligations of the Sponsor and its
Subsidiaries party thereto to the Servicer and the Participants; (2) the terms and conditions of
the Existing Loan Facility shall be amended as set forth herein and, as so amended, shall be
restated in their entirety, but only with respect to the rights, duties and obligations among
Sponsor, Participants and the Servicer accruing from and after the Effective Date; (3) all
indemnification obligations of the Sponsor and its Subsidiaries under the Existing Loan Facility
Agreement or any other “Operative Document” (as defined in the Existing Loan Facility Agreement)
shall survive the execution and delivery of this Loan Facility Agreement and shall continue in full
force and effect for the benefit of the Servicer, the Participants, and any other Person
indemnified under the Existing Loan Facility Agreement or such other “Operative Document” at any
time prior to the Effective Date; (4) any and all references in the Operative Documents to the
Existing Loan Facility Agreement shall, without further action of the parties, be deemed a
reference to the Existing Loan Facility Agreement, as amended and restated by this Loan Facility
Agreement, and as this Loan Facility Agreement shall be further amended or amended and restated
from time to time hereafter and (5) all Existing Loans, Existing Loan Commitments and Existing
Notes shall, to the extent outstanding on the Effective Date, be deemed to be Loans, Loan
Commitments and Notes, respectively, outstanding under this Agreement and shall not be deemed to be
paid, released, discharged or otherwise satisfied by the execution of this Agreement, and this
Agreement shall not constitute a refinancing, substitution or novation of such Loans, Loan
Commitments and Notes, or any of the other rights, duties and obligations of the parties hereunder;
and




          (b) (1) each Participant (other than Bank of America, N.A.) shall be deemed to have sold,
assigned, transferred and conveyed to the Servicer, without recourse or warranty, such
Participant’s undivided percentage ownership interest in the Participant’s Interest as in effect
immediately prior to the effectiveness of this Loan Facility Agreement, (ii) Servicer shall be
deemed to have sold, assigned, transferred and conveyed to the Participants (including Bank of
America, N.A.), without recourse or warranty, and each Participant shall be deemed to have
purchased from the Servicer, an undivided percentage ownership interest equal to each Participant’s
Pro Rata Share of the Participating Commitments after giving effect to this Loan Facility Agreement
in the Participant’s Interest, (iii) the Participant Fundings shall be reallocated by the
Participants such that each Participant has funded its Pro Rata Share based upon its Participating
Commitment after giving effect to this Amendment and (iv) the Servicer shall issue to each
Participant a Participation Certificate (which shall be deemed to automatically replace any
existing Participation Certificates) reflecting the relevant Participant’s revised Participating
Commitment Amount.




 









 





ARTICLE XIV

THE SERVICER




          Section 14.1. Appointment of Servicer as Agent. To the extent of its ownership
interest in the Loans, each
Participant hereby designates Servicer as its agent to administer all matters concerning the
Loans and to act as herein specified. Each Participant hereby irrevocably authorizes the Servicer
to take such actions on its behalf under the provisions of this Agreement, the other Operative
Documents, and all other instruments and agreements referred to herein or therein, and to exercise
such powers and to perform such duties hereunder and thereunder as are specifically delegated to or
required of the Servicer by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Servicer may perform any of its duties hereunder by or through its agents
or employees.




          Section 14.2. Nature of Duties of Servicer. The Servicer shall have no duties or
responsibilities except those expressly set forth in this Agreement and the other Operative
Documents. None of the Servicer nor any of its respective officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The Servicer shall not have
by reason of this Agreement a fiduciary relationship in respect of any Participant; and nothing in
this Agreement, express or implied, is intended to or shall be so construed as to impose upon the
Servicer any obligations in respect of this Agreement or the other Operative Documents except as
expressly set forth herein.




          Section 14.3. Lack of Reliance on the Servicer.




          (a) Independently and without reliance upon the Servicer, each Participant, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Credit Parties in connection with the taking or not taking
of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of the
Credit Parties, and, except as expressly provided in this Agreement, the Servicer shall have no
duty or responsibility, either initially or on a continuing basis, to provide any Participant with
any credit or other information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.




          (b) The Servicer shall not be responsible to any Participant for any recitals, statements,
information, representations or warranties herein or in any document, certificate or other writing
delivered in connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement, the Guaranty Agreement,
and Loan Document or any other documents contemplated hereby or thereby, or the financial condition
of the Credit Parties or any Borrower, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this Agreement, the
Guaranty Agreement or the other documents contemplated hereby or




 









 




thereby, or the financial
condition of the Credit Parties or any Borrower, or the existence or possible existence of any
Unmatured Credit Event or Credit Event.




          Section 14.4. Certain Rights of the Servicer. If the Servicer shall request
instructions from the Required Participants with respect to any action or actions (including the
failure to act) in connection with this Agreement, the Servicer shall be entitled to refrain from
such act or taking such act, unless and until the Servicer shall have received instructions from
the Required Participants; and the Servicer shall
not incur liability in any Person by reason of so refraining. Without limiting the foregoing,
no Participant shall have any right of action whatsoever against the Servicer as a result of the
Servicer acting or refraining from acting hereunder in accordance with the instructions of the
Required Participants.




          Section 14.5. Reliance by Servicer. The Servicer shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cable gram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. The Servicer may consult with legal counsel (including
counsel for any Credit Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts.




          Section 14.6. Indemnification of Servicer. To the extent the Servicer is not
reimbursed and indemnified by the Credit Parties, each Participant will reimburse and indemnify the
Servicer, ratably according to the respective Pro Rata Shares, in either case, for and against any
and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Servicer in performing its
duties hereunder, in any way relating to or arising out of this Agreement or the other Operative
Documents; provided that no Participant shall be liable to the Servicer for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Servicer’s gross negligence or willful misconduct.




          Section 14.7. The Servicer in its Individual Capacity. With respect to its
obligations under this Agreement and the amounts advanced by it, the Servicer shall have the same
rights and powers hereunder as any other Participant and may exercise the same as though it were
not performing the duties specified herein; and the terms “Participants”, “Required Participants”,
or any similar terms shall, unless the context clearly otherwise indicates, include the Servicer in
its individual capacity. The Servicer may accept deposits from, lend money to, and generally
engage in any kind of banking, trust, financial advisory or other business with the Consolidated
Companies or any affiliate of the Consolidated Companies as if it were not performing the duties
specified herein, and may accept fees and other consideration from the Consolidated Companies for
services in connection with this Agreement and otherwise without having to account for the same to
the Participants.




 









 





          Section 14.8. Holders of Participation Certificates. The Servicer may deem and treat
the payee of any Participation Certificate as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been filed with the
Servicer. Any request, authority or consent of any Person who, at the time of making such request
or giving such authority or consent, is the holder of any Participation Certificate shall be
conclusive and binding on any subsequent holder, transferee or assignee of such Participation
Certificate or of any Participation Certificate or Certificates issued in exchange therefor.




ARTICLE XV

MISCELLANEOUS




          Section 15.1. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, telecopy or similar teletransmission or
writing) and shall be given to such party at its address or applicable teletransmission number set
forth on the signature pages hereof, or such other address or applicable teletransmission number as
such party may hereafter specify by notice to the Servicer and Sponsor. Each such notice, request
or other communication shall be effective (i) if given by telex, when such telex is transmitted to
the telex number specified in this Section and the appropriate answerback is received, (ii) if
given by mail, 72 hours after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, (iii) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified in this Section and the appropriate confirmation is received, or (iv)
if given by any other means (including, without limitation, by air courier), when delivered or
received at the address specified in this Section; provided that notices to the Servicer
shall not be effective until received.




          Section 15.2. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the other Operative Documents, nor consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall be in writing and signed by the
Required Participants (and in the case of any amendment, the applicable Credit Party), and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall, unless in
writing and signed by all the Participants do any of the following: (i) waive any of the
conditions specified in Section 2.1 or 11.1, (ii) increase the Participating Commitment Amounts or
contractual obligations of the Participants to Servicer or Sponsor under this Agreement, (iii)
reduce the principal of, or interest on, the Participation Certificates or any fees hereunder, (iv)
postpone any date fixed for the payment in respect of principal of, or interest on, the
Participation Certificates or any fees hereunder, (v) agree to release any Guarantor from its
obligations under any Guaranty Agreement or the Sponsor from its obligations pursuant to this
Agreement, (vi) modify the definition of “Required Participants,” or (vii) modify Section 2.9,
Article 4, Article 10 or this Section 15.2. Notwithstanding the foregoing, no amendment, waiver or
consent shall, unless in writing and signed by the Servicer in addition to the Participants
required hereinabove to take such action, affect the rights or duties of the Servicer under this




 









 




Agreement or under any other Operative Document or Loan Document. In addition, notwithstanding the
foregoing, the Servicer and the Sponsor may, without the consent of or notice to the Participants,
enter into amendments, modifications or waivers with respect to the Servicing Agreement and the Fee
Letter as long as such amendments or modifications do not conflict with the terms of this
Agreement.




          Section 15.3. No Waiver; Remedies Cumulative. No failure or delay on the part of the
Servicer or any Participant in exercising any right or remedy hereunder or under any other
Operative Document, and no course of dealing between any Credit Party and the Servicer or any
Participant shall operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy hereunder or under any
other Operative Document preclude any other or further exercise thereof or the exercise of any
other right or remedy hereunder or thereunder. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which the Servicer or any Participant
would otherwise have. No notice to or demand on any Credit Party not required hereunder or under
any other Operative Document in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the rights of the
Servicer or the Participants to any other or further action in any circumstances without notice or
demand.




          Section 15.4. Payment of Expenses, Etc. Sponsor shall:




          (a) whether or not the transactions hereby contemplated are consummated, pay all reasonable,
out-of-pocket costs and expenses of the Servicer in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred relating to advice of counsel
as to the rights and duties of the Servicer and the Participants with respect thereto) of, and in
connection with the preparation, execution and delivery of, preservation of rights under,
enforcement of, and, after a Unmatured Credit Event or Credit Event, refinancing, renegotiation or
restructuring of, this Agreement and the other Operative Documents and the documents and
instruments referred to therein, and any amendment, waiver or consent relating thereto (including,
without limitation, the reasonable fees actually incurred and disbursements of counsel for the
Servicer), and in the case of enforcement of this Agreement or any Operative Document after a
Credit Event, all such reasonable, out-of-pocket costs and expenses (including, without limitation,
the reasonable fees actually incurred and reasonable disbursements and changes of counsel), for any
of the Participants; and




          (b) Pay and hold the Servicer and each of the Participants harmless from and against any and
all present and future stamp, documentary, and other similar Taxes with respect to this Agreement,
the Participation Certificates, the Loan Documents and any other Operative Documents, any
collateral described therein, or any payments due thereunder, and save the Servicer and each
Participant harmless from and against any and all liabilities with respect to or resulting from any
delay or omission to pay such Taxes.




 









 





          Section 15.5. Right of Setoff. In addition to and not in limitation of all rights of
offset that any Participant may have under applicable law, each Participant shall, upon the
occurrence of any Credit Event and whether or not such Participant has made any demand or any
Credit Party’s obligations have matured, have the right to appropriate and apply to the payment of
any Credit Party’s obligations hereunder and under the other Operative Documents, all deposits of
any Credit Party (general or special, time or demand, provisional or final) then or thereafter held
by and other indebtedness or property then or thereafter owing by such Participant or other holder
to any Credit Party, whether or not related to this Agreement or any transaction hereunder.




          Section 15.6. Benefit of Agreement; Assignments; Participations.




          (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, provided that Sponsor may not assign or
transfer any of its interest hereunder without the prior written consent of the Participants.




          (b) Any Participant may make, carry or transfer Loans at, to or for the account of, any of its
branch offices or the office of an Affiliate of such Participant.




          (c) Each Participant may assign all of its interests, rights and obligations under this
Agreement (including all of its Participating Commitments and the Funded Participant’s Interest at
the time owing to it and the Participation Certificates held by it) to any Eligible Assignee;
provided, however, that (i) the Sponsor and the Servicer shall each have given its
prior written consent to such assignment (which consent shall not be unreasonably withheld or
delayed) unless such assignment is to an Affiliate of the assigning Participant or, in the case of
the Sponsor, unless a Credit Event has occurred and is continuing hereunder, (ii) unless the
Participant is assigning its entire Participating Commitment, the Participating Commitment Amount
of the assigning Participant subject to each assignment (determined as of the date the assignment
and acceptance with respect to such assignment is delivered to the Servicer) shall not be less than
the lesser of (x) 50% of the amount of its Original Participating Commitment or (y) $1,000,000 and
shall be divided pro rata between the two Facilities, and (iii) the parties to each such assignment
shall execute and deliver to the Servicer an Assignment and Acceptance, together with the
Participation Certificate subject to such assignment and, unless such assignment is to an Affiliate
of such Participant, a processing and recordation fee of $1,000. Within ten (10) Business Days
after receipt of the notice and the Assignment and Acceptance, Servicer shall execute and deliver,
in exchange for the surrendered Participation Certificate, a new Participation Certificate to the
order of the assignor and such assignee in a principal amount equal to the applicable Participating
Commitment Amount retained and assumed by it, respectively, pursuant to such Assignment and
Acceptance. Such new Participation Certificate shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Participation Certificate, shall be dated the
date of the surrendered Participation Certificate which it replaces, and shall otherwise be in
substantially the form attached hereto.




 









 





          (d) Each Participant may, without the consent of Sponsor or the Servicer, sell participations
to one or more banks or other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Participating Commitment and the Funded Participant’s
Interest owing to it), provided, however, that (i) no Participant may sell a
participation in its Participating Commitment (after giving effect to any permitted assignment
hereof) unless it retains an aggregate exposure of 25% of its original Participating Commitment
Amount, provided, however, sales of participations to an Affiliate of such Participant shall not be
included in such calculation; provided, however, no such maximum amount shall be
applicable to any such participation sold at any time there exists an Credit Event hereunder, (ii)
such Participant’s obligations under this Agreement shall remain unchanged, (iii) such Participant
shall remain solely responsible to the other parties hereto for the performance of such
obligations, and (iv) the participating bank or other entity shall not be entitled to the benefit
(except through its selling Participant) of the cost protection provisions contained in Article 2
of this Agreement, and (v) Sponsor, Servicer and the other Participants shall continue to deal
solely and directly with each Participant in connection with such Participant’s rights and
obligations
under this Agreement and the other Operative Documents, and such Participant shall retain the
sole right to enforce the obligations of Sponsor relating to the Loans and to approve any
amendment, modification or waiver of any provisions of this Agreement (other than an amendment
requiring approval of 100% of the Participants). Each Participant shall promptly notify in writing
the Servicer and the Sponsor of any sale of a participation hereunder and shall certify to Sponsor
and Servicer its compliance with the terms hereof.




          (e) Any Participant or participant may, in connection with the assignment or participation or
proposed assignment or participation, pursuant to this Section, disclose to the assignee or
participant or proposed assignee or participant any information relating to Sponsor or the other
Consolidated Companies furnished to such Participant by or on behalf of Sponsor or any other
Consolidated Company. With respect to any disclosure of confidential, non-public, proprietary
information, such proposed assignee or participant shall agree to use the information only for the
purpose of making any necessary credit judgments with respect to this credit facility and not to
use the information in any manner prohibited by any law, including without limitation, the
securities laws of the United States. The proposed participant or assignee shall agree not to
disclose any of such information except (i) to directors, employees, auditors or counsel to whom it
is necessary to show such information, each of whom shall be informed of and shall acknowledge the
confidential nature of the information, (ii) in any statement or testimony pursuant to a subpoena
or order by any court, governmental body or other agency asserting jurisdiction over such entity,
or as otherwise required by law (provided prior notice is given to Sponsor and the Servicer unless
otherwise prohibited by the subpoena, order or law), and (iii) upon the request or demand of any
regulatory agency or authority with proper jurisdiction. The proposed participant or assignee
shall further agree to return all documents or other written material and copies thereof received
from any Participant, the Servicer or Sponsor relating to such confidential information unless
otherwise properly disposed of by such entity.




 









 





          (f) Any Participant may at any time assign all or any portion of its rights in this Agreement
to a Federal Reserve Bank; provided that no such assignment shall release the Participant
from any of its obligations hereunder.




          (g) Notwithstanding any provision of this Agreement to the contrary, the Servicer, together
with its Affiliates, shall at all times retain a Participating Commitment in an amount at least
equal to 20% of the aggregate principal amount of all outstanding Loan Commitments.




          Section 15.7. Governing Law; Submission to Jurisdiction.




          (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED
IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.




          (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER OPERATIVE
DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA, OR ANY OTHER COURT OF THE
STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, SPONSOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND SPONSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.




          (c) Nothing herein shall affect the right of the Servicer, any Participant, or any Credit
Party to commence legal proceedings or otherwise proceed against Sponsor in any other jurisdiction.




          Section 15.8. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together constitute one and the
same instrument.




          Section 15.9. Severability. In case any provision in or obligation under this
Agreement or the other Operative Documents shall be invalid, illegal or unenforceable, in whole or
in part, in any jurisdiction, the validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.




 









 





          Section 15.10. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be otherwise within the
limitation of, another covenant, shall not avoid the occurrence of a Unmatured Credit Event or an
Credit Event if such action is taken or condition exists.




          Section 15.11. No Joint Venture. Nothing in this Agreement, the Servicing Agreement or
any of the Loan Documents shall be construed as constituting Sponsor and the Servicer or any
Participant as partners or joint venturers or as creating the relationship of employer and
employee, master and servant, principle and agent, or franchisor or franchisee between Sponsor and
the Servicer or any Participant. Neither Sponsor nor Servicer or any Participant shall have any
right or authority to bind the other party or to assume or create any obligation or responsibility,
express or implied, on behalf of the other party or in the other party’s name. All rights, duties
and obligations under this Agreement and the Operative Documents are exclusively for the benefit of
Sponsor and the Servicer and Participants, as the case may be, and shall not be deemed to affect
any agreement between either of such parties and any third party (including, without limitation,
any Borrower).




          Section 15.12. Repurchase Right. Sponsor may at any time (upon thirty (30) days’ prior
written notice to Servicer) purchase from Servicer all Loans and Loan Commitments and all rights,
titles and interests of the Servicer and the Participants in and to the Loan Documents and the
Collateral relating thereto for a purchase price (payable in immediately available funds) equal to
the aggregate Loan Indebtedness, plus all amounts otherwise owing by the Sponsor pursuant to the
Operative Documents, and the Servicer shall assign, without recourse, representation or warranty
(except as to its own title), its right, title and interest therein to Sponsor upon the Servicer’s
receipt of such purchase price. Thereafter, Servicers shall have no responsibility with respect to
any Loans or Loan Commitments.




          Section 15.13. Confidentiality. Each Participant agrees that it will maintain in
confidence and will not disclose, publish or disseminate, to any Person, any confidential
information which it has or shall acquire during the term of this Agreement relating to the
business, operations and condition, financial or otherwise of the Sponsor or any Borrower, except
that such information may be disclosed by such Participant if and to the extent that:




          (a) such information is in the public domain at the time of disclosure;




          (b) such information is required to be disclosed by subpoena or similar process of applicable
law or regulations;




          (c) such information is required to be disclosed to any regulatory or administrative body or
commission to whose jurisdiction such Participant or any of its Affiliates may be subject;




 









 





          (d) such information is disclosed to counsel, auditors or other professional advisors to such
Participant or to affiliates of such Participant provided that such affiliates agree to keep such
information confidential as set forth herein;




          (e) such information is disclosed with the prior written consent of the Sponsor or the
relevant Borrower, as the case may be, which consent shall not be unreasonably withheld or delayed;




          (f) such information is disclosed in connection with any litigation or dispute between such
Participant and the Sponsor or any Borrower concerning the Operative Documents or the Loan
Documents of such Borrower;




          (g) such information is disclosed in connection with a prospective assignment, grant of a
participation interest in or other transfer by such Participant of any of its interest in the
Operative Documents, provided that the Person to whom such information shall be disclosed shall
have agreed to keep such information confidential as set forth herein;




          (h) such information was in the possession of such Person or such Person’s affiliates without
obligation of confidentiality prior to such Participant furnishing it to such Person; or




          (i) such information is received by such Participant, without restriction as to its disclosure
or use, from a Person, who, to such Participant’s knowledge or reasonable belief, was not
prohibited from disclosing it by any duty of confidentiality.




          (j) Each Participant agrees to use its best efforts to give the Sponsor prompt notice of any
subpoena or similar process referred to in clause (ii) above, provided that such Participant shall
have no liability in event such notice is not given.




          Section 15.14. Headings Descriptive; Entire Agreement. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and shall not in any
way affect the meaning or construction of any provision of this Agreement. This Agreement, the
other Operative Documents, and the agreements and documents required to be delivered pursuant to
the terms of this Agreement constitute the entire agreement among the parties hereto and thereto
regarding the subject matters hereof and thereof and supersede all prior agreements,
representations and understandings related to such subject matters.




          Section 15.15. Patriot Act. The Servicer and each Participant hereby notifies the
Sponsor and each of its Subsidiaries that pursuant to the requirements of the USA PATRIOT Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is
required to obtain, verify and record information that identifies each of the Sponsor and its
Subsidiaries, which information includes the name and address of the Sponsor or such Subsidiary and
other information that will allow such Participant or the Servicer, as applicable, to identify the
Sponsor or such Subsidiary in accordance with the Patriot Act.




 









 





[Signatures Set Forth on Next Page]




 









 





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



	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	AARON RENTS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	309 East Paces Ferry Road, NE

	 	 
	 	By:
	 	/s/ Gilbert L. Danielson
 

	 	 
	Atlanta, Georgia 30305

	 	 	 	 	 	Gilbert L. Danielson	 	 
	Attn: Gilbert L. Danielson

	 	 	 	 	 	Executive Vice President and	 	 
	Telecopy: 404-240-6584

	 	 	 	 	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	[Corporate Seal]	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	SUNTRUST BANK, as Servicer	 	 
	 
	 	 	 	 	 	 	 	 
	303 Peachtree Street NE, 3rd Floor

	 	 
	 	 	 	 	 	 
	Atlanta, Georgia 30308

	 	 	 	 	 	 	 	 
	Attention: Aaron Rents Program Manager

	 	 	 	By:
	 	/s/ Mike Smith
 

	 	 
	Telecopy No. (404) 724-3716

	 	 	 	 	 	Title: Director	 	 
	 

	 	 	 	 	 	          Mike Smith	 	 
	 
	 	 	 	 	 	 	 	 
	with a copy to:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	303 Peachtree Street NE, 3rd Floor
	 	 	 	 	 	 	 	 
	Atlanta, Georgia 30308
	 	 	 	 	 	 	 	 
	Attention: Don Besch
	 	 	 	 	 	 	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	SUNTRUST BANK	 	 
	 
	 	 	 	 	 	 	 	 
	303 Peachtree Street, NE, 3rd Floor

	 	 	 	 	 	 	 	 
	Atlanta, Georgia 30308
	 	 	 	 	 	 	 	 
	Attention: Aaron Rents Program Manager

	 	 	 	By:
	 	/s/ Mike Smith
 

	 	 
	Telecopy No.: (404) 724-3716

	 	 	 	 	 	Name: Mike Smith	 	 
	 

	 	 	 	 	 	Title: Director	 	 
	 
	 	 	 	 	 	 	 	 
	with a copy to:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	303 Peachtree Street NE, 3rd Floor
	 	 	 	 	 	 	 	 
	Atlanta, Georgia 30308
	 	 	 	 	 	 	 	 
	Attention: Don Besch
	 	 	 	 	 	 	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	WACHOVIA BANK, NATIONAL

ASSOCIATION	 	 
	Global Capital Markets

	 	 
	 	 	 	 	 	 
	1339 Chestnut St., PA 4843

	 	 	 	By:
	 	Thomas M. Harper
 

	 	 
	Philadelphia, PA 19107

	 	 	 	 	 	Name: Thomas M. Harper	 	 
	Attn: Anthony Braxton

	 	 	 	 	 	Title: Managing Director	 	 
	 
	 	 	 	 	 	 	 	 
	Telecopy: (267) 321-6700
	 	 	 	 	 	 	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	REGIONS BANK	 	 
	 
	 	 	 	 	 	 	 	 
	One Glenlake Parkway

	 	 	 	 	 	 	 	 
	Suite 400

	 	 	 	By:
	 	  Stephen H. Lee
 

	 	 
	Atlanta, GA 30328

	 	 	 	 	 	Name: Stephen H. Lee	 	 
	Attn: Stephen H. Lee

	 	 	 	 	 	Title: Senior Vice President	 	 
	Telecopy: (770) 481-4395
	 	 	 	 	 	 	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	BRANCH BANKING & TRUST CO.	 	 
	 
	 	 	 	 	 	 	 	 
	950 East Paces Ferry Rd.

	 	 	 	By:
	 	  Paul E. McLaughlin
 

	 	 
	Atlanta, GA 30326

	 	 	 	 	 	Name: Paul E. McLaughlin	 	 
	Attn: Paul McLaughlin

	 	 	 	 	 	Title: Senior Vice President	 	 
	Telecopy: (404) 442-5087
	 	 	 	 	 	 	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





	 	 	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 	 	 
	Bank of America, N.A.

	 	 	 	By:
	 	     /s/ Ken Bauchle
 

	 	 
	600 Peachtree St., NE

	 	 	 	 	 	Name: Ken Bauchle	 	 
	GA1-006-13-15, 13th Floor

	 	 	 	 	 	Title: Senior Vice President	 	 
	Atlanta, GA 30308
	 	 	 	 	 	 	 	 
	Attn: Ken Bauchle, SVP
	 	 	 	 	 	 	 	 
	Telecopy: (404) 607-6343
	 	 	 	 	 	 	 	 






[SIGNATURE PAGE TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT]




 









 





Schedule 1.1(a)




Pricing Grid




	 	 	 	 	 	 	 	 	 	 	 
	 	 	Total Debt to EBITDA	 	 	 	 
	Level	 	Ratio	 	Applicable Margin	 	Applicable Percentage
	I
	 	<1.50:1.00

	 	 	1.125	%	 	 	0.15	%
	II
	 	>1.50:1.00 but < 2.00:1.00

	 	 	1.250	%	 	 	0.20	%
	III
	 	>2.00:1.00 but < 2.50:1.00

	 	 	1.500	%	 	 	0.25	%
	IV
	 	>2.50:1.00

	 	 	1.750	%	 	 	0.30	%






 









 





Schedule 1.1(b)




Participant Commitments




	 	 	 	 	 
	Participant	 	Commitment Amount
	SunTrust Bank
	 	$	30,000,000.00	 
	Wachovia Bank, National Association
	 	$	20,000,000.00	 
	Regions Bank
	 	$	30,000,000.00	 
	Branch Banking & Trust Co.
	 	$	30,000,000.00	 
	Bank of America, N.A.
	 	$	15,000,000.00