EXHIBIT 10(ii)


 


THIRD
AMENDMENT TO 


LOAN
FACILITY AGREEMENT AND GUARANTY


 


THIS THIRD AMENDMENT TO LOAN FACILITY
AGREEMENT AND GUARANTY (this “Amendment”),
is made and entered into as of July 27, 2005, by and among AARON RENTS,
INC., a Georgia corporation (“Sponsor”),
SUNTRUST BANK (“SunTrust”) and each of the
other lending institutions listed on the signature pages hereto (SunTrust
and such lenders, 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 a certain Loan Facility Agreement and Guaranty,
dated as of May 28, 2004, as amended by that certain First Amendment to
Loan Facility Agreement and Guaranty, dated as of September 27, 2004, as
amended by that Second Amendment to Loan Facility Agreement and Guaranty, dated
as of May 27, 2005 (so amended and as may be further amended, restated,
supplemented or otherwise modified from time to time, the “Loan
Facility Agreement”; capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Loan
Facility Agreement), pursuant to which the Participants have made certain
financial accommodations available to the Sponsor;


 


WHEREAS, the Sponsor has requested that the
Participants and the Servicer amend certain provisions of the Loan Facility
Agreement, and subject to the terms and conditions hereof, the Participants are
willing to do so;


 


NOW, THEREFORE, for good and valuable
consideration, the sufficiency and receipt of all of which are acknowledged,
the Sponsor, the Participants and the Servicer agree as follows:


 


1.                                       Amendments.


 


(a)  Section 1.1 of the Loan
Facility Agreement is hereby amended by (i) deleting the definition of
Note Purchase Agreement in its entirety and (ii) adding the following
definitions in the proper alphabetical order:


 


“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
and otherwise modified from time to time.


 


“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 and
otherwise modified from time to time.


 


(b)                                 Section 1.1
of the Loan Facility Agreement is hereby further amended by replacing the
definitions of Consolidated Total Debt, Maximum Commitment Amount, Permitted
Acquisition and Synthetic Lease Documents in their entirety with the following
definitions:


 


“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.  Notwithstanding anything
contained herein to the contrary, for purposes of calculating Consolidated
Total Debt as of any date, the obligations, liabilities and indebtedness of the
Sponsor under this Agreement shall be limited to fifty percent (50%) of the
aggregate outstanding principal amount of the Loans on such date.


 


“Maximum
Commitment Amount” shall mean $140,000,000, as such amount may
be reduced pursuant to Section 2.7, Section 2.8 or Section 15.2.


 


“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 $40,000,000, (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 $80,000,000 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.


 


“Synthetic Lease Documents” shall
mean, collectively, (i) the Amended and Restated Master Agreement, dated
as of October 31, 2001, among the Sponsor, SunTrust Banks, Inc., as
lessor (the “Lessor”), SunTrust Bank and Wachovia Bank, National Association,
formerly known as SouthTrust Bank of Georgia, N.A., as lenders, and SunTrust
Bank, as agent, (ii) the Amended and Restated Lease Agreement, dated as of
October 31, 2001, between the Lessor and the Sponsor and any supplements
thereto, (iii) the Amended and Restated Construction Agency Agreement,
dated as of October 31, 2001, among the Lessor and the Sponsor, (iv) the
Amended and Restated Guaranty, dated as of October 31, 2001, executed by
the Sponsor in favor of the Funding Parties (as defined


 


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therein), and (v) any and all security
agreements and assignments (Construction Contract, Architect’s Agreement,
Permits, Licenses and Governmental Approvals, and Plans and Specifications and
Drawings) executed from time to time by the Sponsor in favor of the Lessor, as
each of the foregoing may be amended, restated, supplemented, modified or
replaced from time to time.


 


(c)                                  Section 1.1
of the Loan Facility Agreement is hereby further amended by adding the
following new definitions in proper alphabetical order:


 


“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.


 


“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.


 


(d)                                 Subsection (h) of
Section 8.1 of the Loan Facility Agreement is hereby amended by replacing
it in its entirety with the following:


 


(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
pursuant to the SouthTrust Loan Facility Agreement in an aggregate principal
amount not to exceed $250,000, and (3) 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 $10,000,000, (4) loans made
pursuant to terms of the Rosey Rentals Loan Facility Agreement in an aggregate
principal amount not to exceed Twenty Five Million Dollars ($25,000,000), and (5) loans
made pursuant to the terms of the RBC Loan Facility Agreement in an aggregate
principal amount not to exceed Fifteen Million Canadian Dollars (Cdn.
$15,000,000);


 


(e)                                  Subsection (l)
of Section 8.1 of the Loan Facility Agreement is hereby amended by
replacing it in its entirety with the following:


 


(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 Guarantees of such Indebtedness by any Subsidiaries of
Sponsor; and


 


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(f)                                    Subsection (f) of
Section 8.4 of the Loan Facility Agreement is hereby amended by replacing
it in its entirety with the following:


 


(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 RBC Loan Facility Agreement and the SouthTrust 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)                                 Section 8.8
of the Loan Facility Agreement is hereby amended by replacing such Section in
its entirety with the following:


 


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 SouthTrust Loan
Facility Agreement, the 2002 Note Agreement, the 2005 Note Agreement, or the
Synthetic Lease Documents (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.


 


(h)                                 Section 8.9
of the Loan Facility Agreement is hereby amended by replacing such Section in
its entirety with the following:


 


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


 


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transactions
so long as the aggregate fair market value of all assets sold and leased back
does not exceed $100,000,000 during the term of this Agreement.


 


(i)                                     Section 9.11
of the Loan Facility Agreement is hereby amended by replacing such Section in
its entirety with the following:


 


Section 9.11 
any judgment or
order for the payment of money in excess of $1,000,000, or any two or more
judgments or orders for the payment of money in excess of $5,000,000, shall be
rendered against the Sponsor 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


 


2.                                       Conditions
to Effectiveness of this Amendment. Notwithstanding any other provision
of this Amendment and without affecting in any manner the rights of the
Participants hereunder, it is understood and agreed that this Amendment shall
not become effective, and the Sponsor shall have no rights under this
Amendment, until the Servicer shall have received (i) reimbursement or
payment of its costs and expenses incurred in connection with this Amendment or
otherwise outstanding (including reasonable fees, charges and disbursements of
King & Spalding LLP, counsel to the Servicer), (ii) a copy of the
2005 Note Agreement and the amendment to the 2002 Note Agreement, each in form
and substance reasonably satisfactory to the Servicer and (iii) executed
counterparts to this Amendment from the Sponsor, each of the Guarantors and the
Required Participants.


 


3.                                       Representations and Warranties.  To induce the Participants and the Servicer
to enter into this Amendment, each Credit Party hereby represents and warrants
to the Participants and the Servicer that:


 


(a)                                  The
execution, delivery and performance by such Credit Party of this Amendment (i) are
within such Credit Party’s power and authority; (ii) have been duly
authorized by all necessary corporate and shareholder action; (iii) are
not in contravention of any provision of such Credit Party’s certificate of
incorporation or bylaws or other organizational documents; (iv) do not
violate any law or regulation, or any order or decree of any Governmental
Authority; (v) do not conflict with or result in the breach or termination
of, constitute a default under or accelerate any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Credit Party or any of its Subsidiaries is a party or by which such
Credit Party or any such Subsidiary or any of their respective property is
bound; (vi) do not result in the creation or imposition of any Lien upon
any of the property of such Credit Party or any of its Subsidiaries; and (vii) do
not require the consent or approval of any Governmental Authority or any other
person;


 


(b)                                 This
Amendment has been duly executed and delivered for the benefit of or on behalf
of each Credit Party and constitutes a legal, valid and binding obligation of
each Credit Party, enforceable against such Credit Party in accordance with its
terms except as the enforceability hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting creditors’
rights and remedies in general; and


 


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(c)                                  After
giving effect to this Amendment, the representations and warranties contained
in the Loan Facility Agreement and the other Loan Documents are true and
correct in all material respects, and no Default or Event of Default has
occurred and is continuing as of the date hereof.


 


4.                                       Reaffirmation of Guaranty.  Each Guarantor consents to the execution
and delivery by the Sponsor of this Amendment and jointly and severally ratify and confirm the terms of the Subsidiary Guaranty
Agreement with respect to the indebtedness now or hereafter outstanding under
the Loan Facility Agreement as amended hereby and all promissory notes issued
thereunder. Each Guarantor acknowledges that, notwithstanding anything to the
contrary contained herein or in any other document evidencing any indebtedness
of the Sponsor to the Participants or any other obligation of the Sponsor, or
any actions now or hereafter taken by the Participants with respect to any
obligation of the Sponsor, the Subsidiary Guaranty Agreement (and in the case
of Sponsor, the guaranty as set forth in Article X of the Loan Facility
Agreement) (i) is and shall continue to be a primary, absolute and
unconditional obligation of such Guarantor, except as may be specifically set
forth in the Subsidiary Guaranty Agreement (or in the case of Sponsor, the
guaranty provisions set forth in Article X of the Loan Facility
Agreement), and (ii) is and shall continue to be in full force and effect
in accordance with its terms.  Nothing
contained herein to the contrary shall release, discharge, modify, change or
affect the original liability of the Guarantors under the Subsidiary Guaranty
Agreement (or in the case of Sponsor, the guaranty provisions set forth in Article X
of the Loan Facility Agreement).


 


5.                                       Effect of Amendment.  Except as set forth expressly herein, all
terms of the Loan Facility Agreement, as amended hereby, and the other Loan
Documents shall be and remain in full force and effect and shall constitute the
legal, valid, binding and enforceable obligations of the Sponsor to the
Participants and the Servicer.  The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
the Participants under the Loan Facility Agreement, nor constitute a waiver of
any provision of the Loan Facility Agreement. 
This Amendment shall constitute a Loan Document for all purposes of the
Loan Facility Agreement.


 


6.                                       Governing Law.   This Amendment shall be governed by, and
construed in accordance with, the internal laws of the State of Georgia and all
applicable federal laws of the United States of America.


 


7.                                       No Novation.  This Amendment is not intended by the parties
to be, and shall not be construed to be, a novation of the Loan Facility
Agreement or an accord and satisfaction in regard thereto.


 


8.                                       Costs and Expenses.  The Sponsor agrees to pay on demand all costs
and expenses of the Servicer in connection with the preparation, execution and
delivery of this Amendment, including, without limitation, the reasonable fees
and out-of-pocket expenses of outside counsel for the Servicer with respect
thereto.


 


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9.                                       Counterparts.  This Amendment may be executed by one or more
of the parties hereto in any number of separate counterparts, each of which
shall be deemed an original and all of which, taken together, shall be deemed
to constitute one and the same instrument. 
Delivery of an executed counterpart of this Amendment by facsimile
transmission or by electronic mail in pdf form shall be as effective as
delivery of a manually executed counterpart hereof.


 


10.                                 Binding Nature.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto, their respective successors,
successors-in-titles, and assigns.


 


11.                                 Entire Understanding.  This Amendment sets forth the entire
understanding of the parties with respect to the matters set forth herein, and
shall supersede any prior negotiations or agreements, whether written or oral,
with respect thereto.


 


[Signature Pages To Follow]


 


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IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed, under seal in the case of the
Sponsor and the Guarantors, by their respective authorized officers as of the
day and year first above written.


 


	
   

  	
  SPONSOR:

  
	
   

  	
   

  
	
   

  	
  AARON RENTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert
  L. Danielson

  	
   

  
	
   

  	
   

  	
  Gilbert L. Danielson

  
	
   

  	
   

  	
  Executive Vice President,

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   [Corporate Seal]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  AARON
  INVESTMENT COMPANY, as

  
	
   

  	
  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert
  L. Danielson

  	
   

  
	
   

  	
   

  	
   Name: 

  	
  Gilbert L.
  Danielson

  
	
   

  	
   

  	
   Title: 

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
  AARON RENTS,
  INC. PUERTO
  RICO, as

  Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert P. Sinclair, Jr.

  	
   

  
	
   

  	
  Name:

  	
   Robert P. Sinclair, Jr.

  
	
   

  	
  Title:

  	
   Treasurer

  
							



 


[SIGNATURE PAGE TO THIRD AMENDMENT]


 





















 


	
   

  	
  PARTICIPANTS:

  
	
   

  	
   

  
	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Ken Bauchle

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ken Bauchle

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
					



 





















 


	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
    /s/ Martha M. Winters

  	
   

  
	
   

  	
  Name:

  	
  Martha M. Winters

  
	
   

  	
  Title:

  	
  Director

  



 





















 


	
   

  	
  REGIONS BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Stephen
  H. Lee

  	
   

  
	
   

  	
   Name:

  	
  Stephen H. Lee

  
	
   

  	
   Title:

  	
  Senior Vice President

  
					



 





















 


	
   

  	
  BRANCH BANKING & TRUST CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul
  McLaughlin

  	
   

  
	
   

  	
   Name:

  	
  Paul McLaughlin

  
	
   

  	
   Title:

  	
  Senior Vice President