EXHIBIT
10(ff)


 


FIRST AMENDMENT AND WAIVER
AGREEMENT


 


This
FIRST AMENDMENT AND WAIVER AGREEMENT (this “Agreement”),
is made as of May 28, 2004, by and between AARON RENTS, INC.,
a Georgia corporation (together with its successors and assigns, the “Company”), AARON RENTS,
INC. PUERTO RICO, a Puerto Rico corporation (together with its
successors and assigns, “ARPR”) and AARON INVESTMENT COMPANY, a Delaware
corporation (together with its successors and assigns, “AIC” and, together with the Company and ARPR, the
“Obligors”) and each of the Persons holding one or more Notes (defined
below) on the Effective Date (defined below) (collectively, the “Noteholders”), with respect to that certain Note Purchase
Agreement, dated as of August 15, 2002 (as in effect immediately prior to
giving effect to this Agreement, the “Existing Note Purchase
Agreement” and, as amended pursuant to this Agreement and as may be
further amended, restated or otherwise modified from time to time, the “Note Purchase Agreement”), by and among the Obligors and
each of the Persons listed on Schedule A thereto (collectively, the “Purchasers”). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Existing Note
Purchase Agreement.


 


RECITALS:


 


A.            Pursuant to the Existing Note
Purchase Agreement, the Obligors authorized the issuance and sale of
$50,000,000 aggregate principal amount of their 6.88% Senior Notes, due August
15, 2009 (the “Notes”) to the Purchasers.


B.            Certain Events of
Default have occurred under the Existing Note Purchase Agreement as more fully
described herein.


C.            The Obligors have
requested that the Noteholders waive certain of their rights to take action
against the Obligors that have arisen as a result of the Existing Event of
Default (defined below), and the undersigned Noteholders are agreeable, subject
to the terms and conditions set forth below, to waiving such rights.


D.            The Obligors have requested that the
Noteholders amend certain provisions of the Existing Note Purchase Agreement,
and the undersigned Noteholders are agreeable, subject to the terms and
conditions set forth below, to consenting to such amendments.


E.             The Noteholders are the holders of
all outstanding Notes as of the date hereof.


 


AGREEMENT:


 


NOW
THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Obligors and the Noteholders
agree as follows:


 


 





















 


1.                                      WAIVER; AMENDMENTS.


 


1.1.                            Waiver.


 


Subject
to the satisfaction of the conditions set forth in Section 3 hereof, each of
the undersigned Noteholders hereby waives its rights to take any action against
the Obligors based on any Event of Default (the “Existing
Event of Default”) arising under paragraph 6I(b) of the Note
Purchase Agreement solely as a result of the failure of the Company to be in
compliance with such covenant for the 2003 fiscal year due to the consummation
by the Company of Acquisitions during such fiscal year having total
consideration in excess of the limitations set forth in clause (e) of the
definition of Permitted Acquisitions. (such waiver herein referred to as the “Waiver”).


 


1.2.                            Amendments
to Existing Note Purchase Agreement.


 


Subject
to the satisfaction of the conditions set forth in Section 3 hereof, the
Existing Note Purchase Agreement is hereby amended in the manner specified in
Exhibit 1.1 (such amendments herein referred to as the “Amendments”).


 


1.3.                            Affirmation
of Obligations under Existing Note Purchase Agreement and Notes.


 


The
Obligors hereby acknowledge and affirm all of their respective obligations
under the terms of the Existing Note Purchase Agreement and the Notes.  The execution, delivery and effectiveness of
this Agreement shall not be deemed, except as expressly provided herein, (a) to
operate as a waiver of any right, power or remedy of any of the Noteholders
under the Existing Note Purchase Agreement or the Notes, nor constitute a
waiver of any provision thereunder, or (b) to prejudice any rights which
any Noteholder now has or may have in the future under or in connection with the
Note Purchase Agreement or the Notes or under applicable law.


 


2.                                      WARRANTIES AND REPRESENTATIONS.


 


To
induce the Noteholders to enter into this Agreement, each of the Obligors
represents and warrants to each of the Noteholders that as of the Effective Date
(as hereinafter defined):


 


2.1.                            Corporate
and Other Organization and Authority.


 


(a)           Each
Obligor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect; and


 


(b)           each
of the Obligors has the requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.


 


2.2.                            Authorization,
etc.


 


This
Agreement has been duly authorized by all necessary corporate action on the
part of the Obligors.  Each of this
Agreement, the Note Purchase Agreement and the Notes constitutes a


 


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legal,
valid and binding obligation of the Obligors, enforceable, in each case,
against such Obligor in accordance with its terms, except as such
enforceability may be limited by


 


(a)           applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and


 


(b)           general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).


 


2.3.                            No
Conflicts, etc.


 


The
execution and delivery by each Obligor of this Agreement and the performance by
such Obligor of its obligations under each of this Agreement, the Note Purchase
Agreement and the Notes do not conflict with, result in any breach in any of
the provisions of, constitute a default under, violate or result in the creation
of any Lien upon any property of such Obligor under the provisions of:


 


(a)           any
charter document, constitutive document, agreement with shareholders or
members, bylaws or any other organizational or governing agreement of such
Obligor;


 


(b)           any
agreement, instrument or conveyance by which such Obligor or any of its
Subsidiaries or any of their respective properties may be bound or affected; or


 


(c)           any
statute, rule or regulation or any order, judgment or award of any court,
tribunal or arbitrator by which such Obligor or any of its Subsidiaries or any
of their respective properties may be bound or affected.


 


2.4.                            Governmental
Consent.


 


The
execution and delivery by the Obligors of this Agreement and the performance by
the Obligors of their respective obligations hereunder and under the Note
Purchase Agreement and the Notes do not require any consents, approvals or
authorizations of, or filings, registrations or qualifications with, any
Governmental Authority on the part of any Obligor.


 


2.5.                            Existence
of Defaults.


 


After
giving effect to the Waiver, no event has occurred and no condition exists that
would constitute a Default or an Event of Default under the Note Purchase
Agreement.


 


3.                                      CONDITIONS TO EFFECTIVENESS OF WAIVER AND
AMENDMENTS.


 


The
Waiver and the Amendments shall become effective as of the date first written
above (the “Effective Date”), provided that (a) each of the Obligors
shall have executed and delivered to each of the Noteholders an original
counterpart of this Agreement and (b) all of the Noteholders shall have
indicated their agreement and written acceptance by executing and delivering
the applicable counterparts of this Agreement.


 


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4.                                      MISCELLANEOUS.


 


4.1.                            Governing
Law.


 


THIS AGREEMENT
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.


 


4.2.                            Duplicate
Originals.


 


Two or
more duplicate originals of this Agreement may be signed by the parties, each
of which shall be an original but all of which together shall constitute one
and the same instrument.  This Agreement
may be executed in one or more counterparts and shall be effective when at
least one counterpart shall have been executed by each party hereto, and each
set of counterparts that, collectively, show execution by each party hereto
shall constitute one duplicate original. 
Delivery of a facsimile of an executed signature page shall be effective
as delivery of an original.


 


4.3.                            Waiver
and Amendments.


 


Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, or by any action or inaction, but only by an instrument in
writing signed by each of the parties signatory hereto.


 


4.4.                            Costs
and Expenses.


 


Whether
or not the Waiver and Amendments become effective, each of the Obligors
confirms its obligation under Paragraph 11B of the Note Purchase Agreement and
agrees that, on the Effective Date (or if an invoice is delivered subsequent to
the Effective Date or if the Waiver and Amendments do not become effective
promptly after receiving any statement or invoice therefor), it will pay all
costs and expenses of the Noteholders relating to this Agreement, including,
but not limited to, the statement for reasonable fees and disbursements of the
Noteholders’ special counsel presented to the Company on the Effective
Date.  The Obligors will also promptly
pay, upon receipt thereof, each additional statement for reasonable fees and
disbursements of the Noteholder’s special counsel rendered after the Effective
Date in connection with this Agreement.


 


4.5.                            Successors
and Assigns.


 


This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto. 
The provisions hereof are intended to be for the benefit of the
Noteholders and shall be enforceable by any successor or assign of any such
Noteholder, whether or not an express assignment of rights hereunder shall have
been made by such Noteholder or its successors and assigns.


 


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4.6.                            Survival.


 


All
warranties, representations, certifications and covenants made by the Obligors
in this Agreement shall be considered to have been relied upon by the
Noteholders and shall survive the execution and delivery of this Agreement,
regardless of any investigation made by or on behalf of the Noteholders.


 


4.7.                            Part
of Existing Note Purchase Agreement; Future References, etc.


 


This
Agreement shall be construed in connection with and as a part of the Existing
Note Purchase Agreement and the Notes and, except as expressly amended by this
Agreement, all terms, conditions and covenants contained in the Existing Note
Purchase Agreement and the Notes are hereby ratified and shall be and remain in
full force and effect.  Any and all
notices, requests, certificates and other instruments executed and delivered
after the execution and delivery of this Agreement may refer to the Existing
Note Purchase Agreement and the Notes without making specific reference to this
Agreement, but nevertheless all such references shall include this Agreement
unless the context otherwise requires.


 


[Remainder
of page intentionally left blank.  Next
page is signature page.]


 


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IN
WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by a duly authorized officer or agent
thereof.


 


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  AARON
  RENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L.
  Danielson

  
	
   

  	
  Title:

  	
  Executive Vice
  President

  
	
   

  	
  and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  AARON
  RENTS, INC. PUERTO RICO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L.
  Danielson

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  AARON
  INVESTMENT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L.
  Danielson

  
	
   

  	
  Title:

  	
  Vice President
  and Treasurer

  
					



 


[Signature
Page to First Amendment and Waiver Agreement]


 





















 


	
  Accepted and
  Agreed:

  	
   

  
	
   

  	
   

  
	
  The foregoing
  Agreement is hereby accepted as of the date first above written.

  
	
   

  	
   

  
	
  THE
  PRUDENTIAL INSURANCE COMPANY OF AMERICA

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R.
  Derrick

  
	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
  GENERAL
  ELECTRIC CAPITAL ASSURANCE COMPANY

  
	
  By:

  	
  Prudential Private Placement Investors, L.P., as Investment Advisor

  
	
   

  	
  By:          Prudential Private
  Placement Investors, Inc., General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R. Derrick

  
	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  GENERAL
  ELECTRIC LIFE AND ANNUITY ASSURANCE COMPANY

  
	
  By:

  	
  Prudential Private Placement Investors, L.P., as Investment Advisor

  
	
   

  	
  By:          Prudential Private
  Placement Investors, Inc., General Partner

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R.
  Derrick

  
	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ING
  LIFE INSURANCE & ANNUITY COMPANY

  
	
  By:

  	
  Prudential Private Placement Investors, L.P., as Investment Advisor

  
	
   

  	
  By:          Prudential Private
  Placement Investors, Inc., General Partner

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R.
  Derrick

  
	
  Title:

  	
  Vice President

  
						



 


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EXHIBIT
1.1


 


AMENDMENTS


 


1.             Clause (f) of
Paragraph 6E (Indebtedness) of the Existing Note Purchase Agreement is hereby
amended by (a) deleting the reference to $5,000,000 in subclause (2) thereof
and inserting $250,000 in lieu thereof, and (b) deleting the reference to
$5,000,000 in subclause (3) thereof and inserting $10,000,000 in lieu thereof.


 


2.             Paragraph 6G
(Sale of Assets) of the Existing Note Purchase Agreement is hereby amended and
restated to read in its entirety as follows:


 


6G.        Sale
of Assets. The Company 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 an Obligor (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, lease or other disposition of inventory and Permitted
Investments in the ordinary course of business, (c) sales and dispositions
permitted under paragraph 6M and sale and leaseback transactions permitted
under paragraph 6O and (d) other sales of assets made on and after the First
Amendment Effective Date not to exceed $10,000,000 in book value in the
aggregate for all such sales.


 


3.             Clause (h) of
Paragraph 6I (Restricted Investments) of the Existing Note Purchase Agreement
is hereby amended and restated to read in its entirety as follows:


 


(h)         Other
Investments not to exceed $10,000,000 in the aggregate at any time.


 


4.             The following new
definition is hereby added to Paragraph 10B of the Existing Note Purchase
Agreement in its proper alphabetical order:


 


“First Amendment
Effective Date” shall mean May 28, 2004.


 


1