EXHIBIT 10(hh)


 


FIRST
AMENDMENT TO 


REVOLVING
CREDIT AGREEMENT 


 


THIS FIRST AMENDMENT TO REVOLVING CREDIT
AGREEMENT (this “Amendment”),
is made and entered into as of July 27, 2005, by and among AARON RENTS,
INC., a Georgia corporation (the “Borrower”),
AARON RENTS, INC. PUERTO RICO, a Puerto Rico corporation (the “Co-Borrower,”) together with the
Borrower, the “Borrowers”), the several
banks and other financial institutions from time to time party hereto
(collectively, the “Lenders”) and SUNTRUST BANK,
in its capacity as Administrative Agent for the Lenders (the “Administrative Agent”).


 


W
I  T  N  E  S  S  E  T  H:


 


WHEREAS, the Borrowers, the Lenders and the
Administrative Agent are parties to a certain Revolving Credit Agreement, dated
as of May 28, 2004 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement), pursuant to which the Lenders
have made certain financial accommodations available to the Borrowers;


 


WHEREAS, the Borrowers have requested that
the Lenders and the Administrative Agent amend certain provisions of the Credit
Agreement, and subject to the terms and conditions hereof, the Lenders are
willing to do so;


 


NOW, THEREFORE, for good and valuable
consideration, the sufficiency and receipt of all of which are acknowledged,
the Borrowers, the Lenders and the Administrative Agent agree as follows:


 


1.                                       Amendments


 


(a)  Section 1.1 of the Credit
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
Borrower, 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 Borrower, 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 Credit Agreement is hereby further amended by replacing the
definitions of Consolidated Total Debt, Permitted Acquisition and Synthetic
Lease Documents in their entirety with the following:


 


“Consolidated Total Debt”
shall mean, at any time, all then currently outstanding obligations,
liabilities and indebtedness of the Borrower 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
Borrower under the Loan Facility Agreement shall be limited to fifty percent
(50%) of the aggregate outstanding principal amount of the Loans on such date.


 


“Permitted Acquisition”
shall mean any Acquisition so long as (a) immediately before and after giving
effect to such Acquisition, no Default or Event of Default 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 Borrower and Subsidiaries will not be engaged in any business
other than businesses of the type conducted by the Borrower 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 Borrower, 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 Borrower and any supplements
thereto, (iii) the Amended and Restated Construction Agency Agreement,
dated as of October 31, 2001, among the Lessor and the Borrower, (iv) the
Amended and Restated Guaranty, dated as of October 31, 2001, executed by
the Borrower in favor of the Funding Parties (as defined 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.


 


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(c)                                  Section 1.1
of the Credit 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 Borrower, Royal Bank of
Canada and any other parties thereto dated on or about the date hereof, whereby
the Borrower and any Subsidiary may, among other things, guarantee loans made
to Canadian franchise operators and owners of the Borrower 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
(g) of Section 7.1 of the Credit Agreement is hereby amended by replacing it in
its entirety with the following:


 


(g) Guarantees by the Borrower of Indebtedness of certain franchise
operators of the Borrower, provided such guarantees are given by the Borrower
in connection with (1) loans made pursuant to the terms of the Loan Facility
Agreement, (2) loans made pursuant to the SouthTrust Loan Facility Agreement in
an aggregate principal amount not exceed $250,000, (3) loans made by SunTrust
Bank to finance the purchase of equity interests in certain franchises of the
Borrower 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 (k)
of Section 7.1 of the Credit Agreement is hereby amended by replacing it
in its entirety with the following:


 


(k)  Indebtedness as evidenced by (i) the
6.88% Senior Notes of Borrower in the amount of $50,000,000 issued pursuant to
the 2002 Note Agreement and (ii) the 5.03% Senior Notes of Borrower in the
amount of $60,000,000 issued pursuant to the 2005 Note Agreement, together with
Guarantees of such Indebtedness by any Subsidiaries of Borrower; and


 


(f)                                    Subsection
(f) of Section 7.4 of the Credit 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


 


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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 7.4(f), not to exceed
the aggregate facility amounts available for borrowing by franchise operators
that the Company is permitted to guarantee pursuant to Section 7.1; and


 


(g)                                 Section 7.8
of the Credit Agreement is hereby amended by replacing such Section in its
entirety with the following:


 


7.8. Restrictive
Agreements. 
The Borrower 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
Borrower 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 Borrower
or any other Subsidiary, to Guarantee Indebtedness of the Borrower or any other
Subsidiary or to transfer any of its property or assets to the Borrower or any
Subsidiary of the Borrower; provided, that (i) the foregoing shall
not apply to restrictions or conditions imposed by law or by this
Agreement, 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 7.9
of the Credit Agreement is hereby amended by replacing such Section in its
entirety with the following:


 


Section 7.9                                   Sale and Leaseback
Transactions. The Borrower 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 Borrower 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 $100,000,000 during the term of this Agreement.


 


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(i)                                     Section 8.1(l)
of the Credit Agreement is hereby amended by replacing such subsection in
its entirety with the following:


 


(l)                                     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 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


 


(j)                                     Schedule 1.1(b) of
the Credit Agreement is hereby amended by deleting such Schedule in its
entirety and replacing it with Schedule 1.1(b) attached to this
Amendment and by this reference incorporated herein and in the Credit
Agreement.


 


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 Borrower shall
have no rights under this Amendment, until the Administrative Agent 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 Administrative Agent), (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 Administrative Agent and (iii) executed
counterparts to this Amendment from the Borrower, each of the Guarantors and
the Required Lenders.


 


3.                                       Representations and Warranties.  To induce the Lenders and the Administrative
Agent to enter into this Amendment, the Borrowers hereby represent and warrant
to the Lenders and the Administrative Agent that:


 


(a)                                  The
execution, delivery and performance by the Borrowers of this Amendment (i) are
within the Borrowers’ power and authority; (ii) have been duly authorized
by all necessary corporate and shareholder action; (iii) are not in
contravention of any provision of the Borrowers’ certificates 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 the
Borrowers or any of their Subsidiaries is a party or by which the Borrowers 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 the Borrowers or any of their 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 the Borrowers and constitutes a legal, valid and binding obligation of each
Borrower, enforceable against each Borrowers in accordance with its terms
except as the enforceability


 


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hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors’ rights and remedies in general; and


 


(c)                                  After
giving effect to this Amendment, the representations and warranties contained
in the Credit 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.  The Guarantor consents to the execution and
delivery by the Borrowers of this Amendment and ratifies and confirms the terms
of the Subsidiary Guaranty Agreement with respect to the indebtedness now or
hereafter outstanding under the Credit Agreement as amended hereby and all
promissory notes issued thereunder. The Guarantor acknowledges that, notwithstanding
anything to the contrary contained herein or in any other document evidencing
any indebtedness of the Borrowers to the Lenders or any other obligation of the
Borrowers, or any actions now or hereafter taken by the Lenders with respect to
any obligation of the Borrowers, the Subsidiary Guaranty Agreement (i) is
and shall continue to be a primary obligation of the Guarantor, (ii) is
and shall continue to be an absolute, unconditional, continuing and irrevocable
guaranty of payment, and (iii) 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 Guarantor under the Subsidiary
Guaranty Agreement.


 


5.                                       Effect of Amendment.  Except as set forth expressly herein, all
terms of the Credit 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 Borrowers to the Lenders and
the Administrative Agent.  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
Lenders under the Credit Agreement, nor constitute a waiver of any provision of
the Credit Agreement.  This Amendment
shall constitute a Loan Document for all purposes of the Credit 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 Credit Agreement or
an accord and satisfaction in regard thereto.


 


8.                                       Costs and Expenses.  The Borrowers agree to pay on demand all
costs and expenses of the Administrative Agent 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 Administrative Agent with respect thereto.


 


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


 


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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
Borrowers and the Guarantor, by their respective authorized officers as of the
day and year first above written.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  AARON RENTS, INC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
   

  	
  Name: Gilbert L. Danielson

  
	
   

  	
   

  	
  Title: Executive Vice President,

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AARON RENTS, INC. PUERTO RICO

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Robert P. Sinclair, Jr.

  	
   

  
	
   

  	
   

  	
  Name: Robert P. Sinclair, Jr.

  
	
   

  	
   

  	
  Title:   Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GUARANTOR:

  
	
   

  	
  AARON
  INVESTMENT COMPANY, as

  
	
   

  	
  Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert
  L. Danielson

  	
   

  
	
   

  	
   

  	
  Name: Gilbert L. Danielson

  
	
   

  	
   

  	
  Title:   Vice President and
  Treasurer

  



 


[SIGNATURE PAGE TO FIRST
AMENDMENT]


 





















 


	
   

  	
   

  	
  SUNTRUST BANK,

  
	
  x

  	
   

  	
  as Administrative Agent, as Issuing Bank,
  as Swingline Lender and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ken
  Bauchle

  	
   

  
	
   

  	
   

  	
  Name: Ken Bauchle

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  



 


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  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Martha
  M. Winters

  	
   

  
	
   

  	
   

  	
  Name: Martha M. Winters

  	
   

  
	
   

  	
   

  	
  Title:   Director

  	
   

  



 


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  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

  	
   

  



 


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