Exhibit 10.1





Exhibit 10.1




EXECUTION COPY




AARON’S, INC.




and certain other Obligors



NOTE PURCHASE AGREEMENT





Dated as of July 5, 2011




$125,000,000 3.75% Senior Notes Due April 27, 2018



 


 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1. AUTHORIZATION OF ISSUE OF NOTES
	 	 	1	 
	 
	 	 	 	 
	2. PURCHASE AND SALE OF NOTES
	 	 	1	 
	 
	 	 	 	 
	3. CONDITIONS OF CLOSING
	 	 	2	 
	 
	 	 	 	 
	3A. Execution and Delivery of Documents
	 	 	2	 
	3B. Opinion of Purchaser’s Special Counsel
	 	 	3	 
	3C. Purchase Permitted By Applicable Laws
	 	 	3	 
	3D. Payment of Fees
	 	 	3	 
	3E. Sale to Other Purchasers
	 	 	3	 
	3F. Changes in Corporate Structure
	 	 	3	 
	3G. Private Placement Number
	 	 	3	 
	3H. Performance; No Default
	 	 	3	 
	3I. Representations and Warranties
	 	 	3	 
	3J. SunTrust Amendments
	 	 	4	 
	3K. Amendment to Existing Note Purchase Agreement
	 	 	4	 
	 
	 	 	 	 
	4. PREPAYMENTS
	 	 	4	 
	 
	 	 	 	 
	4A. Required Prepayments
	 	 	4	 
	4B. Optional Prepayment With Yield-Maintenance Amount
	 	 	4	 
	4C. Notice of Optional Prepayment
	 	 	4	 
	4D. Partial Payments Pro Rata
	 	 	5	 
	4E. Retirement of Notes
	 	 	5	 
	 
	 	 	 	 
	5. AFFIRMATIVE COVENANTS
	 	 	5	 
	 
	 	 	 	 
	5A. Financial Statements
	 	 	5	 
	5B. Information Required by Rule 144A
	 	 	6	 
	5C. Inspection of Property
	 	 	7	 
	5D.
Corporate Existence, Etc.
	 	 	7	 
	5E. Payment of Taxes and Claims
	 	 	7	 
	5F. Line of Business
	 	 	7	 
	5G. Maintenance of Most Favored Lender Status
	 	 	8	 
	5H. Covenant Relating to Domestic Subsidiaries
	 	 	8	 
	5I. Compliance with Laws
	 	 	8	 
	5J. Notices of Material Events
	 	 	9	 
	5K. Payment of Obligations
	 	 	9	 
	5L. Books and Records
	 	 	9	 
	5M. Maintenance of Properties; Insurance
	 	 	10	 
	5N. Covenant Relating to Foreign Subsidiaries
	 	 	10	 
	5O. Tax Good Standing Certificates
	 	 	10	 





 


i









 




TABLE OF CONTENTS
(continued)





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	6. NEGATIVE COVENANTS
	 	 	10	 
	 
	 	 	 	 
	6A. Fixed Charges Coverage Ratio
	 	 	10	 
	6B. Total Debt to EBITDA Ratio
	 	 	11	 
	6C. Total Adjusted Debt to Total Adjusted Capitalization Ratio
	 	 	11	 
	6D. Minimum Consolidated Net Worth
	 	 	11	 
	6E. Indebtedness
	 	 	11	 
	6F. Liens
	 	 	12	 
	6G. Sale of Assets
	 	 	14	 
	6H. Restricted Payments
	 	 	14	 
	6I. Restricted Investments
	 	 	15	 
	6J. Restrictive Agreements
	 	 	16	 
	6K. Amendments to Material Documents
	 	 	16	 
	6L. Accounting Changes
	 	 	16	 
	6M. Fundamental Changes
	 	 	16	 
	6N. Transactions with Affiliates
	 	 	17	 
	6O. Sale and Leaseback Transactions
	 	 	17	 
	6P. Terrorism Sanctions Regulations
	 	 	17	 
	 
	 	 	 	 
	7. EVENTS OF DEFAULT
	 	 	17	 
	 
	 	 	 	 
	7A. Acceleration
	 	 	17	 
	7B. Rescission of Acceleration
	 	 	21	 
	7C. Notice of Acceleration or Rescission
	 	 	21	 
	7D. Other Remedies
	 	 	21	 
	 
	 	 	 	 
	8. REPRESENTATIONS, COVENANTS AND WARRANTIES
	 	 	21	 
	 
	 	 	 	 
	8A. Organization
	 	 	21	 
	8B. Financial Statements
	 	 	22	 
	8C. Actions Pending
	 	 	22	 
	8D. Outstanding Indebtedness
	 	 	22	 
	8E. Title to Properties
	 	 	22	 
	8F. Taxes
	 	 	22	 
	8G. Conflicting Agreements and Other Matters
	 	 	23	 
	8H. Offering of Notes
	 	 	23	 
	8I. Use of Proceeds
	 	 	23	 
	8J. ERISA
	 	 	24	 
	8K. Governmental Consent
	 	 	24	 
	8L. Compliance with Laws
	 	 	24	 
	8M. Environmental Compliance
	 	 	24	 
	8N. Utility Company Status
	 	 	24	 
	8O. Investment Company Status
	 	 	24	 
	8P. Rule 144A
	 	 	25	 
	8Q. Disclosure
	 	 	25	 
	8R. Foreign
Assets Control Regulations, etc.
	 	 	25	 





 


ii









 




TABLE OF CONTENTS
(continued)





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	9. REPRESENTATIONS OF THE PURCHASER
	 	 	26	 
	 
	 	 	 	 
	9A. Nature of Purchase
	 	 	26	 
	9B. Source of Funds
	 	 	26	 
	 
	 	 	 	 
	10. DEFINITIONS; ACCOUNTING MATTERS
	 	 	28	 
	 
	 	 	 	 
	10A. Yield-Maintenance Terms
	 	 	28	 
	10B. Other Terms
	 	 	29	 
	10C. Accounting and Legal Principles, Terms and Determinations
	 	 	39	 
	 
	 	 	 	 
	11. MISCELLANEOUS
	 	 	39	 
	 
	 	 	 	 
	11A. Note Payments
	 	 	39	 
	11B. Expenses
	 	 	39	 
	11C. Consent to Amendments
	 	 	40	 
	11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes
	 	 	40	 
	11E. Persons Deemed Owners; Participations
	 	 	41	 
	11F. Survival of Representations and Warranties; Entire Agreement
	 	 	41	 
	11G. Successors and Assigns
	 	 	41	 
	11H. Confidential Information
	 	 	42	 
	11I. Notices
	 	 	42	 
	11J. Payments due on Non-Business Days
	 	 	43	 
	11K. Satisfaction Requirement
	 	 	43	 
	11L. Governing Law
	 	 	43	 
	11M. Consent to Jurisdiction; Waiver of Immunities
	 	 	44	 
	11N. Severability
	 	 	44	 
	11O. Descriptive Headings
	 	 	44	 
	11P. Counterparts
	 	 	44	 
	11Q. Independence of Covenants
	 	 	44	 
	11R. Waiver of Jury Trial
	 	 	45	 
	11S. Severalty of Obligations
	 	 	45	 
	11T. Independent Investigation
	 	 	45	 
	11U. Directly or Indirectly
	 	 	45	 






 


iii









 







Schedules and Exhibits




	 	 	 	 	 
	Schedule A
	 	—
	 	Purchaser Schedule

	 	 	 	 	 

	Schedule 3F
	 	—
	 	Changes in Corporate Structure

	Schedule 6E
	 	—
	 	Existing Indebtedness

	Schedule 6F
	 	—
	 	Existing Liens

	Schedule 6G
	 	—
	 	Assets to be Sold

	Schedule 6I
	 	—
	 	Existing Investments

	Schedule 8G
	 	—
	 	Restrictions on Indebtedness

	Schedule 8I
	 	—
	 	Use of Proceeds

	 	 	 	 	 

	Exhibit A
	 	—
	 	Form of Note

	 	 	 	 	 

	Exhibit B
	 	—
	 	Payment Instructions

	 	 	 	 	 

	Exhibit C
	 	—
	 	Form of Opinion of Counsel for the Obligors

	 	 	 	 	 

	Exhibit D
	 	—
	 	Form of Joinder Agreement

	 	 	 	 	 

	Exhibit E
	 	—
	 	SunTrust Amendments

	 	 	 	 	 

	Exhibit F
	 	—
	 	Amendment to Existing Note Purchase Agreement







 


 









 







AARON’S, INC.

and certain other Obligors

Aaron Building

East Paces Ferry Road, NE

Atlanta, GA 30305-2377




Dated as of July 5, 2011




To Each of the Purchasers named on

the attached Purchaser Schedule



Ladies and Gentlemen:



Each of AARON’S, INC., a Georgia corporation (together with its successors and assigns, the
“Company”), and AARON INVESTMENT COMPANY, a Delaware corporation (together with its successors and
assigns, “AIC”, and, together with the Company, collectively, the “Obligors”), hereby agrees with
each Purchaser as follows:



1. AUTHORIZATION OF ISSUE OF NOTES.




The Obligors will authorize the issue of their senior promissory notes in the aggregate
principal amount of $125,000,000, to be dated the date of issue thereof, to mature April 27, 2018,
to bear interest on the unpaid balance thereof from the date thereof until the principal thereof
shall have become due and payable at the rate of 3.75% per annum and on overdue payments at the
rate specified therein, and to be substantially in the form of Exhibit A attached hereto. The term
“Notes” as used herein shall include each such senior promissory note delivered pursuant to any
provision of this Agreement and each such senior promissory note delivered in substitution or
exchange for any other Note pursuant to any such provision.



2. PURCHASE AND SALE OF NOTES.




The Obligors hereby agree to sell to each Purchaser and, subject to the terms and conditions
herein set forth, each Purchaser agrees to purchase from the Obligors Notes in the aggregate
principal amount set forth opposite such Purchaser’s name on the Purchaser Schedule hereto at 100%
of such aggregate principal amount. The Obligors will deliver to each Purchaser, at the offices of
Bingham McCutchen LLP at 399 Park Avenue, New York, NY 10022, one or more Notes registered in its
name, evidencing the aggregate principal amount of Notes to be purchased by such Purchaser and in
the denomination or denominations specified in the Purchaser Schedule attached hereto, against
payment of the purchase price thereof by transfer of immediately available funds for credit to the
Obligors’ accounts held at such bank as shall be identified in a written instruction of the
Obligors in the form of Exhibit B attached hereto, delivered to each Purchaser on or before the
date of closing, which shall be July 5, 2011 or any other date upon which the parties hereto may
mutually agree (herein called the “Closing” or the “Date of Closing”).


 


 









 





3. CONDITIONS OF CLOSING.




The obligation of each Purchaser to purchase and pay for the Notes to be purchased by it
hereunder is subject to the satisfaction, on or before the Date of Closing, of the following
conditions:



3A. Execution and Delivery of Documents. Such Purchaser shall have received the following,
each to be dated the Date of Closing unless otherwise indicated:




(i) the Note(s) to be purchased by such Purchaser;




(ii) a favorable opinion of Kilpatrick Townsend & Stockton LLP, special counsel for the
Obligors (or such other counsel designated by the Obligors and acceptable to each Purchaser)
satisfactory to each Purchaser and substantially in the form of Exhibit C attached hereto
and as to such other matters as a Purchaser may reasonably request. The Obligors hereby
direct each such counsel to deliver such opinion, agree that the issuance and sale of any
Notes will constitute a reconfirmation of such direction, and understand and agree that each
Purchaser will and hereby is authorized to rely on such opinion;




(iii) the Articles/Certificate of Incorporation of each of the Obligors, each certified
as of a recent date by the Secretary of State of their respective jurisdictions of
incorporation;




(iv) the Bylaws of each of the Obligors, certified by each of their respective
Secretaries;




(v) an incumbency certificate from each Obligor signed by the Secretary or an Assistant
Secretary and one other officer (who is not signing any other document or agreement in
connection herewith) of each of the Obligors, certifying as to the names, titles and true
signatures of the officers of the Obligors authorized to sign this Agreement and the Notes
and the other documents to be delivered hereunder;




(vi) a certificate of the Secretary of each of the Obligors (A) attaching resolutions
of the board of directors of the Obligors evidencing approval of the transactions
contemplated by this Agreement and the issuance of the Notes and the execution, delivery and
performance thereof, and authorizing certain officers to execute and deliver the same, and
certifying that such resolutions were duly and validly adopted and have not since been
amended, revoked or rescinded, and (B) certifying that no dissolution or liquidation
proceedings as to the Obligors have been commenced or are contemplated;




(vii) an Officer’s Certificate from the Company certifying that the conditions
specified in paragraphs 3F, 3H and 3I have been satisfied;




(viii) corporate good standing certificates as to each Obligor from their respective
jurisdictions of incorporation; and




(ix) such additional documents or certificates with respect to such legal matters or
corporate or other proceedings related to the transactions contemplated hereby as may be
reasonably requested by such Purchaser.


 


2









 





3B. Opinion of Purchaser’s Special Counsel. Such Purchaser shall have received from Bingham
McCutchen LLP a favorable opinion satisfactory to such Purchaser as to such matters incident to the
matters herein contemplated as it may reasonably request.



3C. Purchase Permitted By Applicable Laws. The purchase of and payment for the Notes to be
purchased by such Purchaser on the Date of Closing on the terms and conditions herein provided
(including the use of the proceeds of such Notes by the Obligors) shall not violate any applicable
law or governmental regulation (including, without limitation, section 5 of the Securities Act or
Regulation T, U or X of the Board of Governors of the Federal Reserve System) and shall not subject
such Purchaser to any tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and such Purchaser shall have received such certificates
or other evidence as such Purchaser may request to establish compliance with this condition.



3D. Payment of Fees. The Obligors shall have paid the reasonable fees and expenses of Bingham
McCutchen LLP, as set forth in a statement to be delivered to the Company no later than two
Business Days prior to the Date of Closing.



3E. Sale to Other Purchasers. The Obligors shall have sold to the other Purchasers the Notes
to be purchased by them at the Closing and shall have received payment in full therefor.



3F. Changes in Corporate Structure. Except as set forth on Schedule 3F hereto, no Obligor
shall have changed its jurisdiction of incorporation or been a party to any merger or
consolidation, nor shall any Obligor have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most recent financial
statements. There shall have been no Material Adverse Effect since December 31, 2010.



3G. Private Placement Number. A Private Placement number issued by Standard & Poor’s CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the National Association of
Insurance Commissioners) shall have been obtained for the Notes.



3H. Performance; No Default. The Obligors shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed or complied with by
them prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by paragraph 8I) no Default or Event of Default
shall have occurred and be continuing.



3I. Representations and Warranties. The representations and warranties of the Obligors in
this Agreement shall be correct when made and at the time of Closing.


 


3









 





3J. SunTrust Amendments. The Company shall have delivered a true and correct copy, attached
hereto as Exhibit E, of any amendments to permit the Company to enter into the transactions
contemplated by this Agreement and the Notes that shall be necessary under (i) the
SunTrust Agreement, including, without limitation, an amendment of Section 7.8 thereof, and
(ii) the SunTrust Loan Facility Agreement, including, without limitation, an amendment of Section
8.8 thereof.



3K. Amendment to Existing Note Purchase Agreement. The Obligors and the Existing Noteholders
shall have entered into an amendment to the Existing Note Purchase Agreement and a true and correct
copy, attached hereto as Exhibit F, shall have been delivered to each Purchaser.



4. PREPAYMENTS.




The Notes shall be subject to prepayment with respect to the required prepayments specified in
paragraph 4A and the optional prepayments permitted by paragraph 4B.



4A. Required Prepayments. Until the Notes shall be paid in full, the Obligors shall apply to
the prepayment of the Notes, without Yield-Maintenance Amount, the sum of $25,000,000 on April 27
in each of the years 2014 to 2018, inclusive, and such principal amounts of the Notes, together
with interest thereon to the prepayment dates, shall become due on such prepayment dates;
provided that upon any partial prepayment of the Notes pursuant to paragraph 4B or purchase
of the Notes pursuant to paragraph 4E the principal amount of each required prepayment of the Notes
becoming due under this paragraph 4A on and after the date of such prepayment or purchase shall be
reduced in the same proportion as the aggregate unpaid principal amount of the Notes is reduced as
a result of such prepayment or purchase. The remaining principal amount of the Notes, together
with interest accrued thereon, shall become due on the maturity date of the Notes.



4B. Optional Prepayment With Yield-Maintenance Amount. The Notes shall be subject to
prepayment, in whole at any time or from time to time in part (in a minimum amount of $5,000,000
and in integral multiples of $100,000) at the option of the Obligors, at 100% of the principal
amount so prepaid plus interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each Note.



4C. Notice of Optional Prepayment. The Obligors shall give the holder of each Note
irrevocable written notice of any prepayment pursuant to paragraph 4B not less than 10 Business
Days prior to the prepayment date, specifying such prepayment date and the principal amount of the
Notes, and of the Notes held by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4B. Notice of prepayment having been given as
aforesaid, the principal amount of the Notes specified in such notice, together with interest
thereon to the prepayment date and together with the Yield-Maintenance Amount, if any, with respect
thereto, shall become due and payable on such prepayment date. The Obligors shall, on or before
the day on which it gives written notice of any prepayment pursuant to paragraph 4B, give
telephonic notice of the principal amount of the Notes to be prepaid and the prepayment date to
each Significant Holder which shall have designated a recipient of such notices in the Purchaser
Schedule attached hereto or by notice in writing to the Obligors.


 


4









 





4D. Partial Payments Pro Rata. Upon any partial prepayment of the Notes pursuant to paragraph
4A or 4B, the principal amount so prepaid shall be allocated to all Notes at the time outstanding
in proportion to the respective outstanding principal amounts thereof.



4E. Retirement of Notes. The Obligors shall not, and shall not permit any of their
Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their stated
final maturity (other than by prepayment pursuant to paragraph 4A or 4B or upon acceleration of
such final maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder unless such Obligor or such Subsidiary or Affiliate shall have
offered to prepay or otherwise retire or purchase or otherwise acquire, as the case may be, the
same proportion of the aggregate principal amount of Notes held by each other holder of Notes at
the time outstanding upon the same terms and conditions. Any Notes so prepaid or otherwise retired
or purchased or otherwise acquired by the Obligors or any of their Subsidiaries or Affiliates shall
not be deemed to be outstanding for any purpose under this Agreement.



5. AFFIRMATIVE COVENANTS.




5A. Financial Statements. The Company covenants that it will deliver to each Significant
Holder in duplicate:




(i) as soon as practicable and in any event within 45 days after the end of each
quarterly period (other than the last quarterly period) in each fiscal year, consolidated
statements of income, cash flows and changes in financial position of the Company and its
Subsidiaries for the period from the beginning of the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarterly period, setting forth in each case in comparative form figures for
the corresponding period in the preceding fiscal year, all in reasonable detail and
satisfactory in form to the Required Holder(s) and certified by an authorized financial
officer of the Company, subject to changes resulting from year-end adjustments;
provided, however, that delivery pursuant to clause (iii) below of copies of
the Quarterly Report on Form 10-Q of the Company for such quarterly period filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements of this
clause (i);




(ii) as soon as practicable and in any event within 90 days after the end of each
fiscal year, consolidated statements of income, cash flows and changes in financial position
for the Company and its Subsidiaries for such year, and a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year, setting forth in each case in
comparative form corresponding consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in form to the Required Holder(s) and, as to the
consolidated statements, reported on by independent public accountants of recognized
national standing selected by the Company whose report shall be without limitation as to the
scope of the audit and satisfactory in substance to the Required Holder(s);
provided, however, that delivery pursuant to clause (iii) below of copies of
the Annual Report on Form 10-K of the Company for such fiscal year filed with the Securities
and Exchange Commission shall be deemed to satisfy the requirements of this clause (ii);


 


5









 






(iii) promptly upon transmission thereof, copies of all such financial statements,
proxy statements, notices and reports as it shall send to its public stockholders and copies
of all registration statements (without exhibits) and all reports which it files with the
Securities and Exchange Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);




(iv) promptly upon receipt thereof, a copy of each other report submitted to the
Company or any Subsidiary by independent accountants in connection with any annual, interim
or special audit made by them of the books of the Company or any Subsidiary;




(v) as soon as available and in any event within 30 days after the end of each fiscal
year of the Company, a forecasted income statement, balance sheet, and statement of cash
flows for the following fiscal year, provided that, the Company shall not be required to
deliver such financial statements so long as the Company is not required to provide such
information to any other lender, whether pursuant to the SunTrust Agreement or otherwise;
and




(vi) with reasonable promptness, such other information and documents as such
Significant Holder may reasonably request.



Together with each delivery of financial statements required by clauses (i) and (ii) above, the
Company will deliver to each Significant Holder an Officer’s Certificate demonstrating (with
computations in reasonable detail) compliance by the Company and its Subsidiaries with the
provisions of paragraphs 6A through 6D, inclusive, and stating that there exists no Event of
Default or Default, or, if any Event of Default or Default exists, specifying the nature and period
of existence thereof and what action the Company proposes to take with respect thereto. Together
with each delivery of financial statements required by clause (ii) above, the Company will deliver
to each Significant Holder a certificate of such accountants stating that, in making the audit
necessary for their report on such financial statements, they have obtained no knowledge of any
Event of Default or Default, or, if they have obtained knowledge of any Event of Default or
Default, specifying the nature and period of existence thereof. Such accountants, however, shall
not be liable to anyone by reason of their failure to obtain knowledge of any Event of Default or
Default which would not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards.



5B. Information Required by Rule 144A. The Obligors covenant that they will, upon the request
of the holder of any Note, provide such holder, and any qualified institutional buyer designated by
such holder, such financial and other information as such holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Notes, except at such times as the Obligors are
subject to the reporting requirements of section 13 or 15(d) of the Exchange Act. For the purpose
of this paragraph 5B, the term “qualified institutional buyer” shall have the meaning specified in
Rule 144A under the Securities Act.


 


6









 





5C. Inspection of Property. The Company shall permit the representatives of each Significant
Holder that is an Institutional Investor:




(a) No Default — if no Default or Event of Default then exists, at the expense of such
Significant Holder and upon reasonable prior notice to the Company, to visit the principal
executive office of the Company, to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with the Company’s officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its independent public
accountants, and (with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each Subsidiary, all
at such reasonable times and as often as may be reasonably requested in writing; and




(b) Default — if a Default or Event of Default then exists, at the expense of the
Company to visit and inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public accountants (and
by this provision the Company authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Subsidiaries), all at such times and as often as may be
requested.



5D. Corporate Existence, Etc. Subject to paragraph 6M, each Obligor will at all times
preserve and keep in full force and effect its corporate existence. Subject to paragraphs 6G and
6M, the Company will at all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or franchise would not,
individually or in the aggregate, have a Material Adverse Effect.



5E. Payment of Taxes and Claims. The Company will and will cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments, governmental charges,
or levies imposed on them or any of their properties, assets, income or franchises, to the extent
such taxes and assessments have become due and payable and before they have become delinquent and
all claims for which sums have become due and payable that have or might become a Lien on
properties or assets of the Company or any Subsidiary, provided that neither the Company
nor any Subsidiary need pay any such tax or assessment or claims if (i) the amount, applicability
or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not reasonably be expected to
have a Material Adverse Effect.



5F. Line of Business. The Company will not, and will not permit any of its Subsidiaries to,
engage in any business if, as a result, the general nature of the business in which the Company and
its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the
general nature of the business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement.


 


7









 





5G. Maintenance of Most Favored Lender Status. The Obligors hereby covenant that if the
Obligors shall enter into any credit facility or loan agreement or any amendment thereof
(including, without limitation, any amendment to the SunTrust Agreement or the Existing Note
Purchase Agreement) pursuant to which the credit commitments available to the Obligors,
individually or in the aggregate to one or more of the Obligors under such credit facility or loan
agreement, and/or outstanding principal indebtedness incurred equals or exceeds $25,000,000 and
which provides for the benefit of the lenders thereunder any covenants which are more favorable to
such lenders than the covenants provided for in paragraphs 5 or 6 hereof for the benefit of the
holders of the Notes then, and in each and any such event, the covenants in this Agreement shall be
and shall be deemed to be, notwithstanding paragraph 11C and without any further action on the part
of the Obligors or any other Person being necessary or required, amended to afford the holders of
the Notes the same benefits and rights as such amendments, or other agreements, provide the lenders
thereof. The Obligors will promptly deliver to each holder of Notes a copy of each such agreement
or amendment, or any waiver or modification thereof. Notwithstanding the foregoing, the Obligors
agree to enter into such documentation as the Required Holders may reasonably request to evidence
the amendments provided for in this paragraph 5G.



5H. Covenant Relating to Domestic Subsidiaries. The Company shall not permit any Domestic
Subsidiary to enter into any Guarantee of the obligations under the SunTrust Agreement or the
SunTrust Loan Facility Agreement unless at the time of entering into such Guarantee, such Domestic
Subsidiary (an “Additional Obligor”) contemporaneously therewith executes and delivers, to each of
the holders of the Notes (i) a duly authorized Joinder Agreement substantially in the form of
Exhibit D hereto pursuant to which such Additional Obligor shall jointly and severally assume all
obligations under this Agreement and the Notes, and (ii) a certificate of such Domestic
Subsidiary’s secretary or another responsible officer certifying attached copies of such Domestic
Subsidiary’s constitutive documents and relevant resolutions, and an opinion of counsel to such
Person regarding the authorization, execution and delivery of such Joinder Agreement and its
enforceability, which opinion shall be satisfactory in all respects to the Required Holders. Upon
execution and delivery of any such Joinder Agreement by an Additional Obligor, this Agreement and
the Notes shall be deemed to be amended so that such Additional Obligor shall be an Obligor
hereunder and under the Notes without any further action on the part of the Additional Obligor, the
Obligors, or any other Person being necessary or required (notwithstanding paragraph 11C).



5I. Compliance with Laws. The Company will, and will cause each of its Subsidiaries to,
comply with all laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, the USA Patriot Act and Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective properties or to the
conduct of their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.


 


8









 





5J. Notices of Material Events. The Company will furnish to each Significant Holder prompt
written notice of the following:




(a) the occurrence of any Default or Event of Default;




(b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against the Company 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 Company 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, provided
that, the Company shall not be required to deliver such information set forth in this clause
(c) so long as the Company is not required to provide such information to any other lenders,
whether pursuant to the SunTrust Agreement or otherwise;




(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
Company and its Subsidiaries in an aggregate amount exceeding $2,500,000; and




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



Each notice delivered under this Paragraph 5J shall be accompanied by a written statement of a
Responsible Officer setting forth in reasonable details a description of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.



5K. Payment of Obligations. The Company will, and will cause each of its Subsidiaries to, pay
and discharge at or before maturity, all of its obligations and liabilities 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 Company 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.



5L. Books and Records. The Company 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 the Company in conformity with GAAP.


 


9









 





5M. Maintenance of Properties; Insurance. The Company 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 excepted, 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 and (b) maintain with financially sound and reputable insurance companies, insurance
(including self-insurance in amounts not exceeding the customary amounts maintained by similarly
situated companies and for which adequate reserves are maintained) 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 Company shall
maintain and keep in force insurance coverage on its inventory, as is consistent with best industry
practices.



5N. Covenant Relating to Foreign Subsidiaries. The Company shall not acquire or form any
additional Foreign Subsidiaries; provided, however, that the Company may acquire or form additional
Subsidiaries incorporated under the laws of Canada so long as the Company, within ten (10) Business
Days after any such Foreign Subsidiary is acquired or formed (i) notifies each Significant Holder
thereof (ii) delivers stock certificates and related pledge agreements, in form satisfactory to a
collateral agent acceptable to the Required Holders, 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
Company or any Domestic Subsidiary to secure the obligations under this Agreement and the Notes,
(iii) causes such Subsidiary to deliver simultaneously therewith documents of the type referred to
in paragraph 3A(iii) to paragraph 3A(vi), inclusive, applicable to such Foreign Subsidiary and such
other documents as may be reasonably requested by the Required Holders, and (iv) the holders of the
Notes enter into an intercreditor agreement, in form and substance satisfactory to the Required
Holders, with all other creditors of the Company having a similar covenant with the Company.
Notwithstanding the foregoing, the Company shall not be required to comply with the provisions of
this paragraph 5N so long as the Company is not required to comply with similar provisions with
regard to Foreign Subsidiaries pursuant to any credit facility or loan agreement to which the
Company or any of its Subsidiaries is a party, including, without limitation, the provisions of
section 5.10(b) of the SunTrust Agreement.



5O. Tax Good Standing Certificates. Within 15 days after the Date of Closing, each Obligor
shall deliver to each Purchaser tax good standing certificates from its jurisdiction of
incorporation.



6. NEGATIVE COVENANTS.




So long as any Note or amount owing under this Agreement shall remain unpaid, each Obligor
covenants as follows that:



6A. Fixed Charges Coverage Ratio. The Company will not permit the Consolidated Fixed Charge
Coverage Ratio to be less than 2.00 to 1.00.


 


10









 





6B. Total Debt to EBITDA Ratio. The Company will not, at any time, permit the Total Debt to
EBITDA Ratio to be greater than 3.00 to 1.00.



6C. Total Adjusted Debt to Total Adjusted Capitalization Ratio. The Company will not, at any
time, permit the Total Adjusted Debt to Total Adjusted Capital Ratio to be greater than 0.60 to
1.00.



6D. Minimum Consolidated Net Worth. The Company will not permit Consolidated Net Worth to be
less than the sum of (i) $631,391,000, plus (ii) 50% of cumulative positive Consolidated Net Income
accrued during each fiscal quarter plus (iii) 100% of the net proceeds from any public or private
offering of common stock of the Company commencing, with respect to the foregoing clauses (ii) and
(iii), with the fiscal quarter ending June 30, 2008, 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 Company, the Company shall
notify each holder of the Notes in writing of the amount of the net proceeds thereof.



6E. Indebtedness. The Company 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 this Agreement and the Notes;




(b) Indebtedness of any Subsidiary owing to any Obligor or any Wholly Owned Subsidiary
of any Obligor;




(c) Indebtedness of the Company or any Subsidiary incurred after the Date of Closing to
finance the acquisition, construction or improvement of any fixed or capital assets,
including Capitalized 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) Guarantees by the Company of Indebtedness of any other Obligor and Guarantees by
any Obligor of Indebtedness of the Company;




(e) Loans by the Company to its Foreign Subsidiaries, provided that the amount of such
loans, together with the amount of Guaranteed Indebtedness permitted to be incurred under
clause (h) below, does not exceed $30,000,000 at any time;


 


11









 






(f) Guarantees by the Company of Indebtedness of certain franchise operators of the
Company, provided such Guarantees are given by the Company in connection with
(1) loans made pursuant to the terms of the SunTrust Loan Facility Agreement, (2) loans
made pursuant to the RIMCO Agreement in an aggregate principal amount not to exceed
$7,500,000, and (3) loans made by SunTrust to finance the purchase of equity interests in
certain franchises of the Company in an aggregate principal amount not to exceed
$20,000,000;




(g) Endorsed negotiable instruments for collection in the ordinary course of business;




(h) Guarantees by the Company of Indebtedness of Foreign Subsidiaries, provided
that the sum of the aggregate principal amount of such Guarantees, together with the
principal amount of any loans from the Company to Foreign Subsidiaries permitted pursuant to
paragraph 6I(f) hereof does not exceed $30,000,000 in the aggregate at any time;




(i) Indebtedness existing on the Date of Closing and set forth on Schedule 6E 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;




(j) Indebtedness under the SunTrust Agreement;




(k) Indebtedness under the Existing Note Purchase Agreement;




(l) Indebtedness in respect of Private Placement Debt (other than Private Placement
Debt incurred in respect of the Existing Note Purchase Agreement and this Agreement) in an
aggregate principal amount not to exceed $150,000,000; and




(m) Other unsecured Indebtedness in an aggregate principal amount not to exceed
$75,000,000 at any time outstanding, provided that no Default or Event of Default
shall exist immediately prior to, or as the result of, the incurrence or assumption of such
Indebtedness.



6F. Liens. The Company 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, except:




(a) Liens on any property or asset of the Company or any Subsidiary existing on the
Date of Closing set forth on Schedule 6F; provided, that such Lien shall not apply
to any property or asset of the Company or any Subsidiary not encumbered thereby on the date
hereof;




(b) Liens for taxes, assessments, governmental charges or levies, statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics and materialmen and other similar
Liens, in each case, incurred in the ordinary course of business for sums not yet due or the
payment of which is not at the time required by paragraph 5E;


 


12









 






(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business (i) in connection with workers’ compensation, unemployment
insurance and other types of social security or retirement benefits, or (ii) to secure (or
to obtain letters of credit that secure) the performance of tenders, statutory obligations,
surety bonds, appeal bonds, bids, leases (other than leases providing for Capitalized Lease
Obligations), performance bonds, purchase, construction or sales contracts or other similar
obligations, in each case not incurred or made in connection with the borrowing of money,
the obtaining of advances or credit or the payment of a deferred purchase price, and which
do not, in the aggregate, materially detract from the value of the Company’s property or
assets or impair the use thereof or operation of its business;




(d) Liens on property or assets of the Company or any Subsidiary securing obligations
of such Obligor or Subsidiary to the Company or a Wholly Owned Subsidiary of the Company;




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




(f) [Intentionally Omitted];




(g) Liens in respect of purchase money obligations 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 Capitalized Lease Obligations); provided, that (i) such Lien secures
Indebtedness permitted by paragraph 6E(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;




(h) Liens (i) existing on any asset of any Person at the time such Person becomes a
Subsidiary of the Company, (ii) existing on any asset of any Person at the time such Person
is merged with or into the Company or any Subsidiary of the Company or (iii) existing on any
asset prior to the acquisition thereof by the Company or any Subsidiary of the Company;
provided, that any such Lien was not created in 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;




(i) Liens on shares of stock of any Foreign Subsidiary, only to the extent that the
Notes and the obligations relating thereto are secured pari passu with any other
Indebtedness or obligations secured thereby;


 


13









 






(j) judgment Liens not giving rise to an Event of Default or Liens created by or
existing from any litigation or legal proceedings that are currently being contested in good
faith for which adequate reserves have been established; and




(k) 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 any Obligor or any
Subsidiary.



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, (d) the sale
of any asset, business or property set forth in Schedule 6G attached hereto, (e) the sale of a
store (and related assets) owned by the Company to a franchisee of the Company, and (f) other sales
of assets not to exceed $30,000,000 in book value in the aggregate for all such sales,
provided that, with respect to clauses (d) and (e) only, (i) no Event of Default
shall have occurred and be continuing at the time of, or result from, any such sale and (ii) the
net cash proceeds from any such sale shall be applied to repay outstanding loans under the SunTrust
Agreement (but without any reduction in the aggregate revolving credit commitment thereunder).



6H. Restricted Payments. The Company 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 obligations of the Obligors under the Notes 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 Company solely in shares of any class of its common stock, (ii) Restricted
Payments made by any Subsidiary to any Obligor, and (iii) so long as no Default or Event of Default
has occurred and is continuing, or results from such dividend, at the time such dividend is paid or
redemption or stock repurchase is made (and after giving effect thereto), dividends, distributions,
redemptions and stock repurchases paid in cash during the then current fiscal year of the Company
which do not exceed fifty percent (50%) of Consolidated Net Income (if greater than $0) for the
immediately preceding fiscal year of the Company; provided, that if the aggregate amount of
all such dividends and distributions paid in cash in such 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 of the Company (and will be deemed to be used only after
other availability for Restricted Payments in such fiscal year has been exhausted).


 


14









 





6I. Restricted Investments. The Company 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, 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) Permitted Investments;




(b) Permitted Acquisitions;




(c) Investments made by any Obligor in any other Obligor;




(d) loans in the ordinary course of business to officers, stockholders and directors
provided that the aggregate amount of all such loans does not exceed $1,000,000 at any time;




(e) (i) loans to franchise operators and owners of franchises acquired or funded
pursuant to the SunTrust 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
paragraph 6I(e), not to exceed the aggregate facility amounts available for borrowing by
franchise operators that the Company is permitted to guarantee pursuant to paragraph 6E(f);




(f) loans by the Company to Foreign Subsidiaries, provided that the amount of such
loans together with the aggregate principal amount of Guarantees permitted pursuant to
paragraph 6E(h) hereof does not exceed $30,000,000 in the aggregate at any time;




(g) Investments (other than Permitted Investments) existing on the date hereof and set
forth on Schedule 6I (including Investments in Subsidiaries);




(h) Other Investments not to exceed $25,000,000 in the aggregate at any time; and




(i) Investments in investment grade corporate bonds and variable rate demand notes
having a rating of BBB+ (or the equivalent) or higher, at the time of acquisition thereof,
from S&P or Moody’s Investors Service, Inc. and in either case maturing within two years
from the date of acquisition thereof in an aggregate amount not to exceed $125,000,000 at
any time.


 


15









 





6J. Restrictive Agreements. The Company 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 Company 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 Company
or any other Subsidiary, to Guarantee Indebtedness of the Company or any other Subsidiary or to
transfer any of its property or assets to the Company or any Subsidiary of the Company;
provided, that (i) the foregoing shall not apply to restrictions or conditions imposed by
law or by this Agreement, the SunTrust Agreement, the SunTrust Loan Facility Agreement, the
Industrial Revenue Bonds or the Existing Note Purchase 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.



6K. Amendments to Material Documents. The Company will not, and will not permit any
Subsidiary to, amend, modify or waive any of its rights in a manner that would have a Material
Adverse Effect under their respective certificates of incorporation, bylaws or other organizational
documents.



6L. Accounting Changes. The Company will not, and will not permit any Subsidiary to, (a) make
any significant change in accounting treatment or reporting practices other than those permitted by
GAAP (each a “Permitted Change”), provided that a Permitted Change will only be permitted
to the extent that no Event of Default would occur at the end of the fiscal quarter of the Company
in which such Permitted Change is to occur, or at the end of the next succeeding fiscal quarter of
the Company, in each case if such Permitted Change were not to be made, or (b) change the fiscal
year of the Company or of any Subsidiary, except to change the fiscal year of a Subsidiary
to conform its fiscal year to that of the Company.




6M. Fundamental Changes.




(a) The Company 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 Default or Event of Default shall have occurred and be continuing (i) the
Company or any Subsidiary may merge with a Person if the Company (or such Subsidiary if the
Company is not a party to such merger) is the surviving Person, (ii) any Subsidiary may
merge into another Subsidiary or the Company; provided, however, that if the Company
is a party to such merger, the Company shall be the surviving Person, provided,
further, that if any Subsidiary to such merger is an Obligor, the Obligor 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 Company or


 


16









 






 to an Obligor, (iv) AIC or any
Additional Obligor may liquidate or dissolve into the Company if such liquidation or dissolution
does not have a Material Adverse Effect, (v) any other Subsidiary may liquidate or dissolve
if the Company determines in good faith that such liquidation or dissolution does not have a
Material Adverse Effect and such Subsidiary liquidates or dissolves into another Obligor or
the Company; 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 paragraph 6I.




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



6N. Transactions with Affiliates. The Company 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 Company or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties, (b) transactions between or among the Company and
its Wholly-Owned Subsidiaries not involving any other Affiliates, (c) any Restricted Payment
permitted by paragraph 6H and (d) transactions permitted under paragraph 6I(d).



6O. Sale and Leaseback Transactions. The Company 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 Company 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.



6P. Terrorism Sanctions Regulations. The Company will not, and will not permit any Controlled
Entity to, (a) become a Blocked Person or (b) have any investments in or engage in any dealings or
transactions with any Blocked Person if such investments, dealings or transactions would cause any
holder of a Note to be in violation of any laws or regulations that are applicable to such holder.



7. EVENTS OF DEFAULT.




7A. Acceleration. If any of the following events shall occur and be continuing for any reason
whatsoever (and whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):




(i) the Obligors default in the payment of any principal of or Yield-Maintenance Amount
payable with respect to any Note or any fee that may be due in connection with any of the
matters specified in paragraph 11B(ii)(C) when the same shall become due, either by the
terms thereof or otherwise as herein provided; or




(ii) the Obligors default in the payment of any interest on any Note for more than 3
Business Days after the date due; or


 


17









 






(iii) (A) any Obligor or any Subsidiary defaults (whether as primary obligor or as
guarantor or other surety) in any payment of principal of or interest on the SunTrust
Agreement, the SunTrust Loan Facility Agreement and the Existing Note Purchase Agreement
beyond any period of grace provided with respect thereto, or the Obligors or any Subsidiary
fail to perform or observe any other agreement, term or condition contained in such
agreements (or if any other event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due prior to any stated maturity, or any such obligation
shall be declared to be due and payable, or required to be prepaid or redeemed (other than a
regularly scheduled required prepayment or redemption), purchased or defeased, or any offer
to prepay, redeem, purchase, repurchase or defease such obligation shall be required to be
made, in each case prior to the stated maturity thereof; or (B) any Obligor or any
Subsidiary defaults (whether as primary obligor or as guarantor or other surety) in any
payment of principal of or interest on Indebtedness (or any Capitalized Lease Obligation,
any obligation under a conditional sale or other title retention agreement, any obligation
issued or assumed as full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit (other than, in each case in this paragraph 7A(iii)(B),
(x) the SunTrust Agreement, the SunTrust Loan Facility Agreement and the Existing Note
Purchase Agreement, which are addressed in paragraph 7A(iii)(A), and (y) any Indebtedness,
Capitalized Lease Obligations or other obligation in an aggregate principal amount that does
not exceed $5,000,000) beyond any period of grace provided with respect thereto, or the
Obligors or any Subsidiary fail to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is created (or if any other event
thereunder or under any such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders of such obligation
(or a trustee on behalf of such holder or holders) to cause, such obligation to become due
prior to any stated maturity, or any such obligation shall be declared to be due and
payable; or required to be prepaid or redeemed (other than a regularly scheduled required
prepayment or redemption), purchased or defeased, or any offer to prepay, redeem, purchase,
repurchase or defease such obligation shall be required to be made, in each case prior to
the stated maturity thereof; or




(iv) any representation or warranty made by or on behalf of any Obligor or by any
officer of any Obligor herein or in any other writing furnished in connection with or
pursuant to this Agreement or the transactions contemplated hereby shall be false in any
material respect on the date as of which made; or




(v) the Company fails to perform or observe any agreement contained in paragraph 6 or
paragraphs 5A or 5J(a); or


 


18









 






(vi) the Company fails to perform or observe any other agreement, term or condition
contained herein and such failure shall not be remedied within 30 days after the earlier of
(A) any Responsible Officer obtaining actual knowledge thereof or (B) notice thereof being
given to the Obligors by any Purchaser; or




(vii) the Company or any Subsidiary makes an assignment for the benefit of creditors or
is generally not paying its debts as such debts become due; or




(viii) any decree or order for relief in respect of the Company or any Subsidiary is
entered under any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law, whether now or hereafter in
effect (herein called the “Bankruptcy Law”), of any jurisdiction; or




(ix) the Company or any Subsidiary petitions or applies to any tribunal for, or
consents to, the appointment of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official of the Company or any Subsidiary, or of any substantial part
of the assets of the Company or any Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings relating to the Company or any
Subsidiary under the Bankruptcy Law of any other jurisdiction; or




(x) any such petition or application is filed, or any such proceedings are commenced,
against the Company or any Subsidiary and the Company or such Subsidiary by any act
indicates its approval thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver, custodian, liquidator
or similar official, or approving the petition in any such proceedings, and such order,
judgment or decree remains unstayed and in effect for more than 60 days; or




(xi) any order, judgment or decree is entered in any proceedings against the Company
decreeing the dissolution of the Company and such order, judgment or decree remains unstayed
and in effect for more than 60 days; or




(xii) any order, judgment or decree is entered in any proceedings against the Company
or any Subsidiary decreeing a split-up of the Company or such Subsidiary which requires the
divestiture of assets representing a substantial part, or the divestiture of the stock of a
Subsidiary whose assets represent a substantial part, of the consolidated assets of the
Company and its Subsidiaries (determined in accordance with GAAP) or which requires the
divestiture of assets, or stock of a Subsidiary, which shall have contributed a substantial
part of the consolidated net income of the Company and its Subsidiaries (determined in
accordance with GAAP) for any of the three fiscal years then most recently ended, and such
order, judgment or decree remains unstayed and in effect for more than 60 days ( as used in
this clause (xii), “substantial” shall mean in excess of 20% of consolidated assets or
consolidated net income, as the case may be); or


 


19









 






(xiii) any one or more judgments in an aggregate amount in excess of $10,000,000, to
the extent such judgments are not covered by insurance for which
coverage is acknowledged by the insurer, are rendered against the Company or any
Subsidiary and either (a) enforcement proceedings have been commenced by any creditor upon
any such judgments or (b) within 30 days after entry thereof, any such judgments are not
discharged or execution thereof stayed pending appeal, or within 30 days after the
expiration of any such stay, any such judgments are not discharged; or”; and




(xiv) (A) any Plan shall fail to satisfy the minimum funding standards of ERISA or the
Code for any plan year or part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of the Code, (B) a notice of
intent to terminate any Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of such proceedings, (C) the aggregate
“amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed
$1,000,000, (D) the Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, (E) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (F) the Company or any Subsidiary
establishes or amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the Company or any
Subsidiary thereunder; and any such event or events described in clauses (A) through (F)
above, either individually or together with any other such event or events, could reasonably
be expected to have a Material Adverse Effect; or




(xv) a Change in Control shall occur or exist.



then (a) if such event is an Event of Default specified in clause (i) or (ii) of this paragraph 7A,
the holder of any Note (other than the Obligors or any of their Subsidiaries or Affiliates) may at
its option during the continuance of such Event of Default, by notice in writing to the Obligors,
declare such Note to be, and such Note shall thereupon be and become, immediately due and payable
at par, together with interest accrued thereon, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Obligors, (b) if such event is an Event
of Default specified in clause (viii), (ix) or (x) of this paragraph 7A with respect to any
Obligor, all of the Notes at the time outstanding shall automatically become immediately due and
payable, together with interest accrued thereon and the Yield-Maintenance Amount, if any, with
respect to each Note, without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Obligors, and (c) with respect to any event constituting an Event of Default
(including an event described in clause (a), above), the Required Holder(s) may at its or their
option, by notice in writing to the Obligors, declare all of the Notes to be, and all of the Notes
shall thereupon be and become, immediately due and payable together with interest accrued thereon
and together with the Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Obligors.


 


20









 





The Obligors acknowledge, and the parties hereto agree, that each holder of a Note has the right to
maintain its investment in the Notes free from repayment by the Obligors (except as herein
specifically provided for) and that the provision for payment of the Yield-Maintenance Amount by
the Obligors in the event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right under such
circumstances.



7B. Rescission of Acceleration. At any time after any or all of the Notes shall have been
declared immediately due and payable pursuant to paragraph 7A, the Required Holder(s) may, by
notice in writing to the Obligors, rescind and annul such declaration and its consequences if (i)
the Obligors shall have paid all overdue interest on the Notes, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Notes which have become due otherwise
than by reason of such declaration, and interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes, (ii) the Obligors shall not have paid
any amounts which have become due solely by reason of such declaration, (iii) all Events of Default
and Defaults, other than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and (iv) no judgment or
decree shall have been entered for the payment of any amounts due pursuant to the Notes or this
Agreement. No such rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.



7C. Notice of Acceleration or Rescission. Whenever any Note shall be declared immediately due
and payable pursuant to paragraph 7A or any such declaration shall be rescinded and annulled
pursuant to paragraph 7B, the Obligors shall forthwith give written notice thereof to the holder of
each Note at the time outstanding.



7D. Other Remedies. If any Event of Default or Default shall occur and be continuing, the
holder of any Note may proceed to protect and enforce its rights under this Agreement and such Note
by exercising such remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the exercise of any power
granted in this Agreement. No remedy conferred in this Agreement upon the holder of any Note is
intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy conferred herein or now or hereafter existing at law
or in equity or by statute or otherwise.



8. REPRESENTATIONS, COVENANTS AND WARRANTIES.





Each Obligor represents, covenants and warrants as follows:



8A. Organization. Each Obligor and each of their Subsidiaries is a corporation duly organized
and existing in good standing under the respective laws of the jurisdictions of incorporation, and
are duly qualified as foreign corporations and are 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. Each of the Obligors has
the corporate power and authority to own or hold under lease the properties it purports to own
or hold under lease, to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes and to perform the provisions hereof and thereof.


 


21









 





8B. Financial Statements. The Company has furnished each Purchaser with the following
financial statements, identified by a principal financial officer of the Company: (i) a
consolidated balance sheet of the Company and its Subsidiaries as at December 31 in each of the
years 2008 to 2010, inclusive, and consolidated statements of income, cash flows and changes in
financial position of the Company and its Subsidiaries for each such year, all reported on by Ernst
& Young; and (ii) a consolidated balance sheet of the Company and its Subsidiaries as at March 31
in each of the years 2010 and 2011 and consolidated statements of income, cash flows and changes in
financial position for the three-month period ended on each such date, prepared by the Company.
Such financial statements (including any related schedules and/or notes) are true and correct in
all material respects (subject, as to interim statements, to changes resulting from audits and
year-end adjustments), have been prepared in accordance with GAAP consistently followed throughout
the periods involved and show all liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such principles. The balance sheets fairly
present the condition of the Company and its Subsidiaries as at the dates thereof, and the
statements of income, cash flows and changes in financial position fairly present the results of
the operations of the Company and its Subsidiaries and their cash flows for the periods indicated.
There has been no change in the business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as a whole that would have a Material Adverse Effect since
December 31, 2010.



8C. Actions Pending. There is no action, suit, investigation or proceeding pending or, to the
knowledge of the Obligors, threatened against the Company or any of its Subsidiaries, or any
properties or rights of the Company or any of its Subsidiaries, by or before any court, arbitrator
or administrative or governmental body which the Company believes would result in a Material
Adverse Effect.



8D. Outstanding Indebtedness. Neither the Company nor any of its Subsidiaries has outstanding
any Indebtedness except as permitted by paragraph 6E. There exists no default under the provisions
of any instrument evidencing such Indebtedness or of any agreement relating thereto.



8E. Title to Properties. The Company and each of its Subsidiaries have good and marketable
title to each of their respective real properties (other than properties which it leases) and good
title to all other respective properties and assets, including the properties and assets reflected
in the balance sheet as at December 31, 2010 referred to in paragraph 8B (other than properties and
assets disposed of in the ordinary course of business), subject to no Lien of any kind except Liens
permitted by paragraph 6F. All leases necessary in any material respect for the conduct of the
respective businesses of the Company and its Subsidiaries are valid and subsisting and are in full
force and effect.



8F. Taxes. The Company and each of its Subsidiaries have filed all federal, state and other
income tax returns which, to the knowledge of the officers of the Company, are required to be
filed, and each has paid all taxes as shown on such returns and on all assessments received by
it to the extent that such taxes have become due, except such taxes as are being contested in
good faith by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP.


 


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8G. Conflicting Agreements and Other Matters. Neither the Company nor any of its Subsidiaries
is a party to any contract or agreement or subject to any charter or other corporate restriction
which materially and adversely affects its business, property or assets, or financial condition.
Neither the execution nor delivery of this Agreement or the Notes, nor the offering, issuance and
sale of the Notes, nor fulfillment of nor compliance with the terms and provisions hereof and of
the Notes will conflict with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the creation of any Lien
upon any of the properties or assets of the Company or any of its Subsidiaries pursuant to, the
charter or by-laws of the Company or any of its Subsidiaries, any award of any arbitrator or any
agreement (including any agreement with stockholders), instrument, order, judgment, decree,
statute, law, rule or regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary,
any agreement relating thereto or any other contract or agreement (including its charter) which
limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of the
Company of the type to be evidenced by the Notes except as set forth in the agreements listed in
Schedule 8G attached hereto. The Company has obtained waivers, attached hereto as Exhibit E, with
respect to the agreements set forth in Schedule 8G, therein waiving all restrictions on the
incurrence of Indebtedness of the Company with respect to each such agreement as the result of the
Obligors’ entering into the transactions contemplated hereby, except where the failure to
obtain such waiver would not result in a Material Adverse Effect.



8H. Offering of Notes. Neither the Obligors nor any agent acting on their behalf has,
directly or indirectly, offered the Notes or any similar security of the Obligors for sale to, or
solicited any offers to buy the Notes or any similar security of the Obligors from, or otherwise
approached or negotiated with respect thereto with, any Person other than the Purchaser(s), and
neither the Obligors nor any agent acting on their behalf has taken or will take any action which
would subject the issuance or sale of the Notes to the provisions of section 5 of the Securities
Act or to the provisions of any securities or Blue Sky law of any applicable jurisdiction.



8I. Use of Proceeds. The Obligors will apply the proceeds of the sale of the Notes as set
forth in Schedule 8I. No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any Securities under such circumstances as to involve
the Obligors in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 1% of the value of the assets of the Company and its Subsidiaries and none of the
Obligors has any present intention that margin stock will constitute more than 1% of the value of
such assets. As used in this paragraph, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation U.


 


23









 





8J. ERISA. No accumulated funding deficiency (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, exists with respect to any Plan (other than a
Multiemployer Plan). No liability to the PBGC has been or is expected by the Company or any ERISA
Affiliate to be incurred with respect to any Plan (other than a Multiemployer Plan) by the Company,
any Subsidiary or any ERISA Affiliate which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Company and its Subsidiaries taken as a
whole. Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect to any Multiemployer
Plan which is or would be materially adverse to the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole. The execution and delivery of
this Agreement and the issuance and sale of the Notes will be exempt from, or will not involve any
transaction which is subject to, the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section 502(i) of ERISA or a
tax could be imposed pursuant to section 4975 of the Code. The representation by the Company in
the next preceding sentence is made in reliance upon and subject to the accuracy of the
representation in paragraph 9B.



8K. Governmental Consent. Neither the nature of the Company or of any Subsidiary, nor any of
their respective businesses or properties, nor any relationship between the Company or any
Subsidiary and any other Person, nor any circumstance in connection with the offering, issuance,
sale or delivery of the Notes is such as to require any authorization, consent, approval, exemption
or other action by or notice to or filing with any court or administrative or governmental body
(other than routine filings after the Date of Closing with the Securities and Exchange Commission
and/or state blue sky authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.



8L. Compliance with Laws. The Company and its Subsidiaries and all of their respective
properties and facilities have complied at all times and in all respects with all federal, state,
local and regional statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations, including those relating to protection of the environment except, in any
such case, where failure to comply would not result in a Material Adverse Effect.



8M. Environmental Compliance. The Company and its Subsidiaries and all of their respective
properties and facilities have complied at all times and in all respects with all foreign, federal,
state, local and regional statutes, laws, ordinances and judicial or administrative orders,
judgments, rulings and regulations relating to protection of the environment except, in any
such case, where failure to comply would not result in a Material Adverse Effect.



8N. Utility Company Status. Neither the Company nor any Subsidiary is a (i) “holding
company,” a “subsidiary company” of a “holding company” or an “affiliate” of a “holding company” or
of a “subsidiary company” of a “holding company,” as such terms are defined in the Public Utility
Holding Company Act of 2005, as amended or (ii) public utility within the meaning of the Federal
Power Act, as amended.



8O. Investment Company Status. Neither the Company nor any Subsidiary is an “investment
company” or a company “controlled” by an “investment company” within the
meaning of the Investment Company Act of 1940, as amended, or an “investment adviser” within
the meaning of the Investment Advisers Act of 1940, as amended.


 


24









 





8P. Rule 144A. The Notes are not of the same class as securities of the Obligors, if any,
listed on a national securities exchange, registered under Section 6 of the Exchange Act or quoted
in a U.S. automated inter-dealer quotation system.



8Q. Disclosure. Neither this Agreement nor any other document, certificate or statement
furnished to any Purchaser by or on behalf of the Obligors in connection herewith contains any
untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which has or in the future may (so far as the Company can now
foresee) have a Material Adverse Effect and which has not been set forth in this Agreement or in
the other documents, certificates and statements furnished to each Purchaser by or on behalf of the
Obligors prior to the date hereof in connection with the transactions contemplated hereby.




8R. Foreign Assets Control Regulations, etc.




(a) Neither the Company nor any Controlled Entity is (i) a Person whose name appears on
the list of Specially Designated Nationals and Blocked Persons published by the Office of
Foreign Assets Control, U.S. Department of Treasury (“OFAC”) (an “OFAC Listed Person”) or
(ii) a department, agency or instrumentality of, or is otherwise controlled by or acting on
behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity,
organization, foreign country or regime that is subject to any OFAC Sanctions Program (each
OFAC Listed Person and each other Person, entity, organization and government of a country
described in clause (ii), a “Blocked Person”).




(b) No part of the proceeds from the sale of the Notes hereunder constitutes or will
constitute funds obtained on behalf of any Blocked Person or will otherwise be used,
directly by the Company or indirectly through any Controlled Entity, in connection with any
investment in, or any transactions or dealings with, any Blocked Person.




(c) To the Company’s actual knowledge after making due inquiry, neither the Company nor
any Controlled Entity (i) is under investigation by any Governmental Authority for, or has
been charged with, or convicted of, money laundering, drug trafficking, terrorist-related
activities or other money laundering predicate crimes under any applicable law
(collectively, “Anti-Money Laundering Laws”), (ii) has been assessed civil penalties under
any Anti-Money Laundering Laws or (iii) has had any of its funds seized or forfeited in an
action under any Anti-Money Laundering Laws. The Company has taken reasonable measures
appropriate to the circumstances (in any event as required by applicable law) to ensure that
the Company and each Controlled Entity is and will continue to be in compliance with all
applicable current and future Anti-Money Laundering Laws.


 


25









 






(d) No part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for any improper payments to any governmental official or employee, political
party, official of a political party, candidate for political office, official of any public
international organization or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage. The Company has taken
reasonable measures appropriate to the circumstances (in any event as required by applicable
law) to ensure that the Company and each Controlled Entity is and will continue to be in
compliance with all applicable current and future anti-corruption laws and regulations.



9. REPRESENTATIONS OF THE PURCHASER.





Each Purchaser represents as follows:



9A. Nature of Purchase. Such Purchaser is not acquiring the Notes to be purchased by it
hereunder with a view to or for sale in connection with any distribution thereof within the meaning
of the Securities Act, provided that the disposition of its property shall at all times be and
remain within its control.



9B. Source of Funds. At least one of the following statements is an accurate representation
as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of
the Notes to be purchased by such Purchaser hereunder:




(i) the Source is an “insurance company general account” (as the term is defined in the
United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance Commissioners (the
“NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any
employee benefit plan together with the amount of the reserves and liabilities for the
general account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the
same employee organization in the general account do not exceed 10% of the total reserves
and liabilities of the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or




(ii) the Source is a separate account that is maintained solely in connection with such
Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to
any employee benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any annuitant)) are
not affected in any manner by the investment performance of the separate account; or




(iii) the Source is either (a) an insurance company pooled separate account, within the
meaning of PTE 90-1 or (b) a bank collective investment fund, within the meaning of the PTE
91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this
clause (iii), no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially owns more
than 10% of all assets allocated to such pooled separate account or collective investment
fund; or


 


26









 






(iv) the Source constitutes assets of an “investment fund” (within the meaning of Part
VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager”
or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s
assets that are managed by the QPAM in such investment fund, when combined with the assets
of all other employee benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by
the same employee organization and managed by such QPAM, represent more than 20% of the
total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM
Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM
maintains an ownership interest in the Company that would cause the QPAM and the Company to
be “related” within the meaning of Part VI(h) of the QPAM Exemption and (a) the identity of
such QPAM and (b) the names of any employee benefit plans whose assets in the investment
fund, when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of
the QPAM Exemption) of such employer or by the same employee organization, represent 10% or
more of the assets of such investment fund, have been disclosed to the Company in writing
pursuant to this clause (iv); or




(v) the Source constitutes assets of a “plan(s)” (within the meaning of section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within
the meaning of Part IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled
by the INHAM (applying the definition of “control” in section IV(h) of the INHAM Exemption)
owns a 5% or more interest in the Company and (a) the identity of such INHAM and (b) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have been
disclosed to the Company in writing pursuant to this clause (v); or




(vi) the Source is a governmental plan; or




(vii) the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been identified to
the Company in writing pursuant to this clause (vii); or




(viii) the Source does not include assets of any employee benefit plan, other than a
plan exempt from the coverage of ERISA.



As used in this paragraph 9B, the terms “employee benefit plan,” “governmental plan,” and “separate
account” shall have the respective meanings assigned to such terms in Section 3 of ERISA.


 


27









 





10. DEFINITIONS; ACCOUNTING MATTERS.




For the purpose of this Agreement, the terms defined in paragraphs 10A and 10B (or within the
text of any other paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph 10C.




10A. Yield-Maintenance Terms.



“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which commercial
banks in New York City are required or authorized to be closed.



“Called Principal” shall mean, with respect to any Note, the principal of such Note that is to
be prepaid pursuant to paragraph 4B or has become or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.



“Discounted Value” shall mean, with respect to the Called Principal of any Note, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date with respect to such Called Principal,
in accordance with accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on the Notes is payable, if interest is payable other than on
a semi-annual basis) equal to the Reinvestment Yield with respect to such Called Principal.



“Reinvestment Yield” shall mean, with respect to the Called Principal of any Note, 0.50% over
the yield to maturity implied by (i) the yields reported as of 10:00 a.m. (New York City local
time) on the Business Day next preceding the Settlement Date with respect to such Called Principal,
on the display designated as “Page PX1” (or such other display as may replace Page PX1) on
Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or (ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable (including by way of interpolation), the Treasury
Constant Maturity Series Yields reported, for the latest day for which such yields shall have been
so reported as of the Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication)
for actively traded on-the-run U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond
equivalent yields in accordance with accepted financial practice and (b) interpolating linearly
between yields reported for various maturities. The Reinvestment Yield shall be rounded to that
number of decimal places as appears in the coupon of the applicable Note.



“Remaining Average Life” shall mean, with respect to the Called Principal of any Note, the
number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying (a) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due date of such Remaining Scheduled
Payment.


 


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“Remaining Scheduled Payments” shall mean, with respect to the Called Principal of any Note,
all payments of such Called Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no payment of such Called Principal were
made prior to its scheduled due date.



“Settlement Date” shall mean, with respect to the Called Principal of any Note, the date on
which such Called Principal is to be prepaid pursuant to paragraph 4B or has become or is declared
to be immediately due and payable pursuant to paragraph 7A, as the context requires.



“Yield-Maintenance Amount” shall mean, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Called Principal of such Note over the sum of (i)
such Called Principal plus (ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.




10B. Other Terms.



“Acquisition” shall mean any transaction in which the Company or any of its Subsidiaries
directly or indirectly (i) acquires any ongoing business, (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 any Obligor, or (iv) acquires control of more than 50%
ownership interest in any partnership, joint venture or limited liability company.




“Additional Obligor” shall have the meaning specified in paragraph 5H hereto.



“Affiliate” shall mean any Person directly or indirectly controlling, controlled by, or under
direct or indirect common control with, the Obligors, except a Subsidiary. A Person shall be
deemed to control a corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.




“Agreement, this” shall mean this Note Purchase Agreement, as amended from time to time.




“Anti-Money Laundering Laws” shall have the meaning specified in paragraph 8R(c) hereof.




“AIC” shall have the meaning specified in the introduction hereto.




“Bankruptcy Law” shall have the meaning specified in paragraph 7A(viii).



“Blocked Person” shall have the meaning specified in paragraph 8R(a) hereof.


 


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“Capitalized Lease Obligation” 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 Company to any Person or “group”
(within the meaning of the Exchange Act 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 Exchange Act and the
rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) other
than the Loudermilk Family of 33 1/3% or more of the total voting power of shares of stock entitled
to vote in the election of directors of the Company; or (c) occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Company by Persons who were neither (i)
nominated by the current board of directors or (ii) appointed by directors so nominated.




“Closing” shall have the meaning specified in paragraph 2 hereof.




“Company” shall have the meaning specified in the introduction hereto.



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



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



“Consolidated Fixed Charge Coverage Ratio” shall mean, at any date of determination, the ratio
of (a) Consolidated EBITDAR for the period of four consecutive fiscal quarters of the Company
ending on, or most recently ended as of, such date, to (b) Consolidated Fixed Charges for such
period.



“Consolidated Fixed Charges” shall mean, for the Company and its Subsidiaries for any period,
determined on a consolidated basis in accordance with GAAP, the sum (without duplication) of (a)
Consolidated Interest Expense for such period and (b) Consolidated Lease Expense for such period.


 


30









 





“Consolidated Interest Expense” shall mean, for the Company 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 Capitalized Lease
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 Company and its Subsidiaries with respect to leases of real and
personal property (excluding Capitalized 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 Company
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
Company and its Subsidiaries in the unremitted earnings of any Person that is not the Company or a
Subsidiary, and (iv) any income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of any Company or is merged into or consolidated with the Company or a Subsidiary.



“Consolidated Net Worth” shall mean, as of any date of determination, the total shareholders’
equity of the Company and its Subsidiaries on a consolidated basis, determined in accordance with
GAAP.



“Consolidated Total Adjusted Capital” shall mean, as of any date of determination, 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 the Company and its Subsidiaries measured at the present value of such obligations
(discounted annually at a rate of 10%).



“Consolidated Total Debt” shall mean, at any time, all then currently outstanding obligations,
liabilities and indebtedness of the Obligors on a consolidated basis of the types described in the
definition of Indebtedness (other than as described in subsection (x) thereof).



“Controlled Entity” shall mean any of the Subsidiaries of the Company and any of their or the
Company’s respective Controlled Affiliates. As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise.




“Date of Closing” shall have the meaning specified in paragraph 2 hereof.



“Default” shall mean any of the events specified in paragraph 7A, whether or not any
requirement for such event to become an Event of Default has been satisfied.


 


31









 





“Domestic Subsidiary” shall mean each Subsidiary of the Company that is incorporated or
organized under the laws of any State of the United States of America, the District of Columbia or
Puerto Rico.



“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.



“Environmental Liability” means 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
Company 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 the rules and regulations promulgated thereunder from time to time in effect.



“ERISA Affiliate” shall mean any corporation which is a member of the same controlled group of
corporations as the Company within the meaning of section 414(b) of the Code, or any trade or
business which is under common control with the Company within the meaning of section 414(c) 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
Company 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 Company 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 Company 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 Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company 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.


 


32









 





“Event of Default” shall mean any of the events specified in paragraph 7A, provided that there
has been satisfied any requirement in connection with such event for the giving of notice, or the
lapse of time, or the happening of any further condition, event or act.



“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in effect.



“Existing Note Purchase Agreement” shall mean that certain Note Purchase Agreement, dated as
of July 27, 2005, by and among the Obligors and each of the Existing Noteholders, as amended by
that certain First Amendment to Note Purchase Agreement, dated as of November 4, 2008, that certain
letter amendment, dated as of April 19, 2011, and that certain letter amendment, dated the date
hereof.




“Existing Noteholders” shall mean each holder of an Existing Note.



“Existing Note(s)” shall mean those certain 5.03% Senior Notes due July 27, 2012, issued
pursuant to the Existing Note Purchase Agreement.




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




“GAAP” shall have the meaning set forth in paragraph 10C.



“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.


 


33









 





“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.



“including” shall mean, unless the context clearly requires otherwise, “including without
limitation”.



“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 paragraph 7A(iii), 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 Capitalized 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 (v) 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.



“Industrial Revenue Bonds” shall mean the Fort Bend Industrial Development Corporation
Industrial Development Revenue Bonds (Aaron Rents, Inc. Project), Series 2000.




“INHAM Exemption” shall have the meaning specified in paragraph 9B(v) hereof.



“Institutional Investor” shall mean any insurance company, commercial, investment or merchant
bank, finance company, mutual fund, registered money or asset manager, savings and loan
association, credit union, registered investment advisor, pension fund, investment company or fund,
licensed broker or dealer, “qualified institutional buyer” (as such term is defined under Rule 144A
promulgated under the Securities Act, or any successor law, rule or regulation) or institutional
“accredited investor” (as such term is defined under Regulation D promulgated under the Securities
Act, or any successor law, rule or regulation).




“Investment” shall have the meaning specified in paragraph 6I.



“Joinder Agreement(s)” shall mean those certain Joinder Agreements executed pursuant to
paragraph 5H hereof, substantially in the form of Exhibit D hereto.


 


34









 





“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 a Lien
for purposes of this Agreement.



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



“Material Adverse Effect” shall mean (i) a material adverse effect on the business, assets,
liabilities, operations or financial condition of the Company and its Subsidiaries, taken as a
whole, (ii) a material impairment of the Obligors’ ability to perform any of their respective
obligations under the Agreement and the Notes or (iii) a material impairment of the validity or
enforceability of this Agreement or the Notes.



“Multiemployer Plan” shall mean any Plan which is a “multiemployer plan” (as such term is
defined in section 4001(a)(3) of ERISA).




“NAIC Annual Statement” shall have the meaning specified in paragraph 9B(i) hereof.




“Notes” shall have the meaning specified in paragraph 1 hereto.



“Obligor” shall have the meaning specified in the introduction hereto, and shall include any
Additional Obligors made a party to this Agreement pursuant to the terms of paragraph 5H hereof.




“OFAC” shall have the meaning specified in paragraph 8R(a) hereof.




“OFAC Listed Person” shall have the meaning specified in paragraph 8R(a) hereof.



“OFAC Sanctions Program” shall mean any program identified at
http://www.ustreas.gov/offices/enforcement/ofac/programs/.



“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
nonrecourse 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.



“Officer’s Certificate” shall mean a certificate signed in the name of the Company by its
President, one of its Vice Presidents or its Treasurer.



“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA or
any successor thereto.


 


35









 





“Permitted Acquisitions” shall mean any Acquisition so long as (a) at the time of such
Acquisition, no Default or Event of Default is in existence, (b) after giving effect to such
Acquisition, no Default or Event of Default is in existence, (c) such Acquisition has been approved
by the board of directors of the Person being acquired prior to any public announcement thereof,
(d) 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, and (e) 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. As used herein, Acquisitions will be considered related
Acquisitions if the sellers under such Acquisitions are the same Person or any affiliate thereof.




“Permitted Change” shall have the meaning specified in paragraph 6L.




“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,
from S&P’s or Moody’s Investors Service, Inc., 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, corporation, limited liability company,
association, trust, unincorporated organization, or a government or agency or political subdivision
thereof.



“Plan” shall mean 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 Company 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.


 


36









 





“Private Placement Debt” shall mean Indebtedness incurred by the Company or its Subsidiaries
in respect of the issuance and sale of notes or other securities by the Company or its Subsidiaries
to Institutional Investors, which issuance and sale does not require registration of such
securities with the U.S. Securities and Exchange Commission pursuant to the Securities Act.




“PTE” shall have the meaning specified in paragraph 9B(i) hereof.




“Purchaser” shall mean each Person named on the Purchaser Schedule attached hereto.




“Purchaser Schedule” shall mean that Purchaser Schedule attached as Schedule A hereto.




“QPAM Exemption” shall have the meaning specified in paragraph 9B(iv) hereof.



“Release” shall mean 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.



“Required Holder(s)” shall mean the holder or holders of at least 51% of the aggregate
principal amount of the Notes from time to time outstanding.



“Responsible Officer” shall mean the chief executive officer, chief operating officer, chief
financial officer or chief accounting officer of each of the Obligors or any other officer of the
Obligors involved principally in its financial administration or its controllership function.




“Restricted Payment” shall have the meaning specified in paragraph 6H hereto.



“RIMCO Agreement” shall mean that certain Loan Facility Agreement and Guaranty dated as of May
29, 2007 by and among the Company, SunTrust Bank as Servicer, and the financial institutions from
time to time a party thereto, as Participants, as amended, restated, supplemented or otherwise
modified from time to time.



“S&P” shall mean Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc., and any
successor thereto.



“Securities Act” shall mean the Securities Act of 1933, as amended from time to time, and the
rules and regulations promulgated thereunder from time to time in effect.



“Significant Holder” shall mean (i) each Purchaser, so long as it shall hold (or be committed
under this Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the
aggregate principal amount of the Notes from time to time outstanding.




“Source” shall have the meaning specified in paragraph 9B hereof.


 


37









 





“Subsidiary” shall mean any corporation, partnership, joint venture, limited liability
company, association or other entity the accounts of which would be consolidated with those of
the Company in the Company’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 interest are, as of such date, owned, controlled or held, by the Company or one of more
subsidiaries of the Company. Unless otherwise indicated, all references to a “Subsidiary” or
“Subsidiaries” herein shall mean a Subsidiary of the Company.




“SunTrust” shall mean SunTrust Bank, together with its successors and assigns.



“SunTrust Agreement” shall mean that certain Revolving Credit Agreement, dated as of May 23,
2008, among the Company and the lenders signatory thereto, as amended, restated, supplemented,
replaced, refinanced or otherwise modified from time to time.



“SunTrust Loan Facility Agreement” means that certain Second Amended and Restated Loan
Facility Agreement and Guaranty, dated as of June 18, 2010, by and among the Company, SunTrust and
the financial institutions party thereto, as amended, restated, supplemented, replaced, refinanced
or otherwise modified from time to time.



“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 period of four
consecutive fiscal quarters of the Company ending on, or most recently ending as of, such date.



“Transferee” shall mean any direct or indirect transferee of all or any part of any Note
purchased under this Agreement.



“USA Patriot Act” shall mean United States Public Law 107-56, Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.



“Wholly Owned Subsidiary” shall mean any Subsidiary, all of the stock of every class of which
is, at the time as of which any determination is being made, owned by the Company either directly
or through Wholly Owned Subsidiaries, and which has outstanding no options, warrants, rights or
other securities entitling the holder thereof (other than the Company or a Wholly Owned Subsidiary)
to acquire shares of capital stock of such corporation.



“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.


 


38









 





10C. Accounting and Legal Principles, Terms and Determinations. All references in this
Agreement to “GAAP” shall mean generally accepted accounting principles, as in effect
in the United States from time to time. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all unaudited financial statements and certificates and reports as to
financial matters required to be furnished hereunder shall be prepared, in accordance with GAAP,
applied on a basis consistent with the most recent audited consolidated financial statements of the
Company and its Subsidiaries delivered pursuant to paragraph 5A(i) or (ii) or, if no such
statements have been so delivered, the most recent audited financial statements referred to in
clause (i) of paragraph 8B. Any reference herein to any specific citation, section or form of law,
statute, rule or regulation shall refer to such new, replacement or analogous citation, section or
form should such citation, section or form be modified, amended or replaced. For purposes of
determining compliance with the financial covenants contained in this Agreement, any election by
the Company to measure any financial liability using fair value (as permitted by Accounting
Standard Codification Topic No. 825-10-25 — Fair Value Option or any similar accounting standard)
shall be disregarded and such determination shall be made as if such election had not been made.



11. MISCELLANEOUS.




11A. Note Payments. So long as any Purchaser shall hold any Note, the Obligors will make
payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to such
Note, which comply with the terms of this Agreement, by wire transfer of immediately available
funds for credit (not later than 12:00 noon, New York City time, on the date due) to such
Purchaser’s account or accounts as specified in the Purchaser Schedule attached hereto, or such
other account or accounts in the United States as such Purchaser may designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will make a notation thereon (or on a
schedule attached thereto) of all principal payments previously made thereon and of the date to
which interest thereon has been paid. The Obligors agree to afford the benefits of this paragraph
11A to any Transferee which shall have made the same agreement as the Purchasers have made in this
paragraph 11A.



11B. Expenses. Whether or not the transactions contemplated hereby shall be consummated, the
Obligors shall pay, and save each Purchaser and any Transferee harmless against liability for the
payment of, all out-of-pocket expenses arising in connection with such transactions, including:




(i) (A) all stamp and documentary taxes and similar charges, (B) costs of obtaining a
private placement number from S&P for the Notes and (C) fees and expenses of brokers,
agents, dealers, investment banks or other intermediaries or placement agents, in each case
as a result of the execution and delivery of this Agreement or the issuance of the Notes;




(ii) document production and duplication charges and the reasonable fees and expenses
of any special counsel engaged by such Purchaser or such Transferee in connection with (A)
this Agreement and the transactions contemplated hereby, (B) the execution and delivery of
any Joinder Agreement by an Additional Obligor, and (C) any
subsequent proposed waiver, amendment or modification of, or proposed consent under,
this Agreement, whether or not such the proposed action shall be effected or granted;


 


39









 






(iii) the costs and expenses, including reasonable attorneys’ and financial advisory
fees, incurred by such Purchaser or such Transferee in enforcing (or determining whether or
how to enforce) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in connection with
this Agreement or the transactions contemplated hereby or by reason of your or such
Transferee’s having acquired any Note, including without limitation costs and expenses
incurred in any workout, restructuring or renegotiation proceeding or bankruptcy case; and




(iv) any judgment, liability, claim, order, decree, cost, fee, expense, action or
obligation resulting from the consummation of the transactions contemplated hereby,
including the use of the proceeds of the Notes by the Obligors.



The obligations of the Obligors under this paragraph 11B shall survive the transfer of any
Note or portion thereof or interest therein by any Purchaser or Transferee and the payment of any
Note.



11C. Consent to Amendments. This Agreement may be amended, and the Obligors may take any
action herein prohibited, or omit to perform any act herein required to be performed by it, if the
Obligors shall obtain the written consent to such amendment, action or omission to act, of the
Required Holder(s) except that, without the written consent of the holder or holders of all Notes
at the time outstanding, no amendment to this Agreement shall change the maturity of any Note, or
change the principal of, or the rate, method of computation or time of payment of interest on or
any Yield-Maintenance Amount payable with respect to any Note, or affect the time, amount or
allocation of any prepayments, or change the proportion of the principal amount of the Notes
required with respect to any consent, amendment, waiver or declaration. Each holder of any Note at
the time or thereafter outstanding shall be bound by any consent authorized by this paragraph 11C,
whether or not such Note shall have been marked to indicate such consent, but any Notes issued
thereafter may bear a notation referring to any such consent. No course of dealing between the
Obligors and the holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used herein and in the
Notes, the term “this Agreement” and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.



11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The Notes are issuable
as registered notes without coupons in denominations of at least $1,000,000, except as may be
necessary to (i) reflect any principal amount not evenly divisible by $1,000,000 or (ii) enable the
registration of transfer by a holder of its entire holding of Notes. The Company shall keep at its
principal office a register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer of any Note at the principal
office of the Company, the Company shall, at its expense, execute and deliver one or more new Notes
of like tenor and of a like aggregate principal amount, registered in the name of such transferee
or transferees. At the option of the holder of any Note, such Note may be exchanged for other
Notes of like tenor and of any authorized


 


40









 







denominations, of a like aggregate principal amount, upon surrender of the Note to be exchanged at the principal office of the
Company. Whenever any Notes are so surrendered for exchange, the Obligors shall, at their expense,
execute and deliver the Notes which the holder making the exchange is entitled to receive. Every
Note surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer duly executed, by the holder of such Note or such holder’s
attorney duly authorized in writing. Any Note or Notes issued in exchange for any Note or upon
transfer thereof shall carry the rights to unpaid interest and interest to accrue which were
carried by the Note so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case of any such loss,
theft or destruction, upon receipt of such holder’s unsecured indemnity agreement, or in the case
of any such mutilation upon surrender and cancellation of such Note, the Obligors will make and
deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. The
Company shall give to any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all registered holders of
Notes.



11E. Persons Deemed Owners; Participations. Prior to due presentment for registration of
transfer, the Obligors may treat the Person in whose name any Note is registered as the owner and
holder of such Note for the purpose of receiving payment of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Obligors shall not be affected by notice to the
contrary. Subject to the preceding sentence, the holder of any Note may from time to time grant
participations in such Note to any Person on such terms and conditions as may be determined by such
holder in its sole and absolute discretion.



11F. Survival of Representations and Warranties; Entire Agreement. All representations and
warranties contained herein or made in writing by or on behalf of the Obligors in connection
herewith shall survive the execution and delivery of this Agreement and the Notes, the transfer by
a Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any time by or on behalf
of any Purchaser or any Transferee. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between the Purchasers and the Obligors and
supersede all prior agreements and understandings relating to the subject matter hereof.



11G. Successors and Assigns. All covenants and other agreements in this Agreement contained
by or on behalf of either of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.


 


41









 





11H. Confidential Information. For the purposes of this paragraph 11H, “Confidential
Information” means information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise adequately identified
when received by you as being confidential information of the Company or such Subsidiary, provided
that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by you or any person acting on your
behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under paragraph 5A that are
otherwise publicly available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial advisors and other professional advisors
who agree to hold confidential the Confidential Information substantially in accordance with the
terms of this paragraph 11H, (iii) any other holder of any Note, (iv) any Institutional Investor to
which you sell or offer to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this paragraph 11H), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this paragraph 11H), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating agency that requires
access to information about your investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which you are a party or (z) if an Event of Default has
occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure
to be necessary or appropriate in the enforcement or for the protection of the rights and remedies
under your Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this paragraph 11H as
though it were a party to this Agreement. On reasonable request by the Company in connection with
the delivery to any holder of a Note of information required to be delivered to such holder under
this Agreement or requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company embodying the provisions
of this paragraph 11H.



11I. Notices. All written communications provided for hereunder shall be sent by first class
mail or nationwide overnight delivery service (with charges prepaid) and (i) if to a Purchaser,
addressed to it at the address specified for such communications in the Purchaser Schedule attached
hereto, or at such other address as such Purchaser shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to such other holder at such address as such
other holder shall have specified to the Company in writing or, if any such other holder shall not
have so specified an address to the Company, then addressed to such other holder in care of the
last holder of such Note which shall have so specified an address to the Company, and (iii) if to
the Obligors, addressed to them at:




The Company:




1100 Aaron Building

309 East Paces Ferry Road, NE

Atlanta, GA 30305-2377

Attention: Gilbert L. Danielson

Telecopy No. 404.240.6520


 


42









 






AIC:




Aaron Investment Company

Two Greenville Crossing

4005 Kennett Pike, Suite 220

Greenville, Delaware 19807

Attention: Marianne Stearns and Linda Jones

Telecopy No.: 302.655.5209




With a copy to:




Aaron Investment Company

1100 Aaron Building

309 East Paces Ferry Road, NE

Atlanta, GA 30305-2377

Attention: Gilbert L. Danielson

Telecopy No.: 404.240.6520



or at such other address as the Obligors shall have specified to the holder of each Note in
writing; provided, however, that any such communication to the Obligors may also, at the
option of the holder of any Note, be delivered by any other means either to the Obligors at the
addresses specified above or to any officer of the Obligors.



11J. Payments due on Non-Business Days. Anything in this Agreement or the Notes to the
contrary notwithstanding, any payment of principal of or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day. If the date for any
payment is extended to the next succeeding Business Day by reason of the preceding sentence, the
period of such extension shall not be included in the computation of the interest payable on such
Business Day.



11K. Satisfaction Requirement. If any agreement, certificate or other writing, or any action
taken or to be taken, is by the terms of this Agreement required to be satisfactory to any
Purchaser or to the Required Holder(s), the determination of such satisfaction shall be made by
such Purchaser or the Required Holder(s), as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.



11L. Governing Law. This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New York.


 


43









 





11M. Consent to Jurisdiction; Waiver of Immunities. The Obligors hereby irrevocably submit to
the jurisdiction of any New York state or Federal court sitting in New York in any action or
proceeding arising out of or relating to this Agreement, and the Obligors hereby irrevocably agree
that all claims in respect of such action or proceeding may be heard and determined in New York
state or Federal court. The Obligors hereby irrevocably waive, to the
fullest extent they may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Obligors agree and irrevocably consent to the
service of any and all process in any such action or proceeding by the mailing, by registered or
certified U.S. mail, or by any other means or mail that requires a signed receipt, of copies of
such process to CT Corporation System at 1633 Broadway, New York, New York 10019. The Obligors
agree that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this paragraph 11M shall affect the right of any holder of the Notes to serve legal
process in any other manner permitted by law or affect the right of any holder of the Notes to
bring any action or proceeding against the Obligors or their property in the courts of any other
jurisdiction. To the extent that the Obligors have or hereafter may acquire immunity from
jurisdiction of any court or from any legal process (whether through service of notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with respect to
themselves or their property, the Obligors hereby irrevocably waive such immunity in respect of its
obligations under this agreement.



11N. Severability. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.



11O. Descriptive Headings. The descriptive headings of the several paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this Agreement.



11P. Counterparts. This Agreement may be executed in any number of counterparts (or
counterpart signature pages), each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed
by less than all, but together signed by all, of the parties hereto. Delivery of a facsimile or
electronic transmission of an executed signature page shall be effective as delivery of an
original.



11Q. Independence of Covenants. All covenants hereunder shall be given independent effect so
that if a particular action or condition is prohibited by any one of such covenants, the fact that
it would be permitted by an exception to, or otherwise be in compliance within the limitations of,
another covenant shall not (i) avoid the occurrence of an Event of Default or Default if such
action is taken or such condition exists or (ii) in any way prejudice an attempt by the holders to
prohibit (through equitable action or otherwise) the taking of any action by the Company or a
Subsidiary which would result in an Event of Default or Default.


 


44









 





11R. WAIVER OF JURY TRIAL. THE OBLIGORS AND THE HOLDERS OF THE NOTES AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, THE NOTES, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION AND THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE HOLDERS OF THE NOTES AND THE OBLIGORS
EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE HOLDERS OF THE
NOTES AND THE OBLIGORS FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.



11S. Severalty of Obligations. The sales of Notes to the Purchasers are to be several sales,
and the obligations of the Purchasers under this Agreement are several obligations. Except as
provided in paragraph 3E, no failure by any Purchaser to perform its obligations under this
Agreement shall relieve any other Purchaser or any Obligor of any of its obligations hereunder, and
no Purchaser shall be responsible for the obligations of, or any action taken or omitted by, any
other Purchaser hereunder.



11T. Independent Investigation. Each Purchaser has made its own independent investigation of
the condition (financial and otherwise), prospects and affairs of the Obligors in connection with
its purchase of the Notes hereunder and has made and shall continue to make its own appraisal of
the creditworthiness of the Obligors. No holder of Notes shall have any duty or responsibility to
any other holder of Notes, either initially or on a continuing basis, to make any such
investigation or appraisal or to provide any credit or other information with respect thereto. No
holder of Notes is acting as agent or in any other fiduciary capacity on behalf of any other holder
of Notes.



11U. Directly or Indirectly. Where any provision in this Agreement refers to action to be
taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or indirectly by such Person.



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



 


45









 





Please sign the form of acceptance on the enclosed counterpart of this letter and return the
same to the Obligors, whereupon this letter shall become a binding agreement between the Obligors
and each Purchaser.



	 	 	 	 	 
	 	Very truly yours,



AARON’S, INC.

 	 
	 	By:  	/s/ Gilbert L. Danielson
 	 
	 	 	Name:  	Gilbert L. Danielson 	 
	 	 	Title:  	Executive Vice President


and Chief Financial Officer 	 
	 
	 	AARON INVESTMENT COMPANY

 	 
	 	By:  	/s/ Gilbert L. Danielson
 	 
	 	 	Name:  	Gilbert L. Danielson 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



 












 







The foregoing Agreement is hereby accepted

as of the date first above written.




THE PRUDENTIAL INSURANCE COMPANY OF AMERICA




	 	 	 	 	 	 	 
	By:	 	/s/ Jay S. White	 	 
	 	 	 	 	 
	 	 	Name: Jay S. White	 	 
	 	 	Title: Senior Vice President	 	 
	 
	 	 	 	 	 	 
	PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY COMPANY	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Investment Management, Inc., 


as investment manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay S. White
 

Name: Jay S. White 

Title:   Senior Vice President
	 	 
	 
	 	 	 	 	 	 
	THE PRUDENTIAL LIFE INSURANCE COMPANY, LTD.	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Investment Management (Japan),
Inc., as Investment Manager	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Investment Management, Inc., 

as Sub-Adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay S. White	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jay S. White 

Title:   Senior Vice President	 	 
	 
	 	 	 	 	 	 
	ZURICH AMERICAN INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Private Placement Investors,
L.P. 

(as Investment Advisor)	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Private Placement Investors, Inc.


(as its General Partner)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay S. White	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jay S. White

Title:   Senior Vice President	 	 





 


 









 





	 	 	 	 	 	 	 
	FORETHOUGHT LIFE INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Private Placement Investors,
L.P. 

(as Investment Advisor)	 	 
	 
	 	 	 	 	 	 
	By:	 	Prudential Private Placement Investors, Inc.

(as its General Partner)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jay S. White	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	Name: Jay S. White 

Title:   Senior Vice President
	 	 







 


 











 







SCHEDULE 3F




CHANGES IN CORPORATE STRUCTURE




None.




Schedule 3F





 


 











 




SCHEDULE 6E




EXISTING INDEBTEDNESS




As of March 31, 2011




	 	 	 	 	 
	1. Amount Outstanding Under the SunTrust Agreement:
	 	$	0	 
	 
	 	 	 	 
	2. Total Amounts Guaranteed Under the SunTrust
Loan Facility Agreement:
	 	$	111,300,000.00	 
	 
	 	 	 	 
	3. Total Amounts Guaranteed Under franchisee debt programs
Guaranteed by the Borrower (other than the SunTrust
Loan Facility Agreement:
	 	$	16,600,000.00	 
	 
	 	 	 	 
	4. Amount Outstanding Under the Industrial Revenue Bonds
	 	$	3,300,889.00	 
	 
	 	 	 	 
	5. Capital Lease Liability on Kennesaw office building
	 	$	5,028,609.00	 
	 
	 	 	 	 
	6. Capital Lease Liability on Cairo manufacturing plant
	 	$	1,985,759.00	 
	 
	 	 	 	 
	7. Capital Lease Liability on 11 Properties
—Aaron Ventures I, LLC (December 2002)
	 	$	2,876,870.00	 
	 
	 	 	 	 
	8.1 Capital Lease Liability on 11 Properties
—Aaron Ventures I, LLC (October/November 2004)
	 	$	4,270,067.00	 
	 
	 	 	 	 
	9. Existing Note Purchase Agreement
	 	$	24,000,000.00	 






Schedule 6E



 


 








 





SCHEDULE 6F




EXISTING LIENS





None.



Schedule 6F



 


 









 





SCHEDULE 6G




ASSETS TO BE SOLD




None.



Schedule 6G



 


 









 





SCHEDULE 6I




EXISTING INVESTMENTS




1. Existing Investments in Aaron Investment Company (100% of the issued and outstanding capital
stock is owned by the Company)



2. Existing Investments in Aaron Rents, Inc. Puerto Rico (100% of the issued and outstanding
capital stock is owned by the Company)



3. Existing Investments in Aaron’s Canada, ULC (100% of the issued and outstanding capital stock is
owned by the Company)



4. Existing Investments in 99LTO, LLC (100% of the issued and outstanding capital stock is owned by
the Company)



Schedule 6I



 


 









 





SCHEDULE 8G




RESTRICTIONS ON INDEBTEDNESS




Restrictions on incurring additional Indebtedness are contained in documents associated with the
following existing agreements and documents:




	1.	 	The SunTrust Agreement

	 
	2.	 	The SunTrust Loan Facility Agreement

	 
	3.	 	The Industrial Revenue Bonds

	 
	4.	 	The Existing Note Purchase Agreement






Schedule 8G



 


 









 







SCHEDULE 8I




USE OF PROCEEDS




The proceeds from the sale of the Notes will be used by the Company for general corporate purposes
and to repurchase stock of the Company from time to time.



Schedule 8I



 


 









 







EXHIBIT A




[FORM OF NOTE]




AARON’S, INC.

AARON INVESTMENT COMPANY

3.75% SENIOR NOTE DUE APRIL 27, 2018




			
	 	 	 
	No. R-[_____]
	 	[Date]
	$[                    ]
	 	PPN: 00256@ AA7






FOR VALUE RECEIVED, the undersigned, AARON’S, INC. (together with its successors, herein
called the “Company”), a corporation organized and existing under the laws of the State of Georgia,
and AARON INVESTMENT COMPANY (together with its successors, herein called “AIC”, and together with
the Company, collectively, the “Obligors”), a corporation organized and existing under the laws of
Delaware, hereby promise to pay to [                                        ], or registered assigns, the principal sum
of [                    ] DOLLARS (or so much thereof as shall not have been prepaid) on April 27,
2018, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of 3.75% per annum from the date hereof, payable quarterly on
the 27th day of January, April, July, and October in each year, commencing with July 27, 2011 or
the next such payment date succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) on any overdue payment (including any overdue prepayment) of principal,
any overdue payment of interest and any overdue payment of any Yield-Maintenance Amount (as defined
in the Note Purchase Agreement referred to below), payable quarterly as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from time to time equal to
the greater of (i) 5.75% or (ii) 2.0% over the rate of interest publicly announced by the Bank of
New York from time to time in New York City, New York as its “base” or “prime” rate.



Payments of principal of, interest on and any Yield-Maintenance Amount payable with respect to
this Note are to be made at the main office of the Bank of New York in New York City or at such
other place as the holder hereof shall designate to the Company in writing, in lawful money of the
United States of America.



This Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to a
Note Purchase Agreement, dated as of July 5, 2011 (as from time to time amended, herein called the
“Note Purchase Agreement”), among the Obligors and the original purchasers of the Notes named in
the Purchaser Schedule attached thereto and is entitled to the benefits thereof.



Exhibit A-1



 


 









 





This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender
of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of
transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the Obligors may treat
the person in whose name this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Obligors shall not be affected by any notice to the
contrary.



The Obligors agree to make required prepayments of principal on the dates and in the amounts
specified in the Note Purchase Agreement. This Note is also subject to optional prepayment, in
whole or from time to time in part, on the terms specified in the Note Purchase Agreement.



In case an Event of Default, as defined in the Note Purchase Agreement, shall occur and be
continuing, the principal of this Note may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Yield-Maintenance Amount) and with the effect
provided in the Note Purchase Agreement.



THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF NEW YORK.



	 	 	 	 	 
	 	AARON’S, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



	 	 	 	 	 
	 	AARON INVESTMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exhibit A-2




 


 









 





EXHIBIT B




PAYMENT INSTRUCTIONS




[COMPANY LETTERHEAD]




July 5, 2011




To the Purchasers identified on Schedule A




to the Note Purchase Agreement dated

as of July 5, 2011 by each of the Obligors

with each of the Purchasers (the “Note Purchase Agreement”)




	 	 	 	Re: Payment Instructions






Dear Sirs:



Pursuant to paragraph 2 of the Note Purchase Agreement, we hereby deliver to you our written
instructions for payment by you of the purchase price for the Notes. Capitalized terms used in
this letter and not defined herein shall have the definitions given such terms in the Note Purchase
Agreement.



Deliver the purchase price for the Notes no later than the Date of Closing by transferring by
wire transfer through the Fedwire Funds Transfer System immediately available funds to the
following account of the Obligors:




SunTrust Bank

Atlanta, Georgia

ABA Transit No. 061000104

Account No. 8800527494



Please confirm the origination of the wire transfer by telephonically providing our attorneys
applicable FED reference numbers.



	 	 	 	 	 
	 	Sincerely,



AARON’S, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Gilbert L. Danielson 	 
	 	 	Title:  	Executive Vice President, 

Chief Financial Officer 	 



Exhibit B-1



 


 









 





	 	 	 	 	 
	 	AARON INVESTMENT COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	Gilbert L. Danielson 	 
	 	 	Title:  	Vice President and Treasurer 	 



Exhibit B-2



 


 









 







EXHIBIT C




OPINION OF COUNSEL FOR THE OBLIGORS






Attached.



Exhibit C



 


 









 





EXHIBIT D




[FORM OF JOINDER AGREEMENT]




[Date]




To each of the Noteholders (as defined herein)




Ladies and Gentlemen:



Reference is made to the Note Purchase Agreement, dated as of July 5, 2011 (as amended or
restated from time to time, the “Note Purchase Agreement”), among Aaron’s, Inc., Aaron Investment
Company, and each of the Persons listed on the Purchaser Schedule attached thereto. The current
holders of all outstanding Notes are herein referred to as the “Noteholders”. Capitalized terms
used herein and not otherwise defined have the meanings ascribed to such terms in the Note Purchase
Agreement.




[                    ], a [                    ] corporation (the “Company”), agrees with you as follows:




1. Note Purchase Agreement; Notes. The Company hereby unconditionally and expressly
agrees (i) to become a party to the Note Purchase Agreement and the Notes and to (A) perform
and observe each and every one of the covenants, agreements, terms, conditions, obligations,
duties and liabilities of an Obligor under the Note Purchase Agreement and (B) assume all
payment obligations jointly and severally with the other Obligors under the Notes, and (ii)
that all references to an Obligor or the Obligors in the Note Purchase Agreement or any
document, instrument or agreement executed and delivered or furnished, or to be executed and
delivered or furnished, in connection therewith shall be deemed to be references which
include the Company, as an Obligor (or any term which is used in such document, instrument
or agreement to refer to an Obligor or the Obligors).




2. Warranties and Representations. The Company hereby warrants and represents that
each of the warranties and representations set forth in paragraph 8 of the Note Purchase
Agreement are true and correct with respect to the Company as of the date hereof and such
warranties and representations are incorporated by reference herein in their entirety. Such
representations and warranties shall survive the execution and delivery hereof.




3. Covenants. The Company hereby covenants that it will perform each of the covenants
set forth in paragraphs 5 and 6 the Note Purchase Agreement, and such covenants are
incorporated by reference herein in their entirety. Such covenants shall survive the
execution and delivery hereof.




4. Further Assurances. The Company agrees to cooperate with the Noteholders and
execute such further instruments and documents as the Required Holders shall reasonably
request to effect, to the reasonable satisfaction of the Required Holders, the purposes of
this Joinder Agreement.



Exhibit D-1



 


 









 






5. Amendment. This Joinder Agreement may be amended only in a writing executed by the
Company and the Required Holders.




6. Notices. All written communications provided for under the Note Purchase Agreement
shall be sent by first class mail or nationwide overnight delivery service (with charges
prepaid) to the Company at the address set forth in Annex 1 hereto.




7. Binding Effect. This Agreement shall be binding upon the Company and shall inure to
the benefit of the Noteholders and their respective successors, assigns and any subsequent
holders of the Notes.




8. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall
be construed, interpreted and enforced in accordance with, and governed by, the internal
laws of the State of New York. The provisions of paragraphs 11L, 11M and 11R of the Note
Purchase Agreement shall apply to this Agreement as if each reference to “this Agreement”
therein were a reference to this Agreement.



IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by one
of its duly authorized officers.



	 	 	 	 	 
	 	[                    ]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exhibit D-2




 


 









 







ANNEX 1 TO JOINDER AGREEMENT




[Address of the Company]




Exhibit D-3




 


 









 





EXHIBIT E




SUNTRUST AMENDMENTS





Attached.



Exhibit E



 


 









 







EXHIBIT F




AMENDMENT TO EXISTING NOTE PURCHASE AGREEMENT




Attached.



Exhibit F