Document:

Exhibit
10.1

 

Form of

OFFICEMAX
INCORPORATED

2005 Director Restricted Stock Unit Award Agreement

This Restricted Stock Unit
Award (the “Award”), is granted on July 29, 2005 (the “Award Date”), by
OfficeMax Incorporated (“OfficeMax”) to                                   
(“Director” or “you”) pursuant to the 2003 OfficeMax Incentive and Performance
Plan (the “Plan”) and pursuant to the following terms:

1.                                       The Award is
subject to all the terms and conditions of the Plan.  All capitalized terms not defined in this
Agreement shall have the meaning stated in the Plan.

2.                                       You are awarded
                      
restricted stock units, at no cost to you, subject to the restrictions set
forth in the Plan and this Agreement.

3.                                       Your Award is
subject to a six-month restriction period. 
The units will vest six months following the date of grant, on January
30, 2006, and will be payable six months following the date of your termination
of service as a director due to your death, disability, retirement or
resignation.

4.                                       If you
terminate service as a director prior to January 30, 2006, your Award will be
forfeited.

 

5.                                       In the event of
a Change in Control (as defined in the Plan) prior to the end of the
restriction period pursuant to paragraph 3, the continuing entity may either
continue this Award or replace this Award with an award of at least equal value
with terms and conditions not less favorable than the terms and conditions
provided in this Award Agreement, in which case the Award will vest and become
payable according to the terms of the applicable Award Agreement.  If the continuing entity does not so continue
or replace this Award, the restriction period will lapse with respect to all
units not vested at the time of the Change in Control or your termination, and
all units will vest immediately and will be payable according to paragraph 3
above.  In the event of a Change in
Control, payment of the Award will be made in the common stock of the
continuing entity when due according to the applicable Award Agreement.

6.                                       The units
awarded pursuant to this Agreement cannot be sold, assigned, pledged,
hypothecated, transferred, or otherwise encumbered prior to payment.

7.                                       You will
receive notional dividend units on the awarded units equal to the amount of
dividends paid on OfficeMax’s common stock. 
Dividend units paid on your restricted stock units will be held in
escrow until the restrictions on the respective restricted stock units have
lapsed, the units have vested, and payment of the restricted stock units is
made.  Dividend units paid on forfeited
restricted stock units will be forfeited.

8.                                       With respect to
the awarded units, you are not a shareholder and do not have any voting rights.

9.                                       Vested
restricted stock units will be paid to you in whole shares of OfficeMax common
stock.  Partial units, if any, and
dividend units will be paid in cash.

You must sign this Agreement and
return it to OfficeMax’s Compensation Department on or before August 31,
2005, or the Award will be forfeited. 
Return your executed Agreement to: 
Pam Brown, OfficeMax, 150 Pierce Road, Itasca, IL  60143, or fax your signed form to
630-438-2460.

	
  OfficeMax Incorporated

  	
   

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
  Lorene Flewellen

  	
   

  	
   

  	
   

  
	
   

  	
  Senior Vice President,
  Human Resources

  	
   

  	
  Printed Name:EXHIBIT 10(ee)

 

EXECUTION VERSION

 

 

 

AARON RENTS, INC.

and certain other Obligors

 

 

 

NOTE PURCHASE AGREEMENT

 

 

 

DATED AS OF JULY 27, 2005

 

 

$60,000,000 5.03% SENIOR NOTES DUE JULY 27,
2012

 

 

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  AUTHORIZATION OF ISSUE OF
  NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  PURCHASE AND SALE OF NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  CONDITIONS OF CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3A.

  	
  Execution and Delivery of
  Documents

  	
   

  
	
   

  	
  3B.

  	
  Opinion
  of Purchaser’s Special Counsel

  	
   

  
	
   

  	
  3C.

  	
  Purchase Permitted By
  Applicable Laws

  	
   

  
	
   

  	
  3D.

  	
  Payment of Fees

  	
   

  
	
   

  	
  3E

  	
  Sale to Other Purchasers

  	
   

  
	
   

  	
  3F.

  	
  Changes in Corporate
  Structure

  	
   

  
	
   

  	
  3G.

  	
  Private Placement Number

  	
   

  
	
   

  	
  3H.

  	
  Performance; No Default

  	
   

  
	
   

  	
  3I.

  	
  Representations and
  Warranties

  	
   

  
	
   

  	
  3J.

  	
  Waivers

  	
   

  
	
   

  	
  3K.

  	
  Amendment to
  Existing Note Purchase Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  PREPAYMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4A.

  	
  Required Prepayments

  	
   

  
	
   

  	
  4B.

  	
  Optional Prepayment With
  Yield-Maintenance Amount

  	
   

  
	
   

  	
  4C.

  	
  Notice of Optional
  Prepayment

  	
   

  
	
   

  	
  4D.

  	
  Partial Payments Pro Rata

  	
   

  
	
   

  	
  4E.

  	
  Retirement of Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5A.

  	
  Financial Statements

  	
   

  
	
   

  	
  5B.

  	
  Information Required by
  Rule 144A

  	
   

  
	
   

  	
  5C.

  	
  Inspection of Property

  	
   

  
	
   

  	
  5D.

  	
  Corporate Existence, Etc

  	
   

  
	
   

  	
  5E.

  	
  Payment of Taxes and Claims

  	
   

  
	
   

  	
  5F.

  	
  Line
  of Business

  	
   

  
	
   

  	
  5G.

  	
  Maintenance of Most Favored
  Lender Status

  	
   

  
	
   

  	
  5H.

  	
  Covenant Relating to
  Domestic Subsidiaries

  	
   

  
	
   

  	
  5I.

  	
  Compliance with Laws

  	
   

  
	
   

  	
  5J.

  	
  Notices of Material Events

  	
   

  
	
   

  	
  5K.

  	
  Payment of Obligations

  	
   

  
	
   

  	
  5L.

  	
  Books and Records

  	
   

  
	
   

  	
  5M.

  	
  Maintenance of Properties;
  Insurance

  	
   

  
	
   

  	
  5N.

  	
  Covenant Relating to Foreign
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6A.

  	
  Fixed Charges Coverage Ratio

  	
   

  

 

i

 

	
   

  	
  6B.

  	
  Total Debt to EBITDA Ratio

  	
   

  
	
   

  	
  6C.

  	
  Total Adjusted Debt to Total
  Adjusted Capitalization Ratio

  	
   

  
	
   

  	
  6D.

  	
  Minimum Consolidated Net
  Worth

  	
   

  
	
   

  	
  6E.

  	
  Indebtedness

  	
   

  
	
   

  	
  6F.

  	
  Liens

  	
   

  
	
   

  	
  6G.

  	
  Sale of Assets

  	
   

  
	
   

  	
  6H.

  	
  Restricted Payments

  	
   

  
	
   

  	
  6I.

  	
  Restricted Investments

  	
   

  
	
   

  	
  6J.

  	
  Restrictive Agreements

  	
   

  
	
   

  	
  6K.

  	
  Amendments to Material
  Documents

  	
   

  
	
   

  	
  6L.

  	
  Accounting Changes

  	
   

  
	
   

  	
  6M.

  	
  Fundamental Changes

  	
   

  
	
   

  	
  6N.

  	
  Transactions with Affiliates

  	
   

  
	
   

  	
  6O.

  	
  Sale and Leaseback
  Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7A.

  	
  Acceleration

  	
   

  
	
   

  	
  7B.

  	
  Rescission of Acceleration

  	
   

  
	
   

  	
  7C.

  	
  Notice
  of Acceleration or Rescission

  	
   

  
	
   

  	
  7D.

  	
  Other Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  REPRESENTATIONS, COVENANTS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8A.

  	
  Organization

  	
   

  
	
   

  	
  8B.

  	
  Financial Statements

  	
   

  
	
   

  	
  8C.

  	
  Actions Pending

  	
   

  
	
   

  	
  8D.

  	
  Outstanding Indebtedness

  	
   

  
	
   

  	
  8E.

  	
  Title to Properties

  	
   

  
	
   

  	
  8F.

  	
  Taxes

  	
   

  
	
   

  	
  8G.

  	
  Conflicting Agreements and
  Other Matters

  	
   

  
	
   

  	
  8H.

  	
  Offering of
  Notes

  	
   

  
	
   

  	
  8I.

  	
  Use of
  Proceeds

  	
   

  
	
   

  	
  8J.

  	
  ERISA

  	
   

  
	
   

  	
  8K.

  	
  Governmental
  Consent

  	
   

  
	
   

  	
  8L.

  	
  Compliance
  with Laws

  	
   

  
	
   

  	
  8M.

  	
  Environmental
  Compliance

  	
   

  
	
   

  	
  8N.

  	
  Utility
  Company Status

  	
   

  
	
   

  	
  8O.

  	
  Investment
  Company Status

  	
   

  
	
   

  	
  8P.

  	
  Rule 144A

  	
   

  
	
   

  	
  8Q.

  	
  Disclosure

  	
   

  
	
   

  	
  8R.

  	
  Foreign
  Assets Control Regulations, etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  REPRESENTATIONS OF
  THE PURCHASER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9A.

  	
  Nature of
  Purchase

  	
   

  
	
   

  	
  9B.

  	
  Source of
  Funds

  	
   

  

 

ii

 

	
  10.

  	
  DEFINITIONS;
  ACCOUNTING MATTERS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10A.

  	
  Yield-Maintenance
  Terms

  	
   

  
	
   

  	
  10B.

  	
  Other Terms

  	
   

  
	
   

  	
  10C.

  	
  Accounting
  and Legal Principles, Terms and Determinations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11A.

  	
  Note
  Payments

  	
   

  
	
   

  	
  11B.

  	
  Expenses

  	
   

  
	
   

  	
  11C.

  	
  Consent to
  Amendments

  	
   

  
	
   

  	
  11D.

  	
  Form,
  Registration, Transfer and Exchange of Notes; Lost Notes

  	
   

  
	
   

  	
  11E.

  	
  Persons
  Deemed Owners; Participations

  	
   

  
	
   

  	
  11F.

  	
  Survival of
  Representations and Warranties; Entire Agreement

  	
   

  
	
   

  	
  11G.

  	
  Successors
  and Assigns

  	
   

  
	
   

  	
  11H.

  	
  Confidential
  Information

  	
   

  
	
   

  	
  11I.

  	
  Notices

  	
   

  
	
   

  	
  11J.

  	
  Payments
  due on Non-Business Days

  	
   

  
	
   

  	
  11K.

  	
  Satisfaction
  Requirement

  	
   

  
	
   

  	
  11L.

  	
  Governing
  Law

  	
   

  
	
   

  	
  11M.

  	
  Consent to
  Jurisdiction; Waiver of Immunities

  	
   

  
	
   

  	
  11N.

  	
  Severability

  	
   

  
	
   

  	
  11O.

  	
  Descriptive
  Headings

  	
   

  
	
   

  	
  11P.

  	
  Counterparts

  	
   

  
	
   

  	
  11Q.

  	
  Independence
  of Covenants

  	
   

  
	
   

  	
  11R.

  	
  Waiver of
  Jury Trial

  	
   

  
	
   

  	
  11S.

  	
  Severalty
  of Obligations

  	
   

  
	
   

  	
  11T.

  	
  Independent
  Investigation

  	
   

  
	
   

  	
  11U.

  	
  Directly or
  Indirectly

  	
   

  

 

iii

 

Schedules and Exhibits

 

	
  Schedule A

  	
  —

  	
  Purchaser
  Schedule

  
	
   

  	
   

  	
   

  
	
  Schedule 3F

  	
  —

  	
  Changes in
  Corporate Structure

  
	
  Schedule 6E

  	
  —

  	
  Existing
  Indebtedness

  
	
  Schedule 6F

  	
  —

  	
  Existing Liens

  
	
  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

  	
  —

  	
  Forms of Waivers

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
   

  	
  Form of
  Amendment to Existing Note Purchase Agreement

  

 

iv

 

AARON RENTS, INC.

and certain other Obligors

1100 Aaron Building

309 East Paces Ferry Road, NE

Atlanta, GA 30305-2377

 

Dated as of July 27, 2005

 

To Each of the Purchasers
named on

the attached Purchaser
Schedule

 

Ladies and Gentlemen:

 

Each
of AARON RENTS, INC., a Georgia
corporation (together with its successors and assigns, the “Company”), AARON RENTS, INC. PUERTO
RICO, a Puerto Rico corporation (together with its successors and
assigns, “ARPR”) and AARON
INVESTMENT COMPANY, a Delaware corporation (together with its
successors and assigns, “AIC”, and,
together with the Company and ARPR, the “Obligors”)
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 $60,000,000, to be dated the date of issue thereof, to mature July 27,
2012, 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
5.03% 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 27, 2005 or any other date on or before August 3,
2005 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 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
and tax good standing certificates as to each Obligor from their respective
jurisdictions of incorporation; and

 

2

 

(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.

 

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, 2004.

 

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.          Waivers.  The
Company shall have delivered a true and correct copy, attached hereto as Exhibit E,
of any waivers to permit the Company to enter into the transactions
contemplated by this Agreement and the Notes that shall be necessary under [the
SunTrust Agreement, including, without limitation, waivers of Section 7.1
and Section 7.8 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 $12,000,000 on July 27 in each of the years 2008 to 2012,
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.  Any
partial prepayment of the Notes pursuant to this paragraph 4B shall be applied
in satisfaction of required payments of principal on a pro rata basis.

 

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) with respect to
consolidated statements;

 

(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

 

5

 

Commission
shall be deemed to satisfy the requirements of this clause (ii) with
respect to consolidated statements;

 

(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;

 

(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)

 

6

 

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.

 

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.  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.

 

7

 

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.

 

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, the SouthTrust 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, the SunTrust Loan Facility Agreement or the SouthTrust
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,
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

 

8

 

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.  Without
limitation of the foregoing, the Company will, and will cause each of its
Subsidiaries to, not be a Person described in section 1 of the
Anti-Terrorism Order, and not knowingly engage in any dealings or transactions,
or otherwise knowingly be associated, with any such Person.

 

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 $500,000, (iii) receives
notice of any claim with respect to any Environmental Liability in excess of
$500,000, or (iv) becomes aware of any basis for any Environmental
Liability in excess of $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 $1,000,000;
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

 

9

 

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.

 

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 similar documents applicable to
such Foreign Subsidiary described in Paragraph 3 hereof as 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.

 

10

 

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.

 

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) $338,340,000, 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 after the
Date of Closing, 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

 

11

 

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 $20,000,000 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)           Indebtedness
or contingent liability under the Synthetic Lease Documents, provided that
the aggregate outstanding principal amount of all such Indebtedness does not
exceed $25,000,000 at any one time;

 

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

 

(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 $10,000,000
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;

 

12

 

(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 $100,000,000; and

 

(m)          Other
unsecured Indebtedness in an aggregate principal amount not to exceed $30,000,000
at any time outstanding, provided that no Default or Event of Default
shall exist as a result of the incurrence, assumption or maintenance 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;

 

(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

 

13

 

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)            Subject
to compliance with paragraph 6E(e), Liens granted under the Synthetic Lease
Documents in the real or personal property financed thereunder, and in certain
related rights of the Company to secure the Company’s indebtedness and
liabilities under the Synthetic Lease Documents;

 

(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;

 

(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.

 

14

 

6G.          Sale of
Assets.

 

The Company will
not, and will not permit any of its Subsidiaries to, convey, sell, lease,
assign, transfer or otherwise dispose of, any of its assets, business or
property, whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary’s common stock to any
Person other than an Obligor (or to qualify directors if required by applicable
law), except (a) the sale or other disposition for fair market value of
obsolete or worn out property or other property not necessary for operations,
disposed of in the ordinary course of business; (b) the sale, lease or
other disposition of inventory and Permitted Investments in the ordinary course
of business, (c) sales and dispositions permitted under paragraph 6M and
sale and leaseback transactions permitted under paragraph 6O and (d) other
sales of assets not to exceed $10,000,000 in book value in the aggregate for
all such sales.

 

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,
dividends, distributions, redemptions and stock repurchases paid in cash 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.

 

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;

 

15

 

(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, the loan agreement relating to the Rosey
Rentals Guarantee, the RBC Agreement and the SouthTrust 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 $10,000,000 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); and

 

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

 

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 Synthetic Lease Documents, the Industrial Revenue Bonds, the RBC Agreement
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.

 

16

 

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 Permitted Changes shall only be permitted to the extent
that (i) if such Permitted Change had not occurred, no Event of Default
would have existed as at the last day of the next succeeding fiscal quarter of
the Company, and (ii) if such Permitted Change had already occurred, no
Event of Default would have existed as at the last day of the immediately
preceding fiscal quarter of the Company, or, 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 to an
Obligor, (iv) ARPR, 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

 

17

 

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 $100,000,000 during the term of this
Agreement.

 

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

 

(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

 

18

 

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 $1,000,000) 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

 

(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

 

19

 

(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

 

(xiii)         any
judgment in an amount in excess of $1,000,000, or any two or more judgments in
an aggregate amount in excess of $5,000,000, is or are rendered against the
Company or any Subsidiary and either (a) enforcement proceedings have been
commenced by any creditor upon any such judgment or judgments or (b) within
30 days after entry thereof, any such judgment or judgements is or are not
discharged or execution thereof stayed pending appeal, or within 30 days after
the expiration of any such stay, any such judgment or judgments is or are not
discharged; or

 

(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

 

20

 

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.

 

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

 

21

 

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.

 

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 2002 to 2004, 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 2004 and 2005 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

 

22

 

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, 2004.

 

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 has 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, 2004 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 their 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 has 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.

 

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 but excluding the
agreements listed on Schedule 8G), 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

 

23

 

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.

 

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

 

24

 

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 1935, 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.

 

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

 

25

 

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.  Neither the sale of the Notes
by the Obligors hereunder nor its use of the proceeds thereof will violate the
Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.  Whether or not, in each case,
the Company or any Subsidiary is subject to the jurisdiction thereof, the
Company and the Subsidiaries are in full compliance with the provisions of the
Anti-Terrorism Order and the USA Patriot Act.

 

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

 

26

 

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

 

(iv)          the Source
constitutes assets of an “investment fund” (within the meaning of Part V
of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset
manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan’s assets that are included 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 Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 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 (applying the definition of “control” in Section V(e) of the
QPAM Exemption) owns a 5% or more interest in the Company and (a) the
identity of such QPAM and (b) the names of all employee benefit plans
whose assets are included in 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.

 

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

 

27

 

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 for actively traded U.S. Treasury securities having a maturity equal
to the Remaining Average Life of such Called Principal as of such Settlement
Date on the Treasury Yield Monitor page of Standard & Poor’s MMS
– Treasury Market Insight (or, if Standard & Poor’s shall cease to
report such yields in MMS – Treasury Market Insight or shall cease to be
Prudential Capital Group’s customary source of information for calculating
yield-maintenance amounts on privately placed notes, then such source as is
then Prudential Capital Group’s customary source of such information), or if
such yields shall not be reported as of such time or the yields reported as of
such time shall not be ascertainable, (ii) 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(519) (or any
comparable successor publication) for actively traded 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

 

28

 

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.

 

“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-Terrorism
Order” means Executive Order No. 13,224, 66 Fed. Reg. 49,079
(2001) issued by the President of the U.S. (Executive Order Blocking Property
and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or
Support Terrorism).

 

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

 

29

 

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

 

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

 

“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 Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder in effect on the date hereof), (b) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or “group” (within the meaning of the Securities Exchange Act of
1934 and the rules of the Securities and Exchange Commission thereunder as
in effect on the date hereof) other than the Loudermilk Family of 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.

 

“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

 

30

 

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.

 

“Consolidated
Interest Expense” shall mean 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 on the date that
such Person’s assets are acquired by the Company or its Subsidiaries.

 

“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).

 

31

 

Notwithstanding anything contained herein to the contrary, for purposes
of calculating Consolidated Total Debt as of any date, the obligations,
liabilities and indebtedness of the Company under the SunTrust Loan Facility
Agreement shall be limited to fifty percent (50%) of the aggregate outstanding
principal amount of the Loans (as such term is defined in the SunTrust Loan
Facility Agreement) on such date.

 

“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.

 

“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.

 

“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

 

32

 

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.

 

“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.

 

“Existing Note Purchase Agreement” shall mean that certain Note Purchase
Agreement, dated as of August 15, 2002, by and among the Obligors and each
of the Existing Noteholders, as amended by that certain First Amendment and
Waiver Agreement, dated as of May 28, 2004, by and between the Obligors
and the Existing Noteholders, as amended by that certain Second Amendment to
Note Purchase Agreement dated as of July 27, 2005, by and between the
Obligors and the Existing Noteholders.

 

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

 

“Existing
Note(s) “ shall mean
those certain 6.88% Senior Notes due August 15, 2009, 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 

 

33

 

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.

 

“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.

 

34

 

“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.

 

“Lien”
shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit
arrangement, or other arrangement having the practical effect of the foregoing
or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having the same economic
effect as any of the foregoing).  A
covenant not to grant a Lien or a “negative pledge” shall not be determined a
Lien for purposes of this Agreement.

 

“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) material impairment
of the Obligors’ ability to perform any of their respective obligations under
the Agreement and the Notes or (iii) 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).

 

“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.

 

“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

 

35

 

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, or any successor or
replacement entity thereto under ERISA.

 

“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 $40,000,000, 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 $80,000,000. 
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

 

36

 

(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.

 

“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.

 

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

 

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

 

“RBC
Agreement” shall mean
that certain Credit Facility, dated as of July 26, 2005, among the Company
and Royal Bank of Canada, as amended, restated, supplemented, replaced,
refinanced or otherwise modified from time to time.

 

“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.

 

“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.

 

“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.

 

“Rosey
Rentals Guarantee” shall
mean that certain Unconditional Guarantee of Payment, dated as of December 5,
2003, of the Company in favor of SouthTrust Bank, for the benefit of Rosey
Rentals, L.P., as amended by that certain Amendment and Reaffirmation of

 

37

 

Guaranty dated as of May 5, 2004 and by
that certain Amendment and Reaffirmation of Guaranty dated as of November 12,
2004, as amended, restated, supplemented, replaced, refinanced or otherwise
modified from time to time.

 

“S&P”
shall mean Standard and Poor’s Corporation, or any successor Person.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“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.

 

“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
“Subsidiaries” herein shall mean a Subsidiary of the Company.

 

“SouthTrust
Agreement” shall mean that certain Loan Facility Agreement
and Guaranty, dated as of August 31, 2000, among the Company, SouthTrust
Bank and each of the lenders signatory thereto, as amended, restated,
supplemented, replaced, refinanced or otherwise modified from time to time.

 

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

 

“SunTrust
Agreement” means that certain Revolving Credit Agreement,
dated as of May 28, 2004, among the Company, ARPR 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 Loan Facility
Agreement and Guaranty, dated as of May 28, 2004, 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.

 

“Synthetic
Lease Documents” shall have the meaning specified in the
SunTrust Agreement.

 

“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.

 

38

 

“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.

 

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.

 

39

 

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;

 

(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

 

40

 

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 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

 

41

 

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.

 

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

 

42

 

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:

 

43

 

The Company:

 

1100
Aaron Building

309
East Paces Ferry Road, NE

Atlanta,
GA 30305-2377

Attention:         Gilbert
L. Danielson

Telecopy No.   404.240.6520

 

ARPR:

 

1100
Aaron Building

309
East Paces Ferry Road, NE

Atlanta,
GA 30305-2377

Attention:         Gilbert
L. Danielson

Telecopy No.:  404.240.6520

 

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.

 

44

 

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.

 

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 it 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 counterparts shall be an original but all of
which together shall constitute one instrument.

 

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

 

45

 

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.

 

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.

 

46

 

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.]

 

47

 

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 RENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gilbert L.
  Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L. Danielson

  
	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  AARON RENTS, INC. PUERTO RICO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gilbert L.
  Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L. Danielson

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  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.

  	
   

  
	
   

  	
   

  
	
  GIBRALTAR
  LIFE INSURANCE CO., 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:

  	
  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:

  	
  Vice President

  	
   

  
										

 

 

[Signature Page to Note
Purchase Agreement]

 

 

	
  PRUCO
  LIFE INSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Jay S. White

  	
   

  	
   

  
	
  Name:

  	
  Jay S. White

  	
   

  
	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  
	
  UNITED
  OF OMAHA 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:

  	
  Vice President

  	
   

  

 

 

[Signature Page to Note
Purchase Agreement]

 

 

EXHIBIT A

 

[FORM OF NOTE]

 

AARON RENTS, INC.

AARON RENTS, INC. PUERTO
RICO

AARON INVESTMENT COMPANY

 

5.03% SENIOR NOTE DUE JULY 27,
2012

 

	
  No. R-[    ]

  	
   

  	
  July 27, 2005

  
	
  $[               ]

  	
   

  	
  PPN: 00253# AB 6

  

 

FOR VALUE
RECEIVED, the undersigned, AARON RENTS,
INC. (together with its successors, herein called the “Company”), a corporation organized and existing under the
laws of the State of Georgia, AARON RENTS, INC. PUERTO
RICO (together with its successors, herein called “ARPR”), a corporation organized and existing under the laws
of Puerto Rico, and AARON INVESTMENT COMPANY
(together with its successors, herein called “AIC”,
and together with the Company and ARPR, 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 on July 27, 2012, 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 5.03% per annum from the date hereof, payable quarterly
on the 27th day of January, April, July, and October in each year,
commencing with October 27, 2005 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) 7.03% 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 27, 2005 (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.

 

 

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
  RENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AARON
  RENTS, INC. PUERTO RICO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AARON
  INVESTMENT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]