Document:

EXHIBIT
10(ff)

 

FIRST AMENDMENT AND WAIVER
AGREEMENT

 

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

 

RECITALS:

 

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

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

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

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

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

 

AGREEMENT:

 

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

 

 

 

1.                                      WAIVER; AMENDMENTS.

 

1.1.                            Waiver.

 

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

 

1.2.                            Amendments
to Existing Note Purchase Agreement.

 

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

 

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

 

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

 

2.                                      WARRANTIES AND REPRESENTATIONS.

 

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

 

2.1.                            Corporate
and Other Organization and Authority.

 

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

 

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

 

2.2.                            Authorization,
etc.

 

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

 

2

 

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

 

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

 

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

 

2.3.                            No
Conflicts, etc.

 

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

 

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

 

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

 

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

 

2.4.                            Governmental
Consent.

 

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

 

2.5.                            Existence
of Defaults.

 

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

 

3.                                      CONDITIONS TO EFFECTIVENESS OF WAIVER AND
AMENDMENTS.

 

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

 

3

 

4.                                      MISCELLANEOUS.

 

4.1.                            Governing
Law.

 

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

 

4.2.                            Duplicate
Originals.

 

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

 

4.3.                            Waiver
and Amendments.

 

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

 

4.4.                            Costs
and Expenses.

 

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

 

4.5.                            Successors
and Assigns.

 

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

 

4

 

4.6.                            Survival.

 

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

 

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

 

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

 

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

 

5

 

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

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  AARON
  RENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L.
  Danielson

  
	
   

  	
  Title:

  	
  Executive Vice
  President

  
	
   

  	
  and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  AARON
  RENTS, INC. PUERTO RICO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L.
  Danielson

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  AARON
  INVESTMENT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L.
  Danielson

  
	
   

  	
  Title:

  	
  Vice President
  and Treasurer

  
					

 

[Signature
Page to First Amendment and Waiver Agreement]

 

 

	
  Accepted and
  Agreed:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  
	
  THE
  PRUDENTIAL INSURANCE COMPANY OF AMERICA

  
	
   

  
	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R.
  Derrick

  
	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
  GENERAL
  ELECTRIC CAPITAL ASSURANCE COMPANY

  
	
  By:

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

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R. Derrick

  
	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  GENERAL
  ELECTRIC LIFE AND ANNUITY ASSURANCE COMPANY

  
	
  By:

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

  
	
   

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

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R.
  Derrick

  
	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ING
  LIFE INSURANCE & ANNUITY COMPANY

  
	
  By:

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

  
	
   

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

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Robert R.
  Derrick

  	
   

  
	
  Name:

  	
  Robert R.
  Derrick

  
	
  Title:

  	
  Vice President

  
						

 

6

 

EXHIBIT
1.1

 

AMENDMENTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1EXHIBIT 10(gg)

 

SECOND AMENDMENT TO NOTE PURCHASE
AGREEMENT

 

This SECOND
AMENDMENT TO NOTE PURCHASE AGREEMENT (this “Agreement”),
is made as of July 27, 2005, by and between AARON RENTS,
INC., a Georgia corporation (together with its successors and
assigns, the “Company”), AARON RENTS, INC. PUERTO RICO, a Puerto
Rico corporation (together with its successors and assigns, “ARPR”) and AARON
INVESTMENT COMPANY, a Delaware corporation (together with its
successors and assigns, “AIC” and, together with the Company and ARPR,
collectively, the “Obligors”) and each of the Persons holding one
or more Notes (defined below) on the Effective Date (defined below)
(collectively, the “Noteholders”),
with respect to that certain Note Purchase Agreement, dated as of August 15,
2002 (as amended by that certain First Amendment and Waiver Agreement, dated as
of May 28, 2004 and as in effect immediately prior to giving effect to
this Agreement, the “Existing Note Purchase
Agreement” and, as amended pursuant to this Agreement and as may be
further amended, restated or otherwise modified from time to time, the “Note Purchase Agreement”), by and among the Obligors and
each of the Noteholders. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Existing Note Purchase
Agreement.

 

RECITALS:

 

A.                                    Pursuant
to the Existing Note Purchase Agreement, the Obligors issued and sold fifty
million dollars ($50,000,000) in aggregate principal amount of its 6.88% Senior
Notes due August 15, 2009 (the “Notes”) to the
Noteholders.

 

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

 

C.                                    The
Noteholders are the holders of all outstanding Notes, as of the date hereof, in
the aggregate principal amounts indicated on Annex 1 hereto.

 

AGREEMENT:

 

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

 

1.                                      AMENDMENTS.

 

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

 

2.                                      WARRANTIES AND REPRESENTATIONS.

 

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

 

 

2.1.                            Corporate
and Other Organization and Authority.

 

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

 

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

 

2.2.                            Authorization,
etc.

 

This Agreement has been duly authorized by all
necessary corporate action on the part of the Obligors.  Each of this Agreement, the Note Purchase
Agreement and the Notes constitutes a legal, valid and binding obligation of
the Obligors, enforceable, in each case, against such Obligor in accordance
with its terms, except as such enforceability may be limited by

 

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

 

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

 

2.3.                            No
Conflicts, etc.

 

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

 

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

 

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

 

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

 

2.4.                            Governmental
Consent.

 

The execution and delivery by the Obligors of this
Agreement and the performance by the Obligors of their respective obligations
hereunder and under the Note Purchase Agreement

 

2

 

and the Notes do not require any
consents, approvals or authorizations of, or filings, registrations or
qualifications with, any Governmental Authority on the part of any Obligor.

 

2.5.                            Existence
of Defaults.

 

Since December 31, 2004, no event has occurred
and no condition has existed that would constitute a Default or an Event of
Default under the Note Purchase Agreement.

 

3.                                      CONDITIONS TO EFFECTIVENESS OF AMENDMENTS.

 

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

 

4.                                      MISCELLANEOUS.

 

4.1.                            Governing
Law.

 

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

 

4.2.                            Duplicate
Originals.

 

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

 

4.3.                            Waiver
and Amendments.

 

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

 

4.4.                            Costs
and Expenses.

 

Whether or not the Amendments become effective, each
of the Obligors confirms its obligation under Paragraph 11B of the Note
Purchase Agreement and agrees that, on the Effective Date (or if an invoice is
delivered subsequent to the Effective Date or if the Amendments do not become
effective, promptly after receiving any statement or invoice

 

3

 

therefor), it will pay all costs
and expenses of the Noteholders relating to this Agreement, including, but not
limited to, the statement for reasonable fees and disbursements of the
Noteholders’ special counsel presented to the Company on the Effective
Date.  The Obligors will also promptly
pay, upon receipt thereof, each additional statement for reasonable fees and
disbursements of the Noteholders’ special counsel rendered after the Effective
Date in connection with this Agreement.

 

4.5.                            Successors
and Assigns.

 

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

 

4.6.                            Survival.

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  AARON RENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gilbert L. Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L. Danielson

  
	
   

  	
  Title:

  	
  Executive Vice President

  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  AARON RENTS, INC. PUERTO RICO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gilbert L.
  Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L. Danielson

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  
	
   

  	
  AARON INVESTMENT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gilbert L.
  Danielson

  	
   

  
	
   

  	
  Name:

  	
  Gilbert L. Danielson

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  
	
  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

  
	
   

  
	
   

  
	
  By:

  	
     /s/ Jay S. White

  	
   

  	
   

  
	
  Name:

  	
  Jay S. White

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY

  
	
  By:

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

  
	
  By:

  	
  Prudential Private Placement
  Investors, Inc., General Partner

  
	
   

  	
   

  
	
  By:

  	
     /s/ Jay
  S. White

  	
   

  	
   

  
	
  Name:

  	
  Jay S. White

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
										

 

[Signature Page to Second
Amendment to Note Purchase Agreement]

 

 

	
  GENERAL ELECTRIC LIFE AND ANNUITY ASSURANCE
  COMPANY

  
	
  By:

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

  
	
  By:

  	
  Prudential Private Placement
  Investors, Inc., General Partner

  
	
   

  
	
   

  
	
  By:

  	
    /s/ Jay S. White

  	
   

  	
   

  
	
  Name:

  	
  Jay S. White

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
  ING LIFE INSURANCE & ANNUITY COMPANY

  
	
  By:

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

  
	
  By:

  	
  Prudential Private Placement
  Investors, Inc., General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   /s/Jay S. White

  	
   

  	
   

  
	
  Name:

  	
  Jay S. White

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
						

 

[Signature Page
to Second Amendment to Note Purchase Agreement]

 

 

EXHIBIT A

 

AMENDMENTS

 

1. Paragraph 5G of the Existing Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

 

“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 2005 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 to, 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.”

 

2. Paragraph 6E of the Existing Note Purchase Agreement is hereby
amended by

 

(i) deleting the
reference to “Capital” in clause (c) and inserting “Capitalized” in lieu
thereof;

 

(ii) amending and
restating clause (f) in its entirety to read as follows:

 

“(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);”;

 

(iii) deleting the word “and”
in clause (j);

 

(iv) amending and
restating clause (k) in its entirety to read as follows:

 

“(k)                            Indebtedness
under the 2005 Note Purchase Agreement;”;

 

(v) adding the following
clause (l):

 

“(l)                               Indebtedness
in respect of Private Placement Debt (other than Private Placement Debt
incurred in respect of this Agreement or the 2005 Note Purchase Agreement) in
an aggregate principal amount not to exceed $100,000,000; and”;

 

and (vi) adding
the following clause (m):

 

“(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.”

 

3. Paragraph 6F of the Existing Note Purchase Agreement is hereby
amended by

 

(i) deleting the
reference to “Capital” in clause (c) and inserting “Capitalized” in lieu
thereof; and

 

(ii) deleting the
reference to “Capital” in clause (g) and inserting “Capitalized” in lieu
thereof.

 

4. Paragraph 6I of the Existing Note Purchase Agreement is hereby
amended by

 

(i) deleting the
reference to “any obligations of,” in the first sentence thereof; and

 

(ii) amending and
restating clause (e) thereof in its entirety to read as follows:

 

“(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)”

 

5. Paragraph 6J of the Existing Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

 

“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 2005 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.”

 

6. Paragraph 6O of the Existing Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

 

“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. Paragraph 7A(ii) of the Existing Note Purchase Agreement is
hereby amended by deleting the reference to “3 days” and inserting “3 Business
Days” in lieu thereof.

 

 

8. Paragraph 7A(iii) of the Existing Note
Purchase Agreement is hereby amended and restated in its entirety to read as
follows:

 

“(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 2005 Note Purchase Agreement beyond any period
of grace provided with respect thereto, or the Obligors or any Subsidiary fail
to perform or observe any other agreement, term or condition contained in such
agreements (or if any other event thereunder or under any such agreement shall
occur and be continuing) and the effect of such failure or other event is to
cause, or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become due prior
to any stated maturity, or any such obligation shall be declared to be due and
payable; or required to be prepaid or redeemed (other than a regularly
scheduled required prepayment or redemption), purchased or defeased, or any
offer to prepay, redeem, purchase, repurchase or defease such obligation shall
be required to be made, in each case prior to the stated maturity thereof; or (B) any
Obligor or any Subsidiary defaults (whether as primary obligor or as guarantor
or other surety) in any payment of principal of or interest on Indebtedness (or
any Capitalized Lease Obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as full or
partial payment for property whether or not secured by a purchase money
mortgage or any obligation under notes payable or drafts accepted representing
extensions of credit (other than, in each case in this Paragraph 7A(iii)(B),
(x) the SunTrust Agreement, the SunTrust Loan Facility Agreement and the 2005
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”

 

9. The definition of “Permitted Acquisitions” in Paragraph 10B is hereby
amended by (i) deleting the reference to $20,000,000 in subclause (d) thereof
and inserting $40,000,000 in lieu thereof, and (ii) deleting the reference
to $40,000,000 in subclause (e) thereof and inserting $80,000,000 in lieu
thereof.

 

 

10. The definition of “SunTrust Agreement” in Paragraph 10B is hereby amended
by deleting the reference to March 30, 2001 therein and inserting May 28,
2004 in lieu thereof.

 

11. The definition of “SunTrust Loan Facility Agreement” in Paragraph 10B is
hereby amended by deleting the reference to March 30, 2001 therein and
inserting May 28, 2004 in lieu thereof.

 

12. The following new definitions are hereby added to Paragraph 10B of
the Existing Note Purchase Agreement in their proper alphabetical order to read
as follows:

 

“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.

 

“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.

 

“Rosey Rentals Guarantee” shall mean that certain Unconditional
Guaranty 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 Guaranty dated as of May 5, 2004
and by that certain Amendment and Reaffirmation of Guaranty dated November 12,
2004, as amended, restated, supplemented, replaced, refinanced or otherwise
modified from time to time.

 

“2005 Note Purchase Agreement” shall mean that certain Note Purchase
Agreement dated as of July 27, 2005, by and among each of the Obligors and
the purchasers listed on Schedule A thereto, as amended, restated,
supplemented, replaced, refinanced or otherwise modified from time to time.

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