Document:

Exhibit

10(w)

 

AMENDMENT

NO. 1 TO

SERVICING

AGREEMENT

 

THIS AMENDMENT NO. 1 TO SERVICING AGREEMENT (this “Amendment”)

dated as of April 30, 2003, by and between AARON RENTS, INC., a Georgia

corporation (“Sponsor”) and SUNTRUST BANK, a banking corporation organized

and existing under the laws of the State of Georgia having its principal office

in Atlanta, Georgia (the “Servicer”).

 

W I T N E S S E T H:

 

WHEREAS,  in

order to make available a loan facility to certain franchisees of Sponsor, the

Sponsor, Servicer, and each of the other lending institutions listed on the

signature pages thereto (the “Participants”), entered into that certain

Loan Facility Agreement and Guaranty, dated as of dated as of March 30, 2001,

as amended by that certain Amendment No. 1 to Loan Facility Agreement and

Guaranty dated as of October 31, 2002 

and as amended by that certain Amendment No. 2 to Loan Facility

Agreement and Guaranty dated as of the date hereof (as amended or modified, the

“Loan Facility Agreement”);

 

WHEREAS, in order to expedite the ongoing operations

of the loan facility, Sponsor and the Servicer entered into that certain

Servicing Agreement, dated as of March 30, 2001 (as amended or modified, the “Servicing

Agreement”) to set forth certain agreements regarding fees and operations;

 

WHEREAS, the Sponsor has requested, and the Servicer

and the Participants have agreed, to enter into certain amendments to the Loan

Facility Agreement;

 

WHEREAS, the Sponsor, the Participants and the

Servicer wish to enter into this Amendment to set forth their understandings

regarding the amendments;

 

NOW, THEREFORE, for and in consideration of the mutual

premises contained herein and other valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties hereto, intending to

be legally bound, agree as follows:

 

1.              

Definitions.  All terms

used herein without definition shall have the meanings set forth for such terms

in the Servicing Agreement.

 

2.             Amendments

 

(a)           Section 2.1(a) of the Servicing

Agreement is hereby amended by deleting such subsection in its entirety and

substituting the following in lieu thereof:

 

 

(a)           Approval Process.

 

In

the event that Sponsor desires that Servicer establish a Loan Commitment under

the Operative Documents, Sponsor shall forward to Servicer an appropriate

Funding Approval Notice no later than thirty (30) days prior to the anticipated

Closing Date of such Loan Commitment. 

Such Funding Approval Notice shall indicate whether the requested Loan

Commitment is a Startup Franchisee Loan Commitment or an Established Franchisee

Loan Commitment and shall contain the following information:

 

(i)  the Franchisee’s legal name and State of

organization;

 

(ii)

the amount of the Revolving Loan Commitment if applicable;

 

(iii)

the amount of the Term Loan Commitment if applicable;

 

(iv)

the applicable interest rate for such Loan;

 

(v)  the amount of the Commitment Fee, which

shall not exceed 100 basis points;

 

(vi)  a copy of the Franchisee’s executed

franchise application authorizing release of all information set forth therein

or delivered in connection therewith to Servicer;

 

(vii)

the amortization period with respect to any Established Franchisee Term Loan;

 

(viii)  the Franchisee’s federal tax identification

number or social security number;

 

(ix)  the legal address(es) (including county) of

the Franchisee’s residence or principal place of business, each store location,

and the site(s) where any Collateral to be pledged as security for the Loan is

stored, together with any other corporate or tradenames used by the Franchisee

in the last five (5) years;

 

(x)  if the Franchisee is a corporation, copies

of the Franchisee’s Articles or Certificate of Incorporation, certified by the

Secretary of State of its incorporation, copies of the Franchisee’s by-laws and

current incumbency certificate, if the Franchisee is a partnership, a copy of

the current partnership agreement, if the Franchisee is a limited liability

company, a copy of the current 

 

2

 

operating or limited liability company agreement and

if the Franchisee is a sole proprietor, a Statement of Sole Proprietorship in

the form provided by Servicer;

 

(xi)   good standing certificate from the

Secretary of State in which the Franchisee is organized or formed;

 

(xii)  for any Established Franchisee Loan

Commitment, a detailed description of the financial covenants to be included in

the Established Franchisee Loan Agreement, including any defined terms used in

such financial covenants; and

 

(xiii)

such other information as Servicer shall reasonably request, including, without

limitation, a listing of all Subsidiaries of the Franchisee, a listing of all

Guarantors and a listing of all Permitted Liens.

 

The Funding Approval Notice shall contain a statement

that Sponsor has approved the Franchisee for a franchise license and for

participation in the Franchisee Loan Program and shall also state that the

Sponsor consents to the liens in favor of Servicer provided for therein.

 

(b)  the last

three unnumbered paragraphs of Section 2.2 of the Servicing Agreement are

hereby amended by deleting such unnumbered paragraphs in their entirety and

substituting the following in lieu thereof:

 

To the extent that any of the foregoing items (other

than the Loan Agreement or Master Note) have been provided by the relevant

Franchisee in connection with a prior Loan, Sponsor may waive the requirement

that such documents be prepared by the Servicer or executed by the

Franchisee.  If the Franchisee is a

Startup Franchisee, at the request of the Sponsor set forth in the Funding

Approval Notice, the Servicer will prepare a Commitment Letter and forward such

Commitment Letter with the Legal Forms to the Franchisee.

 

In addition, Servicer shall engage a nationally

recognized service to perform searches of the Uniform Commercial Code

jurisdictions listed by the Sponsor in the Funding Approval Notice.  Prior to the Closing Date, Servicer shall

prepare appropriate UCC financing statements to be filed in connection with the

Loan and will arrange for them to be filed in the appropriate filing offices.

 

Servicer shall prepare and shall execute the Loan

Documents where required and forward copies of the executed documents to the

Franchisee and, if requested by the Sponsor, to the Sponsor.  Franchisee shall execute and deliver to the

Servicer  prior to the funding of the

initial Advance to such Borrower the Loan Documents and the Sponsor shall

provide the Servicer with either (1) the name, address and telephone number of

the representative

 

3

 

of Sponsor who will be closing the Loan, or (2) if no

such representative is to be present, an authorization for the Servicer to

close the Loan without any further authorization from Sponsor upon receipt of

signed, notarized Loan Documents for such Loan.  If requested in writing by the Sponsor, the Servicer shall give

copies of the executed Loan Documents to Sponsor.  In addition, Sponsor shall cause the Borrower to forward or to

have forwarded to Servicer a Certificate of Insurance evidencing the Borrower’s

ownership of liability insurance and of property and casualty insurance in an

amount not less than the greater of (i) the Loan Commitment, or (ii) the full

replacement cost of the Collateral, which certificate shall name Servicer as

sole loss payee and additional insured and shall also provide that Servicer

shall receive thirty (30) days’ prior written notice at

 

	

  SunTrust Bank

  
	

  Strategic Partners Program

  
	

  Attn: Aaron Rents Program Manager

  
	

  PO Box 4418

  
	

  Mail Code 1923

  
	

  Atlanta, GA 30302

  

 

of any lapse, termination or cancellation of the

insurance policies referenced on such certificate.  The Servicer shall have no obligation to obtain such Certificate

of Insurance or to notify Sponsor of any Borrower’s failure to deliver such

Certificate of Insurance or to notify Sponsor of the contents thereof.

 

(c)  The Servicing Agreement is hereby amended by

deleting third paragraph of Section 2.3(c) in its entirety and substituting the

following in lieu thereof:

 

In addition, each

Established Franchisee Loan Agreement shall provide that the aggregate

outstanding principal amount of all Advances made by Servicer to the relevant

Established Franchisee shall not at any time exceed an amount equal to the

relevant Established Franchisee Borrowing Base.

 

(d) The Servicing

Agreement is hereby amended by deleting Section 2.8(b) in its entirety and

substituting the following in lieu thereof:

 

(b)           Upon establishment of the

above-referenced accounts and receipt of the above-referenced Loan Documents,

duly executed by the Established Franchisee Borrower and each Guarantor, and if

requested by Sponsor, confirmation by Servicer of its first-priority security

interest in the Collateral, Servicer shall notify the relevant Established

Franchisee Borrower and Sponsor that the Established Franchisee Borrower may

request Advances pursuant to the Established Franchisee Line of Credit

Commitment and its Term Loan; provided, however, that the minimum

amount of each Advance shall be $500. 

Each Advance made pursuant to the Established Franchisee Line of Credit

 

4

 

Commitment shall be made by Servicer for the sole

purposes of (i) honoring requests from the Established Franchisee Borrower, made

through the Aaron’s Proprietary System, for ACH transfers to suppliers of

Merchandise in payment of Approved Invoices, and (ii) honoring requests from

the Established Franchisee Borrower for such Advances made via ACH transfers to

an operating account or other location specified by such Established Franchisee

Borrower (and granted a vendor identification number by Sponsor) for working

capital purposes.  The Established

Franchisee Borrowers shall not be authorized to use the DDA Account for any

other purpose.  The proceeds of each

Term Loan will be used for such purposes as have been approved by the Sponsor.

 

(e) The Servicing

Agreement is hereby amended by deleting Section 2.10 in its entirety and

substituting the following in lieu thereof:

 

(a)           All

outstanding Advances made pursuant to the Established Franchisee Line of Credit

Commitment with respect to each Established Franchisee Line of Credit Loan

shall be due and payable in full on the Maturity Date of such Loan, if not

sooner accelerated in accordance with the terms of the applicable Loan

Documents.  In addition, the outstanding

Advances made pursuant to the Established Franchisee Line of Credit Commitment

pursuant to each Established Franchisee Line of Credit Loan shall not exceed

the sum of the Established Franchisee Borrowing Base for such Established

Franchisee Borrower, minus the outstanding principal amount of such Established

Franchisee Borrower Term Loan, as determined by Sponsor on the fifth Business

Day of each month (as determined on the last day of the preceding calendar

month) and reported to Servicer on such date. 

Servicer shall be entitled to rely upon the calculation of the

Established Franchisee Borrowing Base for each Established Franchisee Borrower

submitted by Sponsor for all purposes hereunder.  Upon receipt of the Established Franchisee Borrowing Base,

Servicer shall input such information into Servicer’s loan records to be

effective as of the date which is two Business Days after receipt of such

information. The statements prepared to be delivered to each Established

Franchisee Borrower with respect to the next Payment Date shall be prepared

requiring a repayment of any Advances outstanding on the fifth Business Day of

such month in excess of relevant Established Franchisee Borrowing Base as

delivered to Servicer by Sponsor on such date. 

In addition, however, Servicer, on the date which is two Business Days

after receipt of such calculation from Sponsor, shall notify the Established

Franchisee Borrowers in writing (including facsimile) of the new Established

Franchisee Borrowing Base for such Borrower and shall require that such

Established Franchisee Borrower repay on the next Payment Date any additional

Advances made pursuant to the Established Franchisee Line of Credit Commitment

made since the date of the preparation of the statement for such Payment Date

if necessary to avoid any overadvance as of such date.  Upon the earlier of one (1) Business Day

after notice from the Sponsor to the Servicer or

 

5

 

the next Payment Date, each Established Franchisee

Borrower shall prepay its outstanding Advances made pursuant to the Established

Franchisee Line of Credit Commitment in excess of the relevant Established

Franchisee Borrowing Base.

 

(b)           Each Established Franchisee Term Loan

shall have a term of no longer than 4 years and shall be repaid in equal

monthly installments of principal with an amortization period of not more than

seven (7) years as specified by Sponsor in its Funding Approval Notice, with

the final installment being due and payable on the Maturity Date in an amount

equal to the entire outstanding principal balance of the Term Loan.

 

(f)            The Servicing Agreement is hereby

amended by replacing Exhibit E thereto with Exhibit E attached hereto.

 

3.             Conditions of Effectiveness.  This Amendment shall become effective as of

the date first above written (the “Effective Date”) when (i) this

Amendment shall have been executed and delivered by Sponsor to the Servicer and

Servicer shall have executed the same, and (ii) Amendment No. 2 to Loan

Facility Agreement and Guaranty described in the preamble hereto shall have

been executed and delivered by the parties thereto.

 

4.             Representations and Warranties

of Sponsor.  Sponsor, without limiting

the representations and warranties provided in the Servicing Agreement,

represents and warrants to the Servicer as follows:

 

(a)           The execution, delivery and

performance by Sponsor of this Amendment are within Sponsor’s corporate powers,

have been duly authorized by all necessary corporate action (including any

necessary shareholder action) and do not and will not (a) violate any

provision of any law, rule or regulation, any judgment, order or ruling of any

court or governmental agency, the articles of incorporation or by-laws of

Sponsor or any indenture, agreement or other instrument to which Sponsor is a

party or by which Sponsor or any of its properties is bound or (b) be in

conflict with, result in a breach of, or constitute with notice or lapse of time

or both a default under any such indenture, agreement or other instrument.

 

(b)           This Amendment constitutes the legal,

valid and binding obligations of Sponsor, enforceable against Sponsor in

accordance with their respective terms.

 

(c)           No Unmatured Credit Event or Credit

Event has occurred and is continuing as of the Effective Date.

 

5.              

Survival.  Each of the foregoing representa­tions and

warranties and each of the representations and warranties made in the Servicing

Agreement shall be made at and as of the Effective Date.  Each of the foregoing representations and

warranties shall constitute a representation and warranty of Sponsor under the

Servicing Agreement, and it shall be a Credit

 

6

 

Event if any such representation and warranty shall prove to have been

incorrect or false in any material respect at the time when made.  Each of the representations and warranties

made under the Servicing Agreement (including those made herein) shall survive

and not be waived by the execution and delivery of this Amendment or any

investigation by the Servicer.

 

6.              

No Waiver, Etc.  Sponsor

hereby agrees that nothing herein shall constitute a waiver by the Servicer of

any  Credit Event, whether known or

unknown, which may exist under the Servicing Agreement.  Sponsor hereby further agrees that no

action, inaction or agreement by the Servicer, including without limitation,

any indulgence, waiver, consent or agreement altering the provisions of the

Servicing Agreement which may have occurred with respect to any obligation

during the terms of the Servicing Agreement or any portion thereof, or any

other matter relating to the Servicing Agreement, shall require or imply any

future indulgence, waiver, or agreement by the Servicer. In addition, Sponsor

acknowledges and agrees that it has no knowledge of any defenses,

counterclaims, offsets or objections in its favor against the Servicer with

regard to any of the obligations due under the terms of the Servicing Agreement

as of the date of this Amendment.

 

7.              

Ratification of Servicing Agreement.  Except as expressly amended herein, all terms, covenants and

conditions of the Servicing Agreement and the other Operative Documents shall

remain in full force and effect, and the parties hereto do expressly ratify and

confirm the Servicing Agreement as amended herein.  All future references to the Servicing Agreement shall be deemed

to refer to the Servicing Agreement as amended hereby.

 

8.              

Binding Nature.  This

Amendment shall be binding upon and inure to the benefit of the parties hereto,

their respective heirs, successors, successors-in-titles, and assigns.

 

9.              

Costs, Expenses and Taxes. 

Sponsor agrees to pay on demand all reasonable costs and expenses of the

Servicer in connection with the preparation, execution and delivery of this

Amendment and the other instruments and documents to be delivered hereunder,

including, without limitation, the reasonable fees and out-of-pocket

expenses of counsel for the Servicer with respect thereto and with respect to

advising the Servicer as to its rights and responsibilities hereunder and

thereunder.  In addition, Sponsor shall

pay any and all stamp and other taxes payable or determined to be payable in connection

with the execution and delivery of this Amendment and the other instruments and

documents to be delivered hereunder, and agrees to save the harmless from and

against any and all liabilities with respect to or resulting from any delay in

paying or omission to pay such taxes.

 

10.            

Governing Law.  THIS

AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF

THE STATE OF GEORGIA.

 

11.            

Entire Understanding. 

This Amendment sets forth the entire understanding of the parties with

respect to the matters set forth herein, and shall supersede any prior negotia­tions

or agreements, whether written or oral, with respect thereto.

 

7

 

12.            

Counterparts.  This

Amendment may be executed in any number of counterparts and by different

parties hereto in separate counterparts and may be delivered by

telecopier.  Each counterpart so

executed and delivered shall be deemed an original and all of which taken

together shall constitute but one and the same instrument.

 

8

 

IN WITNESS WHEREOF, the parties hereto have executed

this Amendment through their authorized officers as of the date first above

written.

 

 

	

   

  	

  AARON RENTS, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Gilbert L. Danielson

  	

   

  
	

   

  	

   

  	

  Name: Gilbert L. Danielson

  
	

   

  	

   

  	

  Title: Executive VP and CFO

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  SUNTRUST BANK, as

  Servicer

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Donald M. Thompson

  	

   

  
	

   

  	

   

  	

  Name: Donald M. Thompson

  
	

   

  	

   

  	

  Title: Director

  
					

 

 

[SIGNATURE

PAGE TO AMENDMENT NO. 1

TO

SERVICING AGREEMENT]

 

9

 

EXHIBIT

E

TO

SERVICING

AGREEMENT

 

 

AARON

RENTS, INC. FRANCHISEE

LOAN

PROGRAM

 

FORM OF FUNDING APPROVAL

NOTICE

 

	

  Type of Borrower

  	

   

  	

  [   ]

  	

   

  	

  Startup Franchisee

  	

   

  	

  [   ]

  	

  Established Franchisee

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Legal Name of Franchisee:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Principal Place of Business:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  State of Organization:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Legal Entity Type:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Federal Tax Identification

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Number (if corporation) or

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Social Security Number (if

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  individual):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Type of Loan Commitment:

  	

   

  	

  [   ]

  	

   

  	

  Startup Franchisee

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  [   ]

  	

   

  	

  Established Franchisee Line of

  Credit

  
	

   

  	

   

  	

   

  	

   

  	

  Commitment

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  [   ]

  	

   

  	

  Established Franchisee Term Loan

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Commitment

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Amount of Term Loan Commitment

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Amount of Revolving Loan Commitment

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Commitment Fee(1):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Closing Fees(2):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

(1)  Not to exceed 100 basis

points

(2)  [$500 per store location]

[$5,000 in the case of Established Franchisee Borrowers that have customized

financial covenants as specified by Sponsor in accordance with Section 6 of the

Servicing Agreement]

 

10

 

	

  Proceeds of Term Loan

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Closing Date:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Interest Rate:

  	

   

  	

  Prime Rate plus

         %

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Term Loan Amortization(3):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Locations of Collateral:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  (if different from principal

  	

   

  	

  Complete address and county

  	

   

  	

   

  	

   

  
	

  place of business)

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete address and county

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete address and county

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Guarantor(s):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Social Security Number

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete Address

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Guarantor(s) (Continued):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Social Security Number

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete Address

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Social Security Number

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete Address

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Non-Guaranteeing Spouse(s):

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete Address

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete Address

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

(3)  Not to exceed 4 years.

 

11

 

	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Complete Address

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Individual/Entity Subordinating:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Name

  	

   

  	

   

  	

   

  	

   

  
	

  Any corporate trade names

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  used in the last 5 years:

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Permitted Liens

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Subsidiaries

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Copy of Franchisee

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Application Executed by

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Franchisee Attached

  	

   

  	

  [   ]

  	

   

  	

  YES

  	

   

  	

  [   ]

  	

   

  	

  NO

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  [Copy of Franchise

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Agreement Executed by

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Franchisee Attached

  	

   

  	

  [   ]

  	

   

  	

  YES

  	

   

  	

  [   ]

  	

   

  	

  NO]

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Copy of Corporate Documents

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Attached

  	

   

  	

  [   ]

  	

   

  	

  YES

  	

   

  	

  [   ]

  	

   

  	

  NO

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Copy of Good Standing Certificate

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  from State in which the Franchisee

  is

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  organized or formed Attached

  	

   

  	

  [   ]

  	

   

  	

  YES

  	

   

  	

  [   ]

  	

   

  	

  NO

  
													

 

 

FOR ESTABLISHED FRANCHISEE ONLY:  [  ]

See attached spreadsheet for non-standard financial covenants.

 

Pursuant to

Section 2.1 of that certain Servicing Agreement executed in connection with

that certain Loan Facility Agreement and Guaranty dated as of March 30, 2001

(as amended, the “Agreement”) by and between SunTrust Bank (“ST”)

and each of the other lending institutions party thereto (ST, such lenders,

together with any assignees thereof becoming “Participants”), and

SunTrust Bank, as servicer and agent for the Participants (in such capacity,

the “Servicer”), and Aaron Rents, Inc. (“Aaron”), Aaron hereby

certifies to the Servicer that it has approved the Dealer for a franchise

license and for participation in the Program and directs the Servicer to

establish a Loan Commitment to the above-referenced Dealer in accordance with

the terms set forth herein and pursuant to the terms and subject to the further

conditions of the Agreement and the Servicing Agreement.  Sponsor hereby expressly consents to the

liens granted by the above-referenced Dealer, in favor of the Servicer.  

 

	

  AARON RENTS, INC.

  	

                                                                ,

            

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

  Title:

  	

   

  	

   

  
						

 

12<PAGE>

                                                                   Exhibit 10.32

                               REGISTER.COM, INC.
                             STOCK OPTION AGREEMENT

RECITALS

         A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).

         B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.

         C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.

                  NOW, THEREFORE, it is hereby agreed as follows:

              1. Grant of Option. The Corporation hereby grants to Optionee, as
of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The option shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

              2. Option Term. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the day immediately preceding the Expiration Date, unless sooner
terminated in accordance with Paragraph 5 or 6.

              3. Limited Transferability. This option shall be neither
transferable nor assignable by Optionee other than to a Beneficiary following
Optionee's death and may be exercised, during Optionee's lifetime, only by
Optionee. However, if this option is designated a Non-Qualified Option in the
Grant Notice, then this option may be assigned in whole or in part during
Optionee's lifetime either as (i) a gift to one or more family members of
Optionee's Immediate Family, to a trust in which Optionee and/or one or more
such family members hold more than fifty percent (50%) of the beneficial
interest or an entity in which more than fifty percent (50%) of the voting
interests are owned by Optionee and/or one or more such family members, or (ii)
pursuant to a domestic relations order. The assigned portion shall be
exercisable only by the person or persons who acquire a proprietary interest in
the option pursuant to such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for this option immediately prior
to such assignment and shall be set forth in such documents issued to the
assignee as the Plan Administrator may deem appropriate.

              4. Vesting and Exercisability. This option shall vest and become
exercisable for the Option Shares in one or more installments as specified in
the Grant Notice. As the option becomes exercisable for such installments, those
installments shall accumulate, and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the
option term under Paragraph 5 or 6.

<PAGE>

              5. Cessation of Service. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

                  (i) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while this option is
outstanding, then this option shall remain exercisable until the earlier of (i)
the expiration of the three (3)-month period measured from the date of such
cessation of Service or (ii) the Expiration Date, provided, however that if
Optionee, following a Change in Control, is terminated without Cause, or
Optionee resigns with Good Reason, then this option shall accelerate, vest and
become exercisable in full on the effective date of Optionee's cessation of
Service.

                  (ii) Should Optionee die while holding this option, then
Optionee's Beneficiary shall have the right to exercise this option until the
earlier of (A) the expiration of the twelve (12)-month period measured from the
date of Optionee's death or (B) the Expiration Date.

                  (iii) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then this option shall remain
exercisable until the earlier of (i) the expiration of the twelve (12)-month
period measured from the date of such cessation of Service or (ii) the
Expiration Date.

                  (iv) During the applicable post-Service exercise period, this
option may not be exercised in the aggregate for more than the number of vested
Option Shares for which the option is exercisable on the date of Optionee's
cessation of Service. Upon the expiration of the applicable exercise period or
(if earlier) upon the Expiration Date, this option shall terminate and cease to
be outstanding for any vested Option Shares for which the option has not been
exercised. However, this option shall, immediately upon Optionee's cessation of
Service for any reason, terminate and cease to be outstanding to the extent this
option is not otherwise at that time exercisable for vested shares.

                  (v) Should Optionee's Service be terminated for Misconduct or
should Optionee engage in Misconduct while this option is outstanding, then this
option shall terminate immediately and cease to be outstanding.

         6. Special Acceleration of Option.

              (a) In the event of a Change in Control, this option, to the
extent outstanding at that time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior to the
effective date of the Change in Control, become exercisable for all of the
Option Shares at the time subject to this option and may be exercised for any or
all of those Option Shares as fully-vested shares of Common Stock. Subject to
paragraph 7 hereof, no such acceleration of this option, however, shall occur if
and to the extent: (i) this option is, in connection with the Change in Control,
assumed or otherwise continued in full force and effect by the successor
corporation (or parent thereof) pursuant to the terms of the Change in Control
or (ii) this option is replaced with a cash incentive program of the successor
corporation which preserves the spread existing at the time of the Change in
Control on the Option Shares for which this option is not otherwise at that time
exercisable (the excess of the Fair Market Value of those Option Shares over the
aggregate Exercise Price payable for such shares) and provides for subsequent
pay-out in accordance with the same option exercise schedule set forth in the
Grant Notice.

                                       2
<PAGE>

              (b) Immediately following the consummation of the Change in
Control, this option shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control, in which case it will be subject to paragraph 7 hereof.

              (c) If this option is assumed in connection with a Change in
Control, then this option shall be appropriately adjusted, immediately after
such Change in Control, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Change in Control
had the option been exercised immediately prior to such Change in Control, and
appropriate adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same. To the extent the holders of
Common Stock receive cash consideration for their Common Stock in consummation
of the Change in Control, the successor corporation may, in connection with the
assumption of this option, substitute one or more shares of its own common stock
with a fair market value equivalent to the cash consideration paid per share of
Common Stock in such Change in Control.

              (d) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

         7. Acceleration When Option is Assumed in a Change in Control. In the
event Optionee, at any time following a Change in Control, is terminated without
Cause, or Optionee resigns with Good Reason, this option shall accelerate, vest
and become exercisable in full on the effective date of Optionee's cessation of
Service.

         8. Adjustment in Option Shares. Should any change be made to the Common
Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

         9. Stockholder Rights. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

                                       3
<PAGE>

         10. Manner of Exercising Option. In order to exercise this option with
respect to all or any part of the Option Shares for which this option is at the
time exercisable, Optionee (or any other person or persons exercising the
option) must take the following actions:

            (i) Execute and deliver to the Corporation a Notice of Exercise for
the Option Shares for which the option is exercised.

            (ii) Pay the aggregate Exercise Price for the purchased shares in
one or more of the following forms:

                  (A) cash or check made payable to the Corporation;

                  (B) a promissory note payable to the Corporation, but only to
the extent authorized by the Plan Administrator in accordance with Paragraph 13;

                  (C) shares of Common Stock held by Optionee (or any other
person or persons exercising the option) for the requisite period necessary to
avoid a charge to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date; or

                  (D) through a special sale and remittance procedure pursuant
to which Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (I) to a Corporation-approved
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Corporation, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for the purchased
shares plus all applicable income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (II) to the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale.

                           Except to the extent the sale and remittance
                  procedure is utilized in connection with the option exercise,
                  payment of the Exercise Price must accompany the Notice of
                  Exercise delivered to the Corporation in connection with the
                  option exercise.

                (iii) Furnish to the Corporation appropriate documentation that
the person or persons exercising the option (if other than Optionee) have the
right to exercise this option.

                (iv) Make appropriate arrangements with the Corporation (or
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of
all income and employment tax withholding requirements applicable to the option
exercise.

              (b) As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.

                                       4
<PAGE>

              (c) In no event may this option be exercised for any fractional
shares.

         11. Compliance with Laws and Regulations.

              (a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.

              (b) The inability of the Corporation to obtain approval from any
regulatory body having authority deemed by the Corporation to be necessary to
the lawful issuance and sale of any Common Stock pursuant to this option shall
relieve the Corporation of any liability with respect to the non-issuance or
sale of the Common Stock as to which such approval shall not have been obtained.
The Corporation, however, shall use its best efforts to obtain all such
approvals.

         12. Successors and Assigns. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the Corporation and its successors and assigns and
Optionee and Optionee's assigns and Beneficiaries.

         13. Notices. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

         14. Financing. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, permit Optionee to pay the Exercise Price
for the purchased Option Shares by delivering a full-recourse promissory note
payable to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.

         15. Construction. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and except as otherwise provided in this
Agreement, are in all respects limited by and subject to the terms of the Plan.
All decisions of the Plan Administrator with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in this option.

         16. Governing Law. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of New York without
resort to that State's conflict-of-laws rules.

         17. Excess Shares. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with respect to those excess shares, unless stockholder approval of an
amendment sufficiently increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.

                                       5
<PAGE>

         18. Additional Terms Applicable to an Incentive Stock Option. In the
event this option is designated an Incentive Stock Option in the Grant Notice,
the following terms and conditions shall also apply to the grant:

              (i) This option shall cease to qualify for favorable tax treatment
as an Incentive Stock Option if (and to the extent) this option is exercised for
one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.

              (ii) No installment under this option shall qualify for favorable
tax treatment as an Incentive Stock Option if (and to the extent) the aggregate
Fair Market Value (determined at the Grant Date) of the Common Stock for which
such installment first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates of grant) of the
Common Stock or other securities for which this option or any other Incentive
Stock Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any Parent or Subsidiary)
first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand
Dollar ($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Qualified Option.

              (iii) Should the exercisability of this option be accelerated upon
a Change in Control, then this option shall qualify for favorable tax treatment
as an Incentive Stock Option only to the extent the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for which this option first
becomes exercisable in the calendar year in which the Change in Control occurs
does not, when added to the aggregate value (determined as of the respective
date or dates of grant) of the Common Stock or other securities for which this
option or one or more other Incentive Stock Options granted to Optionee prior to
the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Change in Control, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Qualified Option.

              (iv) Should Optionee hold, in addition to this option, one or more
other options to purchase Common Stock which become exercisable for the first
time in the same calendar year as this option, then the foregoing limitations on
the exercisability of such options as Incentive Stock Options shall be applied
on the basis of the order in which such options are granted.

                                       6
<PAGE>

        19. Leave of Absence. The following provisions shall apply upon the
Optionee's commencement of an authorized leave of absence:

              (i) The exercise schedule in effect under the Grant Notice shall
be frozen as of the first day of the authorized leave, and this option shall not
become exercisable for any additional installments of the Option Shares during
the period Optionee remains on such leave.

              (ii) Should Optionee resume active Employee status within sixty
(60) days after the start date of the authorized leave, Optionee shall, for
purposes of the exercise schedule set forth in the Grant Notice, receive Service
credit for the entire period of such leave. If Optionee does not resume active
Employee status within such sixty (60)-day period, then no Service credit shall
be given for the period of such leave.

              (iii) If this option is designated as an Incentive Stock Option in
the Grant Notice, then the following additional provision shall apply:

                            (A) If the leave of absence continues for more than
              ninety (90) days, then this option shall automatically convert to
              a Non-Qualified Option at the end of the three (3)-month period
              measured from the ninety-first (91st) day of such leave, unless
              Optionee's reemployment rights are guaranteed by statute or by
              written agreement. Following any such conversion of this option,
              all subsequent exercises of this option, whether effected before
              or after Optionee's return to active Employee status, shall result
              in an immediate taxable event, and the Corporation shall be
              required to collect from Optionee the income and employment
              withholding taxes applicable to such exercise.

              (iv) In no event shall this option become exercisable for any
additional Option Shares or otherwise remain outstanding if Optionee does not
resume Employee status prior to the Expiration Date of the option term.

         20. No Right to Employment. Nothing in this Agreement or the Plan shall
confer upon Optionee any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of
Optionee, which rights are hereby expressly reserved by each, to terminate
Optionee's Service at any time for any reason, with or without cause.

                                       7
<PAGE>

                                    EXHIBIT I

                               NOTICE OF EXERCISE

         I hereby notify Register.com, Inc. (the "Corporation") that I elect to
purchase _________ shares of the Corporation's Common Stock (the "Purchased
Shares") at the option exercise price of $_____ per share (the "Exercise Price")
pursuant to that certain option (the "Option") granted to me under the
Corporation's 2000 Stock Incentive Plan on __________________.

         Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

--------------------------------------
Date

                                          --------------------------------------
                                          Optionee

                                          Address:
                                                  ------------------------------

                                          --------------------------------------
Print name in exact manner it is to
appear on the stock certificate:
                                          --------------------------------------
Address to which certificate is to be
sent, if different from address above:
                                          --------------------------------------
Social Security Number:
Employee Number
                                          --------------------------------------

<PAGE>

                                    APPENDIX

       The following definitions shall be in effect under the Agreement:

         A. Agreement or Option Agreement shall mean this Stock Option
Agreement.

         B. Beneficiary shall mean, in the event the Plan Administrator
implements a beneficiary designation procedure, the person designated by
Optionee, pursuant to such procedure, to succeed to Optionee's rights under the
option evidenced by this Agreement to the extent the option is held by Optionee
at the time of death. In the absence of such designation or procedure, the
Beneficiary shall be the personal representative of the estate of Optionee or
the person or persons to whom the option is transferred by will or the laws of
descent and distribution.

         C. Board shall mean the Corporation's Board of Directors.

         D. Cause shall have the meaning set forth in paragraph 8 of the Letter
Agreement.

         E. Change in Control shall mean, notwithstanding any definition of such
term contained in the Plan, the occurrence of any of the following events:

              (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (x) the then outstanding shares of Common Stock of the Corporation (the
"Outstanding Common Stock") or (y) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally in
the election of directors (the "Outstanding Voting Securities"); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the
Corporation, (B) any acquisition by the Corporation, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation, or (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (A), (B) and (C) of paragraph (iii) below; or

              (b) Individuals who, as of the date of this Agreement (the
"Effective Date"), constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

                                       A-1
<PAGE>

              (c) Consummation of a reorganization, merger, consolidation, sale
or other disposition of all or substantially all of the assets of the
Corporation or an acquisition of the assets of another entity (a "Business
Combination"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to consummation of such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of Common Stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors (or other governing body, if applicable), as the case may be, of the
entity resulting from such Business Combination (including, without limitation,
an entity which as a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to the consummation of such Business Combination of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust)) beneficially owns, directly or indirectly, 50% or more of,
respectively, the then outstanding shares of common stock of the entity
resulting from such Business Combination or of the combined voting power of the
then outstanding voting securities of such entity, except to the extent that
such ownership existed prior to the consummation of the Business Combination,
and (C) at least a majority of the members of the board of directors (or other
governing body, if applicable) of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

              (d) Approval by the shareholders of the Corporation of a complete
liquidation or dissolution of the Corporation.

         F. Code shall mean the Internal Revenue Code of 1986, as amended.

         G. Common Stock shall mean the Corporation's common stock.

         H. Corporation or Company shall mean Register.com, Inc., a Delaware
corporation.

         I. Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

         J. Exercise Date shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

         K. Exercise Price shall mean the exercise price per share as specified
in the Grant Notice.

         L. Expiration Date shall mean the date on which the option expires as
specified in the Grant Notice.

                                       A-2
<PAGE>

         M. Fair Market Value per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

              (i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as the price is reported by
the National Association of Securities Dealers on the Nasdaq National Market or
any successor system. If there is no closing selling price for the Common Stock
on the date in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.

              (ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.

         N. Good Reason shall have the meaning set forth in paragraph 9 of the
Letter Agreement.

         O. Grant Date shall mean the effective date of grant of the option as
specified in the Grant Notice.

         P. Grant Notice shall mean the Notice of Grant of Stock Options
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

         Q. Immediate Family of Optionee shall mean Optionee's child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationships.

         R. Incentive Option or Incentive Stock Option shall mean an option
which satisfies the requirements of Code Section 422.

         S. Letter Agreement shall mean the Letter Agreement of Employment,
dated as of June 11, 2002 between the Corporation and Jonathan Stern.

         T. Misconduct shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any intentional wrongdoing by Optionee, whether by
omission or commission, which adversely affects the business or affairs of the
Corporation (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not limit the grounds for the dismissal or discharge of
Optionee or any other individual in the Service of the Corporation (or any
Parent or Subsidiary).

                                       A-3
<PAGE>

         U. Non-Qualified Option or Non-Statutory Option shall mean an option
not intended to satisfy the requirements of Code Section 422.

         V. Notice of Exercise shall mean the notice of exercise in the form
attached hereto as Exhibit I.

         W. Option Shares shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.

         X. Optionee shall mean the person to whom the option is granted as
specified in the Grant Notice.

         Y. Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

         Z. Permanent Disability shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.

         AA. Plan or Stock Option Plan shall mean the Corporation's 2000 Stock
Incentive Plan, as amended.

         BB. Plan Administrator shall mean either the Board or a committee of
the Board acting in its administrative capacity under the Plan.

         CC. Service shall mean Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.

         DD. Stock Exchange shall mean the American Stock Exchange or the New
York Stock Exchange.

         EE. Subsidiary shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

                                       A-4

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