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EXHIBIT 10(b)
EXECUTION COUNTERPART
AMENDMENT NO. 1 TO LOAN FACILITY
AGREEMENT AND GUARANTY
THIS AMENDMENT NO. 1 TO LOAN FACILITY AGREEMENT AND GUARANTY
(this "Amendment") dated as of March 13, 1998, by and between XXXXX RENTS, INC.,
a Georgia corporation ("Sponsor"), each of the financial institutions listed on
the signature pages hereof (the "Participants") and SUNTRUST BANK, ATLANTA, a
Georgia banking corporation, as servicer (in such capacity, the "Servicer");
W I T N E S S E T H:
WHEREAS, the Sponsor, Participants and Servicer, in order to
make available a loan facility to certain franchisees of Sponsor, entered into
that certain Loan Facility Agreement and Guaranty dated as of January 20, 1998
(as hereafter amended or modified, the "Loan Facility Agreement") by and among
Sponsor, Servicer and the Participants;
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 January 20, 1998, as amended by that certain First
Amendment to Servicing Agreement dated as of March 13, 1998 (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 Loan Facility Agreement.
2. Amendments.
1. Amendment to Section 1.1 of the Loan Facility Agreement.
Section 1.1 of the Loan Facility Agreement is hereby amended by adding
the following new definitions to such Section 1.1 in alphabetical
ord\er:
'"Amortization Period" shall mean, for any Franchisee
Borrower (i) 18 months; provided that, in the case of
Electronic Equipment Advances, such advance
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may be amortized over a period of 24 months; provided further,
however, in the event the Franchisee Loan Commitment of such
Franchisee Borrower is terminated by 90 days' notice from the
Servicer, all amounts due and payable with respect to
Electronic Equipment Advances shall be due and payable in full
at the end of 18 months following the termination of the
Franchisee Loan Commitment.
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"Electronic Equipment" shall include all computers,
computer equipment, big screen televisions, and any other
types of inventory designated by the Sponsor from time to time
and approved by the Required Participants. The Sponsor must
send a written request for such approval to the Servicer.
"Electronic Equipment Advances" shall mean all
advances under Franchisee Loan Commitments made to purchase
Electronic Equipment where the Sponsor and the Franchisee
Borrower have agreed that the Amortization Period shall be 24
months.
"Electronic Equipment Asset Dispositions" shall mean
all Asset Dispositions of Electronic Equipment for which the
Sponsor and the Franchisee Borrower have agreed that the
Amortization Period shall be 24 months.
2. Further Amendment to Section 1.1 of the Loan Facility
Agreement. Section 1.1 of the Loan Facility Agreement is hereby further
amended by deleting the definition of "Loan Term" and substituting the
following in lieu thereof:
""Loan Term" means the prescribed term of the Loan
Commitment to any Borrower as documented in the applicable
Loan Documents and any term out period thereafter, such term
not to exceed, (x) in the case of any Franchisee Loan
Commitment, one (1) year subject to extension in accordance
with the terms of the applicable Franchisee Loan Agreement,
plus, in the event that the Franchisee Loan Commitment is
terminated upon ninety (90) days' notice from the Servicer,
the Amortization Period and (y) in the case of a Qualified
Franchisee Loan Commitment, four (4) years."
3. Amendment to Section 2.1 of the Loan Facility Agreement.
Section 2.1 of the Loan Facility Agreement is hereby amended by
deleting subsection (c) thereof and substituting the following in lieu
thereof:
"(c) Authorization of Loan Commitments Pursuant to
Franchisee Commitment; Loan Terms. Within the limits of the
Franchisee Commitment and in accordance with the procedures
set forth in this Agreement and the Servicing Agreement, the
Sponsor may authorize the Servicer to establish a Loan
Commitment pursuant to the Franchisee Commitment in favor of a
Franchisee who meets the credit criteria established by the
Sponsor. The amount of each Loan Commitment shall be
determined by the Sponsor but shall not be less than $100,000
for any Franchisee. Pursuant to the Loan Commitment, the
Servicer shall agree to make
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Advances to each Borrower thereunder. Each Loan shall bear
interest at the Borrower Rate designated by Sponsor in the
applicable Funding Approval Notice, and interest shall be
payable on each Payment Date and on the Maturity Date of such
Loan when all principal and interest shall be due and payable
in full. Each Loan may be prepaid in full or in part on any
Business Day, without premium or penalty. Each Loan Commitment
shall be evidenced by a Franchisee Loan Agreement and
Franchisee Note substantially in the forms attached hereto.
The Loan Term of each Franchisee Loan Commitment shall be,
initially, one year, but shall automatically renew unless
terminated by ninety (90) days prior written notice by
Servicer prior to the first anniversary date and may
thereafter be terminated at any time by Servicer upon ninety
(90) days prior written notice by Servicer; provided that the
amounts outstanding thereunder shall be allowed to term out
over the Amortization Period as provided below. The proceeds
of each advance made pursuant to the Franchisee Loan
Commitment shall be used solely to purchase inventory. At the
end of each month, the aggregate advances (other than
Electronic Equipment Advances) made to each Franchisee
Borrower during such month (net of any prepayments during such
month other than Electronic Equipment Asset Disposition
proceeds to the extent applied to offset Electronic Equipment
Advances as provided below) shall be amortized (in accordance
with a straight-line amortization schedule) over the
Amortization Period. At the end of the month, the aggregate
Electronic Equipment Advances made to each Franchisee Borrower
during such month (net of proceeds of Electronic Equipment
Asset Dispositions received during such month) shall be
amortized (in accordance with a straight-line amortization
schedule) over the Amortization Period. In the event that the
Franchisee Loan Commitment of such Franchisee Borrower is
terminated by the Servicer as provided above, the Franchisee
Borrower shall, notwithstanding the other provisions of this
Section 2.6(c), amortize all outstanding advances over the
Amortization Period (in accordance with a straight-line
amortization schedule), with all Electronic Equipment Advances
due and payable in full no later than 18 months after
termination. In the event that the Franchisee Borrower
terminates the Franchisee Loan Commitment upon ninety (90)
days notice to the Servicer, however, all amounts advanced to
such Franchisee Borrower shall be due and payable in full on
the termination date, together with all accrued and unpaid
interest thereon. With respect to each Franchisee Loan
Agreement executed after the Effective Date (other than a
Franchisee Loan Agreement executed by a Borrower under the
Existing Facility Agreement), the Borrower shall agree to pay
a commitment fee on the unused Loan Commitment in an amount to
be determined by the Sponsor but in any event not to exceed
0.5% per annum, such commitment fee to be paid quarterly, in
arrears."
4. Amendment to Section 8.13 of the Loan Facility Agreement.
Section 8.13 of the Loan Facility Agreement is hereby amended by
deleting the last clause of said Section 8.13 thereof and substituting
the following in lieu thereof:
"subject to the Franchisee Borrowers' right to term
out advances for the Amortization Period."
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5. Amendment to Exhibit B to Loan Facility Agreement. Exhibit
B of the Loan Facility Agreement, the Form of Line of Credit and
Security Agreement, is hereby amended by deleting said Exhibit B
thereof and substituting Exhibit B attached hereto.
3. Conditions of Effectiveness. This Amendment shall become effective
as of the date first above written (the "Effective Date") when this (i)
Amendment shall have been executed and delivered by Sponsor and the Participants
to the Servicer, and (ii) the Sponsor and the Servicer shall have executed the
Amendment No. 1 to Servicing Agreement in the form attached hereto as Exhibit A.
4. Representations and Warranties of Sponsor. Sponsor, without limiting
the representations and warranties provided in the Loan Facility Agreement,
represents and warrants to the Participants and the Servicer as follows:
1. 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.
2. This Amendment constitutes the legal, valid and binding
obligations of Sponsor, enforceable against Sponsor in accordance with
their respective terms.
3. 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 Loan Facility 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 Loan Facility Agreement, and it shall be a Credit 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 Loan Facility Agreement (including those made herein)
shall survive and not be waived by the execution and delivery of this Amendment
or any investigation by the Participants or the Servicer.
6. No Waiver, Etc. Sponsor hereby agrees that nothing herein shall
constitute a waiver by the Participants of any Unmatured Credit Event or Credit
Event, whether known or unknown, which may exist under the Loan Facility
Agreement. Sponsor hereby further agrees that no action, inaction or agreement
by the Participants, including without limitation, any indulgence, waiver,
consent or agreement altering the provisions of the Loan Facility Agreement
which may have occurred with respect to the non-payment of any obligation during
the terms of the Loan Facility Agreement or any portion thereof, or any other
matter relating to the Loan Facility Agreement, shall
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require or imply any future indulgence, waiver, or agreement by the
Participants. In addition, Sponsor acknowledges and agrees that it has no
knowledge of any defenses, counterclaims, offsets or objections in its favor
against any Participant with regard to any of the obligations due under the
terms of the Loan Facility Agreement as of the date of this Amendment.
7. Ratification of Loan Facility Agreement. Except as expressly
amended herein, all terms, covenants and conditions of the Loan Facility
Agreement and the other Operative Documents shall remain in full force and
effect, and the parties hereto do expressly ratify and confirm the Loan Facility
Agreement as amended herein. All future references to the Loan Facility
Agreement shall be deemed to refer to the Loan Facility 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 Servicer and each
Participant 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.
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.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment through their authorized officers as of the date first above written.
XXXXX RENTS, INC.
By:
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Title:
Attest:
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Secretary
[CORPORATE SEAL]
SUNTRUST BANK, ATLANTA, as Servicer
By:
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Title:
By:
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Title:
SUNTRUST BANK, ATLANTA
By:
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Title:
By:
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Title:
THE FIRST NATIONAL BANK OF CHICAGO/NBD
By:
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Title:
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FIRST UNION NATIONAL BANK
By:
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Title:
SOUTHTRUST BANK, N.A.
By:
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Title:
