Rent-Way, Inc. Third Amendment To Credit Agreement
Exhibit 10.24
Rent-Way, Inc.
Third Amendment To Credit Agreement
This Third Amendment to Credit Agreement (herein, the “Amendment”) is entered into as of
November 18, 2005, among Rent-Way, Inc., a Pennsylvania corporation (the “Company”), the direct and
indirect Subsidiaries of the Borrower (the “Subsidiaries”), the Lenders party hereto, and Xxxxxx
X.X., successor by merger to Xxxxxx Trust and Savings Bank, as administrative agent for the Lenders
(the “Agent”).
Preliminary Statements
A. The Company, the Subsidiaries, the Lenders, and the Agent are parties to that certain
Credit Agreement dated as of June 2, 2003, as amended (the “Credit Agreement”). All capitalized
terms used herein without definition shall have the same meanings herein as such terms have in the
Credit Agreement.
B. The Company, the Subsidiaries and the Lenders have agreed to make certain amendments to the
Credit Agreement, in each case under the terms and conditions set forth in this Amendment.
Now, Therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Amendments to the Credit Agreement.
Subject to the satisfaction of the conditions precedent set forth in Section 2 hereof, the
Credit Agreement shall be and hereby is amended as follows:
1.1. The table appearing in the definition of the term “Applicable Margin” contained in
Section 5.1 of the Credit Agreement shall be amended to read as follows:
| APPLICABLE MARGIN | APPLICABLE MARGIN | |||||||||||||
| FOR BASE RATE LOANS | FOR EURODOLLAR | |||||||||||||
| UNDER REVOLVING | LOANS UNDER | APPLICABLE | ||||||||||||
| LEVERAGE RATIO | CREDIT AND | REVOLVING CREDIT | MARGIN FOR | |||||||||||
| FOR SUCH PRICING | REIMBURSEMENT | AND LETTER OF CREDIT | COMMITMENT | |||||||||||
| LEVEL | DATE | OBLIGATIONS SHALL BE: | FEE SHALL BE: | FEE SHALL BE: | ||||||||||
V
|
Greater than 4.5 to 1.0 | 2.00 | % | 3.75 | % | 0.50 | % | |||||||
IV
|
Less than or equal to 4.5 to 1.0, but greater than 4.0 to 1.0 | 1.75 | % | 3.50 | % | 0.50 | % | |||||||
| APPLICABLE MARGIN | APPLICABLE MARGIN | |||||||||||||
| FOR BASE RATE LOANS | FOR EURODOLLAR | |||||||||||||
| UNDER REVOLVING | LOANS UNDER | APPLICABLE | ||||||||||||
| LEVERAGE RATIO | CREDIT AND | REVOLVING CREDIT | MARGIN FOR | |||||||||||
| FOR SUCH PRICING | REIMBURSEMENT | AND LETTER OF CREDIT | COMMITMENT | |||||||||||
| LEVEL | DATE | OBLIGATIONS SHALL BE: | FEE SHALL BE: | FEE SHALL BE: | ||||||||||
III
|
Less than or equal to 4.0 to 1.0, but greater than 3.5 to 1.0 | 1.50 | % | 3.25 | % | 0.50 | % | |||||||
II
|
Less than or equal to 3.5 to 1.0, but greater than 3.0 to 1.0 | 1.0 | % | 2.75 | % | 0.50 | % | |||||||
I
|
Less than or equal to 3.0 to 1.0 | 0.50 | % | 2.25 | % | 0.50 | % | |||||||
1.2. The definition of the term “Indebtedness for Borrowed Money” contained in Section
5.1 of the Credit Agreement shall be amended by adding the following proviso thereto immediately
before the period appearing at the end of such definition:
“; provided however, that the term “Indebtedness for Borrowed Money” shall not include the
indebtedness evidenced by any Senior Notes owned by the Company or any Subsidiary of the
Company so long as such Senior Notes are not shown as an asset on the Company’s financial
statements.”
1.3. Clause (d) of the definition of Permitted Acquisition in Section 5.1 of the Credit
Agreement shall be amended by deleting the reference to “$3,000,000” therein and replacing such
reference with “$5,000,000” in lieu thereof.
1.4. Section 8.22 of the Credit Agreement shall be amended to read as follows:
“Section 8.22. Capital Expenditures The Borrower shall not, nor shall it permit any of
the Guarantors to, incur Capital Expenditures in an amount in excess of $25,000,000 in the
aggregate during any fiscal year.”
1.5. Section 8.24 of the Credit Agreement shall be amended to read as follows:
“Section 8.24. Leverage Ratio. As of the last day of each fiscal quarter of the
Borrower ending during each of the periods specified below, the Borrower shall not permit
the Leverage Ratio at such time to be greater than:
-2-
| Leverage Ratio shall not be | ||||
| From and including | To and including | More than: | ||
| December 31, 2005 | December 31, 2005 | 5.25 to 1.0 | ||
| January 1, 2006 | June 30, 2006 | 5.75 to 1.0 | ||
| July 1, 2006 | December 31, 2006 | 5.00 to 1.0 | ||
| January 1, 2007 | June 30, 2007 | 4.50 to 1.0 | ||
| July 1, 2007 | Thereafter | 4.25 to 1.0” |
1.6. Section 8.27 of the Credit Agreement shall be amended and restated in its entirety to
read as follows:
“Section 8.27. Monthly Minimum EBITDA. As of the last day of each calendar month
ending during each of the periods specified below, the Borrower shall not permit its EBITDA
for the twelve (12) consecutive calendar months then ended to be less than:
| EBITDA shall not be Less | ||||
| From and including | To and including | than: | ||
| October 1, 2005 | March 31, 2006 | $45,000,000 | ||
| April 1, 2006 | May 31, 2006 | $40,000,000 | ||
| June 1, 2006 | August 31, 2006 | $42,000,000 | ||
| September 1, 2006 | November 30, 2006 | $45,000,000 | ||
| December 1, 2006 | February 28, 2007 | $50,000,000 | ||
| March 1, 2007 | May 31, 2007 | $52,500,000 | ||
| June 1, 2007 | Thereafter | $55,000,000” |
1.7. Section 8.21(a) of the Credit Agreement shall be amended to read as follows:
“Section 8.21. Senior Notes (a) The Borrower shall not, nor shall it permit any
Subsidiary to, (i) amend or modify any of the terms or conditions relating to Senior Notes
(other than amendments and modifications that (A) would extend the maturity or reduce the
amount of any payment of principal or reduce the rate or extend any date for payment of
interest, (B) adds collateral that conforms to collateral covered by the Collateral
Documents, or (C) releases collateral) or (ii) directly or indirectly make any voluntary
prepayment of any Senior Notes, purchase any Senior Notes, or effect any voluntary
redemption of any Senior Notes; provided, however, the foregoing shall not prohibit the
Borrower from:
-3-
(1) prepaying, purchasing and redeeming Senior Notes (x) with the proceeds of
the issuance and sale of common stock of the Borrower so long as no Default or Event
of Default shall exist before or after giving effect thereto and (y) after the
Borrower’s obligations under Section 4.19 of the Senior Note Indenture have
terminated pursuant to Section 4.19(d) of the Senior Note Indenture so long as (I)
no Revolving Loans are outstanding immediately prior to and for 10 consecutive days
immediately after such prepayment, purchase or redemption, and (II) no Default or
Event of Default shall exist before and after giving effect thereto, and
(2) purchasing Senior Notes in the open market for an aggregate purchase price
not to exceed $10,000,000 during the term of this Agreement so long as (x) after
giving effect to each such purchase, no Default or Event of Default shall exist
before or after giving effect thereto, including with respect to the covenants
contained in Sections 8.22, 8.23, 8.24, 8.25, 8.26 and 8.27 on a pro forma basis,
and (y) the Borrower has complied with all requirements of the Senior Note Indenture
applicable to such purchase, including without limitation obtaining any necessary
consents of the holders of the Senior Notes.”
1.8. Schedule 6.2 of the Credit Agreement shall be replaced by Schedule 6.2 attached to this
Amendment.
Section 2. Conditions Precedent.
The effectiveness of this Amendment is subject to the satisfaction of all of the following
conditions precedent:
2.1. The Company, the Subsidiaries, the Agent, and the Required Lenders shall have executed
and delivered this Amendment.
2.2. Each of the representations and warranties set forth in Section 6 of the Credit Agreement
shall be true and correct (except that for purposes of this paragraph the representations contained
in Section 6.5 shall be deemed to refer to the most recent financial statements of the Company
delivered to the Lenders).
2.3. The Company shall be in full compliance with all of the terms and conditions of the
Credit Agreement and no Event of Default or Default shall have occurred and be continuing
thereunder or shall result after giving effect to this Amendment.
2.4. Legal matters incident to the execution and delivery of this Amendment shall be
satisfactory to the Agent and its counsel.
2.5. The Subsidiaries shall have executed and delivered to the Agent their consent to this
Amendment in the form set forth below.
-4-
2.6. The Agent shall have received for the account of each Lender executing this Amendment a
non-refundable amendment fee in the amount equal to 0.30% of each such Lenders Revolving Credit
Commitment.
Section 3. Representations.
In order to induce the Lenders to execute and deliver this Amendment, the Company hereby
represents to the Lenders that as of the date hereof, and after giving effect to the amendments
called for hereby, the representations and warranties set forth in Section 6 of the Credit
Agreement are and shall be and remain true and correct (except that for purposes of this paragraph
the representations contained in Section 6.5 shall be deemed to refer to the most recent financial
statements of the Company delivered to the Lenders) and the Company is in compliance with all of
the terms and conditions of the Credit Agreement and no Default or Event of Default exists under
the Credit Agreement or shall result after giving effect to this Amendment.
Section 4. Miscellaneous.
4.1. The Company and the Subsidiaries heretofore executed and delivered to the Agent and the
Lenders the Collateral Documents to which it is a party. The Company and the Subsidiaries hereby
acknowledge and agree that the Liens created and provided for by the Collateral Documents to which
it is a party continue to secure, among other things, the Obligations arising under the Credit
Agreement as amended hereby; and the Collateral Documents to which it is a party and the rights and
remedies of the Lenders thereunder, the obligations of the Company and the Subsidiaries thereunder,
and the Liens created and provided for thereunder remain in full force and effect and shall not be
affected, impaired or discharged hereby. Nothing herein contained shall in any manner affect or
impair the priority of the liens and security interests created and provided for by the Collateral
Documents to which it is a party as to the indebtedness which would be secured thereby prior to
giving effect to this Amendment.
4.2. Except as specifically amended herein or waived hereby, the Credit Agreement shall
continue in full force and effect in accordance with its original terms. Reference to this
specific Amendment need not be made in the Credit Agreement, the Notes, or any other instrument or
document executed in connection therewith, or in any certificate, letter or communication issued or
made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.
4.3. This Amendment may be executed in any number of counterparts, and by the different
parties on different counterpart signature pages, all of which taken together shall constitute one
and the same agreement. Any of the parties hereto may execute this Amendment by signing any such
counterpart and each of such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
4.4. The Company agrees to pay all reasonable out-of-pocket costs and expenses incurred by the
Agent in connection with the credit facilities and the preparation, execution and delivery of this
Amendment, and the documents and transactions contemplated hereby, including the reasonable fees
and expenses of counsel for the Agent with respect to the foregoing.
-5-
[Signature Page(s) to Follow]
-6-
This Third Amendment to Credit Agreement is entered into as of the date and year first above
written.
| Rent-Way, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way of Tomorrow, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way of Michigan, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way Developments, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way of TTIG, L.P. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
Rent-Way, Inc.
Signature Page to Third Amendment to Credit Agreement
Signature Page to Third Amendment to Credit Agreement
Accepted and agreed to as of the date and year last above written.
| Xxxxxx X.X., successor by merger to Xxxxxx Trust and Savings Bank, as Agent |
||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| General Electric Capital Corporation | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| National City Bank of Pennsylvania | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
Rent-Way, Inc.
Signature Page to Third Amendment to Credit Agreement
Signature Page to Third Amendment to Credit Agreement
Guarantors’ Acknowledgement and Consent
Each of the undersigned heretofore executed and delivered to the Agent one or more Guaranties
and Collateral Documents. Each of the undersigned hereby consents to the Amendment as set forth
above and agrees to the terms set forth therein and confirms that the Loan Documents executed and
delivered by it and all of such undersigned’s obligations thereunder remain in full force and
effect. Each of the undersigned further agrees that the consent of such undersigned to any further
amendments to the Credit Agreement or to the Security Agreement shall not be required as a result
of this consent having been obtained. Each of the undersigned acknowledges that the Lenders are
relying on this acknowledgement and consents in entering into the Amendment set forth above.
| Rent-Way of Tomorrow, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way of Michigan, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way Developments, Inc. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
| Rent-Way of TTIG, L.P. | ||||||||
| By | ||||||||
| Name | ||||||||
| Title | ||||||||
Rent-Way, Inc.
Signature Page to Guarantors’ Acknowledgement and Consent to
Third Amendment to Credit Agreement
Signature Page to Guarantors’ Acknowledgement and Consent to
Third Amendment to Credit Agreement
SCHEDULE 6.2
SUBSIDIARIES
| JURISDICTION | ||||||
| OF | PERCENTAGE | |||||
| NAME | ORGANIZATION | OWNERSHIP | OWNER | |||
Rent-Way of Tomorrow, Inc.
(“Tomorrow”) |
Delaware | 100% | Borrower | |||
Rent-Way of Michigan, Inc.
(“Michigan”) |
Delaware | 100% | Borrower | |||
Rent-Way Developments,
Inc. (“Developments”) |
Delaware | 100% | Michigan | |||
Rent-Way of TTIG, L.P. |
Indiana | 100% | Developments and | |||
| Tomorrow | ||||||
dPi Teleconnect, L.L.C. |
Delaware | 83.5% | Borrower |
