UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 18, 2010
| Georgia | 1-13941 | 58-0687630 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 309 E. Paces Ferry Road,
N.E. Atlanta, Georgia |
30305-2377 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (404) 231-0011
| Not
Applicable |
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Amended and Restated Loan Facility Agreement and Guaranty
On June 18, 2010, Aaron’s, Inc. (the “Company”) entered into the Second Amended and Restated Loan Facility Agreement and Guaranty with SunTrust Bank, as servicer, and the other participants listed therein (the “Amended Franchisee Loan Facility”), attached hereto as Exhibit 10.1, which amends the Amended and Restated Loan Facility Agreement and Guaranty dated as of May 23, 2008, as amended as of May 22, 2009 (the “Existing Franchisee Loan Facility”). Pursuant to this facility, the Company’s franchisees can borrow funds guaranteed by the Company. The Amended Franchisee Loan Facility amends the Existing Franchisee Loan Facility to, among other things, (i) extend the maturity date of the Existing Franchisee Loan Facility until May 20, 2011, (ii) increase the maximum commitment amount under the facility from $175,000,000 to $200,000,000, (iii) provide for the ability to extend loans to franchisees that operate stores located in Canada (other than in the Province of Quebec) and modify or incorporate provisions needed to accomplish the same, (iv) increase the maximum available amount of swing loans from $20,000,000 to $25,000,000, (v) reduce the Company’s interest obligations with respect to franchisees that operate stores located in the U.S. and establish the Company’s interest obligations with respect to franchisees that operate stores located in Canada, and (vi) modify certain exhibits to the Existing Franchisee Loan Facility, to include a form of Canadian Loan Agreement and certain related documents and to revise the form of Franchisee Borrower Loan and Security Agreement.
The Company remains subject to the same financial covenants under the Existing Franchisee Loan Facility, which forbid the Company from exceeding certain debt to equity levels and require the maintenance of a minimum net worth ratio, a minimum ratio of debt to earnings before interest, taxes, depreciation and amortization and a minimum fixed charge coverage ratio. If the Company fails to comply with these covenants, the Company will be in default under the agreement.
Amendment to Servicing Agreement
In connection with the Amended Franchisee Loan Facility, on June 18, 2010, the Company also entered into the Amended and Restated Servicing Agreement with SunTrust Bank, as servicer (the “Amended Servicing Agreement”), attached hereto as Exhibit 10.2, which amends the Servicing Agreement dated as of May 28, 2004, as amended on May 22, 2009. This agreement sets forth the operations and procedures that are applicable to the facility described above. The Amended Servicing Agreement, among other things, modifies the operations and procedures applicable to the operation of the Existing Franchisee Loan Facility to conform such operations and procedures to the amendments agreed upon pursuant to the Amended Franchisee Loan Facility.
The foregoing description of the Amended Franchisee Loan Facility and Amended Servicing Agreement are qualified in their entirety by reference to the full text of such documents, which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The relevant disclosure set forth in Item 1.01 above is incorporated herein by reference in response to this Item 2.03.
| Item 9.01 |
Financial Statements and Exhibits.
|
(d) Exhibits
| Exhibit No. | Description | |
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10.1
|
Second Amended and Restated Loan Facility Agreement and Guaranty, by and among Aaron’s, Inc., as sponsor, SunTrust Bank, as servicer, and each of the other financial institutions party thereto as participants, dated as of June 18, 2010. | |
|
10.2
|
Amended and Restated Servicing Agreement, by and between Aaron’s, Inc., as sponsor, SunTrust Bank, as servicer, dated as of June 18, 2010. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AARON’S, INC.
By: /s/ Gilbert L. Danielson
Gilbert L. Danielson
Executive Vice President and Chief Financial Officer
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