EXHIBIT 10.15
FIRST AMENDMENT TO
FRANCHISEE FINANCING AGREEMENT
This First Amendment to Franchisee Financing Agreement ("Amendment") is
made and entered into by and among Textron Financial Corporation, a Delaware
corporation ("TFC"), ColorTyme, Inc., a Texas corporation ("ColorTyme"), and
Rent-A-Center, Inc., a Delaware corporation ("RAC").
RECITALS
A. TFC, ColorTyme and RAC are parties to that certain Amended and
Restated Franchisee Financing Agreement dated March 27, 2002 (the "Agreement").
Capitalized terms used in this Amendment that are not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement.
B. ColorTyme and RAC have requested, and TFC has agreed, that a portion
of the credit facility evidenced by the Agreement may be refinanced by a third
party.
C. TFC, ColorTyme and RAC desire to amend the Agreement on the terms
set forth in this Amendment.
AGREEMENT
In consideration of the premises and other valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and intending to be
legally bound hereby, TFC, ColorTyme and RAC agree as follows:
1. Credit Facility. Section 1.1 of the Agreement is hereby amended by
deleting the existing section 1.1 in its entirety and substituting in place
thereof the following:
1.1 Credit Facility. TFC shall provide a credit facility for
Franchisees on the terms and subject to the conditions set forth in
this Agreement. The amount of the credit facility shall be up to, but
not in excess of, forty million dollars ($40,000,000.00).
2. Letter of Credit. Section 3.3 of the Agreement is hereby amended by
deleting the existing section 3.3 in its entirety and substituting in place
thereof the following:
3.3 Letter of Credit. Within five (5) business days following
each notice of a default under a Receivable pursuant to section 3.1,
RAC shall cause a standby letter of credit to be issued to TFC in an
amount equal to one hundred fifteen percent (115%) of the outstanding
balance of the defaulted Receivable. The letter of credit shall secure
the obligations of ColorTyme under section 3.4 with respect to such
defaulted Receivable. Upon payment by ColorTyme of the Recourse Amount
(as that term is hereinafter defined) with respect to the defaulted
Receivable, such letter of credit shall be promptly returned to RAC for
cancellation. The letter of credit shall provide for a term of one (1)
year; shall be payable upon presentation to the issuing
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bank of a certificate of TFC stating that ColorTyme has failed to pay
all amounts due under section 3.4 with respect to the Receivable for
which the letter of credit was issued; shall be issued by a bank
located in the United States that is included in the bank group of
RAC's senior lenders (or such other bank as may be approved by TFC in
its discretion), but excluding any bank that has a participation
interest in any of the Receivables or this Agreement, which bank must
have a senior unsecured issuer rating of Aa or above as determined by
Moody's Investors Service or a short-term issue credit rating of A1 or
above as determined by Standard & Poors; and shall otherwise be
acceptable to TFC in all respects.
3. Assignment to ColorTyme. Section 3.4 of the Agreement is hereby
amended by deleting the existing section 3.4 in its entirety and substituting in
place thereof the following:
3.4 Assignment to ColorTyme. TFC shall assign its interest in
the defaulted Receivable and the collateral securing such defaulted
Receivable to ColorTyme, WITHOUT RECOURSE OR WARRANTY OF ANY KIND
WHATSOEVER, (a) following repossession and/or foreclosure of the
collateral securing the defaulted Receivable, or (b) following the
entry by a court of competent jurisdiction of an order staying or
barring such actions or adjudicating the rights of TFC with respect to
such collateral, or (c) in any event, eleven (11) months following the
issuance of the letter of credit with respect to the defaulted
Receivable pursuant to section 3.3. Contemporaneously with and as a
condition precedent to such assignment, ColorTyme shall pay to TFC an
amount (the "Recourse Amount") equal to the sum of (x) the outstanding
principal balance of such Receivable, (y) all accrued and unpaid
interest thereon and (z) all reasonable expenses incurred by TFC,
including the fees and expenses of its legal counsel, in connection
with the enforcement of such Receivable, up to a maximum of one
thousand dollars ($1,000.00) per Receivable.
4. Consent of Guarantor. RAC, as the guarantor of all debts,
liabilities and obligations of ColorTyme to TFC under the Agreement, hereby
consents to the amendment of the Agreement as provided herein.
5. Effect of this Amendment. In the event of a conflict between the
terms of this Amendment and the terms of the Agreement, the provisions of this
Amendment shall prevail. Except as expressly set forth in this Amendment,
however, all provisions of the Agreement shall remain unchanged and shall
continue in full force and effect. This Amendment is hereby incorporated into
the Agreement for all purposes.
6. Effective Date. This Amendment shall be effective as of the
commencement of business at the offices of TFC in Reno, Nevada, on the date
hereof.
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IN WITNESS WHEREOF, TFC, ColorTyme and RAC have executed this Amendment
on this 23rd day of July, 2002.
COLORTYME, INC.
5700 Tennyson Parkway, Suite 180
Plano, Texas 75024
By: /s/ Steven M. Arendt
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Name: Steven M. Arendt
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Title: President and Chief Executive Officer
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RENT-A-CENTER, INC.
5700 Tennyson Parkway, 3rd Floor
Plano, Texas 75024
By: /s/ Mitchell E. Fadel
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Name: Mitchell E. Fadel
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Title: President
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TEXTRON FINANCIAL CORPORATION
6490 South McCarran Blvd., C-21
Reno, Nevada 89509
By: /s/ Scott Hastings
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Name: Scott Hastings
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Title: Division President
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