Letter Agreement Amending Asset Purchase Agreement Between Rent-A-Center East, Inc. and Rent-Way Entities (February 10, 2003)

Contract Categories: Business Finance › Purchase Agreements
Summary

This letter agreement, dated February 10, 2003, is between Rent-A-Center East, Inc. and Rent-Way, Inc. (including its subsidiaries). It modifies their previous Asset Purchase Agreement by transferring ownership of certain store assets and leases after the original closing. Specifically, it returns the Chattanooga store to Rent-Way and transfers the Marlow Heights store to Rent-A-Center, with each party assuming related assets, liabilities, and income from the date of transfer. The agreement also updates the list of store leases being transferred and clarifies the parties’ ongoing obligations.

View More
EX-10.6 8 j9886301exv10w6.txt EXHIBIT 10.6 Exhibit No. 10.6 [RAC Letterhead] February 10, 2003 VIA FACSIMILE ###-###-#### Rent-Way, Inc. Rent-Way of Michigan, Inc. Rent-Way of TTIG, L.P. Attn: Chief Executive Officer One Rent Way Place Erie, Pennsylvania 16505 Dear Sir: Reference is made to that certain Asset Purchase Agreement, dated as of December 17, 2002, by and among Rent-A-Center East, Inc., a Delaware corporation (formerly known as Rent-A-Center, Inc.) ("ACQUIROR"), and Rent-Way, Inc. (the "COMPANY"), Rent-Way of Michigan, Inc. ("RENT-WAY MICHIGAN") and Rent-Way of TTIG, L.P. ("TTIG" and, together with Rent-Way Michigan, the "OPERATING SUBSIDIARIES"), as amended by that certain letter agreement dated December 31, 2002, that certain letter agreement dated January 7, 2003, and that certain letter agreement dated February 7, 2003 (together, the "ASSET PURCHASE AGREEMENT"). Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Asset Purchase Agreement. WHEREAS, the Closing of the transactions contemplated under the Asset Purchase Agreement occurred as of February 8, 2003; and WHEREAS, the parties now desire to alter the original lists of Account Stores, the real property leases of which shall be retained by the Company and the Operating Subsidiaries, and Acquired Stores, the real property leases of which shall be assumed by Acquiror, as set forth herein. NOW, THEREFORE, this letter agreement, in accordance with Section 7.4 of the Asset Purchase Agreement, memorializes the understanding of the parties to the Asset Purchase Agreement regarding certain post-closing changes thereto and hereby amends, modifies and supplements the Asset Purchase Agreement as follows: 1. Return of Chattanooga Store. Acquiror hereby sells, transfers, assigns, conveys and delivers to TTIG any and all of those Assets related to the Account Store located at 2109 East 23rd Street, Chattanooga, TN (the "CHATTANOOGA STORE") and acquired at by Acquiror at Closing, effective as of the date hereof, free and clear of all Encumbrances (except for those Encumbrances under Acquiror's senior credit facility, if any, which may have attached on February 8, 2003 and which Acquiror covenants it will obtain applicable releases if required). TTIG hereby assumes and agrees to pay, perform, discharge, and satisfy any and all of those Assumed Liabilities related to the Chattanooga Store previously assumed by Acquiror at Closing, effective as of the date hereof. Acquiror shall be entitled to all income earned in or from the ownership or operation of the Assets related to the Chattanooga Store with respect to events occurring prior to the date hereof, and TTIG will be entitled to all income earned in or from the ownership or operation of the Assets related to the Chattanooga Store with respect to events occurring on or after the date hereof. Without limiting the generality of the foregoing, all cash receipts received at the Chattanooga Store prior to the date hereof shall be the property of Acquiror, and all cash receipts received at the Chattanooga Store on or after the date hereof shall be the property of TTIG. The parties hereto agree to cooperate with each other to ensure that any amounts received are delivered to the party entitled to such amounts as provided herein. 2. Acquisition of Marlow Heights Store. (a) Each of the Company and the Operating Subsidiaries, as the case may be, hereby sells, transfers, assigns, conveys and delivers to Acquiror all of such entity's right, title and interest in and to those Assets related to the store located at 4141 Branch Avenue, Marlow Heights, MD (the "MARLOW HEIGHTS STORE"), in each case free and clear of any and all Encumbrances, effective as of the date hereof. Acquiror hereby acquires the Assets related to the Marlow Heights Store as of the date hereof as if the Assets related to the Marlow Heights Store were Assets originally acquired under the Asset Purchase Agreement as an Acquired Store. The Company and the Operating Subsidiaries, as the case may be, shall be entitled to all income earned in or from the ownership or operation of the Assets related to the Marlow Heights Store with respect to events occurring prior to the date hereof, and the Acquiror will be entitled to all income earned in or from the ownership or operation of the Assets related to the Marlow Heights Store with respect to events occurring on or after the date hereof. Without limiting the generality of the foregoing, all cash receipts received at the Stores prior to the date hereof shall be the property of the Company and the Operating Subsidiaries, as the case may be, and all cash receipts received at the Stores on or after the date hereof shall be the property of the Acquiror. The parties hereto agree to cooperate with each other to ensure that any amounts received are delivered to the party entitled to such amounts as provided herein. All property taxes, rent, utilities and amounts under the real estate lease related to the Marlow Heights Store shall be apportioned on an accrual basis as of the close of business on the date immediately prior to the date hereof between Acquiror, the Company and the Operating Subsidiaries such that Acquiror shall be responsible only for property taxes, rent, utilities and amounts under the Store Leases with respect to periods occurring on or after the date hereof. 2 (b) The Representations and Warranties of the Company and the Operating Subsidiaries set forth in Section 3.3, 3.4, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.17, 3.19, 3.21(b) and 3.31 of the Asset Purchase Agreement are hereby incorporated herein by reference and are deemed made as of the date hereof with respect to matters related to the Marlow Heights Store and the operations conducted therein by the Company or the Operating Subsidiaries on or prior to the date hereof. (c) As of the date hereof, Acquiror shall hereby assume only those liabilities or obligations of a kind or nature, whether absolute, contingent, accrued, known or unknown, that are attributable to the periods, events or circumstances on or after the date hereof, and which arise under, relate to or are in connection with the Assets related to the Marlow Heights Store on or after the date hereof. Except as specifically set forth in the previous sentence, Acquiror shall assume no other liabilities or obligations relating to the Assets related to the Marlow Heights Store, including, without limitation, those specifically excluded liabilities set forth in Section 1.5(b) of the Asset Purchase Agreement as applied to the Marlow Heights Store. (d) Acquiror, the Company and the Operating Subsidiaries acknowledge and agree that all of the Indemnification provisions set forth in Article VIII of the Asset Purchase Agreement shall be deemed to apply with equal force to any Indemnity Claims arising or resulting from and to the extent they are attributable to the Marlow Heights Store as if the Marlow Heights Store was originally an Acquired Store and acquired as of the Closing Date under the Asset Purchase Agreement. 3. New Acquired Stores. (a) Each of the Company and the Operating Subsidiaries, as the case may be, hereby sells, transfers, assigns, conveys and delivers to Acquiror and the Subsidiary Transferees, as the case may be, all of such entity's right, title and interest in and to the real estate leases (and fixtures related thereto) (the "ACCOUNT STORE LEASES") related to the Stores set forth in this Section 3(a) below, such Stores having been previously designated as Account Stores under the Asset Purchase Agreement, in each case free and clear of any and all Encumbrances, effective as of the date hereof. Acquiror and the Subsidiary Transferees, as the case may be, will acquire the Account Store Leases as of the date hereof under the same terms and subject to the same exceptions (including those set forth in Section 1.5 of the Asset Purchase Agreement) as if the Account Store Leases related to the New Acquired Stores were Assets originally acquired under the Asset Purchase Agreement, effective as of the date hereof. 3
--------------------------------------------------------------------------- STORE # ADDRESS CITY ST --------------------------------------------------------------------------- 00146 245 South George Street York PA --------------------------------------------------------------------------- 00182 2801 Lancaster Avenue Wilmington DE --------------------------------------------------------------------------- 00231 6451 West Colfax Avenue Lakewood CO --------------------------------------------------------------------------- 01004 1105 South Josey Lane Carrollton TX --------------------------------------------------------------------------- 01007 800 North Highway 77 Waxahachie TX --------------------------------------------------------------------------- 01073 4449 NW 50th Street Oklahoma City OK --------------------------------------------------------------------------- 01145 2301 East Lake Mead Road North Las Vegas NV --------------------------------------------------------------------------- 01146 2350 Miracle Mile Bullhead City AZ --------------------------------------------------------------------------- 01248 1967 North Decatur Boulevard Las Vegas NV --------------------------------------------------------------------------- 01424 2514 South Federal Hwy. Fort Pierce FL --------------------------------------------------------------------------- 01448 1815 S WW White Road San Antonio TX --------------------------------------------------------------------------- 01452 1376 Sullivan Lane Sparks NV --------------------------------------------------------------------------- 01455 4003 East Sprague Spokane WA --------------------------------------------------------------------------- 01510 6990 East 22nd Street Tucson AZ --------------------------------------------------------------------------- 01745 1115 Charles G. Seviers Boulevard Clinton TN --------------------------------------------------------------------------- 01879 4082 Lankford Highway Exmore VA ---------------------------------------------------------------------------
(b) The Representations and Warranties of the Company and the Operating Subsidiaries set forth in Section 3.8 of the Asset Purchase Agreement are hereby incorporated herein by reference and are deemed made by the Company and the Operating Subsidiaries as of the date hereof with respect to the matters related to the Account Store Leases on or prior to the date hereof. (c) As of the date hereof, Acquiror and the Subsidiary Transferees, as the case may be, shall assume only those liabilities or obligations of a kind or nature, whether absolute, contingent, accrued, known or unknown, that are attributable to the periods, events or circumstances on or after the date hereof, and which arise under, relate to or are in connection with the Account Store Leases on or after the date hereof. Except as specifically set forth in the previous sentence, Acquiror shall assume no other liabilities or obligations relating to the Account Store Leases. 4 (d) Acquiror, the Company and the Operating Subsidiaries acknowledge and agree that all of the Indemnification provisions set forth in Article VIII of the Asset Purchase Agreement shall be deemed to apply with equal force to any Indemnity Claims arising or resulting from and to the extent they are attributable to Account Store Leases as if originally contemplated by the Asset Purchase Agreement. 4. New Account Stores. (a) Acquiror and the Subsidiary Transferees, as the case may be, hereby sells, transfers, assigns, conveys and delivers to the Company and the Operating Subsidiaries, as the case may be, without representation or warranty and free and clear of all Encumbrances (except for those Encumbrances under Acquiror's senior credit facility, if any, which may have attached on February 8, 2003 and which Acquiror covenants it will obtain applicable releases if required), all of such entity's right, title and interest in and to all of the real estate leases, fixtures, supplies, office furniture, computers (including peripherals), equipment (other than filing cabinets, copiers and fax machines), product displays and any deposits (the "RETURNED ASSETS") related to the Stores set forth in this Section 4(a) below, such Stores having been previously designated as Acquired Stores under the Asset Purchase Agreement, effective as of the date hereof:
--------------------------------------------------------------------- STORE # ADDRESS CITY ST --------------------------------------------------------------------- 00196 8636 Richmond Highway Alexandria VA --------------------------------------------------------------------- 00224 5330 West Washington Indianapolis IN --------------------------------------------------------------------- 00280 421 Smithville Road Orrville OH --------------------------------------------------------------------- 00552 1740 South Cliff Avenue Sioux Falls SD --------------------------------------------------------------------- 01230 110 West McGaffey Roswell NM --------------------------------------------------------------------- 01259 400 Northline Mall Houston TX --------------------------------------------------------------------- 01272 1920 11th Avenue North Texas City TX --------------------------------------------------------------------- 01317 92 15th Street Tuscaloosa AL --------------------------------------------------------------------- 01403 1509 E. Main Street Russellville AR ---------------------------------------------------------------------
(b) The Company and the Operating Subsidiaries, as the case may be, hereby assume and agree to pay, perform, discharge, and satisfy any and all of those Assumed Liabilities related to the Returned Assets previously assumed by Acquiror and the Subsidiary Transferees on the Closing Date, effective as of the date hereof. 5 5. Exercise of Account Store Acquisition Option. (a) Acquiror hereby exercises its rights under Section 6.3 of the Asset Purchase Agreement to assume from the Company and the Operating Subsidiaries, as the case may be, the real estate lease (and the fixtures related thereto) with respect to each of the following Account Stores (the "ADDITIONAL LEASES"):
--------------------------------------------------------------------- STORE # ADDRESS CITY ST --------------------------------------------------------------------- 00246 2116 North Mitchell Street Cadillac MI --------------------------------------------------------------------- 00488 5402 Charlotte Avenue Nashville TN --------------------------------------------------------------------- 01005 222 Camp Wisdom Road Duncanville TX --------------------------------------------------------------------- 01051 9751 Webb Chapel Dallas TX --------------------------------------------------------------------- 01505 114 N. Vine Street Urbana IL --------------------------------------------------------------------- 01549 1709 North Walnut Hartford City IN --------------------------------------------------------------------- 01813 1834 North Main Street Longmont CO --------------------------------------------------------------------- 01817 1341 24th Street Port Huron MI ---------------------------------------------------------------------
The parties hereby acknowledge that this letter agreement shall constitute the written notice required under Section 6.3 of the Asset Purchase Agreement and that they will enter into the assignment and assumption agreement, in the form attached as Exhibit "A" hereto, with respect to such real estate leases in accordance with Section 6.3 of the Asset Purchase Agreement. As consideration for Acquiror exercising its rights under Section 6.3 of the Asset Purchase Agreement with respect to the Account Stores set forth above, the Company and the Operating Subsidiaries shall pay to Acquiror on the date hereof the amount of Two Hundred Thousand Dollars ($200,000) by wire transfer of immediately available funds. (b) The Representations and Warranties of the Company and the Operating Subsidiaries set forth in Section 3.8 of the Asset Purchase Agreement are hereby incorporated herein by reference and are deemed made by the Company and the Operating Subsidiaries as of the date hereof with respect to the matters related to the Additional Leases on or prior to the date hereof. (c) As of the date hereof, Acquiror shall assume only those liabilities or obligations of a kind or nature, whether absolute, contingent, accrued, known or unknown, that are attributable to the periods, events or circumstances on or after the date hereof, and which arise under, relate to or are in connection with the Additional 6 Leases on or after the date hereof. Except as specifically set forth in the previous sentence, Acquiror shall assume no other liabilities or obligations relating to the Additional Leases. (d) Acquiror, the Company and the Operating Subsidiaries acknowledge and agree that all of the Indemnification provisions set forth in Article VIII of the Asset Purchase Agreement shall be deemed to apply with equal force to any Indemnity Claims arising or resulting from and to the extent they are attributable to the Additional Leases as if originally contemplated by the Asset Purchase Agreement. (e) Pursuant to Section 4.10 of the Asset Purchase Agreement, Acquiror hereby designates that (i) the Additional Leases related to the above referenced Store Nos. 01005 and 01051 shall be acquired as of the date hereof by Rent-A-Center Texas, L.P., (ii) the Additional Lease related to the above referenced Store No. 01813 shall be acquired as of the date hereof by Rent-A-Center West, Inc., and (iii) the Additional Leases related to the above referenced Store Nos. 00246, 00488, 01505, 01549 and 01817 shall be acquired as of the date hereof by Rent-A-Center East, Inc. 6. Entire Agreement. Notwithstanding the provisions of Section 9.5 of the Asset Purchase Agreement and consistent with Section 7.4 of the Asset Purchase Agreement, this letter agreement, together with the Asset Purchase Agreement and all other documents and instruments referred to therein, including, but not limited to, the letter agreement from Acquiror to the Company and the Operating Subsidiaries, dated December 31, 2002, relating to the extension of the Due Diligence Period, the letter agreement from Acquiror to the Company and the Operating Subsidiaries, dated January 7, 2003, relating to the Acquiror's internal reorganization, and the letter agreement from Acquiror to the Company and the Operating Subsidiaries, dated February 7, 2003, relating to various transitional and other matters, constitutes the entire agreement and supersedes all other prior agreements and undertakings, both written and oral, among the parties with respect to the transactions contemplated by the Asset Purchase Agreement. 7. No Further Amendments. Other than as specifically provided for herein, all other terms and conditions of the Asset Purchase Agreement shall remain in full force and effect in accordance with its terms. 8. Governing Law. The provisions of Section 9.9 of the Asset Purchase Agreement shall apply to this letter agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 7 RENT-A-CENTER EAST, INC., formerly known as Rent-A-Center, Inc. By: -------------------------------- Name: -------------------------- Title: ------------------------- RENT-A-CENTER WEST, INC., By: -------------------------------- Name: -------------------------- Title: ------------------------- RENT-A-CENTER TEXAS, L.P. By: Rent-A-Center East, Inc., its general partner By: -------------------------------- Name: -------------------------- Title: ------------------------- AGREED AND ACCEPTED: RENT-WAY, INC. By: /s/ WILLIAM A. MCDONNELL --------------------------------- Name: William A. Mcdonnell --------------------------------- Title: Vice President and CFO --------------------------------- RENT-WAY OF MICHIGAN, INC. By: /s/ WILLIAM A. MCDONNELL --------------------------------- Name: William A. Mcdonnell --------------------------------- Title: Vice President and CFO --------------------------------- 8 RENT-WAY OF TTIG, L.P. By: Rent-Way Development, Inc., its general partner By: /s/ WILLIAM A. MCDONNELL --------------------------------- Name: William A. Mcdonnell --------------------------------- Title: Vice President and CFO --------------------------------- cc: Hodgson Russ, LLP One M&T Plaza, Suite 2000 Buffalo, New York ###-###-#### Attention: John J. Zak, Esq. Telecopy: 716 ###-###-#### 9 EXHIBIT "A" ASSIGNMENT AND ASSUMPTION AGREEMENT