WORLD ACCEPTANCE CORPORATION
NINTH AMENDMENT TO CREDIT AGREEMENT AND
FIFTH AMENDMENT TO REVOLVING CREDIT NOTES
Harris Trust and Savings Bank
in its individual capacity as a Bank and as Agent
111 West Monroe Street
Chicago, Illinois 60690
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
December 1, 1992, between the undersigned, World Acceptance Corporation, a South
Carolina corporation (the "Borrower") and you, as heretofore 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.
The Borrower has requested that the Banks make an amendment to the Credit
Agreement and the Notes to increase the amount of the Revolving Credit
thereunder, and the Banks are willing to do so under the terms and conditions
set forth in this Amendment.
1. AMENDMENT.
Upon your acceptance hereof in the space provided for that purpose below,
the Credit Agreement shall be and hereby is amended as follows:
(a) The Commitments of the Banks under the Credit Agreement are hereby
amended as follows:
Bank Commitment
Harris Trust and Savings Bank $25,000,000 plus additional
$12,500,000 from November 30, 1996
to and including April 15, 1997
The First National Bank of Chicago $25,000,000 plus additional
$12,500,000 from November 30, 1996
to and including April 15, 1997
(b) The proviso in the first sentence of Section 3.1 of the Credit
Agreement shall be amended in its entirety and as so amended shall read as
follows:
provided however, that the commitment fee for any unused portion of the
$25,000,000 temporary increase in the Commitments shall be one-quarter of
one percent (1/4 of 1%) per annum.
2. AMENDMENTS TO NOTES.
Upon your acceptance hereof in the space provided for that purpose below,
each of the Notes shall be and hereby is amended as follows:
(a) Each Note shall be amended by deleting the amount "$30,000,000" wherever
such amount appears therein and by substituting therefor the amount
"$37,500,000".
(b) Each Note shall be amended by deleting the phrase "Thirty Million" appearing
therein and by substituting therefor the phrase "Thirty-Seven Million Five
Hundred Thousand".
The Borrower hereby confirms its promise to pay all principal of and
interest on the Notes as amended hereby.
3. CONDITIONS PRECEDENT
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
(a) The Borrower and the Banks shall have executed and delivered this Amendment.
(b) The Company shall have paid closing fees to each Bank in the amount of
$18,750 per Bank.
(c) The Banks shall have received copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in connection with
execution and delivery of this Amendment to the extent the Banks or their
counsel may reasonably request.
(d) Legal matters incident to the execution and delivery of this Amendment shall
be satisfactory to the Banks and their counsel; and the Banks shall have
received the favorable written opinion of counsel for the Borrower in form and
substance satisfactory to the Banks and their counsel.
(e) Each Restricted Subsidiary shall have executed and delivered to the Banks
its consent in the form set forth below.
(f) The Note Purchasers shall have consented to the execution and delivery
hereof.
4. REPRESENTATIONS.
In order to induce the Banks to execute and deliver this Amendment, the
Borrower hereby represents to the Banks that, except as set forth on Schedule 1
hereto, as of the date hereof, each of the representations and warranties set
forth in Section 6 of the Credit Agreement are and shall be and remain true and
correct (except that the representations contained in Section 6.6 shall be
deemed to refer to the most recent financial statements of the Borrower
delivered to the Banks), in each such case, after giving effect to this
Amendment and the Borrower is in full compliance with all of the terms and
conditions of the Credit Agreement and no
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Default or Event of Default has occurred and is continuing thereunder or shall
result after giving effect to this Amendment.
5. MISCELLANEOUS
(a) The Borrower has heretofore executed and delivered the Collateral Documents
to the Security Trustee for the benefit of the Banks and the Note Purchasers and
the Borrower hereby agrees that notwithstanding the execution and delivery of
this Amendment, the Collateral Documents shall be and remain in full force and
effect and that any rights and remedies of the Security Trustee thereunder,
obligations of the Borrower thereunder and any liens and security interest
created or provided for thereunder shall be and 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 as to
the indebtedness which would be secured thereby prior to giving effect to this
Amendment.
(b) The Credit Agreement and Notes, as amended hereby, shall continue in full
force and effect in accordance with their original terms. Reference to this
specific Amendment need not be made in any note, document, letter, certificate,
the Credit Agreement or Notes being sufficient to refer to the Credit Agreement
and Notes as amended hereby.
(c) The Borrower agrees to pay on demand all costs and expenses of or incurred
by the Agent in connection with the negotiation, preparation, execution and
delivery of this Amendment, including the fees and expenses of counsel for the
Agent.
(d) This Amendment may be executed in any number of counterparts, and by
different counterparts, 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.
December 2, 1996
WORLD ACCEPTANCE CORPORATION
By /s/A.A. McLean III
Its Executive Vice President
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Accepted and agreed to as of the date and year last above written.
HARRIS TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and as
Agent
By /s/[signature illegible]
Its Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By /s/Craig Goldsmith
Its AVP
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For purposes of inducing the undersigned Note Purchasers to consent to this
Amendment, the Borrower hereby represents and warrants that, except as set forth
on Schedule 1 hereto, as of the date hereof, each of the representations and
warranties set forth in Exhibit C of the Note Purchase Agreements are and shall
be and remain true and correct (except that the representations contained in
paragraph 4 shall be deemed to refer to the most recent financial statements of
the Borrower delivered to the Note Purchasers), in each such case, after giving
effect to this Amendment and the Borrower is in full compliance with all of the
terms and conditions of the Note Purchase Agreements and no Default or Event of
Default (as defined therein) has occurred and is continuing thereunder or shall
result after giving effect to this Amendment.
WORLD ACCEPTANCE CORPORATION
By /s/A.A. McLean III
Its Executive Vice President
Consented and agreed to as of the date and year last above written.
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By /s/James C. Fifield
Its____________________________
By /s/Stephen G. Skrivanek
Its Counsel
JEFFERSON PILOT LIFE INSURANCE
COMPANY
By /s/James E. McDonald
Its_____________________________
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CONSENT
The undersigned have each heretofore executed and delivered to the Security
Trustee a Guaranty Agreement ("Guaranty") and a Security Agreement and Indenture
of Trust ("Security Agreement") and each hereby consents to the Amendment as set
forth above and confirms that its Guaranty and Security Agreement and all of the
undersigned's obligations thereunder remain in full force and effect. The
undersigned each further agrees that the consent of the undersigned to any
further amendments of the Credit Agreement shall not be required as a result of
this consent having been obtained.
WORLD ACCEPTANCE CORPORATION OF
ALABAMA
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
WORLD ACCEPTANCE CORPORATION OF
MISSOURI
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
WORLD FINANCE CORPORATION OF GEORGIA
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer and Assistant
Secretary
WORLD FINANCE CORPORATION OF
ILLINOIS
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
WORLD FINANCE CORPORATION OF
LOUISIANA
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
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Secretary
WORLD ACCEPTANCE CORPORATION OF
OKLAHOMA, INC.
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
WORLD FINANCE CORPORATION OF SOUTH
CAROLINA
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer and Assistant
Secretary
WORLD FINANCE CORPORATION OF
TENNESSEE
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
WORLD FINANCE CORPORATION OF TEXAS
By /s/A.A. McLean III
Its President
WFC LIMITED PARTNERSHIP
By: WFC of South Carolina, Inc.,
as sole general partner
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
WFC OF SOUTH CAROLINA, INC.
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
Secretary
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Schedule 1
Exceptions to Representations and Warranties
The Borrower and its Georgia subsidiary are named as co-defendants with a
number of other finance companies, jewelry and furniture retailers and insurance
companies in an action, formerly pending in U.S. District Court in Georgia,
which has been transferred and consolidated with other pending actions under the
caption In re American Insurance Company, "Non-filing Insurance" Fee Litigation
(Multidistrict Litigation Docket No. 1130, U.S. District Court, District of
Alabama, Northern Division). The consolidated action involves the defendants'
non-file insurance practices. The complaint alleges, among other things, that
the defendants' non-file insurance coverages do not constitute true insurance,
which result in alleged federal truth-in-lending, RICO and antitrust violations
and state fraud, breach of contract and conversion violations, and seeks
certification of a nationwide class of plaintiffs to recover money damages and
injunctive relief. The complaint in this action was filed on April 18, 1995, the
Borrower has filed an answer and the parties are in the discovery process. The
Borrower has been advised that certain of the defendants in the case have agreed
to settle the claims made against them by paying money damages to the
plaintiffs. The Borrower has also been advised that at least one of the settling
defendants has agreed to change its non-file insurance practices. If the
Borrower's non-file insurance practices are found to be invalid, the Borrower
could be required to refund non-file insurance fees, pay other significant
damages to the plaintiffs or change its non-file insurance practices going
forward, and the Borrower could experience a reduction in future income unless
legislative reforms are enacted. The Borrower disputes the allegations made in
the complaint, and intends to defend itself vigorously. Although the Borrower is
unable to predict with certainty the outcome of this litigation, management
expects that it will not have a material adverse effect on the Borrower's
consolidated financial position or results of operations.
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