WORLD ACCEPTANCE CORPORATION
SIXTH AMENDMENT TO SECURITY AGREEMENT, PLEDGE AND
INDENTURE OF TRUST
December 2, 1996
Harris Trust and Savings Bank,
as Security Trustee
Chicago, Illinois
Ladies and Gentlemen:
Reference is hereby made to that certain Security Agreement, Pledge and
Indenture of Trust dated as of December 1, 1992 between the undersigned, World
Acceptance Corporation, a South Carolina corporation (the "Company") and you
(the "Security Trustee"), as amended by that certain First Amendment dated as of
April 2, 1993, Second Amendment dated as of September 1, 1993, Third Amendment
dated as of June 30, 1995, Fourth Amendment dated as of November 1, 1995 and
Fifth Amendment dated as of June 1, 1996 (collectively, the "Indenture"). All
capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Indenture.
The Company has requested that the holders of the Notes (hereinafter
referred to as "Noteholders") make certain amendments to, and give certain
consents under, the Indenture, and the Noteholders and the Security Trustee are
willing to do so under the terms and conditions set forth in this Amendment.
1. AMENDMENTS.
Upon acceptance hereof by the Required Noteholders (as hereinafter defined)
and the Security Trustee in the spaces provided for that purpose below, the
Indenture shall be and hereby is amended by inserting the following clause after
the word "Debt" in the fourth line of Section 3.18(a)(i):
; provided, that for the period from November 30, 1996 through May 31,
1997, the percentage "400%" in the second sentence of this clause (i) shall
be "500%".
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
a. The Company, holders of at least 76% of the Aggregate Principal
Amount of Outstanding Notes (the "Required Noteholders") and the Trustee
shall have executed and delivered this Amendment.
b. The Company shall have paid closing fees (i) to Principal Mutual
Life Insurance Company, in the amount of
$22,500 and (ii) to Jefferson-Pilot Life Insurance Company, in the amount
of $7,500.
c. The Security Trustee and Noteholders shall have received copies
(executed or certified) of all legal documents or proceedings taken in
connection herewith to the extent the Security Trustee, any Noteholder or
their respective counsel may reasonably request.
d. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Security Trustee, the Required
Noteholders and their counsel; and the Noteholders shall have received the
favorable written opinion of counsel for the Company in form and substance
satisfactory to the Security Trustee, the Required Noteholders and their
counsel.
e. Each Restricted Subsidiary shall have executed and delivered to the
Security Trustee and Noteholders its consent in the form set forth below.
3. REPRESENTATIONS.
In order to induce the Security Trustee and Noteholders to execute and
deliver this Amendment, the Company hereby represents to the Security
Trustee and Noteholders that, except as set forth on Schedule A hereto, as
of the date hereof, each of the representations and warranties set forth in
Section 3 of the Indenture and in Exhibit C to the Note Agreements are and
shall be and remain true and correct, in each such case, after giving
effect to this Amendment; the Company is in full compliance with all of the
terms and conditions of the Indenture and the Note Agreements; and no
Default or Event of Default has occurred and is continuing thereunder or
shall result after giving effect to this Amendment.
4. MISCELLANEOUS.
a. The Indenture, as amended hereby, shall continue in full force and
effect in accordance with its original terms and any and all rights and
remedies of the Security Trustee and Noteholders thereunder, obligations of
the Company thereunder and any liens and security interests 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 Indenture as to the
indebtedness which would be secured thereby prior to giving effect to this
Amendment. Reference to this specific Amendment need not be made in any
note, document, letter, certificate, the Indenture itself, the Notes or any
communication issued or made pursuant to or with respect to the Indenture,
any reference in any of such to the Indenture being sufficient to refer to
the Indenture as amended hereby.
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b. The Company agrees to pay on demand all costs and expenses of or
incurred by the Security Trustee and Noteholders in connection with the
negotiation, preparation, execution and delivery of this Amendment,
including the fees and expenses of counsel for the Security Trustee and
Noteholders.
c. This Amendment may be executed in any number of counterparts, and
by the different parties on 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 South
Carolina.
Dated as of December 2, 1996.
WORLD ACCEPTANCE CORPORATION
By /s/A.A. McLean III
A.A. McLean, III,
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,
as Security Trustee
By /s/[signature illegible]
Its Vice President
The undersigned Noteholders hereby consent to the foregoing and direct
the Security Trustee to execute and deliver the same as of the date last
above written.
PRINCIPAL MUTUAL LIFE HARRIS TRUST AND SAVINGS BANK
INSURANCE COMPANY individually and as Agent
under Credit Agreement dated
of December 1, 1992, as
amended
By /s/James C. Fifield By /s/[signature illegible]
Its____________________ Its Vice President
By /s/Stephen G. Skrivanek
Its Counsel
JEFFERSON-PILOT LIFE THE FIRST NATIONAL BANK OF
INSURANCE COMPANY CHICAGO
By /s/James E. McDonald By /s/Craig Goldsmith
Its____________________ Its AVP
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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 or a Security Agreement, Pledge and Indenture of Trust ("Security
Agreement"), in each case, in favor of the Security Trustee and each hereby
consents to the Amendment as set forth above and each hereby 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 Indenture
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
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WORLD FINANCE CORPORATION OF
LOUISIANA
By /s/A.A. McLean III
Its Executive Vice President, Chief
Financial Officer, and Assistant
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/Duane D. Moore
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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WORLD FINANCE CORPORATION OF ILLINOIS
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.