WORLD ACCEPTANCE CORPORATION
THIRD AMENDMENT TO NOTE AGREEMENTS
June 30, 1995
Principal Mutual Life Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-00000
Attn: Xx. Xxxxxx Xxxxxx,
Investment Department
Securities Division
Jefferson-Pilot Life Insurance Company
X.X. Xxx 00000
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xx. X. Xxxxx Xxxxx
Securities Administration 36300
Ladies and Gentlemen:
Reference is hereby made to those certain Note Agreements each dated as of
December 1, 1992, between the undersigned World Acceptance Corporation, a South
Carolina corporation (the "Company"), and you, as amended by agreements dated as
of April 2, 1993 and November 1, 1994 (the "Note Agreements"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Note Agreements.
The Company has requested that you make certain amendments to the Note
Agreements such that the definition of "subsidiary" contained therein shall
contemplate subsidiaries which are organized as partnerships, limited liability
companies and other entities in addition to corporations, and you are willing to
do so under the terms and conditions set forth in this Amendment.
1. AMENDMENTS.
Upon your acceptance hereof in the space provided for that purpose below,
the Note Agreements shall be and hereby are amended as follows:
(a) The term "subsidiary" set forth in Section 7.1 of the Note Agreements
is amended in its entirety as follows:
"subsidiary" shall mean, as to any particular parent corporation, any
corporation, partnership, limited liability company or other entity of
which more
Principal Mutual Life Insurance Company
Jefferson-Pilot Life Insurance Company
June 30, 1995
Page -2-
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than 50% (by number of votes or other similar decisionmaking authority) of
the Voting Stock shall be owned by such parent corporation and/or one or
more corporations, partnerships, limited liability companies or other
entities which are themselves subsidiaries of such parent corporation. The
term "Subsidiary" shall mean a subsidiary of the Company.
(b) The last two sentences of Paragraph 1 of Exhibit 2 to the Note
Agreements are amended in their entirety as follows:
The Company has good and marketable title to all of the shares of the
stock, partnership interest, membership interest or other applicable equity
interest of each Subsidiary, free and clear in each case of any Lien other
than the Lien of the Company Security Agreement. All such shares,
partnership interests, membership interests and other equity interests have
been duly authorized and validly issued and are fully paid and
non-assessable.
(c) Paragraph 2 of Exhibit 2 to the Note Agreements is amended in its
entirety as follows:
2. Organization and Authority. The Company, and each Subsidiary,
(a) is a corporation, partnership, limited liability company or other
entity duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization;
(b) has all requisite corporate or other applicable power and
authority and all necessary licenses and permits to own and operate its
properties and to carry on its business as now conducted; and
(c) is duly licensed or qualified and is in good standing as a foreign
corporation, partnership, limited liability company or other entity in each
jurisdiction where the nature of the business conducted or the nature of
the property owned or leased by its makes such licensing or qualification
necessary.
(d) Paragraph 20 of Exhibit 2 to the Note Agreements is amended in its
entirety as follows:
Principal Mutual Life Insurance Company
Jefferson-Pilot Life Insurance Company
June 30, 1995
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20. Compliance by Restricted Subsidiaries. Compliance by each
Restricted Subsidiary with all of the provisions of its respective
Subsidiary Security Agreement and its respective Subsidiary Guaranty
Agreement--
(a) is within the corporate or other applicable powers of such
Restricted Subsidiary;
(b) will not violate any provisions of any law or any order of any
court or governmental authority or agency and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under the charter, bylaws, certificate of limited
partnership, partnership agreement, articles of organization, operating
agreement or other applicable governing documents of such Restricted
Subsidiary or any indenture or other agreement or instrument to which such
Restricted Subsidiary is a party or by which it may be bound or result in
the imposition of any Liens or encumbrances on any property of such
Restricted Subsidiary (other than as contemplated by such Subsidiary
Security Agreement); and
(c) has been duly authorized by proper corporate or other proper
action on the part of such Restricted Subsidiary (other than such action as
has already been taken, no action by the stockholders or other
equityholders of such Restricted Subsidiary being required by law, by the
charter, bylaws, certificate of limited partnership, partnership agreement,
articles of organization, operating agreement or other applicable governing
documents of such Restricted Subsidiary or otherwise), executed and
delivered by such Restricted Subsidiary and such Subsidiary Security
Agreement and Subsidiary Guaranty Agreement constitute the legal, valid and
binding obligations, contracts and agreements of such Restricted Subsidiary
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law) and to the
discretion of the court before which any proceedings may be brought.
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
(a) The Company and holders of at least 76% in aggregate principal
amount of outstanding Notes shall have executed and delivered this
Amendment.
Principal Mutual Life Insurance Company
Jefferson-Pilot Life Insurance Company
June 30, 1995
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(b) The Purchasers shall have received copies (executed or certified,
as may be appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Amendment to the extent
the Purchasers or their counsel may reasonably request.
(c) Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Purchasers and their counsel; and
the Purchasers shall have received the favorable written opinion of counsel
for the Company in form and substance satisfactory to the Purchasers and
their counsel.
(d) Each Restricted Subsidiary shall have executed and delivered to
the Purchasers its consent in the form set forth below.
3. REPRESENTATIONS.
In order to induce the Purchasers to execute and deliver this Amendment,
the Company hereby represents to the Purchasers 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 to the Note Agreements are and shall be and
remain true and correct, in each such case, after giving effect to this
Amendment, and the Company is in full compliance with all of the terms and
conditions of 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. For purposes of this Section 3 and the filing and recording of
financing statements or other notices with respect to the Subsidiary Security
Agreements executed and delivered as of the date hereof or as of July 1, 1995,
the term Closing Date as used in Paragraph 19 of Exhibit C to the Note
Agreements shall mean and include the date of this Amendment and July 1, 1995.
4. MISCELLANEOUS.
(a) The Company and the Restricted Subsidiaries have heretofore executed
and delivered the Company Security Agreement and the Subsidiary Security
Agreements, as applicable, to the Security Trustee for the benefit of the
Purchasers and the Banks, and the Company and the Restricted Subsidiaries hereby
agree that notwithstanding the execution and delivery of this Amendment, the
Company Security Agreement and Subsidiary Security Agreements shall be and
remain in full force and effect and that any rights and remedies of the Security
Trustee thereunder, obligations of the Company and the Restricted Subsidiaries
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
Principal Mutual Life Insurance Company
Jefferson-Pilot Life Insurance Company
June 30, 1995
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security interests created and provided for by the Company Security Agreement or
the Subsidiary Security Agreements as to the indebtedness which would be secured
thereby prior to giving effect to this Amendment.
(b) The Note Agreements, 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 Note
Agreements themselves, the Notes or any communication issued or made pursuant to
or with respect to the Note Agreements, any reference in any of such to the Note
Agreements being sufficient to refer to the Note Agreements as amended hereby.
(c) The Company agrees to pay on demand all costs and expenses of or
incurred by the Purchasers in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the fees and expenses of
counsel for the Purchasers.
(d) 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.
Principal Mutual Life Insurance Company
Jefferson-Pilot Life Insurance Company
June 30, 1995
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Dated June 30, 1995.
WORLD ACCEPTANCE CORPORATION
By: /s/ X. X. XxXxxx, III
-----------------------------------
Title: Senior Vice President,
Chief Financial Officer
and Assistant Secretary
Accepted and agreed to as of the date and year last above written.
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxx Xxxxx
-----------------------------------
Title: Counsel
By: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
-----------------------------------
Title: Counsel
JEFFERSON-PILOT LIFE INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxxx, XX
-----------------------------------
Title: Second Vice President
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 Note Agreements shall not be required as a result of
this consent having been obtained.
COLONIAL FINANCE CORPORATION OF
TENNESSEE
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD ACCEPTANCE CORPORATION OF
ALABAMA
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD ACCEPTANCE CORPORATION OF
MISSOURI
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD FINANCE CORPORATION OF GEORGIA
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
[signatures continued]
WORLD FINANCE CORPORATION OF
LOUISIANA
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD FINANCE CORPORATION OF
OKLAHOMA, INC.
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD FINANCE CORPORATION OF
SOUTH CAROLINA
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD FINANCE CORPORATION OF
TENNESSEE
By: /s/ X. X. XxXxxx, III
----------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Assistant Secretary
WORLD FINANCE CORPORATION OF TEXAS
By: /s/ Xxxxx X. Xxxxx
----------------------------------------------
Title: President
WFC LIMITED PARTNERSHIP
By: WORLD FINANCE CORPORATION OF TEXAS
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------
Title: President
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SCHEDULE 1
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
The Company and its Georgia subsidiary are named as co-defendants with 30
other finance companies, jewelry and furniture retailers and insurance companies
in an action, Xxxxxx X. Xxxxxx, et al. v. World Finance Corporation of Georgia
and World Acceptance Corporation, et al. (Case No. 95-52-COL, U.S. Dist. Ct.,
Middle District of Georgia, Columbus Division), involving 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. The
complaint in this action was filed on April 18, 1995, and as of the date of this
Report, the Company is in the process of preparing its answer. The Company
disputes the allegations made in the complaint, and intends to defend itself
vigorously. Although the Company is unable to predict the outcome of this
litigation, management believes that it will not have a material adverse effect
on the Company's financial position or results of operations.