Amended and Restated Security Agreement,
Pledge and Indenture of Trust
 
Dated as of September 17, 2010
 
Between
 
World Acceptance Corporation
 
and
 
Harris N.A.,
as Collateral Agent
   

 
 

--------------------------------------------------------------------------------

 
 

   
Table of Contents
             
Section
 
Heading
 
Page
         
Parties
 
   
 
  1
         
Recitals
 
   
 
  1
         
Section 1.
 
Interpretation of Agreement; Definitions.
 
1
         
Section 1.1.
 
Definitions
 
1
Section 1.2.
 
Accounting Principles
 
5
Section 1.3.
 
Directly or Indirectly
 
5
              
Section 2.
 
Granting Clauses
 
6
         
Section 2.1.
 
Equipment
 
6
Section 2.2.
 
Receivables
 
6
Section 2.3.
 
Pledged Collateral
 
6
Section 2.4.
 
General Intangibles
 
6
Section 2.5.
 
Investment Property
 
6
Section 2.6.
 
Records and Cabinets
 
7
Section 2.7.
 
Partnership Interests
 
7
Section 2.8.
 
Additional Property
 
7
Section 2.9.
 
Deposit Accounts
 
7
Section 2.10.
 
Other Proceeds and Products
 
7
         
Section 3.
 
Covenants, Representations and Warranties of the Borrower
 
8
         
Section 3.1.
 
Location of Collateral
 
8
Section 3.2.
 
Warranty of Title
 
8
Section 3.3.
 
No Alienation of Collateral
 
9
Section 3.4.
 
Removal of Collateral
 
9
Section 3.5.
 
Compliance with Leases
 
9
Section 3.6.
 
Protection of Collateral
 
9
Section 3.7.
 
Further Assurances
 
10
Section 3.8.
 
Maintenance of Lien; Recording; Opinions of Counsel
 
10
Section 3.9.
 
Guaranty and Security Agreement Supplements
 
11
Section 3.10.
 
Deposit Accounts
 
11
         
Section 4.
 
Special Provisions Relating to Receivables
 
12
         
Section 4.1.
 
Representations and Warranties
 
12
Section 4.2.
 
Receivable Schedules
 
13
Section 4.3.
 
Collection of Receivables
 
13
Section 4.4.
 
Power of Attorney
 
15

 
 
-i-

--------------------------------------------------------------------------------

 

Section 5.
 
Special Provisions Relating to Pledged Collateral
 
15
         
Section 5.1.
 
Delivery of Pledged Collateral; Transfer to Security Trustee
 
15
Section 5.2.
 
Voting Power; Payments
 
15
Section 5.3.
 
Covenants of the Borrower
 
17
         
Section 6.
 
Application of Certain Moneys
 
17
         
Section 6.1.
 
Application if no Default or Event of Default Exists
 
17
Section 6.2.
 
Application if a Default or an Event of Default Exists
 
18
         
Section 7.
 
Defaults and Remedies
 
18
         
Section 7.1.
 
Events of Default
 
18
Section 7.2.
 
Security Trustee’s Rights
 
18
Section 7.3.
 
Waiver by Borrower
 
19
Section 7.4.
 
Effect of Sale
 
19
Section 7.5.
 
Application of Sale and Other Proceeds
 
19
Section 7.6.
 
Discontinuance of Remedies
 
20
Section 7.7.
 
Cumulative Remedies
 
20
         
Section 8.
 
The Security Trustee
 
20
         
Section 8.1.
 
Duties of Security Trustee
 
20
Section 8.2.
 
Security Trustee’s Liability
 
21
Section 8.3.
 
No Responsibility of Security Trustee for Recitals
 
22
Section 8.4.
 
Certain Limitations on Security Trustee’s Rights to Compensation and
Indemnification
 
23
Section 8.5.
 
Status of Moneys Received
 
23
Section 8.6.
 
Resignation of Security Trustee
 
23
Section 8.7.
 
Removal of Security Trustee
 
24
Section 8.8.
 
Appointment of Successor Security Trustee
 
24
Section 8.9.
 
Succession of Successor Security Trustee
 
24
Section 8.10.
 
Eligibility of Security Trustee
 
25
Section 8.11.
 
Successor Security Trustee by Merger
 
25
Section 8.12.
 
Co-Trustees
 
25
Section 8.13.
 
Compensation and Reimbursement
 
26
         
Section 9.
 
Supplements; Waivers
 
26
         
Section 9.1.
 
Supplemental Security Agreements Without Secured Creditor Consent
 
26
Section 9.2.
 
Waivers and Consents by Secured Creditors; Supplemental Security Agreements with
Secured Creditors’ Consent
 
27
Section 9.3.
 
Notice of Supplements
 
27
Section 9.4.
 
Opinion of Counsel Conclusive as to Supplements
 
27

 
 
-ii-

--------------------------------------------------------------------------------

 

Section 10.
 
Miscellaneous
 
27
         
Section 10.1.
 
Successors and Assigns
 
27
Section 10.2.
 
Severability
 
27
Section 10.3.
 
Communications
 
28
Section 10.4.
 
Release
 
28
Section 10.5.
 
Counterparts
 
29
Section 10.6.
 
Governing Law
 
30
Section 10.7.
 
Headings
 
30
Section 10.8.
 
Prior Liens
 
30
         
Section 10.9.
 
Amendment and Restatement " \l 2
 
30
         
Signature Page
     
31

 
Attachments to Security Agreement, Pledge and Indenture of Trust:
 
Schedule I
—
Description of Pledged Shares
Schedule II
—
Description of Partnership Interest
Schedule III
—
Locations of the Borrower’s Offices and Facilities
Schedule IV
—
Concentration Accounts
Exhibit A
—
Form of Subsidiary Security Agreement
Exhibit B
—
Form of Subsidiary Guaranty Agreement

 
 
-iii-

--------------------------------------------------------------------------------

 

Amended and Restated Security Agreement,
Pledge and Indenture of Trust
 
Amended and Restated Security Agreement, Pledge and Indenture of Trust (this
“Agreement”) dated as of September 17, 2010, between World Acceptance
Corporation, a South Carolina corporation (the “Borrower”), and Harris N.A., as
collateral agent (the “Collateral Agent”) which amends and restates that certain
Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as
of June 30, 1997 (as the same has heretofore been amended, restated, modified,
supplemented or waived pursuant to the terms thereof) between the Borrower and
Harris N.A. (the “Original Security Agreement”).  The post office addresses of
the Borrower and the Collateral Agent are set forth in §10.3.
 
Recitals:
 
A.       The capitalized terms used in this Agreement shall have the respective
meanings specified in §1.1 unless otherwise herein defined or the context hereof
shall otherwise require.
 
B.       The Borrower is authorized by law, and deems it necessary from time to
time, to borrow money for its proper purposes and to secure the same as
hereinafter provided, and to that end, in the exercise of said authority, has
duly authorized the execution and delivery of this Agreement providing for the
securing of certain obligations of the Borrower hereunder, all as hereinafter
provided.
 
C.       The Borrower has authorized borrowings and other extensions of credit
pursuant to the Credit Agreement.  In addition, the Borrower may from time to
time be liable to the Lenders and/or their affiliates with respect to Hedging
Liability (as such term is defined in the Credit Agreement) (the Collateral
Agent, the Administrative Agent and the Lenders, together with affiliates of the
Lenders with respect to Hedging Liability, being hereinafter referred to
collectively as the “Secured Creditors” and individually as a “Secured
Creditor”).
 
D.       All acts and proceedings required by law and by the Articles of
Incorporation and By-Laws of the Borrower, to constitute this Agreement a valid
and binding agreement for the uses and purposes herein set forth, in accordance
with its terms, have been done and taken, and the execution and delivery of this
Agreement has been in all respects duly authorized.
 
Section 1.
Interpretation of Agreement; Definitions.

 
Section 1.1.       Definitions.  Except as otherwise provided in this Section 1,
all capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.  Unless the context
otherwise requires, the terms hereinafter set forth when used herein shall have
the following meanings and the following definitions shall be equally applicable
to both the singular and plural forms of any of the terms herein defined:
 
“Account Debtor” shall mean any Person who is or may become obligated to the
Borrower under or on account of a Receivable.
 
 
 

--------------------------------------------------------------------------------

 
 
“Administrative Agent” shall have the same meaning herein as such term is
defined in the Credit Agreement.
 
“Affiliate” shall have the same meaning herein as such term is defined in the
Credit Agreement.
 
“Base Rate” shall have the same meaning herein as such term is defined in the
Credit Agreement.
 
“Borrower” shall mean World Acceptance Corporation, a South Carolina
corporation, and any Person which succeeds to all, or substantially all of the
assets and business of World Acceptance Corporation.
 
“Closing Date” shall mean September 17, 2010.
 
“Collateral” as used herein shall mean any and all property from time to time
subject to the security interest granted hereby.
 
“Collateral Agent” means the Person named above as the “Collateral Agent” in the
first paragraph of this Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter “Collateral Agent” shall mean such successor Collateral Agent.
 
“Credit Agreement” shall mean that certain Amended and Restated Revolving Credit
Agreement dated as of September 17, 2010 among the Borrower, the Administrative
Agent and the Lenders, as the same may from time to time be amended, restated,
modified, supplemented or waived pursuant to the terms thereof.
 
“Default” shall mean any event or condition, the occurrence of which would, with
the lapse of time or the giving of notice, or both, constitute an Event of
Default.
 
“Event of Default” shall have the meaning specified in §7.1.
 
“GAAP” shall have the same meaning herein as such term is defined in the Credit
Agreement.
 
“Governing Documents” shall mean collectively the charter instruments, by-laws,
partnership agreements, operating agreements and other similar documents
prescribing the internal governance of each Restricted Subsidiary.
 
“Indebtedness for Borrowed Money” shall have the same meaning herein as such
term is defined in the Credit Agreement.
 
“Insurance Subsidiary” shall have the same meaning herein as such term is
defined in the Credit Agreement.

 
-2-

--------------------------------------------------------------------------------

 
 
“Investment Property” shall have the meaning specified in §2.5.
 
“Lenders” shall have the same meaning herein as such term is defined in the
Credit Agreement.
 
“Lien” shall mean any interest in property securing an obligation owed to a
Person, whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest arising from a mortgage,
security agreement, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes.  The term “Lien” includes
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other similar title exceptions and
encumbrances, including but not limited to mechanics’, materialmen’s,
warehousemen’s, carriers’ and other similar encumbrances, affecting
property.  For the purposes of this Agreement, a Person shall be deemed to be
the owner of any property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes.
 
“Moody’s” shall mean Moody’s Investors Service, Inc.
 
“Partnership Interests” shall have the meaning specified in §2.7.
 
“Person” shall mean an individual, partnership, corporation, limited liability
company, trust or unincorporated organization, and a government agency or
political subdivision thereof.
 
“Pledged Collateral” shall mean and include:
 
(a)       the Pledged Shares;
 
(b)       all shares, Securities, moneys, or other property distributed as a
dividend on any shares of capital stock or other Pledged Collateral (including
the Pledged Shares) at any time pledged hereunder or a distribution or return of
capital upon or in respect of any such capital stock or other Pledged Collateral
or any part thereof, or resulting from a split-up, revision, reclassification or
other like change of any such capital stock or other Pledged Collateral, and any
subscription warrants, rights or options issued to the holders of, or otherwise
in respect of, any such capital stock or other Pledged Collateral; and
 
(c)       in the event of any consolidation or merger in which the issuer of any
Pledged Collateral is not the surviving entity, or in the event of any sale,
lease, transfer or other disposition of all or substantially all of the assets
of such issuer;
 
(i)       all shares of each class of the capital stock or other Security of the
successor entity formed by or resulting from such consolidation or merger, or of
the corporation to which such sale, lease, transfer or other disposition shall
have been made, and
 
(ii)       all other Securities, money or property,

 
-3-

--------------------------------------------------------------------------------

 
 
distributed or distributable in any such event in respect of any of the Pledged
Collateral in connection with such consideration, merger, sale, lease, transfer
or other disposition.
 
“Pledged Shares” shall mean all of the capital stock, partnership interests,
membership interests and other equity interests owned by the Borrower (as more
specifically set forth on Schedule I hereto) or hereafter acquired, including,
without limitation, (a) all rights, authority, powers and privileges of the
Borrower as a shareholder or holder of any partnership interest, membership
interest or other equity interest of any entity, whether now existing or
hereafter arising under the Governing Documents or at law or otherwise, and the
rights of the Borrower under such Governing Documents to acquire additional
shares of stock or partnership interests, membership interests or other equity
interests or to acquire the shares of stock, partnership interest, membership
interest or other equity interest of other shareholders, partners, members or
other holders of equity interests, and (b) all other instruments owned or held
by, or otherwise established in favor of, the Borrower in the nature of capital
stock of, partnership interest, membership interest or any other equity interest
in any entity, of any and every type, class and series.
 
“Receivables” shall mean all accounts receivable, receivables, contract rights,
controls, instruments, notes, drafts, bills, acceptances, documents, chattel
paper, general intangibles and all other forms of obligations owing to a Person,
including, without limitation, all Accounts, Instruments (including Promissory
Notes), Documents, Chattel Paper (including tangible and electronic Chattel
Paper), Letter of Credit Rights, Supporting Obligations, General Intangibles
(including Payments Intangibles), as defined in the Uniform Commercial Code as
in effect in the State of South Carolina.
 
“Required Lenders” shall have the same meaning herein as such term is defined in
the Credit Agreement.
 
“Restricted Subsidiary” shall have the same meaning herein as such term is
defined in the Credit Agreement.
 
“S&P” shall mean Standard & Poor’s Ratings Services Group, a division of The
McGraw-Hill Companies, Inc.
 
“Secured Indebtedness” shall mean the “Obligations,” as such term is defined in
the Credit Agreement, in each case whether now existing or hereafter arising,
due or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired.
 
“Security” shall have the same meaning as in Section 2(a)(1) of the Securities
Act of 1933, as amended.
 
“subsidiary” shall mean, as to any particular parent entity, any corporation,
partnership, limited liability company or other entity of which more than 50%
(by number of votes or other decision making authority) of the Voting Stock
shall be owned by such parent and/or one or more corporations, partnerships,
limited liability companies or other entities which are themselves subsidiaries
of such parent entity.  The term “Subsidiary” shall mean a subsidiary, directly
or indirectly, of the Borrower.

 
-4-

--------------------------------------------------------------------------------

 
 
“Subsidiary Guaranty Agreement” shall mean the Amended and Restated Guaranty
Agreement dated as of September 17, 2010 of each Restricted Subsidiary existing
on such date and each other Restricted Subsidiary which has executed a Guaranty
Supplement in the form of Exhibit A thereto pursuant to the terms thereof and
§3.9 (or in such other form agreed to by the Administrative Agent), in each
case, for the benefit of the Collateral Agent and the Guaranteed Creditors (as
defined therein), as the same may from time to time be amended, restated,
modified, supplemented or waived pursuant to the terms thereof.
 
“Subsidiary Security Agreement” shall mean the Amended and Restated Security
Agreement, Pledge and Indenture of Trust dated as of September 17, 2010 between
each Restricted Subsidiary existing on the Closing Date and the Collateral
Agent, as supplemented from time to time by a security agreement supplement
between a Restricted Subsidiary and the Collateral Agent delivered pursuant to
the terms thereof and §3.9, in each such case, substantially in the form of
Exhibit A to the Subsidiary Security Agreement, as the same may from time to
time be amended, restated, modified, supplemented or waived pursuant to the
terms thereof.
 
“Underlying Collateral” shall mean, with respect to any Receivable of the
Borrower, all of its rights with respect to any collateral granted by the
Account Debtor in connection with any Receivable owing by it to the Borrower.
 
“Uniform Commercial Code” as used herein with reference to any collateral shall
mean the Uniform Commercial Code as enacted in the jurisdiction applicable to
such Collateral, as amended from time to time, and any successor statute(s)
thereto.
 
“Voting Stock” shall mean Securities or other equity interests of any class or
classes, the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons performing
similar functions).
 
Section 1.2.    Accounting Principles.  Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP, to
the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
 
Section 1.3.    Directly or Indirectly.  Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.

 
-5-

--------------------------------------------------------------------------------

 
 
Section 2.
Granting Clauses.

 
The Borrower in consideration of the premises and other good and valuable
consideration, receipt whereof is hereby acknowledged, and intending to be
legally bound, and in order to secure the payment of all Secured Indebtedness
and the performance and observance of all the covenants and conditions contained
in the this Agreement, the Credit Agreement, the Subsidiary Guaranty Agreements,
the Subsidiary Security Agreement, and the other Loan Documents entered into
from time to time in connection therewith and any agreements entered into in
connection with any Hedging Liability, does hereby mortgage, grant, convey,
warrant, assign, pledge and hypothecate unto the Collateral Agent, its
successors in trust and assigns, forever, and grants to the Collateral Agent,
its successors in trust and assigns, forever, a continuing security interest in,
all and singular the following described properties, rights, interests and
privileges, together with the proceeds thereof, now or hereafter owned by the
Borrower (hereinafter sometimes referred to as the “Collateral”):
 
Section 2.1.    Equipment.  All building materials, building equipment,
machinery, fixtures, apparatus, furniture and equipment and other personal
property (other than motor vehicles and accessions to motor vehicles) of every
kind and nature whatsoever located, including without limitation:  all air
conditioning, ventilating, plumbing, heating, lighting and electrical systems
and apparatus; all communications equipment and intercom systems and apparatus;
all typewriters, computers and other office machines and equipment, furniture,
furnishings; all sprinkler equipment and apparatus, all elevators and
escalators; and all machinery, equipment, engines, boilers, tools, fixtures,
furniture, carpeting, tables and chairs, together with all accessories, parts
and appurtenances appertaining or attached thereto, whether now owned or
hereafter acquired, and all substitutions, renewals, or replacements of and
additions, improvements, accessions and accumulations to any and all thereof,
together with all the rents, income, revenues, issues, proceeds, profits and
avails arising therefrom or in connection therewith;
 
Section 2.2.    Receivables.  All Receivables, whether now existing or hereafter
arising, and however evidenced or acquired, or in which the Borrower now has or
hereafter acquires any rights and all rights of the Borrower to any Underlying
Collateral granted by an Account Debtor in connection with any Receivable owing
by it to the Borrower;
 
Section 2.3.    Pledged Collateral.  All Pledged Collateral;
 
Section 2.4.    General Intangibles.  All General intangibles of the Borrower,
including, without limitation, tax refunds, rights with respect to trademarks,
service marks, trade names, patents, copyrights, trade-secrets information and
rights to prevent others from doing acts that constitute unfair competition with
or misappropriation of property of the Borrower including, without limitation,
any sums (net of expenses) that the Borrower may receive arising out of any
claim for infringement of its rights in any patent, copyright, trademark, trade
name, trade secret or other proprietary right and all rights of the Borrower
under contracts to enjoy performance by others or to be entitled to enjoy rights
granted by others, including, without limitation, any licenses (to the extent
permitted by law);
 
Section 2.5.    Investment Property.  All Investment Property, whether now owned
or existing or hereafter created, acquired or arising, or in which the Borrower
now has or hereafter acquires any rights (the term “Investment Property” means
and includes all investment property and any other securities (whether
certificated or uncertificated), security entitlements, securities accounts,
commodity contracts and commodity accounts, including all substitutions and
additions thereto, all dividends, distributions and sums distributable or
payable from, upon, or in respect of such property, and all rights and
privileges incident to such property, but excludes the Pledged Collateral);

 
-6-

--------------------------------------------------------------------------------

 
 
Section 2.6.    Records and Cabinets.  All supporting evidence and documents
relating to any of the above-described property, including without limitation,
written applications, credit information, account cards, payment records,
correspondence, delivery and installation certificates, invoice copies, delivery
receipts, notes and other evidences of indebtedness, insurance certificates and
the like, together with all books of account, data processing records, computer
software and licenses to use the same, ledgers and cabinets in which the same
are reflected or maintained, all whether now existing or hereafter arising;
 
Section 2.7.    Partnership Interests.  (i) All right, title and interest of the
Borrower, whether now owned or hereafter acquired, in all partnerships or
limited liability companies, including, but not limited to, those set forth on
Schedule II hereto (collectively, the “Partnerships”), (ii) any and all payments
or distributions of whatever kind or character and whether in cash or other
property, at any time made, owing or payable to the Borrower in respect of or on
account of its present or hereafter acquired interest in the Partnerships,
whether due or to become due and whether representing profits, distributions
pursuant to complete or partial liquidation or dissolution, repayment of capital
contributions or otherwise, and the right to receive, receipt for, use and enjoy
all such payments and distributions, and all proceeds thereof, in every case
whether now arising or hereafter acquired or arising, and (iii) all proceeds of
any of the foregoing (all of the foregoing rights, interests, properties and
privileges assigned in and in which a security interest is granted pursuant to
this §2.7 being hereafter collectively called the “Partnership Interests”);
 
Section 2.8.    Additional Property.  All property and rights, if any, which are
by the express provisions of this Agreement required to be subjected to the lien
hereof and any additional property and rights that may from time to time
hereafter, by writing of any kind, be subjected to the lien hereof by the
Borrower or by anyone acting at the direction or as an agent of the Borrower;
and
 
Section 2.9.    Deposit Accounts.  All Deposit Accounts, as such term is defined
in the Uniform Commercial Code; and
 
Section 2.10.  Other Proceeds and Products.  All proceeds and products of the
foregoing and all insurance of the foregoing and proceeds thereof, whether now
existing or hereafter arising;
 
 provided that, in the case of a lien and security interest on the voting stock
or other similar voting equity interests of a corporation, limited liability
company, partnership or other entity which is a “controlled foreign corporation”
as defined under Section 957 of the Internal Revenue Code (herein, a “Foreign
Company”), if granting a security interest of more than 65% of the total
combined voting stock or other voting equity interests of any such Foreign
Company would cause adverse tax consequences to the Borrower, then such lien and
security interest on the voting stock or other voting equity interests shall be
limited to 65% of the total combined voting stock or other voting equity
interests of such Foreign Company.

 
-7-

--------------------------------------------------------------------------------

 
 
To Have and to Hold the Collateral, With Power of Sale and right of entry and
possession, unto the Collateral Agent, its successors and assigns, forever; in
Trust Nevertheless, upon the terms and trust herein set forth, for the equal and
proportionate benefit, security and protection of all present and future Secured
Creditors; provided always, however, that these presents are upon the express
condition that if the Borrower shall irrevocably pay or cause to be irrevocably
paid all the Secured Indebtedness and all obligations to extend Secured
Indebtedness have expired or otherwise terminated, then these presents and the
estate hereby granted and conveyed shall cease and this Agreement shall become
null and void; otherwise this Agreement shall remain in full force and effect.
 
Section 3.
Covenants,Representations and Warranties of the Borrower.

 
The Borrower hereby covenants with, and represents and warrants to, the
Collateral Agent and for the benefit of the Secured Creditors from time to time
that:
 
Section 3.1.    Location of Collateral.  The Collateral (other than the
Underlying Collateral and the Pledged Collateral) and the books and records
relating thereto are in the Borrower’s possession at the offices and facilities
owned or leased by the Borrower set forth in Schedule III hereto.  Not less than
ten days before the opening of any additional business location which would
require the filing of an additional financing statement in accordance with the
Uniform Commercial Code in order to perfect the security interest of the
Collateral Agent in the Collateral, any change in the business location where
the Collateral and the books and records relating thereto are located and/or
maintained which would require the filing of an additional financing statement
in accordance with the Uniform Commercial Code in order to perfect the security
interest of the Collateral Agent in the Receivables or any other Collateral, the
Borrower will deliver to the Collateral Agent a supplement hereto amending
Schedule III to include such business location, together with evidence of the
filing of financing statements or other notices of the security interest hereof
and an opinion of the Borrower’s counsel responsive to the requirements of §3.8
hereof.  On the written request of the Collateral Agent or the Administrative
Agent, the Borrower will deliver to the Collateral Agent a supplement hereto
amending Schedule III to include any additional business locations not
previously reflected in a supplement hereto.
 
Section 3.2.    Warranty of Title.  The Borrower is the lawful owner of the
Collateral (other than the Underlying Collateral) and has the sole right and
lawful authority to deliver this Agreement.  The Collateral (other than the
Underlying Collateral) and every part thereof is, on the Closing Date, free and
clear of all Liens, except the Lien of this Agreement and Liens permitted by
clauses (e), (f), (g) and (i) of Section 8.11 of the Credit Agreement and will
be free and clear of all Liens, except the Lien of this Agreement and the other
Liens of the character described in clauses (e), (f), (g) and (i) of
Section 8.11 of the Credit Agreement, and the Borrower will warrant and defend
the Collateral (other than the Underlying Collateral) against any claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to the Collateral Agent.

 
-8-

--------------------------------------------------------------------------------

 
 
Section 3.3.    No Alienation of Collateral.  Except as permitted by the
provisions of Section 8.13 of the Credit Agreement, the Borrower will not,
without the Collateral Agent’s prior written consent, sell, assign, mortgage,
lease or otherwise dispose of the Collateral or any interest therein.
 
Section 3.4.    Removal of Collateral.  The Borrower will not remove the
Collateral and/or the books and records relating thereto from the locations set
forth in Schedule III hereto (i) without complying with §3.1 hereof or (ii)
without the Collateral Agent’s prior written consent (provided that the Borrower
may move items of Collateral among such locations).  The Borrower will at all
times allow the Collateral Agent, the Lenders and their representatives free
access to, and right of inspection of, the Collateral.
 
Section 3.5.    Compliance with Leases.  The Borrower will comply with the terms
and conditions of any leases covering the premises wherein the Collateral is
located and any orders, ordinances, laws or statutes of any city, state or other
governmental entity, department or agency having jurisdiction with respect to
such premises or the conduct of business thereon unless the failure to so comply
will not, individually or in the aggregate, have a material adverse effect on
such Collateral or impair the rights or interests of the Borrower or the
Collateral Agent therein.
 
Section 3.6.    Protection of Collateral.  At any time and from time to time,
any Secured Creditor may, at its option, or the Collateral Agent may, at the
direction of the Administrative Agent, discharge any taxes, or other Liens at
any time levied or placed on the Collateral which are due and unpaid and (A)
which are not being contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of the Collateral or any
material interference with the use thereof or (B) for which the Borrower has not
set aside on its books, reserves adequate in accordance with GAAP with respect
thereto, and such parties may pay for the maintenance and preservation of the
Collateral, including the purchasing of insurance therefor to the extent
required to be maintained by the Borrower pursuant to Section 8.2 of the Credit
Agreement and not so maintained, and the Borrower will immediately reimburse the
Collateral Agent or such Secured Creditor on demand for any payment made or any
expense incurred by the Collateral Agent or such Secured Creditor pursuant to
the foregoing authority with interest at a rate per annum equal to the higher of
(i) 10.5% and (ii) the Base Rate plus 2%.  All such expenses and payments shall
have the benefit of and be secured by the security interest herein granted, and
the Collateral Agent is authorized to charge any depository account of the
Borrower maintained with the Collateral Agent or any Secured Creditor for the
amount of such expenses and payments.

 
-9-

--------------------------------------------------------------------------------

 
 
Section 3.7.    Further Assurances.  The Borrower agrees to execute and deliver
to the Collateral Agent such further agreements and assignments or other
instruments and to do all such other things as the Collateral Agent may deem
necessary or appropriate to assure the Collateral Agent its first priority
security interest hereunder, including such financing statement or statements or
amendments thereof or supplements thereto or other instruments as the Collateral
Agent may from time to time reasonably require to perfect, and continue the
perfection of, the security interest in the Collateral contemplated by this
Agreement.  The Borrower hereby agrees that, to the extent permitted by
applicable law, a carbon, photographic or other reproduction of this Agreement
or any such financing statement is sufficient for filing as a financing
statement by the Collateral Agent without notice thereof to the Borrower
wherever the Collateral Agent in its sole discretion desires to file the
same.  The Borrower hereby authorizes the Collateral Agent to file any and all
financing statements covering the Collateral or any part thereof as the
Collateral Agent may require.  The Collateral Agent shall, when an Event of
Default shall have occurred and be continuing, or at such other time pursuant to
§4 or §5, have the right to take physical possession of any and all of the
Collateral and to maintain such possession on the Borrower’s premises or, if
possible, to remove the Collateral or any part thereof to such other places as
the Collateral Agent may desire.  If the Collateral Agent exercises its right to
take possession of the Collateral, the Borrower shall, upon the Collateral
Agent’s demand, if possible, assemble the Collateral and make it available to
the Collateral Agent at a place designated by the Collateral Agent.  The
Borrower shall at its expense perform any and all other steps reasonably
requested by the Collateral Agent to preserve and protect the first priority
security interest hereby granted in the Collateral.  If any Collateral is in the
possession or control of any of the Borrower’s agents or processors while a
Default or an Event of Default shall have occurred and be continuing, the
Borrower agrees (i) to notify such agents or processors in writing of the
Collateral Agent’s security interest therein, and (ii) upon the Collateral
Agent’s request instruct them to hold all such Collateral for the Collateral
Agent’s account and subject to the Collateral Agent’s instructions.  The
Borrower agrees to mark its books and records to reflect the security interest
of the Collateral Agent in the Collateral.
 
Section 3.8.    Maintenance of Lien; Recording; Opinions of Counsel.  (a) The
Borrower will, at its expense, take all necessary action to maintain and
preserve the first and prior perfected lien of this Agreement (including,
without limitation, the filing of all financing statements or similar notices
thereof if and to the extent permitted or required by applicable law) so long as
the Secured Creditors have any commitment to extend Secured Indebtedness to the
Borrower and thereafter so long as any Secured Indebtedness remains outstanding.
 
(b)    The Borrower will, forthwith after the execution and delivery of this
Agreement and thereafter from time to time, cause this Agreement (and all
financing statements, continuation statements or similar notices thereof if and
to the extent permitted or required by applicable law) to be filed, registered
and recorded in such manner and in such places as may be required by law in
order to publish notice of and fully to protect the first lien of the Collateral
Agent in and to the Collateral; and from time to time will perform or cause to
be performed any other act as provided by law and will execute or cause to be
executed any and all further instruments that may be required for such
publication and protection or requested by the Administrative Agent.  With
respect to any Investment Property held by a securities intermediary, commodity
intermediary, or other financial intermediary of any kind, at the Collateral
Agent’s request, acting at the direction of the Administrative Agent, the
Borrower shall execute and deliver, and shall cause any such intermediary to
execute and deliver, an agreement among the Borrower, the Collateral Agent and
such intermediary in form and substance reasonably satisfactory to the
Administrative Agent which provides, among other things, for the intermediary’s
agreement that, upon notice by the Collateral Agent that an Event of Default has
occurred and is continuing, it shall comply with entitlement orders, and apply
any value distributed on account of any Investment Property maintained in an
account with such intermediary, as directed by the Collateral Agent without
further consent of the Borrower.

 
-10-

--------------------------------------------------------------------------------

 
    
(c)    The Borrower agrees at its own expense to furnish to the Collateral Agent
promptly after the execution and delivery of any supplement or amendment hereto
or any continuation statement, an opinion of counsel satisfactory to the
Collateral Agent (who may be independent counsel to the Borrower) stating that
in the opinion of such counsel, such supplement or amendment to this Agreement
(or a financing statement, continuation statement or similar notice thereof if
and to the extent required by applicable law) or such continuation statement, as
the case may be, has been properly recorded or filed for record in all public
offices in which such recording or filing is necessary to perfect the Lien
provided by this Agreement as a valid Lien and security interest in the
Collateral.
 
Section 3.9.    Guaranty and Security Agreement Supplements.  The Borrower
hereby covenants and agrees that, within 30 days after any Person becomes a
Restricted Subsidiary, it will (i) deliver all of the certificates or other
instruments evidencing the capital stock, partnership interests, membership
interests or other equity interests of such Restricted Subsidiary (except the
Borrower will transfer and deliver only 65% of the Voting Stock of any Foreign
Company, including the Insurance Subsidiary) and all other items constituting
Pledged Collateral, with all such certificates or other instruments duly
endorsed in blank or accompanied by an assignment or assignments sufficient to
transfer title thereto, to the Collateral Agent to be held in pledge pursuant to
the terms hereof as part of the Pledged Collateral, together with an amended
Schedule I and, if applicable, Schedule II, hereto or to the Subsidiary Security
Agreement, as the case may be, describing such additional Pledged Shares and, if
applicable, Partnership Interests, and (ii) cause such Restricted Subsidiary
(other than the Insurance Subsidiary) to enter into a Guaranty Supplement to
each Subsidiary Guaranty Agreement substantially in the form of Exhibit A
thereto and a supplement to the Subsidiary Security Agreement substantially in
the form of Exhibit A thereto, together with such items described in §3.8 hereof
as the Collateral Agent or the Administrative Agent may reasonably request.
 
Section 3.10.    Deposit Accounts.  The Borrower may maintain one or more local
deposit accounts for the deposit of checks and the making of disbursements in
the ordinary course of business (“Local Accounts”) and one or more concentration
accounts into which the Borrower sweeps or periodically transfers collections
from the Subsidiary Local Accounts in the ordinary course of business
(“Concentration Accounts”).  All Concentration Accounts of the Borrower as of
September 17, 2010, are listed and identified (by account number and depository
institution) on Schedule IV attached hereto and made a part hereof.  The
Borrower shall promptly notify the Collateral Agent of any other Concentration
Account opened or maintained by the Borrower after the date hereof, and shall
submit to the Collateral Agent a supplement to Schedule IV to reflect such
additional accounts (provided the Borrower’s failure to do so shall not impair
the Collateral Agent’s security interest therein).  So long as no Event of
Default has occurred and is continuing, the Collateral Agent’s security interest
in the Local Accounts need not be perfected.  With respect to any Concentration
Account maintained by a depository institution other than the Collateral Agent,
and as a condition to the establishment and maintenance of any such
Concentration Account, the Borrower and such depository institution shall have
executed and delivered to the Collateral Agent an account control agreement in
form and substance satisfactory to the Collateral Agent which provides, among
other things, for the depository institution’s agreement that it will comply
with instructions originated by the Collateral Agent directing the disposition
of the funds in the Concentration Account(s) at such depository institution
without further consent by the Borrower.

 
-11-

--------------------------------------------------------------------------------

 
 
Section 4.
Special Provisions Relating to Receivables.

 
Section 4.1.    Representations and Warranties.  The Borrower shall be deemed to
have warranted as to each of its Receivables that:
 
(a)    Such Receivable and all papers and documents relating thereto are genuine
and in all respects what they purport to be;
 
(b)    Such Receivable is legal, valid and subsisting;
 
(c)    The amount of such Receivable represented as owing is the correct amount
actually and unconditionally owing, is not disputed and is not subject to any
set-offs, credits, deductions or countercharges;
 
(d)    Such Receivable has been created, and is, in all respects in compliance
with applicable state and federal lending laws and will continue to be in
compliance with such laws;
 
(e)    The Borrower has no knowledge or reason to know of any fact which would
impair the collectibility of such Receivable;
 
(f)    All of the Borrower’s procedures, requirements and conditions and all
federal and state laws applicable to the making of the loans related to such
Receivable and the creation of such Receivable have been complied with;
 
(g)    To the best knowledge of the Borrower, the Account Debtor on such
Receivable and other obligors had legal capacity to enter into the transactions
related to such Receivable;
 
(h)    The form and content of each document related to such Receivable, the
security related thereto, and the transactions from which it arose comply fully
with any and all applicable laws, ordinances, rules and regulations, federal,
state and/or local, with respect to the extension of credit and charging of
interest, including without limitation, as applicable, the Federal Consumer
Credit Protection Act, the Federal Fair Credit Reporting Act, the Federal Trade
Commission Act, the Federal Equal Credit Opportunity Act and all federal, state
and local laws related to licensing, usury, truth in lending, real estate
settlement procedures, consumer protection, equal credit opportunity, fair debt
collection, unfair and deceptive trade practices, rescission rights and
disclosures, and with all rules and regulations thereunder, all as amended, and
any disclosures required with respect to such Receivable were and will continue
to be made properly and in a timely manner;

 
-12-

--------------------------------------------------------------------------------

 
 
(i)    To the best knowledge of the Borrower, such Receivable and all facts,
statements or obligations contained or implicit in any application for credit or
financial statement of the Account Debtor or other obligor submitted to the
Borrower, including without limitation, the description of any Underlying
Collateral securing such Receivable and the amount owing from the Account Debtor
or other obligor, and the signatures of the parties are genuine, correct, true
and complete;
 
(j)    The Borrower has extended no credit of any kind or in any manner to the
Account Debtor or other obligors in connection with the transactions from which
such Receivable arose other than as indicated on and evidenced by the Borrower’s
files related to such Receivable;
 
(k)    To the best knowledge of the Borrower, each security agreement, UCC
filing, title retention instruments and other document and instrument, if any,
which is security for such Receivable contains a correct and sufficient
description of any Underlying Collateral covered thereby and each lien or
security interest which secures such Receivable is and will continue to be
valid;
 
(l)    Before extending credit to the Account Debtor or other obligor on such
Receivable, the Borrower has made an adequate credit investigation of the
Account Debtor or other obligor and has determined that the risk of extending
such credit is satisfactory and in accordance with the standards historically
observed by the Borrower in the conduct of its business;
 
(m)    Any and all policies of insurance related to the property securing any
obligation of the Account Debtor in connection with such Receivable and any
credit life insurance, credit disability insurance, or credit unemployment
insurance are in full force and effect in accordance with the terms of all
agreements between the Borrower and the Account Debtor; and
 
(n)    As to such Receivable, the Borrower was duly authorized to do business
and in good standing in the jurisdiction in which such Receivable was originated
and was duly licensed to originate such Receivable in such jurisdiction.
 
Section 4.2.    Receivable Schedules.  The Borrower shall provide the Collateral
Agent with such other relevant information as the Collateral Agent may request
from time to time.
 
Section 4.3.    Collection of Receivables.  (a)  Unless and until a Default or
an Event of Default shall have occurred and be continuing and the Borrower shall
have received written notice from the Collateral Agent not to collect the
Receivables, the Borrower shall make collection of all Receivables of the
Borrower and may use the same to carry on its business in accordance with sound
business practice and otherwise subject to the terms hereof.
 
(b)    At any time while a Default or an Event of Default shall have occurred
and be continuing, in the event the Collateral Agent requests the Borrower to do
so:
 
(i)    All instruments and chattel paper at any time constituting part of the
Receivables of the Borrower (including any postdated checks) shall, upon receipt
by the Borrower and to the extent permitted by law, be immediately endorsed to
and deposited with the Collateral Agent in the same form as received by the
Borrower; and/or

 
-13-

--------------------------------------------------------------------------------

 
 
(ii)    The Borrower shall, to the extent permitted by law, instruct all account
debtors to remit all payments in respect of Receivables of the Borrower to a
lockbox to be maintained at the main post office, Chicago, Illinois, or such
other single location as the Collateral Agent may reasonably designate, under
the sole custody and control of the Collateral Agent.
 
(c)    Except as otherwise directed by the Collateral Agent, the Borrower shall
place the following legend conspicuously, on the face of each document,
instrument, chattel paper and other writing evidencing the Receivables created
on or after the Closing Date (provided the legend called for by the Prior
Security Agreement appearing on the Borrower’s existing stock of unexecuted
contacts may continue to be used until reordered):  “A Security Interest in this
document has been granted to Harris N.A., as Secured Party, pursuant to a
Security Agreement, Pledge and Indenture of Trust.”  At any time while a Default
or an Event of Default shall have occurred and be continuing, the Collateral
Agent or its designee may notify the Borrower’s customers or account debtors at
any time that Receivables of the Borrower have been assigned to the Collateral
Agent or of the Collateral Agent’s security interest therein and either in its
own name, that of the Borrower or both, demand, collect (including without
limitation through a lockbox analogous to that described in §4.3(b)(ii) hereof),
receive, receipt for, sue for, compound and give acquittance for any or all
amounts due or to become due on such Receivables, and in the Collateral Agent’s
discretion file any claim or take any other action or proceeding which the
Collateral Agent may deem necessary or appropriate to protect and realize upon
the security interest of the Collateral Agent in such Receivables.
 
(d)    In the event the Collateral Agent has exercised any or all of its rights
under §§4.3(b) or (c) hereof, the Collateral Agent may, at any time while a
Default or an Event of Default shall have occurred and be continuing, cause all
instruments, chattel paper, moneys or other proceeds received by the Collateral
Agent to be deposited, handled and administered in and through a remittance
account.  If a Default or an Event of Default has occurred and is continuing to
the knowledge of the Collateral Agent, all amounts received by the Collateral
Agent pursuant to the Granting Clauses hereof and all amounts held in any
remittance account referred to above in this paragraph shall be held by the
Collateral Agent for application in the manner provided for in §7 in respect of
proceeds and avails of the Collateral.

 
-14-

--------------------------------------------------------------------------------

 
 
Section 4.4.    Power of Attorney.  Upon the occurrence and during the
continuance of a Default or an Event of Default, in addition to any other powers
of attorney granted herein, the Borrower appoints the Collateral Agent, its
nominee, or any other Person whom the Collateral Agent may designate as the
Borrower’s attorney-in-fact, with full power at any time and from time to time
to endorse the Borrower’s name on any checks, notes, acceptances, money orders,
drafts or other forms of payment or security that may come into the Collateral
Agent’s possession, upon the occurrence and during the continuance of a Default
or an Event of Default, to sign the Borrower’s name on any invoice or bill of
lading relating to any Collateral of the Borrower, on drafts against customers,
on schedules and assignments of Collateral of the Borrower, on notices of
assignment, and other public records, on verification of accounts and on notices
to customers, to notify the post office authorities to change the address for
delivery of the Borrower’s mail to an address designated by the Collateral
Agent, to receive, open and dispose of all mail addressed to the Borrower, to
send requests for verification of Receivables of the Borrower to customers or
account debtors, and to do all things necessary to carry out this
Agreement.  The Borrower ratifies and approves all acts of any such attorney and
agrees that neither the Collateral Agent nor any such attorney will be liable
for any acts or omissions nor for any error of judgment or mistake of fact or
law other than their willful misconduct or gross negligence.  The foregoing
power of attorney, being coupled with an interest, is irrevocable until the
Secured Indebtedness is fully and irrevocably paid and satisfied and all
obligations to extend credit under the Credit Agreement have expired or
otherwise terminated.  The Collateral Agent may file one or more financing
statements disclosing its security interest in any or all of the Collateral
without the Borrower’s signature appearing thereon.  The Borrower also hereby
grants the Collateral Agent a power of attorney to execute any such financing
statement, or amendments and supplements to financing statements on behalf of
the Borrower with notice thereof to the Borrower, which power of attorney is
coupled with an interest and irrevocable until the Secured Indebtedness is fully
paid and satisfied.
 
Section 5.
Special Provisions Relating to Pledged Collateral.

 
Section 5.1.    Delivery of Pledged Collateral; Transfer to Collateral
Agent.  All instruments and certificates representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of the Collateral
Agent for the ratable benefit of the Secured Lenders pursuant hereto and shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank and undated, all in form
and substance satisfactory to the Collateral Agent.  The Collateral Agent shall
have the right, subject to applicable law, at any time in its discretion after
the occurrence of an Event of Default, to transfer to or to register in the name
of the Collateral Agent or any of its nominees any or all of such Pledged
Collateral.  Promptly after any such transfer or registration, the Collateral
Agent shall give notice thereof to the Borrower, but the failure to give such
notice shall not affect any of the rights or remedies of the Collateral Agent
hereunder.  The Collateral Agent shall have the right at any time to exchange
instruments or certificates representing or evidencing such Pledged Collateral
for instruments or certificates of smaller or larger denominations, subject to
the terms thereof.
 
Section 5.2.    Voting Power; Payments.  
 
(a)    Voting Power.  So long as an Event of Default shall not have occurred and
be continuing, the Borrower shall have the right to exercise any and all voting
or other consensual rights pertaining to the Pledged Collateral or any part
thereof for all purposes not inconsistent with the terms of this Agreement and
the Credit Agreement, and the Borrower agrees that it will not exercise any such
rights in any manner which is inconsistent with the terms of this Agreement and
the Credit Agreement; provided, however, that the Borrower shall not exercise or
shall refrain from exercising any such right if such action would have a
material adverse affect on the value of the Pledged Collateral or any part
thereof; the Collateral Agent (1) shall have no right to exercise such voting
rights as are reserved in this §5.2(a) to the Borrower and (2) shall execute and
deliver to the Borrower or cause to be executed and delivered to the Borrower
all such proxies, powers of attorney, and other orders, and all such
instruments, without recourse, as the Borrower may reasonably request in writing
for the purpose of enabling the Borrower to exercise the voting rights which it
is entitled to exercise under this §5.2(a).

 
-15-

--------------------------------------------------------------------------------

 
 
(b)    Payments on Default.  So long as no Default or Event of Default shall
have occurred and be continuing, the Borrower shall have the right to receive
and retain all cash distributions and payments made in respect of the Pledged
Collateral to the extent such payments (1) may be legally declared and paid
under applicable law and (2) are not prohibited by the applicable provisions
hereof and of the Credit Agreement; provided, however, that any and all
 
(i)    dividends and distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral,
 
(ii)    dividends and other distributions paid or payable in cash in respect of
any Pledged Collateral in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and
 
(iii)    cash paid, payable or otherwise distributed in redemption of, or in
exchange for, any Pledged Collateral;
 
shall be forthwith delivered to the Collateral Agent to hold as, and such
amounts so delivered shall be, Pledged Collateral and shall, if received by the
Collateral Agent, be received in trust for the benefit of the Collateral Agent,
be segregated from the other property or funds of the Borrower and be forthwith
delivered to the Collateral Agent as Pledged Collateral in the same form as so
received (with all appropriate powers, authorizations, orders and documents).
 
(c)    Voting Rights  after an Event of Default and Receipt of Distributions
after a Default or an Event of Default.  Upon the occurrence and during the
continuance of an Event of Default, all rights of the Borrower to exercise or
refrain from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to clause (a) above and, upon the
occurrence and during the continuance of a Default or an Event of Default, all
rights of the Borrower to receive the dividends and other distributions which it
would otherwise be entitled to receive and retain pursuant to clause (b) above,
in each such case, shall cease during the period and continuance of such Default
or Event of Default, as the case may be, and all such rights shall thereupon
become vested in the Collateral Agent, which shall thereupon have the sole right
to exercise or refrain from exercising such voting and other consensual rights,
as directed in writing by the Administrative Agent pursuant to §8.1 hereof, and
to receive and hold as Pledged Collateral such distributions and dividends.

 
-16-

--------------------------------------------------------------------------------

 
 
Section 5.3.    Covenants of the Borrower.  The Borrower hereby covenants and
agrees as follows:
 
(a)    Issuance of Additional Shares of Stock.  The Borrower will not vote to
enable or otherwise cause any Restricted Subsidiary to issue any shares of stock
or other Securities in addition to, or to issue other securities of any nature
in exchange or substitution for, the Pledged Collateral (except to qualify
directors) unless such stock or other securities may be issued under the
relevant provisions hereof, are pledged to the Collateral Agent for the ratable
benefit of the Secured Creditors as part of the Pledged Collateral and the
Borrower represents to the Collateral Agent and the Secured Creditors that (i)
the Borrower has good and marketable title to such stock or other Security, free
and clear of any Lien other than the Lien hereof and Liens permitted by
clause (i) of Section 8.11 of the Credit Agreement and (ii) such stock or other
Security has been duly authorized, validly issued and is fully paid and
non-assessable.
 
(b)    Regulatory Consent.  The Borrower will use its best efforts to obtain
consent of any regulatory authority, Federal, state or local, if any, having
jurisdiction over any license, franchise or other authorization granted by any
governmental unit or authority, which consent may be required in connection with
the transfer of the Pledged Collateral, and will cooperate fully with the
Collateral Agent in effecting any such transfer, including, without limitation,
the execution and delivery of all applications, certificates and other documents
that may be required to obtain the consent and approval or authorization of or
registration or qualification with, any governmental authority, and
specifically, without limitation, any application for consent to assignment of
license or transfer of control necessary or appropriate under the rules and
regulations of any governmental authority for approval of (1) any sale or sales
of property constituting Pledged Collateral by or on behalf of the Collateral
Agent or (2) any assumption by the Collateral Agent of voting rights or
management rights in the Pledged Collateral, effected in accordance with the
terms of this Agreement.
 
(c)    Additional Pledged Collateral.  If any of the Pledged Collateral,
including, without limitation, any shares, notes, obligations, Securities,
instruments, property or (except to the extent otherwise provided in clauses (b)
and (c) in the definition of Pledged Collateral) moneys, distributions or other
payments of every kind and variety referred to in clauses (a) through (c) in the
definition of Pledged Collateral are received by the Borrower, the Borrower
agrees forthwith to transfer and deliver the same (with the certificates or
other instruments or documents evidencing or documenting any such shares, notes,
obligations, interests, instruments, or other Securities duly endorsed in blank
or accompanied by an assignment or assignments sufficient to transfer title
thereto), to the Collateral Agent to be held in pledge pursuant to the terms of
this Agreement, as part of the Pledged Collateral.
 
(d)    Schedule of Pledged Collateral.  The Borrower will furnish to the
Collateral Agent from time to time statements and schedules further identifying
and describing the Pledged Collateral and such other reports in connection with
the Pledged Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
 
Section 6.
Application of Certain Moneys.

 
Section 6.1.    Application if no Default or Event of Default Exists.  So long
as no Default or Event of Default shall have occurred and be continuing, subject
to the Borrower’s contractual obligations to other parties (including, without
limitation, the Credit Agreement), the Borrower shall be allowed to receive and
apply the Collateral and to carry on its business in accordance with sound
business practices.

 
-17-

--------------------------------------------------------------------------------

 
 
Section 6.2.    Application if a Default or an Event of Default Exists.  If a
Default or an Event of Default has occurred and is continuing, all amounts which
constitute Collateral shall be paid over to the Collateral Agent for application
in the manner provided in §7 in respect of proceeds and avails of the
Collateral.
 
Section 7.
Defaults and Remedies.

 
Section 7.1.    Events of Default.  An “Event of Default” under the Credit
Agreement shall constitute an Event of Default hereunder.
 
Section 7.2.    Collateral Agent’s Rights.  The Borrower agrees that when any
Event of Default has occurred and is continuing, the Collateral Agent may,
subject to the provisions of §8.1, without limitation of all other rights and
remedies available herein, in the Subsidiary Security Agreement, at law or in
equity in such event, exercise any one or more or all, and in any order, of the
remedies hereinafter set forth, it being expressly understood that no remedy
herein conferred is intended to be exclusive of any other remedy or remedies;
but each and every remedy shall be cumulative and shall be in addition to every
other remedy given herein or now or hereafter existing at law or in equity or by
statute:
 
(a)    The Collateral Agent personally, or by agents or attorneys, shall have
the right (subject to compliance with any applicable mandatory legal
requirements) to enter into and upon the premises of the Borrower and take
possession of all or any part of the Collateral and to exclude the Borrower
wholly therefrom, and having and holding the same may use, operate, manage and
control the Collateral and collect and receive all earnings, revenues, issues,
proceeds and income of the Collateral and every part thereof and may maintain,
repair and renew the Collateral and make replacements, alterations, additions
and improvements thereto or remove and dispose of any portion of the Collateral
and may otherwise exercise any and all of the rights and powers of the Borrower
in respect thereof.
 
(b)    The Collateral Agent may, if at the time such action may be lawful and
always subject to compliance with any mandatory legal requirements, either with
or without taking possession, and either before or after taking possession, and
without instituting any legal proceedings whatsoever, and having first given
notice of such sale by registered mail to the Borrower and each Lender once at
least ten days prior to the date of such sale, and any other notice which may be
required by law, sell and dispose of the Collateral, or any part thereof, or
interest therein, at public auction to the highest bidder, in one lot as an
entirety or in separate lots, and either for cash or on credit and on such terms
as the Collateral Agent may determine, and at any place (whether or not it be
the location of the Collateral or any part thereof) designated in the notice
above referred to.  Any such sale or sales may be adjourned from time to time by
announcement at the time and place appointed for such sale or sales, or for any
such adjourned sale or sales, without further notice, and the Collateral Agent
or the Secured Creditors, or of any interest therein, may bid and become the
purchaser at any such sale.

 
-18-

--------------------------------------------------------------------------------

 
 
(c)    The Collateral Agent may proceed to protect and enforce this Agreement
and the Secured Indebtedness or any part thereof by suit or suits or proceedings
in equity, at law or in bankruptcy, and whether for the specific performance of
any covenant or agreement herein contained or in execution or aid of any power
herein granted; or for foreclosure hereunder, or for the appointment of a
receiver or receivers for the Collateral or any part thereof, or for the
recovery of judgment for the Secured Indebtedness or for the enforcement of any
other proper, legal or equitable remedy available under applicable law.
 
Section 7.3.    Waiver by Borrower.  To the extent now or at any time hereafter
enforceable under applicable law, the Borrower covenants that it will not at any
time insist upon or plead, or in any manner whatsoever claim or take any benefit
or advantage of, any stay or extension law now or at any time hereafter in
force, nor claim, take nor insist upon any benefit or advantage of or from any
law now or hereafter in force providing for the valuation or appraisement of the
Collateral or any part thereof, prior to any sale or sales thereof to be made
pursuant to any provision herein contained, or to the decree, judgment or order
of any court of competent jurisdiction; nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and
hereby expressly waives for itself and on behalf of each and every Person,
except decree or judgment creditors of the Borrower acquiring any interest in or
title to the Collateral or any part thereof subsequent to the date of this
Agreement, all benefit and advantage of any such law or laws, and covenants that
it will not invoke or utilize any such law or laws or otherwise hinder, delay or
impede the execution of any power herein granted and delegated to the Collateral
Agent, but will suffer and permit the execution of every such power as though no
such law or laws had been made or enacted.
 
Section 7.4.    Effect of Sale.  Any sale, whether under any power of sale
hereby given or by virtue of judicial proceedings, shall operate to divest all
right, title, interest, claim and demand whatsoever, either at law or in equity,
of the Borrower in and to the property sold and shall be a perpetual bar, both
at law and in equity, against the Borrower, its successors and assigns, and
against any and all persons claiming the property sold or any part thereof
under, by or through the Borrower, its successors or assigns.
 
Section 7.5.    Application of Sale and Other Proceeds.  The Collateral Agent
shall give at least one day prior written notice to the Administrative Agent of
each date (the “Application Date”) on which the proceeds and/or avails of any
sale of the Collateral, or any part thereof, shall be applied, and on such
Application Date, or as soon thereafter as may be practical.  The proceeds and
avails of the Collateral at any time received by the Collateral Agent during the
existence of any Event of Default shall, when received by the Collateral Agent
in cash or its equivalent, be paid over to the Administrative Agent to be
applied in reduction of, or held as collateral security for, the Secured
Indebtedness in accordance with the terms of the Credit Agreement.  The Borrower
shall remain liable to the Secured Creditors for any deficiency.  Any surplus
remaining after the full payment and satisfaction of the Secured Indebtedness
shall be returned to the Borrower or to whomsoever the Collateral Agent
reasonably determines is lawfully entitled thereto

 
-19-

--------------------------------------------------------------------------------

 
 
The proceeds and/or avails of the Collateral shall be applied as set forth above
notwithstanding the time or order of advance of any funds secured by any such
Collateral or any other priority provided by law or otherwise.  By accepting the
benefits of this Agreement, each of the Secured Creditors agrees that it will
not initiate or prosecute, or encourage any other person to initiate or
prosecute, any claim, action or other proceeding challenging the enforceability
of the claims of the Secured Creditors or challenging the enforceability of any
liens or security interests in assets securing the Secured Indebtedness or any
part thereof and the other obligations and liabilities relating thereto, in each
case, created or incurred in accordance with the terms of this Agreement and the
Subsidiary Security Agreement.
 
Section 7.6.    Discontinuance of Remedies.  In case the Collateral Agent shall
have proceeded to enforce any right under this Agreement by foreclosure, sale,
entry or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely, then and in
every such case the Borrower, the Collateral Agent and the Secured Creditors
shall be restored to their former positions and rights hereunder with respect to
the property subject to the lien and security interest created under this
Agreement.
 
Section 7.7.    Cumulative Remedies.  No delay or omission of the Collateral
Agent or of any Secured Creditor to exercise any right or power arising from any
default, shall exhaust or impair any such right or power or prevent its exercise
during the continuance of such default.  No waiver by the Collateral Agent or of
any Secured Creditor of any such default, whether such waiver be full or
partial, shall extend to or be taken to affect any subsequent default, or to
impair the rights resulting therefrom except as may be otherwise provided
therein.  No remedy hereunder is intended to be exclusive of any other remedy
but each and every remedy shall be cumulative and in addition to any and every
other remedy given hereunder or otherwise existing; nor shall the giving, taking
or enforcement of any other or additional security, collateral or guaranty for
the payment of the Secured Indebtedness operate to prejudice, waive or affect
the security of this Agreement or any rights, powers or remedies hereunder, nor
shall the Collateral Agent or of any Secured Creditor be required to first look
to, enforce or exhaust such other or additional security, collateral or
guaranties.
 
Section 8.
The Collateral Agent.

 
The Collateral Agent accepts the trusts hereunder and agrees to perform the
same, but only upon the terms and conditions hereof, including the following, to
all of which the Borrower and the respective Secured Creditors at any time
outstanding by their acceptance thereof agree:
 
Section 8.1.    Duties of Collateral Agent.  (a) The Collateral Agent undertakes
(i) except while an Event of Default actually known to the Collateral Agent
shall have occurred and be continuing, to perform such duties and only such
duties as are specifically set forth in this Agreement, or in any direction
given pursuant to this Agreement, and (ii) while an Event of Default actually
known to the Collateral Agent shall have occurred and be continuing, subject to
§8.1(b), to exercise such of the rights and powers as are vested in it by this
Agreement and permitted by applicable law.

 
-20-

--------------------------------------------------------------------------------

 
 
The Collateral Agent upon receipt of instruments or notices furnished to the
Collateral Agent pursuant to the provisions of this Agreement shall furnish
copies of the same to the Administrative Agent for distribution to the Lenders.
 
(b)    In the event that the Collateral Agent shall have actual knowledge of an
Event of Default, the Collateral Agent shall give prompt written notice of such
Event of Default to the Administrative Agent.  Subject to the terms of §8.2(h),
in accordance with written instructions received from the Administrative Agent,
the Collateral Agent shall take such action or refrain from taking such action
as the Collateral Agent shall be directed in writing by the Administrative
Agent.  If the Collateral Agent shall not have received written instructions as
above provided within twenty (20) days after mailing notice of such Event of
Default to the Lenders, the Collateral Agent may, subject to instructions
received pursuant to the preceding sentence, take such action, or refrain from
taking such action, but shall be under no duty to take or refrain from taking
any action, with respect to such Event of Default, as it shall determine
advisable in the best interests of the Secured Creditors.
 
(c)    The Collateral Agent shall not have any duty or obligation to manage,
control, use, sell, dispose of or otherwise deal with the Collateral, or, to
otherwise take or refrain from taking any action under, or in connection with,
this Agreement, except as expressly provided by the terms of this Agreement or
expressly provided in written instructions received pursuant to this Agreement.
 
(d)    Except if it is herein otherwise expressly provided that no such request
is required, the Collateral Agent shall not be under any obligation to take any
action which is discretionary with the Collateral Agent or otherwise requires
judgment to be made by the Collateral Agent under the provisions hereof, except
on written request by the Administrative Agent.
 
Section 8.2.    Collateral Agent’s Liability.  No provision of this Agreement
(except to the extent provided in §8.13 hereof) shall be construed to relieve
the Collateral Agent from liability for its own gross negligence or willful
misconduct, except that:
 
(a)    unless an Event of Default actually known to the Collateral Agent shall
have occurred and be continuing, the Collateral Agent shall not be liable except
for the performance of such duties as are specifically set forth in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Collateral Agent but the duties and obligations of the
Collateral Agent shall be determined solely by the express provisions of this
Agreement; and
 
(b)    in the absence of bad faith on the part of the Collateral Agent, the
Collateral Agent may rely upon the authenticity of, and the truth of the
statements and the correctness of the opinions expressed in, and shall be
protected in acting upon, any resolution, officer’s certificate, opinion of
counsel (which counsel shall be independent of the Borrower, any Affiliate
thereof and the Secured Creditors), Note, request, notice, consent, waiver,
order, signature guaranty, notarial seal, stamp, acknowledgment, verification,
appraisal, report, stock certificate, or other paper or document believed by the
Collateral Agent to be genuine and to have been signed, affixed or presented by
the proper party or parties; and

 
-21-

--------------------------------------------------------------------------------

 
 
(c)    in the absence of bad faith on the part of the Collateral Agent, whenever
the Collateral Agent, or any of its agents, representatives, experts or counsel
(which counsel shall be independent of the Borrower, any Affiliate thereof and
the Secured Creditors), shall consider it necessary or desirable that any matter
be proved or established, such matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by an officer’s certificate; provided, however, that the Collateral
Agent, or such agent, representative, expert or counsel, may require such
further and additional evidence and make such further investigation as it or
they may consider reasonable; and
 
(d)    the Collateral Agent may consult with counsel (which counsel shall be
independent of the Borrower, any Affiliate thereof and the Secured Creditors)
and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
hereunder in good faith and in accordance with such advice or opinion of
counsel; and
 
(e)    the Collateral Agent shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with any direction or
request of the Lenders or the requisite portion thereof as expressly provided
herein; and
 
(f)    the Collateral Agent shall not be liable for any error of judgment made
in good faith by an officer of the Collateral Agent; and
 
(g)    the Collateral Agent shall not be deemed to have knowledge of any Default
or Event of Default unless and until an officer of the Corporate Trust
Department of the Collateral Agent who customarily handles corporate trusts or
such other Person employed by the Collateral Agent who has primary
responsibility for the transactions contemplated hereby shall have actual
knowledge thereof or the Collateral Agent shall have received written advice
thereof from the Administrative Agent or any Lender; and
 
(h)    whether or not an Event of Default shall have occurred, the Collateral
Agent shall not be under any obligation to take or refrain from taking any
action under this Agreement which may tend to involve it in any expense or
liability, the payment of which within a reasonable time is not, in its
reasonable opinion, assured to it by the security afforded to it by the terms of
this Agreement, unless and until it is requested in writing so to do by one or
more Secured Creditors hereunder and furnished, from time to time as it may
require, with reasonable security and indemnity.
 
Section 8.3.    No Responsibility of Collateral Agent for Recitals.  The
recitals and statements contained herein and in the Loan Documents shall be
taken as the recitals and statements of the Borrower, and the Collateral Agent
assumes no responsibility for the correctness of the same, nor shall the
Collateral Agent have any responsibility for or any liability with respect to
any disclosure, warranty, representation or concealment or failure to disclose
in connection with the offering, solicitation, sale or distribution of the
Secured Indebtedness by the Borrower or by any other Person.

 
-22-

--------------------------------------------------------------------------------

 
 
The Collateral Agent makes no representation as to the validity or sufficiency
of this Agreement, the security hereby or thereby afforded, the title of the
Borrower to or the existence of the Collateral or the descriptions thereof, or
the filing or recording or registering of this Agreement or any other document.
 
The Collateral Agent shall not be concerned with or accountable to any Person
for the use or application of any deposited moneys which shall be released or
withdrawn in accordance with the provisions of this Agreement or of any property
or Securities or the proceeds thereof which shall be released from the lien and
security interest hereof in accordance with the provisions of this Agreement.
 
Section 8.4.    Certain Limitations on Collateral Agent’s Rights to Compensation
and Indemnification.  Except to the extent otherwise expressly provided herein
and in the Credit Agreement, the Collateral Agent shall have no right against
any Secured Creditor for the payment of compensation for its services hereunder
or any expenses or disbursements incurred in connection with the exercise and
performance of its powers and duties hereunder or any indemnification against
liabilities which it may incur in the exercise and performance of such powers
and duties but on the contrary, shall look solely to the Borrower for such
payment and indemnification which the Borrower hereby agrees to make, and the
Collateral Agent shall have no lien on or security interest in the Collateral as
security for such compensation, expenses, disbursements and indemnification
except to the extent provided for in §7.5 and in the Credit Agreement.
 
Section 8.5.    Status of Moneys Received.  (a)  All moneys received by the
Collateral Agent shall, together with any interest thereon, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but (except as herein otherwise provided with respect to the
funds referred to in paragraph (b) of this Section) need not be segregated in
any manner from any other moneys, except to the extent required by law, and may
be deposited by the Collateral Agent under such general conditions as may be
prescribed by law in the Collateral Agent’s general banking department, and the
Collateral Agent shall be under no liability for interest (other than any
interest accrued pursuant to clause (b) of this §8.5) on any moneys received by
it hereunder.
 
(b)    At the Borrower’s written request, so long as no Event of Default has
occurred and is continuing, the Collateral Agent shall invest and reinvest any
funds from time to time held by the Collateral Agent in direct obligations of
the United States of America or obligations for which the full faith and credit
of the United States is pledged to provide for the payment of principal and
interest, maturing not more than 90 days from the date of such investment.
 
Section 8.6.    Resignation of Collateral Agent.  The Collateral Agent may
resign without cause and be discharged from the trusts created hereby by
delivering notice thereof, by registered or certified mail postage prepaid to
the Borrower and the Administrative Agent.  Such resignation shall take effect
immediately upon the appointment of a successor Collateral Agent as provided in
§§8.8 and 8.9.

 
-23-

--------------------------------------------------------------------------------

 
 
Section 8.7.    Removal of Collateral Agent.  The Collateral Agent may be
removed at any time, for or without cause, by an instrument or instruments in
writing executed by the Administrative Agent and delivered to the Collateral
Agent with a copy to the Borrower, specifying the removal and the date when it
shall take effect provided, however, that no such removal shall be effective
hereunder unless and until a successor Collateral Agent shall have been
appointed and shall have accepted such appointment as provided in §§8.8 and 8.9.
 
Section 8.8.    Appointment of Successor Collateral Agent.  In case at any time
the Collateral Agent shall resign or be removed or become incapable of acting, a
successor Collateral Agent may be appointed by the Administrative Agent (acting
at the request or with the consent of the Required Lenders), by an instrument or
instruments in writing executed by the Administrative Agent and filed with such
successor Collateral Agent and the Borrower.
 
Until a successor Collateral Agent shall be so appointed by the Administrative
Agent, the Borrower shall appoint a successor Collateral Agent to fill such
vacancy, by an instrument in writing executed by the Borrower and delivered to
the successor Collateral Agent.  If all or substantially all of the Collateral
shall be in the possession of one or more receivers, trustees, liquidators or
assignees for the benefit of creditors, then such receivers, trustees,
custodians, liquidators or assignees may, by an instrument in writing delivered
to the successor Collateral Agent, appoint a successor Collateral
Agent.  Promptly after any such appointment, the Borrower, or any such
receivers, trustees, custodians, liquidators or assignees, as the case may be,
shall give notice thereof by first class mail postage prepaid to the
Administrative Agent.
 
Any successor Collateral Agent so appointed by the Borrower, or such receivers,
trustees, custodians, liquidators or assignees, shall immediately and without
further act be superseded by a successor Collateral Agent appointed by the
Administrative Agent.
 
If a successor Collateral Agent shall not be appointed pursuant to this Section
within thirty days after notice of the resignation or removal of the retiring
Collateral Agent, the Administrative Agent or such retiring Collateral Agent
(unless the retiring Collateral Agent is being removed) may apply to any court
of competent jurisdiction to appoint a successor Collateral Agent, and such
court may thereupon, after such notice, if any, as it may consider proper,
appoint a successor Collateral Agent.
 
Section 8.9.    Succession of Successor Collateral Agent.  Any successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
the Borrower, the Administrative Agent, and the predecessor Collateral Agent an
instrument accepting such appointment, and thereupon such successor Collateral
Agent, without any further act, deed, conveyance or transfer, shall become
vested with the title to the Collateral, and with all the rights, powers,
trusts, duties and obligations of the predecessor Collateral Agent in the trust
hereunder, with like effect as if originally named as Collateral Agent herein.

 
-24-

--------------------------------------------------------------------------------

 
 
Upon the request of any such successor Collateral Agent, however, the Borrower
and the predecessor Collateral Agent shall execute and deliver such instruments
of conveyance and further assurance and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in such
successor Collateral Agent its interest in the Collateral and all such rights,
powers, trusts, duties and obligations of the predecessor Collateral Agent
hereunder, and the predecessor Collateral Agent shall also assign and deliver to
the successor Collateral Agent any property subject to the lien and security
interest of this Agreement which may then be in its possession.
 
Section 8.10.    Eligibility of Collateral Agent.  The Collateral Agent shall be
a state or national bank or trust company in good standing, organized under the
laws of the United States of America or of any state thereof, having a capital,
surplus and undivided profits aggregating at least $500,000,000 and whose
certificates of deposit are accorded a rating of A or better by S&P and Moody’s
or, if S&P and Moody’s are no longer rating such banks, then by any other
nationally recognized credit rating agency of similar standing or a guaranty of
its obligations hereunder from such a bank or trust company or holding company
in good standing, organized under the laws of the United States of America or of
any State thereof, having a capital, surplus and undivided profits aggregating
at least $500,000,000 and whose certificates of deposit are accorded a rating of
A or better by S&P and Moody’s or, if S&P and Moody’s are no longer rating such
banks, then by any other nationally recognized credit rating agency of similar
standing, if there be such a bank or trust company willing and able to accept
such trust upon reasonable and customary terms.
 
In case the Collateral Agent shall cease to be eligible in accordance with the
provisions of this Section, the Collateral Agent shall resign immediately in the
manner and with the effect specified in §8.6.
 
Section 8.11.    Successor Collateral Agent by Merger.  Any corporation into
which the Collateral Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, or any state or national bank or trust
company in any manner succeeding to the corporate trust business of the
Collateral Agent as a whole or substantially as a whole, if eligible as provided
in §8.10, shall be the successor of the Collateral Agent hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything to the contrary contained herein notwithstanding.
 
Section 8.12.    Co-Trustees.  At any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Collateral may at the
time be located, the Borrower and the Collateral Agent jointly shall have power
and shall execute and deliver all instruments, to appoint one or more persons
approved by the Collateral Agent, to act as co-trustee, or co-trustees, jointly
with the Collateral Agent, or separate trustee or separate trustees, of all or
any part of the Collateral, and to vest in such person or persons in such
capacity, such interest in the Collateral or any part thereof, and such rights,
powers, duties, trusts or obligations as the Borrower and the Collateral Agent
may consider necessary or desirable. If the Borrower shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in case an Event of Default shall have occurred and be continuing, the
Collateral Agent alone shall have power to make such appointment if the
Collateral Agent reasonably believes such appointment is necessary or desirable
to carry out the transactions contemplated hereby.

 
-25-

--------------------------------------------------------------------------------

 
 
Section 8.13.    Compensation and Reimbursement.  The Borrower agrees:
 
(a)    to pay to the Collateral Agent all of its out-of-pocket expenses in
connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated hereby, including but not limited to the
reasonable charges and disbursements of its special counsel;
 
(b)    to pay to the Collateral Agent from time to time reasonable compensation
for all services rendered by it hereunder;
 
(c)    except as otherwise expressly provided herein, to reimburse the
Collateral Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Collateral Agent in accordance with any
provision of this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence or
willful misconduct; and
 
(d)    to indemnify the Collateral Agent for, and to hold it harmless against,
any loss, liability or expense incurred without gross negligence or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of the Agreement, including, but not limited to, the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder, and any
loss, liability, expense or claim arising out of its possession, management,
control, use or operation of the Collateral.
 
Section 9.
Supplements; Waivers.

 
Section 9.1.    Supplemental Security Agreements Without Secured Creditor
Consent.  The Borrower and the Collateral Agent from time to time and at any
time, subject to the restrictions in this Agreement contained, may enter into an
agreement or agreements supplemental hereto, which thereafter shall form a part
hereof, for any one or more or all of the following purposes:
 
(a)    to add to the covenants and agreements to be observed by, and to
surrender any right or power reserved to or conferred upon the Borrower;
 
(b)    to subject to the lien and security interest of this Agreement additional
property hereafter acquired by the Borrower and intended to be subjected to the
lien and security interest of this Agreement and to correct and amplify the
description of any property subject to the lien and security interest of this
Agreement; and
 
(c)    to permit the qualification of this Agreement under the Trust Indenture
Act of 1939, as amended, or any similar Federal statute hereafter in effect,
except that nothing herein contained shall permit or authorize the inclusion of
the provisions referred to in Section 316(a)(2) of said Trust Indenture Act of
1939 or any corresponding provision in any similar Federal statute hereafter in
effect;

 
-26-

--------------------------------------------------------------------------------

 
 
and the Borrower covenants to perform all requirements of any such supplemental
agreement.  No restriction or obligation imposed upon the Borrower may, except
as otherwise provided in this Agreement, be waived or modified by any such
supplemental agreement.
 
Section 9.2.    Waivers and Consents by Secured Creditors; Supplemental Security
Agreements with Secured Creditors’ Consent.  Upon the waiver or consent of the
Administrative Agent (acting at the direction or with the consent of the
Required Lenders under the Credit Agreement), the Borrower and the Collateral
Agent may enter into an agreement or agreements supplemental hereto for the
purpose of waiving, adding, changing or eliminating any provisions of this
Agreement or of any agreement supplemental hereto or modifying in any manner the
rights and obligations of the Secured Creditors and the Borrower.
 
Section 9.3.    Notice of Supplements.  Promptly after the execution by the
Borrower and the Collateral Agent of any supplemental agreement pursuant to the
provisions of §9.1 or §9.2 the Borrower shall deliver a conformed copy thereof,
mailed first-class postage prepaid, to the Administrative Agent at its address
set forth in the Credit Agreement.  Any failure of the Borrower to give such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental agreement.
 
Section 9.4.    Opinion of Counsel Conclusive as to Supplements.  The Collateral
Agent is hereby authorized to join with the Borrower in the execution of any
such supplemental indenture or agreement authorized or permitted by the terms of
this Agreement and to make the further agreements and stipulations which may be
therein contained, and the Collateral Agent may receive an opinion of
independent counsel selected by the Collateral Agent as conclusive evidence that
any supplemental agreement executed pursuant to the provisions of this §9
complies with the requirements of this §9.
 
Section 10.
Miscellaneous.

 
Section 10.1.    Successors and Assigns.  Whenever any of the parties hereto is
referred to such reference shall be deemed to include the successors and assigns
of such party; and all the covenants, promises and agreements in this Agreement
contained by or on behalf of the Borrower or by or on behalf of the Collateral
Agent shall bind and inure to the benefit of the respective successors and
assigns of such parties whether so expressed or not.
 
Section 10.2.    Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 
-27-

--------------------------------------------------------------------------------

 
 
Section 10.3.    Communications.  All communications provided for herein shall
be in writing.  Communications to the Borrower or the Collateral Agent shall be
deemed to have been given (unless otherwise required by the specific provisions
hereof in respect of any matter) when addressed and delivered in person, or five
days after being deposited in the U.S. mail, postage prepaid, by registered or
certified mail, by courier, or by overnight express mail, as follows:
 
If to the Borrower:
 
World Acceptance Corporation
108 Frederick Street
Greenville, South Carolina  29607-2532
Attention:      Chief Financial Officer
 
If to the Collateral Agent:
 
Harris N.A.
111 West Monroe St.
Chicago, Illinois  60603
Attention:      Michael S. Cameli
 
or to the Borrower or the Collateral Agent at such other address as the Borrower
or the Collateral Agent may designate by notice duly given in accordance with
this Section to the other.  Communications to any Secured Creditor shall be
deemed to have been given (unless otherwise provided for by the specific
provisions hereof in respect of any matter) when delivered personally or five
days after being deposited in the U.S. mail, postage prepaid by registered or
certified mail or by courier or by overnight express mail, addressed to such
Secured Creditor at its address set forth in the Credit Agreement.
 
Section 10.4.    Release.   The Collateral Agent shall release fully or
partially, as the case may be, the Lien granted by this Agreement under and only
under the following circumstances:
 
(a)    Upon the written request of the Borrower and the presentation of
satisfactory evidence that all Secured Indebtedness has been irrevocably fully
paid or discharged and all obligations of the Secured Creditors to extend
Secured Indebtedness to the Borrower have terminated or otherwise expired, the
Collateral Agent shall release the Lien and security interest of this Agreement
by proper instrument or instruments;
 
(b)    So long as no Default or Event of Default then exists, upon the sale or
other disposition of any assets of the Borrower and its Restricted Subsidiaries
which the Chief Financial Officer of the Borrower certifies to the Collateral
Agent, the Administrative Agent, and the Lenders in writing does not constitute
a “substantial part” of the assets of the Borrower and its Restricted
Subsidiaries (as defined in Section 8.13 of the Credit Agreement), the
Collateral Agent shall, upon the written direction of the Borrower and without
the consent of the Secured Creditors (unless the Collateral Agent has been
notified in writing by the Administrative Agent or any Lender prior to such
release that the Administrative Agent or such Lender in good faith believes that
the conditions set forth above have not been satisfied, in which case no such
release shall be issued), release the Lien of this Agreement on such assets by
proper instrument or instruments.  If any such sale or other disposition of
assets constituting less than a “substantial part” of the assets of the Borrower
and its Restricted Subsidiaries pursuant to this §10.4(b) results in the sale or
other disposition of the capital stock or other equity interest in a Restricted
Subsidiary, the Subsidiary Guaranty Agreement with respect to, and only with
respect to, such Restricted Subsidiary shall automatically be released and the
Collateral Agent, the Administrative Agent, and the Lenders agree to execute and
deliver such further instruments and do such further acts as the Borrower may
deem necessary or proper to carry out more effectively the foregoing;

 
-28-

--------------------------------------------------------------------------------

 
 
(c)    Upon the sale or other disposition by the Borrower of a “substantial
part” of the assets of the Borrower and its Restricted Subsidiaries (as defined
in Section 8.13 of the Credit Agreement) after the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall, upon the written
direction of the Borrower and the written consent of the Administrative Agent,
release the Lien of this Agreement on such assets by proper instrument or
instruments, provided, that, (i) such sale or other disposition is not to an
Affiliate, (ii) the sale price for such assets is determined by the Borrower in
good faith to be reasonable, as evidenced by a resolution of the board of
directors of the Borrower, (iii) the proceeds of any such sale or other
disposition are applied to the satisfaction of Secured Indebtedness and, if such
application results in the prepayment of any obligations under the Credit
Agreement, such application permanently reduces the amount of the commitment
under the Credit Agreement (unless the Administrative Agent agree otherwise),
(iv) the Administrative Agent and the Lenders shall have received written notice
of such sale or other disposition at least ten days prior to the date of such
sale or other disposition and (v) the Collateral Agent, the Administrative
Agent, and the Lenders receive a certificate of the Chief Financial Officer of
the Borrower certifying to each of the foregoing.  If any such sale or other
disposition of assets of the Borrower and its Restricted Subsidiaries pursuant
to this §10.4(c) results in the sale or other disposition of the capital stock
or other equity interest in a Restricted Subsidiary, the Subsidiary Guaranty
Agreement with respect to, and only with respect to, such Restricted Subsidiary
shall automatically be released and the Collateral Agent, the Administrative
Agent, and the Lenders agree to execute and deliver such further instruments and
do such further acts as the Borrower may deem necessary or proper to carry out
more effectively the foregoing;
 
(d)    Upon the sale or other disposition of the Collateral or any part thereof
pursuant to and in accordance with §7.2, the Collateral Agent shall release the
Lien of this Agreement on the Collateral or such part, as the case may be, by
proper instrument or instruments; and
 
(e)    With the prior written consent of the Administrative Agent and each
Lender, the Collateral Agent shall release the Lien of this Agreement or on any
assets covered by this Agreement by proper instrument or instruments.
 
Section 10.5.    Counterparts.  This Agreement may be executed, acknowledged and
delivered in any number of counterparts, each of such counterparts constituting
an original but all together only one Agreement.

 
-29-

--------------------------------------------------------------------------------

 
 
Section 10.6.    Governing Law.  This Agreement shall be construed in accordance
with and governed by the laws of the State of South Carolina.
 
Section 10.7.    Headings.  Any headings or captions preceding the text of the
several sections hereof are intended solely for convenience of reference and
shall not constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
 
Section 10.8.    Prior Liens.  Upon the execution and delivery of this Agreement
by the Borrower and the Collateral Agent, this Agreement shall supersede all
provisions of the Original Security Agreement as of the date of such execution
and delivery.  The Borrower hereby agrees that, notwithstanding the execution
and delivery of this Agreement, the liens and security interests created and
provided for under the Original Security Agreement continue in effect under and
pursuant to the terms of this Agreement for the benefit of all of the Secured
Indebtedness.  Nothing herein shall in any manner affect or impair the priority
of the liens and security interests created and provided for by the Original
Security Agreement as to the indebtedness and obligations which would otherwise
be secured thereby prior to giving effect to this Agreement.
 
Section 10.9.    Amendment and Restatement.  Upon the execution and delivery of
this Agreement by the Borrower and the Collateral Agent, this Agreement shall
supersede all provisions of that certain Amended and Restated Security
Agreement, Pledge and Indenture of Trust dated as of June 30, 1997, as amended
(the “Prior Security Agreement”), as of such date.  The Borrower hereby agrees
that, notwithstanding the execution and delivery of this Agreement, the liens
and security interests created and provided for under the Prior Security
Agreement continue in effect under and pursuant to the terms of this Agreement
for the benefit of all of the Secured Indebtedness as defined herein.  Nothing
herein contained shall in any manner affect or impair the priority of the liens
and security interests created and provided for by the Prior Security Agreement
as to the indebtedness and obligations which would otherwise be secured thereby
prior to giving effect to this Agreement.
 
[Signature Page Follows]

 
-30-

--------------------------------------------------------------------------------

 
 
In Witness Whereof, the Borrower and the Collateral Agent have caused this
Amended and Restated Security Agreement, Pledge and Indenture of Trust to be
executed as of the day and year first above written.
 

World Acceptance Corporation
   
By
   
Name:  A. Alexander McLean III
 
Title:  Chief Executive Officer
 
Harris N.A., as Collateral Agent
   
By
   
Michael S. Cameli, Vice President

 
 
-31-

--------------------------------------------------------------------------------

 
 
Schedule I
 
Description of Pledged Shares

Subsidiary
 
Description
 
Number of
Shares
 
Stock
Certificate No.
WAC Insurance Company, Ltd.
 
Common, $1 par
 
325*
 
1
WFC of South Carolina, Inc.
 
Common, $.01 par
 
10,000
 
1
World Acceptance Corporation of Alabama
 
Common, $.01 par
 
1,000
 
1
World Acceptance Corporation of Missouri
 
Common, $.01 par
 
1,000
 
1
World Finance Corporation of Georgia
 
Common, $1 par
 
25,000
 
1
   
 
 
25,000
 
2
World Finance Corporation of Illinois
 
Common, $.01 par
 
1,000
 
1
World Finance Corporation of Louisiana
 
Common, no par
 
25
 
1
World Finance Corporation of New Mexico
 
Common, $.01 par
 
1,000
 
3
World Finance Corporation of South Carolina
 
Common, $1 par
 
3,750
 
1
World Finance Corporation of Tennessee
 
Common, $.01 par
 
1,000
 
1
World Finance Corporation of Texas
 
Class A Common, $1 par
 
125,000
 
A-1
   
Class B Common, par
 
5,802
 
B-2
WFC Services, Inc., a Tennessee corporation**
 
No par
 
1,000
 
1
World Finance Corporation of Kentucky
 
No par
 
1,000
 
1
World Finance Corporation of Colorado
 
Common, no par
 
1,000
 
1
WFC Services, Inc., a South Carolina corporation
 
No par
 
1,000
 
1
World Acceptance Corporation de México, S. de R.L. de C.V.
 
Membership interest
 
N/A***
 
uncertificated
interest
Servicios World Acceptance Corporation de México, S. de R.L. de C.V.
 
Membership interest
 
N/A***
 
uncertificated
interest
World Finance Corporation of Wisconsin
  
[_________]
  
[____]
  
[______]****

  

--------------------------------------------------------------------------------

*      Pledged shares constitute 65% of the outstanding voting stock.
 
**    WFC Services, Inc., a Tennessee corporation, is dormant and inactive.
 
***   Pledged membership interests constitute 65% of interests owned by World
Acceptance Corporation.
 
**** Stock certificate to be provided upon issuance.

 
 

--------------------------------------------------------------------------------

 
 
Schedule II
 
Partnership Interests

None.

 
 

--------------------------------------------------------------------------------

 
 
Schedule III
 
Location of Offices
 World Acceptance Corporation

See attached.

 
 

--------------------------------------------------------------------------------

 

Schedule IV

Concentration Accounts

Account Number
Depository Institution
   
71005681
Carolina First Bank

 
 
 

--------------------------------------------------------------------------------