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This instrument and the rights and obligations evidenced hereby are subordinate
in the manner and to the extent set forth in that certain Subordination and
Intercreditor Agreement (the “Intercreditor Agreement”) dated as of even date
herewith, among  Wells Fargo Preferred Capital, Inc., as agent for the
Subordinated Creditors referred to therein, Bank of Montreal, as agent for the
Senior Creditors referred to therein, and World Acceptance Corporation, to the
Senior Debt described in the Intercreditor Agreement, and each holder of this
instrument, by its acceptance hereof, shall be bound by the provisions of the
Intercreditor Agreement.
 
Subordinated Security Agreement,
Pledge and Indenture of Trust
 
Dated as of September 17, 2010
 
Between
 
World Acceptance Corporation
 
and
 
Wells Fargo Preferred Capital, Inc.,
as Collateral Agent
 

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Table of Contents
 
Section
Heading
Page
     
Section 1.
Interpretation of Agreement; Definitions.
1
     
Section 1.1
Definitions
1
     
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
8
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
     
Section 5.
Special Provisions Relating to Pledged Collateral.
15
     
Section 5.1
Delivery of Pledged Collateral; Transfer to Agent.
15
Section 5.2
Voting Power; Payments.
16
Section 5.3
Covenants of the Borrower
17

 
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Section 6.
Application of Certain Moneys.
18
     
Section 6.1
Application if no Default or Event of Default Exists
18
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
Agent’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
20
Section 7.6
Discontinuance of Remedies
20
Section 7.7
Cumulative Remedies
20
     
Section 8.
The Agent.
20
     
Section 8.1
Duties of Agent
20
Section 8.2
Agent’s Liability
21
Section 8.3
No Responsibility of Agent for Recitals
22
Section 8.4
Certain Limitations on Agent’s Rights to Compensation and Indemnification
23
Section 8.5
Status of Moneys Received
23
Section 8.6
Resignation of Agent
23
Section 8.7
Removal of Agent
24
Section 8.8
Appointment of Successor Agent
24
Section 8.9
Succession of Successor Agent
24
Section 8.10
Eligibility of Agent
25
Section 8.11
Successor Agent 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 Lender Consent
26
Section 9.2
Waivers and Consents by Lenders; Supplemental Security Agreements with Lenders’
Consent
27
Section 9.3
Notice of Supplements
27
Section 9.4
Opinion of Counsel Conclusive as to Supplements
27
     
Section 10.
Miscellaneous.
27
     
Section 10.1
Successors and Assigns
27
Section 10.2
Severability
27
Section 10.3
Communications
27
Section 10.4
Release
28
Section 10.5
Counterparts
29
Section 10.6
Governing Law
29
Section 10.7
Headings
29

 
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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 Subordinated Subsidiary Security Agreement
Exhibit B
—
Form of Subordinated Subsidiary Guaranty Agreement

 
 
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Subordinated Security Agreement,
Pledge and Indenture of Trust
 
Subordinated 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 Wells Fargo
Preferred Capital, Inc., as collateral agent (the “Collateral Agent”).  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.
 
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.
 

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“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 Subordinated 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.
 
“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.
 
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“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,
 
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.
 
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“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 Creditors” shall mean, collectively, the Collateral Agent,
Administrative Agent and the Lenders, and each individually a “Secured
Creditor”.
 
“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.
 
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“Subsidiary Guaranty Agreement” shall mean the Subordinated 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, 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 Subordinated 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.

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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 does, on and after the Grant Date,
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, automatically and without any further action, on and after
the Grant Date, 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);
 
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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.
 
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On and after the Grant Date, 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, and on and after the Grant Date,
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 Liens permitted by Section 8.11 of the Credit
Agreement, and on and after the Grant Date, the Liens of this Agreement and will
be free and clear of all Liens, except the other Liens of and, on and after the
Grant Date, the Liens of this Agreement and the character described in
Section 8.11 of the Credit Agreement and on and after the Grant Date, the Liens
of this Agreement, and the Borrower will, on and after the Grant Date, 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.
 
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.
 
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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 rights or interests of the Collateral Agent on and after the Grant Date
therein.
 
Section 3.6         Protection of Collateral.  At any time and from time to
time, on and after the Grant Date, any Lender 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 on and after the Grant Date,
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.
 
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Section 3.7         Further Assurances.  The Borrower agrees to, on and after
the Grant Date, 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 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 on and after the Grant Date 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 on and after the Grant Date any and all financing
statements covering the Collateral or any part thereof as the Collateral Agent
may require.  On and after the Grant Date, 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, on or after the Grant Date, 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 on and after the Grant
Date to preserve and protect the subordinated 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 at any time on and after
the Grant Date (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 on the Grant Date 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, on and after the Grant Date, at its expense,
take all necessary action to maintain and preserve the 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 on and after the Grant Date, 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 subordinated 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 on and after the
Grant Date, 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.
 
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(c)          The Borrower agrees at its own expense to, on and after the Grant
Date, 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, on and after the Grant Date, within 30 days
after any Person becomes a Restricted Subsidiary, it will, following payment in
full of the Revolving Obligations and subject to the terms of the Intercreditor
Agreement, (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, on and after the Grant Date, 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, following payment in full of the Revolving Obligations and subject to
the terms of the Intercreditor Agreement.
 
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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;
 
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(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 at any time on or
after the Grant Date 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, and following payment in full of the Revolving
Obligations and subject to the terms of the Intercreditor Agreement, in the
event the Collateral Agent requests the Borrower to do so at any time on and
after the Grant Date:
 
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(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
 
(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, on and after the Grant Date and following payment in full of the
Revolving Obligations and subject to the terms of the Intercreditor Agreement,
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:  “A Security Interest in this document has been
granted to Wells Fargo Preferred Capital, Inc., as Collateral Agent and Secured
Party, pursuant to a Subordinated 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, on and after the
Grant Date, 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, following payment in full of the Revolving Obligations and
subject to the terms of the Intercreditor Agreement, 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,
on and after the Grant Date, 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, on and after the Grant Date, be held by the Collateral Agent
for application in the manner provided for in §7 in respect of proceeds and
avails of the Collateral.
 
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Section 4.4          Power of Attorney.  Upon the occurrence and during the
continuance of a Default or an Event of Default, following payment in full of
the Revolving Obligations and subject to the terms of the Intercreditor
Agreement, 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, on and after the Grant Date, 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, following payment in full of the Revolving Obligations, 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, on and after the Grant Date, 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, on and after the Grant Date,
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. Following payment in full of the Revolving Obligations and subject to the
terms of the Intercreditor Agreement, all instruments and certificates
representing or evidencing the Pledged Collateral shall, on and after the Grant
Date, be delivered to and held by or on behalf of the Collateral Agent for the
ratable benefit of the Secured Creditors 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, on and after the Grant Date, subject to applicable law, at any time
in its discretion after the occurrence of an Event of Default following payment
in full of the Revolving Obligations and subject to the terms of the
Intercreditor Agreement, 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.
 
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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, on
and after the Grant Date, 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).
 
(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, on and
after the Grant Date, following payment in full of the Revolving Obligations and
subject to the terms of the Intercreditor Agreement, 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, on and after the Grant Date and following payment
in full of the Revolving Obligations and subject to the terms of the
Intercreditor Agreement, 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.
 
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Section 5.3           Covenants of the Borrower.  The Borrower hereby covenants
and agrees on and after the Grant Date 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 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, following payment in full of the Revolving Obligations and subject to
the terms of the Intercreditor Agreement, 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.
 
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(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.
 
Section 6.2           Application if a Default or an Event of Default
Exists.  Following payment in full of the Revolving Obligations and subject to
the terms of the Intercreditor Agreement, if a Default or an Event of Default
has occurred and is continuing, all amounts which constitute Collateral shall on
and after the Grant Date 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,
on and after the Grant Date and following payment in full of the Revolving
Obligations and subject to the terms of the Intercreditor Agreement, 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.
 
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(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 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.
 
(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 on or after the Grant Date 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.
 
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Section 7.5           Application of Sale and Other Proceeds.  Subject to the
terms of the Intercreditor Agreement, the proceeds and avails of the Collateral
at any time received by the Collateral Agent on and after the Grant Date 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.
 
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 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.  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.
 
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(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 Lenders), 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
 
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(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.
 
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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.
 
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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, on and
after the Grant Date, 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.
 
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.
 
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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, on and after the Grant
Date, 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.
 
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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)           on and after the Grant Date, 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;
 
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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.
 
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:
 
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If to the Borrower:
 
World Acceptance Corporation
108 Frederick Street
Greenville, South Carolina  29607-2532
Attention:    Chief Financial Officer
 
If to the Collateral Agent:
 
Wells Fargo Preferred Capital, Inc.
123 South Broad Street, 7th Floor
MAC Y 1379-075
Philadelphia, PA 19109
Attention:    William M. Laird, Senior Vice President
 
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;
 
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(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.  Execution by
facsimile or PDF shall bind the parties hereto.
 
Section 10.6        Governing Law.  This Agreement shall be construed in
accordance with and governed by the laws of the State of Iowa.
 
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.
 
[Signature Page Follows]
 
 
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In Witness Whereof, the Borrower and Collateral Agent have caused this
Subordinated Security Agreement, Pledge and Indenture of Trust to be executed,
and the Collateral Agent in evidence of its acceptance of the trusts hereby
created, has caused this Agreement to be executed as of the date and year first
above written.

World Acceptance Corporation
     
By
    
Name:
A. Alexander McLean III
 
Title:
Chief Executive Officer
     
Wells Fargo Preferred Capital, Inc., as Collateral Agent
     
By
    
Name:
    
Title:
William M. Laird, Senior Vice President

[SIGNATURE PAGE TO SUBORDINATED SECURITY AGREEMENT]
 
 
 

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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
25,000
 
1
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
 
[_________]
 
[____]
 
[______]****

 

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*
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.

 
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Schedule II

Partnership Interests
 
None.
 
 
 

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Schedule III
 
Location of Offices
 World Acceptance Corporation
 
See attached.
 
[SIGNATURE PAGE TO SUBORDINATED SECURITY AGREEMENT]
 
 
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Schedule IV
 
Concentration Accounts
 
Account Number
Depository Institution
   
71005681
Carolina First Bank

 
[SIGNATURE PAGE TO SUBORDINATED SECURITY AGREEMENT]
 
 
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