10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from                                 to                                 

Commission File Number: 0-19599

WORLD ACCEPTANCE CORPORATION

(Exact name of registrant as specified in its charter.)

South Carolina	57-0425114
(State or other jurisdiction of	(I.R.S. Employer Identification
incorporation or organization)	Number)

108 Frederick Street

Greenville, South Carolina 29607

(Address of principal executive offices)

(Zip Code)

(864) 298-9800

(registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period than the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x  Yes         ¨  No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

x  Yes         ¨  No

Indicate the number of shares outstanding of each of issuer’s classes of common stock, as of the latest practicable date, November 14, 2003.

Common Stock, no par value	18,471,711
(Class)	(Outstanding)

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION

		Page
Item 1.	Consolidated Financial Statements (unaudited):
	Consolidated Balance Sheets as of September 30, 2003 and March 31, 2003	3
	Consolidated Statements of Operations for the three month periods and six month periods ended September 30, 2003 and September 30, 2002	4
	Consolidated Statements of Shareholders’ Equity for the year ended March 31, 2003 and the six months ended September 30, 2003	5
	Consolidated Statements of Cash Flows for the three month periods and six month periods ended September 30, 2003 and September 30, 2002	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	17
Item 2.	Changes in Securities	17
Item 4.	Submission of Matters to a Vote of Security Holders	17
Item 6.	Exhibits and Reports on Form 8-K	18
Signatures		20

2

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2003			March 31, 2003
ASSETS
Cash	$	3,132,932		4,022,686
Gross loans receivable		283,485,032		266,752,662
Less:
Unearned interest and fees		(69,227,947	)	(63,578,130	)
Allowance for loan losses		(17,052,677	)	(15,097,780	)
Loans receivable, net		197,204,408		188,076,752
Property and equipment, net		8,237,816		8,297,859
Other assets, net		12,576,138		13,321,175
Intangible assets, net		14,304,138		14,598,808
Total assets	$	235,455,432		228,317,280
LIABILITIES & SHAREHOLDERS’ EQUITY
Liabilities:
Senior notes payable		93,750,000		98,050,000
Subordinated notes payable		2,000,000		4,000,000
Other notes payable		1,682,000		482,000
Accounts payable and accrued expenses		5,148,075		9,744,250
Total liabilities		102,580,075		112,276,250
Shareholders’ equity:
Common stock, no par value		—		—
Authorized 95,000,000 shares; issued and outstanding 18,230,045 and 17,663,189 shares at September 30, 2003 and March 31, 2003, respectively
Additional paid-in capital		6,170,577		1,048,721
Retained earnings		126,704,780		114,992,309
Total shareholders’ equity		132,875,357		116,041,030
	$	235,455,432		228,317,280

See accompanying notes to consolidated financial statements.

3

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended September 30,			Six months ended September 30,
	2003		2002	2003	2002
Revenues:
Interest and fee income	$	36,548,719	32,340,709	70,954,197	62,337,088
Insurance and other income		5,127,116	3,804,927	10,984,945	8,627,575
Total revenues		41,675,835	36,145,636	81,939,142	70,964,663
Expenses:
Provision for loan losses		9,328,087	7,604,577	17,257,444	13,967,881
General and administrative expenses:
Personnel		14,510,675	13,067,707	29,860,318	26,710,725
Occupancy and equipment		2,442,725	2,251,524	4,744,729	4,351,854
Data processing		445,904	438,448	922,556	868,481
Advertising		1,171,208	1,020,991	2,454,172	2,014,697
Amortization of intangible assets		566,456	536,882	1,121,798	1,086,481
Other		2,823,854	2,890,257	5,499,707	5,358,863
		21,960,822	20,205,809	44,603,280	40,391,101
Interest expense		927,946	1,168,847	1,918,947	2,200,913
Total expenses		32,216,855	28,979,233	63,779,671	56,559,895
Income before income taxes		9,458,980	7,166,403	18,159,471	14,404,768
Income taxes		3,358,000	2,543,000	6,447,000	5,113,000
Net income	$	6,100,980	4,623,403	11,712,471	9,291,768
Net income per common share:
Basic	$	.34	.26	.65	.52
Diluted	$	.32	.26	.62	.50
Weighted average common shares outstanding:
Basic		18,107,073	17,647,270	17,937,455	18,014,891
Diluted		19,163,252	18,070,289	18,961,520	18,488,968

See accompanying notes to consolidated financial statements.

4

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

	Additional Paid-in Capital			Retained Earnings		Total
Balances at March 31, 2002	$	681,354		101,752,026		102,433,380
Proceeds from exercise of stock options (416,734 shares), including tax benefit of $392,945		2,745,120		—		2,745,120
Common stock repurchases (1,623,549 shares)		(2,377,753	)	(9,623,240	)	(12,000,993	)
Net income		—		22,863,523		22,863,523
Balances at March 31, 2003	$	1,048,721		114,992,309		116,041,030
Proceeds from exercise of stock options (552,983 shares), including tax benefit of $1,352,508		5,121,856		—		5,121,856
Net income		—		11,712,471		11,712,471
Balances at September 30, 2003	$	6,170,577		126,704,780		132,875,357

See accompanying notes to consolidated financial statements.

5

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended September 30,					Six months ended September 30,
	2003			2002		2003		2002
Cash flows from operating activities:
Net income	$	6,100,980		4,623,403		11,712,471		9,291,768
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		9,328,087		7,604,577		17,257,444		13,967,881
Amortization of intangible assets		566,456		536,882		1,121,798		1,086,481
Amortization of loan costs and discounts		36,718		34,759		80,820		50,303
Depreciation		418,541		412,481		823,347		822,523
Change in accounts:
Other assets, net		154,604		(482,282	)	664,217		(958,436	)
Accounts payable and accrued expenses		(2,922,499	)	(3,986,064	)	(3,243,667	)	(4,169,582	)
Net cash provided by operating activities		13,682,887		8,743,756		28,416,430		20,090,938
Cash flows from investing activities:
Increase in loans, net		(10,448,691	)	(10,466,382	)	(23,495,259	)	(22,595,156	)
Net assets acquired from office acquisitions, primarily loans		(673,403	)	(1,879,733	)	(2,928,841	)	(9,719,256	)
Purchase of premises and equipment		(278,721	)	(535,296	)	(724,304	)	(1,394,868	)
Purchases of intangible assets		(428,522	)	(1,117,446	)	(827,128	)	(2,461,820	)
Net cash used in investing activities		(11,829,337	)	(13,998,857	)	(27,975,532	)	(36,171,100	)
Cash flows from financing activities:
Proceeds (repayment) of senior notes payable, net		(5,300,000	)	6,450,000		(4,300,000	)	28,200,000
Repayment of senior subordinated notes		—		(2,000,000	)	(2,000,000	)	(2,000,000	)
Proceeds from senior subordinated notes		—		—		1,200,000		—
Proceeds from exercise of stock options		2,216,649		236,549		3,769,348		812,606
Common stock repurchases		—		—		—		(9,999,993	)
Net cash (used in) provided by financing activities		(3,083,351	)	4,686,547		(1,330,652	)	17,012,613
Increase (decrease) in cash		(1,229,801	)	(568,554	)	(889,754	)	932,451
Cash, beginning of period		4,362,733		4,723,271		4,022,686		3,222,266
Cash, end of period	$	3,132,932		4,154,717		3,132,932		4,154,717
Supplemental disclosure of cash flow information:
Cash paid for interest expense	$	889,488		1,267,375		1,841,989		2,206,477
Cash paid for income taxes		7,183,928		6,731,426		9,459,472		9,334,556
Supplemental schedule of noncash financing activities:
Tax benefits from exercise of stock options		897,114		69,384		1,352,508		170,970

See accompanying notes to consolidated financial statements.

6

WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2003

NOTE 1—BASIS OF PRESENTATION

The consolidated financial statements of the Company at September 30, 2003, and for the three and six month periods then ended were prepared in accordance with the instructions for Form 10-Q and are unaudited; however, in the opinion of management, all adjustments (consisting only of items of a normal recurring nature) necessary for a fair presentation of the financial position at September 30, 2003, and the results of operations and cash flows for the three and six months periods then ended, have been included. The results for the period ended September 30, 2003 are not necessarily indicative of the results that may be expected for the full year or any other interim period.

Certain reclassification entries have been made for fiscal 2003 to conform with fiscal 2004 presentation. These reclassifications had no impact on shareholders’ equity or net income.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

These consolidated financial statements do not include all disclosures required by accounting principles generally accepted in the United States and should be read in conjunction with the Company’s audited financial statements and related notes for the year ended March 31, 2003, included in the Company’s 2003 Annual Report to Shareholders.

NOTE 2—COMPREHENSIVE INCOME

The Company applies the provision of Financial Accounting Standards Board’s (FASB) Statement of Financial Accounting Standards (SFAS) No. 130 “Reporting Comprehensive Income.” The Company has no items of other comprehensive income; therefore, net income equals comprehensive income.

NOTE 3—ALLOWANCE FOR LOAN LOSSES

The following is a summary of the changes in the allowance for loan losses for the periods indicated (unaudited):

	Three months ended September 30,					Six months ended September 30,
	2003			2002		2003		2002
Balance at beginning of period	$	16,247,662		14,224,955		15,097,780		12,925,644
Provision for loan losses		9,328,087		7,604,577		17,257,444		13,967,881
Loan losses		(9,252,416	)	(7,581,982	)	(16,858,374	)	(14,106,988	)
Recoveries		687,238		574,501		1,384,184		1,139,029
Allowance on acquired loans, net of specific charge-offs		42,106		(226,639	)	171,643		669,845
Balance at end of period	$	17,052,677		14,595,411		17,052,677		14,595,411

For the three months ended September 30, 2003 and 2002, the Company recorded adjustments of approximately $43,000, and $132,000, respectively, to the allowance for loan losses in connection with its acquisitions in accordance generally accepted accounting principles. These adjustments were $183,000 and $1,050,000 for the six months ended September 30, 2003 and 2002, respectively.

The Company records acquired loans at fair value based on current interest rates, less allowances for uncollectibility and collection costs. The Company normally records all acquired loans on its books; however, the acquired loan portfolios generally include some loans that the Company deems uncollectible but which do not have

7

an allowance assigned to them. An allowance for loan losses is then estimated based on a review of the loan portfolio, considering delinquency levels, charge-offs, loan mix and other current economic factors. The Company then records the acquired loans at their gross value and records the related allowance for loan losses as an adjustment to their allowance for loan losses. This is reflected as purchase accounting acquisitions. Subsequent charge-offs related to acquired loans are reflected in the purchase accounting acquisition adjustment in the year of acquisition.

NOTE 4—AVERAGE SHARE INFORMATION

The following is a summary of the basic and diluted average common shares outstanding:

	Three months ended September 30,		Six months ended September 30,
	2003	2002	2003	2002
Basic:
Average common shares outstanding (denominator)	18,107,073	17,647,270	17,937,455	18,014,891
Diluted:
Average common shares outstanding	18,107,073	17,647,270	17,937,455	18,014,891
Dilutive potential common shares	1,056,179	423,019	1,024,065	474,077
Average diluted shares outstanding (denominator)	19,163,252	18,070,289	18,961,520	18,488,968

The following options were outstanding at the period end presented but were excluded from the calculation of diluted earnings per share because of the exercise price was greater than the average market price of the common shares:

For the six months ended	Number of Shares	Range of Exercise Prices
September 30, 2003	—	—
September 30, 2002	825,115	8.63 – 13.00

NOTE 5—STOCK-BASED COMPENSATION

SFAS No. 123, “Accounting for Stock-Based Compensation,” issued in October 1995, allows a company to either adopt the fair value method of valuation or continue using the intrinsic valuation method presented under Accounting Principles Board (APB) Opinion 25 to account for stock-based compensation. The fair value method recommended in SFAS No. 123 requires a company to recognize compensation expense based on the fair value of the option on the grant date. The intrinsic value method measures compensation expense as the difference between the quoted market price of the stock and the exercise price of the option on the date of grant. The Company has elected to continue using APB Opinion 25. Accordingly, no compensation expense has been recorded. Had compensation cost been recognized for the stock option plans applying the fair-value-based method as prescribed by SFAS 123, the Company’s net income and earnings per share would have been reduced to the pro forma amounts indicated below:

	Three months ended September 30,			Six months ended September 30
(Dollars in thousands, except per share amounts)	2003		2002	2003	2002
Net income
Net income, as reported	$	6,101	4,623	11,712	9,292
Deduct:
Total stock-based employee compensation expense determined under fair value based method for all option awards, net of related income tax effect		179	201	358	402
Pro forma net income	$	5,922	4,422	11,354	8,890
Basic earnings per share
As reported	$	0.34	0.26	0.65	0.52
Pro forma	$	0.33	0.25	0.63	0.49
Diluted earnings per share
As reported	$	0.32	0.26	0.62	0.50
Pro forma	$	0.31	0.24	0.60	0.48

8

NOTE 6—ACQUISITIONS

The following table sets forth the acquisition activity of the Company for the six months ended September 30, 2003 and 2002:

	2003		2002
Number of offices purchased		13		25
Merged into existing offices		8		13
Purchase Price	$	3,755,969	$	12,181,076
Tangible assets:
Net loans		2,889,841		9,563,256
Furniture, fixtures & equipment		39,000		156,000
Total tangible assets	$	2,928,841	$	9,719,256
Customer lists		441,392		2,159,476
Non-compete agreements		42,000		120,000
Goodwill		343,736		182,344
Total intangible assets	$	827,128	$	2,461,820

The Company evaluates each acquisition to determine if the acquired enterprise meets the definition of a business. Those that meet the definition of a business are accounted for under SFAS No. 141 and those that do not meet the definition of a business combination are accounted for as asset purchases. The results of all acquisitions have been included in the Company’s consolidated financial statements since the respective acquisition dates. The pro forma impact of these purchases as though they had been acquired at the beginning of the periods presented would not have a material effect on the results of operations as reported.

9

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The following table sets forth certain information derived from the Company’s consolidated statements of operations and balance sheets, as well as operating data and ratios, for the periods indicated (unaudited):

	Three months ended September 30,					Six months ended September 30,
	2003			2002		2003		2002
	(Dollars in thousands)
Average gross loans receivable (1)	$	282,578		252,379		276,957		243,133
Average loans receivable (2)		213,684		191,036		209,822		184,340
Expenses as a % of total revenue:
Provision for loan losses		22.4	%	21.0	%	21.1	%	19.7	%
General and administrative		52.7	%	55.9	%	54.4	%	56.9	%
Total interest expense		2.2	%	3.2	%	2.3	%	3.1	%
Operating margin (3)		24.9	%	23.1	%	24.5	%	23.4	%
Return on average assets (annualized)		10.4	%	8.6	%	10.1	%	8.9	%
Offices opened or acquired, net		13		7		16		20
Total offices (at period end)		486		461		486		461

⁽¹⁾ Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period.

⁽²⁾ Average loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period.

⁽³⁾ Operating margin is computed as total revenues less provision for loan losses and general and administrative expenses, as a percentage of total revenue.

Comparison of Three Months Ended September 30, 2003, Versus

Three Months Ended September 30, 2002

Interest and fee income for the quarter ended September 30, 2003, increased by $4.2 million, or 13.0%, over the same period of the prior year. This increase resulted from a $22.6 million increase, or 11.9%, in average loans receivable over the two corresponding periods. The increase in interest and fee income was greater than the increase in average net loans receivable due to a small change in mix in the loan portfolio. During the 12 months ending on September 30, 2003, small loans (those less than $1,000 in original balance) grew by 15.0% and the larger loans grew by 1.8%. Smaller loans generally carry higher interest rates (and will have higher losses) than the larger loans.

Insurance commissions and other income increased by $1.3 million, or 34.7%, when comparing the two quarterly periods. Insurance commissions increased by $706,000, or 31.4%, due to the increased loan volume in those states where credit insurance may be sold. Additionally, the Company does not recognize insurance income on purchased loans; however insurance commissions are recognized on these loans as they are renewed. Due to the large purchases of loans in the first quarter of fiscal 2003, the insurance revenue from these loans was substantially higher during the second quarter of fiscal 2004 when compared to fiscal 2003. Other income increased by $616,000, or 39.6%. This increase over the prior period is partially due to an accrual of $305,000 in the second quarter of fiscal

10

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

Comparison of Three Months Ended September 30, 2002, Versus

Three Months Ended September 30, 2001, continued

2003 for a required payment to an outside consultants for early termination of a contract during the second quarter of fiscal 2003. This consultant provided services in our income tax preparation business, under a fee splitting basis; therefore, the accrual was reflected as a reduction in our tax preparation fees. Additionally, other sources of revenues, including returned check charges, sale of motor club memberships, and the gross profit from the sale of electronics and appliances under our World Class Buying Club were also higher during the most recent quarter due to the overall increase in the customer base.

Total revenues rose to $41.7 million during the quarter ended September 30, 2003, a 15.3% increase over the $36.1 million for the corresponding quarter of the previous year. Revenues from the 435 offices open throughout both quarters increased by approximately 11.1%, primarily due to increased balances of loans receivable in those offices. At September 30, 2003, the Company had 486 offices in operation, an increase of 16 offices from March 31, 2003.

The provisions for loan losses during the quarter ended September 30, 2003, increased by $1.7 million, or 22.7% from the same quarter last year. This increase resulted from a combination of increases in both the general allowance for loan losses due to loan growth and the amount of loans charged off. Net charge-offs for the current quarter amounted to $8.6 million, a 22.2% increase over the $7.0 million charged off during the same quarter of fiscal 2003. As a percentage of average loans receivable, net charge-offs increased to 16.0% on an annualized basis for three months ended September 30, 2003, from 14.7% annualized for the prior year quarter. The increase in the charge-off percentages is also partially due to the change in the mix of the loan portfolio as previously mentioned. Higher yielding small loans generally have higher loss ratios. Management does not currently believe that loan losses will continue to rise significantly above the most recent quarterly levels; however, the Company can give no assurance that loan losses will not continue to increase, and such further increases would negatively affect the Company’s financial performance.

General and administrative expenses for the quarter ended September 30, 2003, increased by $1.8 million, or 8.7% over the same quarter of fiscal 2003. This increase is due primarily to an increase in personnel cost over the two quarterly periods as a result of the 25 net new offices open or acquired between September 30, 2002 and September 30, 2003. Overall, general and administrative expenses as a percent of total revenues decreased from 55.9% during the quarter ended September 30, 2002 to 52.7% during the most recent quarter.

Interest expense decreased by $241,000, or 20.6%, as a result of the continued reduction in interest rates during the last year as well as due to a 7.1% decrease in average debt outstanding when comparing the two quarterly periods.

The Company’s effective income tax rate remained unchanged at 35.5% when comparing the two quarters.

Net income rose to $6.1 million during the three months ended September 30, 2003, a 32.0% increase over the $4.6 million earned during the corresponding three-month period of the previous year. Diluted earnings per share rose by only 23.1% when comparing the two quarterly periods. This lower percentage increase in diluted earnings per share is due to the increased shares outstanding resulting from the exercise of stock options as well as an increase in the dilutive effect of the remaining outstanding options based on the higher trading price of the Company’s common stock during the period.

Comparison of Six Months Ended September 30, 2003,

Versus Six Months Ended September 30, 2002

For the six-month period ended September 30, 2003, net income amounted to $11.7 million. This represents a $2.4 million, or 26.1%, increase when comparing the two six-month periods. Operating income (revenues less the provision for loan losses and general and administrative expenses) increased by $3.5 million, or 20.9%, over the two periods. This increase was in addition to a decrease in interest expense, offset by an increase in income taxes.

Total revenues amounted to $81.9 million during the current six-month period, an increase of $11.0 million, or 15.5%, over the prior-year period. This increase resulted from increases in interest and fee income of 13.8%, insurance commissions of 22.3% and other income of 34.0%. The increase in interest and fee income resulted from the increase in average loans receivable of 13.8% when comparing the two six-month periods. Revenues from the 435 offices open throughout both six-month periods increased approximately 11.1%.

11

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

The provision for loan losses increased by $3.3 million, or 23.6%, during the current six-month period when compared to the same period of fiscal 2003. This increase resulted primarily from an increase in loan losses over these two periods. Net charge-offs increased to $15.5 million during the six-months ended September 30, 2002, a $2.5 million, or 19.3%, increase over the $13.0 million charged-off during the September 30, 2002 period. As a percentage of average loans receivable, annualized net charge-offs rose to 14.7% during the current period from 14.1% during the same period of fiscal 2003.

General and administrative expenses increased by $4.2 million, or 10.4%, over the two six-month periods. This increase resulted from the 25 net new offices added during the 12 month period ending September 30, 2003. As a percent of total revenues, general and administrative expenses decreased from 56.9% during the six month of fiscal 2003 to 54.4% during the most recent period. Additionally, excluding the expenses associated with ParaData, overall general and administrative expenses, when divided by the average open offices, increased by 5.2% when comparing the two-six month periods.

Interest expense decreased by $282,000 when comparing the two six-month periods, a decrease of 12.8%. This reflects the decrease in interest rates during the past year.

The effective income tax rate remained unchanged at 35.5% during the two six-month periods.

Liquidity and Capital Resources

The Company’s primary ongoing cash requirements relate to the funding of new offices and acquisitions, the overall growth of loans outstanding, the repayment of long-term indebtedness and the repurchase of its common stock. the Company has financed these requirements through a combination of cash flow from operations and borrowings from its institutional lenders. The Company believes that cash flow from operations and borrowings under its revolving credit facility will be adequate to fund its currently expected cost of opening or acquiring new office, including funding initial operating losses of new offices and funding loans receivable originated by those offices and the Company’s other offices and the scheduled repayment of the senior subordinated notes. Management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will result in, or are reasonably likely to result in the Company’s liquidity increasing or decreasing in any material way. From time to time, the Company has needed and obtained, and expects that it will continue to need on a periodic basis, an increase in the borrowing limits under its revolving credit facility. The Company has successfully obtained such increases in the past and anticipates that it will be able to do so in the future as the need arises; however, there can be no assurance that this additional funding will be available (or available on reasonable terms) if and when needed.

As the Company’s gross loans receivable increased from $173.6 million at March 31, 2000 to $266.8 million at March 31, 2003, net cash provided by operating activities for fiscal years 2001, 2002 and 2003 was $31.9 million, $48.3 million and $55.1 million, respectively.

The Company repurchased 1,623,549 shares in fiscal 2003 for an aggregate purchase price of $12,000,000. The Company believes stick repurchases to be a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises.

The Company acquired five offices and a number of loan portfolios from competitors in four states in 13 separate transactions during the first six months of fiscal 2004. Gross loans receivable purchased in these transactions were approximately $4.0 million in the aggregate at the dates of purchase. The Company believes that attractive opportunities to acquire new offices or receivables from its competitors or to acquire offices in communities not currently served by the Company will continue to become available as conditions in local economies and the financial circumstances of owners change. The Company plans to open or acquire at least 25 new offices in each of the next two fiscal years. Expenditures by the Company to open and furnish new offices generally averaged approximately $20,000 per office during fiscal 2003. New offices have also required from $100,000 or $400,000 to fund outstanding loans receivable originated during their first 12 months of operation.

The Company has a $152.0 million base credit facility with a syndicate of banks. In addition to the base revolving credit commitment, there is a $15 million seasonal revolving credit commitment available November 15 of each year through March 31 of the immediately succeeding year to cover the increase in loan demand during this period. The credit facility will expire on September 30, 2005. Funds borrowed under the revolving credit facility bear interest, at the Company’s option, at either the agent bank’s prime rate per annum or the LIBOR rate plus 2.0% per annum. At September 30, 2003, the interest rate on borrowings under the revolving credit facility was 3.16%. The Company pays a commitment fee equal to 0.375% of the daily unused portion of the revolving credit facility. Amounts outstanding under the revolving credit facility may not exceed specified percentages of eligible loans

12

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

receivable. On September 30, 2003, $93.8 million was outstanding under this facility, and there was $58.2 million of unused borrowing availability under the borrowing base limitations.

The Company has a $1.2 million installment note payable with a bank, bearing interest at LIBOR plus 2.00%, payable monthly, due in six $200,000 annual installment beginning on May 1, 2004. Certain fixed assets are pledged as collateral on this note.

The Company has $2.0 million of senior subordinated secured notes payable to an insurance company. These notes mature on June 30, 2004, and bear interest at 10.0%, payable quarterly. The notes were issued at a discounted price equal to 99.6936% and may be prepaid subject to certain prepayment penalties. Borrowings under the revolving credit facility and the senior subordinated notes are secured by a lien on substantially all the tangible and intangible assets of the Company and its subsidiaries pursuant to various security agreements.

The Company also has a $482,000 note payable to an unaffiliated insurance company, bearing interest at 10.0%, payable annually, which matures in September 2004.

The Company’s credit agreements contain a number of financial covenants, including minimum net worth and fixed charge coverage requirements. The credit agreements also contain certain other covenants, including covenants that impose limitations on the Company with respect to (i) declaring or paying dividends or making distributions on or acquiring common or preferred stock or warrants or options; (ii) redeeming or purchasing or prepaying principal or interest on subordinated debt; (iii) incurring additional indebtedness; and (iv) entering into a merger, consolidation or sale of substantial assets or subsidiaries. The senior subordinated notes are also subject to prepayment penalties. The Company was in compliance with these agreements as of September 30, 2003 and does not believe that these agreements will materially limit its business and expansion strategy.

Inflation

The Company does not believe that inflation has a material adverse effect on its financial condition or results of operations. The primary impact of inflation on the operations of the Company is reflected in increased operating costs. While increases in operating costs would adversely affect the Company’s operations, the consumer lending laws of three of the nine states in which the Company currently operates allow indexing of maximum loan amounts to the Consumer Price Index. These provisions will allow the Company to make larger loans at existing interest rates, which could partially offset the effect of inflationary increases in operating costs.

Quarterly Information and Seasonality

The Company’s loan volume and corresponding loans receivable follow seasonal trends. The Company’s highest loan demand occurs each year from October through December, its third fiscal quarter. Loan demand is generally the lowest and loan repayment is highest from January to March, its fourth fiscal quarter. Loan volume and average balances remain relatively level during the remainder of the year. This seasonal trend causes fluctuations in the Company’s cash needs and quarterly operating performance through corresponding fluctuations in interest and fee income and insurance commissions earned, since unearned interest and insurance income are accreted to income on a collection method. Consequently, operating results for the Company’s third fiscal quarter are significantly lower than in other quarters and operating results for its fourth fiscal quarter are generally higher than in other quarters.

13

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

Recently Adopted Accounting Pronouncements

Accounting for Exit or Disposal Activities

In June 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS 146”), which addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 applies to costs associated with an exit activity that do not involve an entity newly acquired in a business combination or with a disposal activity covered by SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Those costs include, but are not limited to, the following: a) termination benefits provided to current employees that are involuntarily terminated under the terms of a benefit arrangement that, in substance, is not an ongoing benefit arrangement or an individual deferred compensation contract (hereinafter referred to as one-time termination benefits); b) costs to terminate a contract that is not a capital lease; and c) costs to consolidate facilities or relocate employees. This Statement does not apply to costs associated with the retirement of a long-lived asset covered by SFAS No. 143, “Accounting for Asset Retirement Obligations.” A liability for a cost associated with an exit or disposal activity shall be recognized and measured initially at its fair value in the period in which the liability is incurred. A liability for a cost associated with an exit or disposal activity is incurred when the definition of a liability is met in accordance with FASB Concepts Statements No. 6, “Elements of Financial Statements.” The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002. The initial adoption of this standard did not have an impact on the financial condition or results of operations of the Company.

Accounting for Guarantees

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 elaborates on the disclosure to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN 45 clarifies that a guarantor is required to disclose (a) the nature of the guarantee; (b) the maximum potential amount of future payments under the guarantee; (c) the carrying amount of the liability; and (d) the nature and extent of any recourse provisions or available collateral that would enable the guarantor to recover the amounts paid under the guarantee. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the obligation it has undertaken in issuing the guarantee at its inception.

The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements in FIN 45 are effective for financial statements ending after December 15, 2002. The initial adoption of this standard did not have an impact on the financial condition or results of operations of the Company.

Accounting for Variable Interest Entities

In January 2003, the FASB issued FASB Interpretation No. 46, (“FIN 46”), “Consolidation of Variable Interest Entities,” which addresses consolidation by business enterprises of variable interest entities. Under FIN 46, an enterprise that holds significant variable interest in a variable interest entity but is not the primary beneficiary is required to disclose the nature, purpose, size, and activities of the variable interest entity, its exposure to loss as a result of the variable interest holder’s involvement with the entity, and the nature of its involvement with the entity and date when the involvement began. The primary beneficiary of a variable interest entity is required to disclose the nature, purpose, size, and activities of the variable interest entity, the carrying amount and classification of consolidated assets that are collateral for the variable interest entity’s obligations, and any lack of recourse by creditors (or beneficial interest holders) of a consolidated variable interest entity to the general creditors (or beneficial interest holders) of a consolidated variable entity to the general creditor of the primary beneficiary. The Company had no impact upon adoption since it had no interests in entities, which it considers to be included within the scope of FIN 46.

14

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

Recently Issued Accounting Pronouncements

Accounting for Loans or Certain Debt Securities Acquired in a Transfer

The AcSEC expects to issue, Statement of Position (“the SOP”) “Accounting for Loans or Certain Debt Securities Acquired in a Transfer”, which addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor’s initial investment in loans or debt securities (“loans”) acquired in purchase business combinations and applies to all nongovernmental entities. The SOP limits the yield that may be accreted to the excess of the investor’s estimate of undiscounted expected principal, interest, and other cash flows over the investor’s initial investment in the loan. The SOP will require that the excess of contractual cash flows over cash flows expected to be collected not be recognized as an adjustment of yield, loss accrual, or valuation allowance. The SOP will prohibit investors from displaying the accretable yield and non-accretable difference in the balance sheet. Subsequent increases in cash flows expected to be collected generally would be recognized prospectively through adjustment of the loan’s yield over its remaining life. Deceases in cash flows expected to be collected would be recognized as an impairment.

For loans acquired in a transfer, which have evidence of deterioration of credit quality since origination, the SOP prohibits “carry over” or creation of a valuation allowances in the initial accounting. The SOP does not prohibit recognition of an allowance for loan loss at acquisition for loans acquired in business combinations that do not have evidence of deterioration of credit quality since origination.

The prohibition of the valuation allowance carryover applies to the purchase of an individual loan, a pool of loans, a group of loans, and loans acquired in a purchase business combination. The SOP will be effective for transfers of loans acquired in fiscal years beginning after December 15, 2004.

Accounting for Derivative Instruments and Hedging Activities

Effective July 1, 2003, the Company adopted SFAS No. 149, (“SFAS 149”), “Amendment of Statement 133 on Derivative Instruments and Hedging Activities,” which amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative, clarifies when a derivative contains a financing component, amends the definition of an underlying to conform it to language used in FIN 45, and amends certain other existing pronouncements. Those changes will result in more consistent reporting of contracts as either derivatives or hybrid instruments. Management does not believe the provisions of this standard will have a material impact on results of future operations.

Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity

Effective July 1, 2003, the Company adopted SFAS No. 150, (“SFAS 150”), “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 requires an issuer to classify certain financial instruments that include certain obligations, such as mandatory redemption, repurchase of the issuer’s equity, or settlement by issuing equity, as liabilities or assets in some circumstances. Forward contracts to repurchase an issuer’s equity shares that require physical settlement in exchange for cash are initially measured at the fair value of the shares at inception, adjusted for any consideration or unstated rights or privileges, which is the same as the amount that would be paid under the conditions specified in the contract if settlement occurred immediately. Those contracts and mandatorily redeemable financial instruments are subsequently measured at the present value of the amount to be paid at settlement, if both the amount of cash and the settlement date are fixed, or, otherwise, at the amount that would be paid under the conditions specified in the contract if settlement occurred at the reporting date. Other financial instruments are initially and subsequently measured at fair value, unless required by SFAS 150 or other generally accepted accounting principles to be measured differently. The Company had no impact upon adoption since it had no financial instruments, which it considers to be included within the scope of SFAS 150.

15

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

Forward-Looking Information

This report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may contain various “forward-looking statements,” within the meaning of Section 21E of the Securities Exchange Act of 1934, that are based on management’s belief and assumptions, as well as information currently available to management. When used in this document, the words “anticipate,” “estimate,” “expect,” “believe,” “plan,” “may,” “will,” “should” and similar expressions may identify forward-looking statements. Although the Company believes that the expectations reflected in any such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Any such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual financial results, performance or financial condition may vary materially from those anticipated, estimated or expected. Among the key factors that could cause the Company’s actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements are the following: changes in interest rates, risks inherent in making loans, including repayment risks and value of collateral; recently-enacted or proposed legislation; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting charge-offs); changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company); and other matters discussed in this Report and the Company’s other filings with the Securities and Exchange Commission.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s financial instruments consist of the following: cash, loans receivable, senior notes payable and subordinated notes payable. Fair market approximates carrying value for all of these instruments. Loans receivable are originated at prevailing market rates and have an average life of approximately four months. Given the short-term nature of these loans, they are continually repriced at current market rates. The revolving credit facility and the other $1.2 million note payable have variable rates based on a margin over LIBOR and reprice with any changes in LIBOR. The interest rate of the subordinated notes is 10%, which is considered to be a market rate for this type of instrument. The Company’s outstanding debt under its floating rate notes was $95.0 million at September 30, 2003. Interest on borrowings under the revolving credit facility is based at the Company’s option, on the prime rate or LIBOR plus 2.00% and on the other note payable, LIBOR plus 2.00%. Based on the outstanding balance at September 30, 2003, a change of 1% in the interest rate would cause a change in interest expense of approximately $950,000 on an annual basis.

Item 4. Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company’s management, including the its chief executive officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2003. Based on that evaluation, the Company’s management, including the CEO and CFO, has concluded that the Company’s disclosure controls and procedures are effective. During the second quarter of fiscal 2004, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

16

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time the Company is involved in routine litigation relating to claims arising out of its operations in the normal course of business. The Company believes that it is not currently a party to any such pending legal proceedings that would have a material adverse effect on its financial condition.

Item 2. Changes in Securities

The Company’s credit agreements contain certain restrictions on the payment of cash dividends on its capital stock. See Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources,” the contents of which are incorporated by reference in repose to this item.

Item 4. Submission of Matters to a Vote of Security Holders

(a) The 2003 Annual Meeting of Shareholders was held on August 6, 2003.

(b) Pursuant to Instruction 3 to Item 4, this paragraph need not be answered.

(c) At the 2003 Annual Meeting of Shareholders, the following two matters were voted upon and passed. The tabulation of votes was:

(1) The election of seven Directors to serve until the 2003 Annual Meeting of Shareholders:

	VOTES IN FAVOR	VOTES WITHHELD*
Ken R. Bramlett, Jr.	15,576,472	138,919
James R. Gilreath	15,577,348	138,043
William S. Hummers III	15,576,348	139,043
Douglas R. Jones	15,577,472	137,919
A. Alexander McLean III	15,576,144	139,247
Charles D. Walters	15,563,642	151,749
Charles D. Way	15,575,144	140,247

(2) The ratification of the selection of KPMG LLP as Independent Auditors:

VOTES IN FAVOR	VOTES AGAINST	ABSTENTIONS*
15,671,005	40,808	3,578

*There were no broker non-votes on these routine items.

17

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

PART II. OTHER INFORMATION, CONTINUED

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit Number	Description	Previous Exhibit Number	Company Registration No. or Report
3.1	Second Amended and Restated Articles of Incorporation of the Company, as amended	3.1	333-107426
3.2	Amended Bylaws of the Company	3.4	33-42879
4.1	Specimen Share Certificate	4.1	33-42879
4.2	Articles 3, 4 and 5 of the Form of Company’s Second Amended and Restated Articles of Incorporation (as amended)	3.1	333-107426
4.3	Article II, Section 9 of the Company’s Second Amended and Restated Bylaws	3.2	33-42879
4.4	Amended and restated Revolving Credit Agreements, dated as of June 30, 1997, as amended between Harris Trust and Savings Bank, the Banks signatory thereto from time to time and the Company		*
4.5	Tenth Amendment to Amended and restated Revolving Credit Agreements, dated as of August 21, 2003	*
4.6	Note Agreement, dated as of June 30, 1997, between Principal Mutual Life Insurance Company and the Company re: 10% Senior Subordinated Secured Notes	4.7	9-30-97 10-Q
4.7	First Amendment to Note Agreement, dated as of August 21, 2003, between Principal Life Insurance Company (f/k/a Principal Mutual Life Insurance Company) and the Company	*
4.8	Amended and Restated Security Agreement, Pledge and Indenture of Trust, dated as of June 30, 1997, between the Company and Harris Trust and Savings Bank, as Security Trustee	4.8	9-30-97 10-Q
4.9	Second Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust	*
4.10	Third Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust, dated as of August 21, 2003	*
10.1+	Amended and Restated Employment Agreement of Charles D. Walters, effective as of June 1, 2003	10.1	6-30-03 10-Q
10.2+	Employment Agreement of A. Alexander McLean, III, effective April 1, 1994	10.2	1994 10-K

18

10.3+	First Amendment to Employment Agreement of A. Alexander McLean, III, effective as of June 1, 2003	10.3	6-30-03 10-Q
10.4+	Amended and Restated Employment Agreement of Douglas R. Jones, effective as of June 1, 2003	10.4	6-30-03 10-Q
10.5+	Securityholders’ Agreement, dated as of September 19, 1991, between the Company and certain of its securityholders	10.5	33-42879
10.6+	World Acceptance Corporation Supplemental Income Plan	10.7	2000 10-K
10.7+	Board of Directors Deferred Compensation Plan	10.6	2000 10-K
10.8+	1992 Stock Option Plan of the Company	4	33-52166
10.9+	1994 Stock Option Plan of the Company, as amended	10.6	1995 10-K
10.10+	2002 Stock Option Plan of the Company	Appendix A	Definitive Proxy Statement on Schedule 14A for the 2002 Annual Meeting
10.11+	The Company’s Executive Incentive Plan	10.6	1994 10-K
10.12+	World Acceptance Corporation Retirement Savings Plan	4.1	333-14399
10.13+	Executive Deferral Plan	10.12	2001 10-K
31.1	Section 302 Certification of Chief Executive Officer	*
31.2	Section 302 Certification of Chief Financial Officer	*
32.1	Section 906 Certification of Chief Executive Officer	*
32.2	Section 906 Certification of Chief Financial Officer	*

+ Management Contract or other compensatory plan required to be filed under Item 14(c) of this report and Item 601 of Regulation 5-K of the Securities and Exchange Commission.

* Filed or furnished herewith.

(b) Reports on Form 8-K.

The Company furnished one report on Form 8-K during the quarter ended September 30, 2003. The report, furnished August 14, 2003, attached the terms of the Company’s earnings press release the quarter ended June 30, 2003.

19

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		WORLD ACCEPTANCE CORPORATION
Dated:	November 14, 2003	/s/  D. R. Jones
		D. R. Jones, President and Chief Executive Officer
Dated:	November 14, 2003	/s/  A. A. McLean III
		A. A. McLean III, Executive Vice President and Chief Financial Officer

20

EX-4.4

Exhibit 4.4

COMPILED COPY

Amended and Restated Revolving Credit Agreement compiled to reflect the following Amendments:

First Amendment to Amended and Restated Credit Agreement dated December 15, 1997

Second Amendment to Amended and Restated Credit Agreement dated December 1, 1998

Third Amendment to Amended and Restated Credit Agreement dated July 30, 1999

Fourth Amendment to Amended and Restated Credit Agreement dated September 30, 1999

Fifth Amendment to Amended and Restated Credit Agreement dated June 28, 2000

Sixth Amendment to Amended and Restated Credit Agreement dated September 25, 2000

Seventh Amendment to Amended and Restated Credit Agreement dated August 13, 2001

Eighth Amendment to Amended and Restated Credit Agreement dated May 8, 2002

Ninth Amendment to Amended and Restated Credit Agreement dated July 10, 2002

Tenth Amendment to Amended and Restated Credit Agreement dated August 21, 2003

AMENDED AND RESTATED

REVOLVING CREDIT AGREEMENT

BY AND AMONG

WORLD ACCEPTANCE CORPORATION,

HARRIS TRUST AND SAVINGS BANK,

INDIVIDUALLY AND AS AGENT

AND

THE BANKS

WHICH ARE PARTIES HERETO

DATED AS OF JUNE 30, 1997

1

TABLE OF CONTENTS

		PAGE
SECTION 1.    THE CREDIT.		1
Section 1.1	The Revolving Credit	1
Section 1.2	[Intentionally Omitted]	2
SECTION 2.    GENERAL PROVISIONS APPLICABLE TO ALL LOANS.		2
Section 2.1	Applicable Interest Rates	2
Section 2.2	Minimum Borrowing Amounts	3
Section 2.3	Borrowing Procedures	3
Section 2.4	Interest Periods	4
Section 2.5	Maturity of Loans	5
Section 2.6	Prepayments	5
Section 2.7	Default Rate	5
Section 2.8	The Notes	6
Section 2.9	Commitment Terminations	6
Section 2.10	Funding Indemnity	7
SECTION 3.    FEES, EXTENSIONS AND APPLICATIONS.		7
Section 3.1	Commitment Fee	7
Section 3.2	Closing Fee	7
Section 3.3	Agent’s Fees	7
Section 3.4	Extension of the Commitments	8
Section 3.5	Place and Application of Payments	8
SECTION 4.    THE COLLATERAL AND GUARANTIES.		9
Section 4.1	The Collateral	9
Section 4.2	Subsidiary Guaranties	10
SECTION 5.    DEFINITIONS; INTERPRETATION.		10
Section 5.1	Definitions	10
Section 5.2	Interpretation	23
SECTION 6.    REPRESENTATIONS AND WARRANTIES.		23
Section 6.1	Organization and Qualification	23
Section 6.2	Subsidiaries	24
Section 6.3	Corporate Authority and Validity of Obligations	24
Section 6.4	Not an Investment Company	25
Section 6.5	Use of Proceeds; Margin Stock	25
Section 6.6	Financial Reports	25

2

Section 6.7	No Material Adverse Change	25
Section 6.8	Litigation	25
Section 6.9	Taxes	25
Section 6.10	Approvals	26
Section 6.11	Indebtedness and Liens	26
Section 6.12	ERISA	26
Section 6.13	Material Agreements	26
Section 6.14	Compliance with Laws	26
Section 6.15	Full Disclosure	27
Section 6.16	No Defaults	27
Section 6.17	Note Purchase Agreements	27
SECTION 7.    CONDITIONS PRECEDENT.		27
Section 7.1	Initial Borrowing	27
Section 7.2	All Loans	28
SECTION 8.     COVENANTS.		29
Section 8.1	Existence, Etc	29
Section 8.2	Insurance	29
Section 8.3	Taxes, Claims for Labor and Materials	29
Section 8.4	Compliance with Laws	30
Section 8.5	Maintenance, Etc	30
Section 8.6	Nature of Business	30
Section 8.7	Consolidated Net Worth	30
Section 8.8	Fixed Charge Coverage Ratio; Loan Loss Reserves	30
Section 8.9	Permitted Indebtedness	30
Section 8.10	Limitations on Indebtedness	31
Section 8.11	Limitation on Liens	32
Section 8.12	Dividends, Stock Purchases	33
Section 8.13	Mergers, Consolidations and Sales or Transfers of Assets	34
Section 8.14	Lease-Backs	36
Section 8.15	Guaranties	36
Section 8.16	Limitation on Restrictions	36
Section 8.17	Transactions with Affiliates	37
Section 8.18	Investments	37
Section 8.19	Termination of Pension Plans	38
Section 8.20	Reports and Rights of Inspection	38
SECTION 9.    EVENTS OF DEFAULT AND REMEDIES.		41
Section 9.1	Events of Default	41
Section 9.2	Notice to Banks	43
Section 9.3	Non-Bankruptcy Defaults	44
Section 9.4	Bankruptcy Defaults	44
Section 9.5	Expenses	44

3

SECTION 10.    CHANGE IN CIRCUMSTANCES.		44
Section 10.1	Change of Law	44
Section 10.2	Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR	45
Section 10.3	Increased Cost and Reduced Return	45
Section 10.4	Lending Offices	46
Section 10.5	Discretion of Bank as to Manner of Funding	46
SECTION 11.    THE AGENT.		46
Section 11.1	Appointment and Authorization	46
Section 11.2	Agent and Affiliates	46
Section 11.3	Action by Agen	47
Section 11.4	Consultation with Experts	47
Section 11.5	Liability of Agent	47
Section 11.6	Indemnification	47
Section 11.7	Credit Decision	48
Section 11.8	Resignation of the Agent	48
Section 11.9	Payments	48
Section 11.10	Co-Agent	49
SECTION 12.    MISCELLANEOUS.		49
Section 12.1	No Waiver of Rights	49
Section 12.2	Non-Business Day	49
Section 12.3	Documentary Taxes	49
Section 12.4	Survival of Representations	49
Section 12.5	Survival of Indemnities	49
Section 12.6	Sharing of Set-Off	49
Section 12.7	Notices	50
Section 12.8	Counterparts	50
Section 12.9	Successors and Assigns	50
Section 12.10	Amendments	51
Section 12.11	Non-Reliance on Margin Stock	52
Section 12.12	Fees and Indemnification	52
Section 12.13	Governing Law	52
Section 12.14	Headings	52
Section 12.15	Entire Agreement	52
Section 12.16	Terms of Collateral Documents not Superseded	52
Section 12.17	Submission to Jurisdiction; Waiver of Jury Trial	52

4

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

To each of the Banks which are or become

parties hereto:

Ladies and Gentlemen:

The undersigned, World Acceptance Corporation, a South Carolina corporation (the “Borrower”), refers to that certain Revolving Credit Agreement dated as December 1, 1992, as amended, currently in effect among the Borrower, Harris Trust and Savings Bank, as agent, and the banks party thereto (the “Original Credit Agreement”). The Borrower hereby requests that the aggregate commitments available under the Original Credit Agreement be increased, that certain additional amendments be made to the Original Credit Agreement and, for the sake of clarity and convenience, that the Original Credit Agreement be restated in its entirety as so amended. This Amended and Restated Credit Agreement amends and replaces in its entirety the Original Credit Agreement, and from the Effective Date all references made to the Original Credit Agreement in any Loan Document or in any other instrument or document shall, without more, be deemed to refer to this Amended and Restated Credit Agreement. This Amended and Restated Credit Agreement shall become effective as of July 3, 1997 (the “Effective Date”), and supersedes all provisions of the Original Credit Agreement as of such date, upon the execution of this Amended and Restated Credit Agreement by each of the parties hereto and the fulfillment of the conditions precedent contained in Section 7.1 hereof.

Section 1. THE CREDIT.

Section 1.1 The Revolving Credit. Subject to the terms and conditions hereof, the Banks agree to extend a revolving credit (the “Revolving Credit”) to the Borrower in an aggregate principal amount at any one time outstanding not to exceed the lesser of (A) the Base Revolving Credit Commitments or, during the Availability Period, the sum of the Base Revolving Credit Commitments plus the Seasonal Revolving Credit Commitments and (B) the Available Borrowing Base as then determined and computed, which may be availed of by the Borrower in its discretion from time to time, be repaid and used again, to but not including the Termination Date. The Revolving Credit, subject to all of the terms and conditions hereof, may be utilized by the Borrower in the form of Domestic Rate Loans or Eurodollar Loans, all as more fully hereinafter set forth. The maximum amount of the Revolving Credit which each Bank agrees to extend to the Borrower shall be such Bank’s Base Revolving Credit Commitment plus, during the Availability Period, such Bank’s Seasonal Revolving Credit Commitments (subject to any reductions thereof pursuant to the terms hereof). The maximum amount of the Revolving Credit which each Bank agrees to extend to the Borrower shall be as set forth opposite its name on the applicable signature page hereof or as otherwise set forth in the relevant Assignment Agreement delivered pursuant to Section 12.9 hereof (its “Commitment” and cumulatively for all the Banks the “Commitments”) (subject to any reductions thereof pursuant to the terms hereof). The obligations of the Banks hereunder are several and not joint, and no Bank shall under any circumstances be obligated to extend credit hereunder in excess of its Commitment. Each Borrowing of Loans shall be made ratably from the Banks in proportion to their respective Commitments. On the Effective Date, the Borrower hereby promises to prepay all Eurodollar

Loans outstanding under the Original Credit Agreement (and each Bank currently a party to the Original Credit Agreement agrees to waive any compensation otherwise required by Section 2.10 of the Original Credit Agreement with respect to, and only with respect to, the prepayment of such Eurodollar Loans currently outstanding under the Original Credit Agreement) and thereafter, subject to the terms and conditions hereof, there shall be such nonratable Borrowings of Loans and repayments thereof as shall be necessary so that after giving effect thereto the Banks each hold their ratable share of all Loans then outstanding in proportion to their respective Commitments (which Loans shall initially constitute Domestic Rate Loans).

Section 1.2 [Intentionally Omitted].

Section 2. GENERAL PROVISIONS APPLICABLE TO ALL LOANS.

Section 2.1 Applicable Interest Rates. (a) Domestic Rate Loans. Each Domestic Rate Loan made by a Bank shall bear interest (computed on the basis of a year of 360 days and actual days elapsed) on the unpaid principal amount thereof from the date such Loan is made until maturity (whether by acceleration or otherwise) at a rate per annum equal to the Domestic Rate from time to time in effect, payable quarterly in arrears on the last day of each March, June, September and December in each year (commencing September 30, 1997) and at maturity (whether by acceleration or otherwise).

“Domestic Rate” means for any day the greater of: (i) the rate of interest announced by the Agent from time to time as its prime commercial rate, or equivalent, as in effect on such day (it being understood and agreed that such rate may not be the Agent’s best or lowest rate); (ii) the average (rounded upwards, if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or more Federal funds brokers selected by the Agent for the sale to the Agent at face value of Federal funds in an amount equal or comparable to the principal amount owed to the Agent for which such rate is being determined, plus 1/2 of 1%. Any change in the interest rate on any Domestic Rate Loan resulting from a change in said Domestic Rate shall be effective on the date of the relevant change in said Domestic Rate.

(b) Eurodollar Loans. Each Eurodollar Loan made by a Bank shall bear interest (computed on the basis of a year of 360 days and actual days elapsed) on the unpaid principal amount thereof from the date such Loan is made until maturity (whether by acceleration or otherwise) at a rate per annum equal to the sum of the applicable Eurodollar Margin plus the Adjusted LIBOR payable on the last day of the applicable Interest Period and at maturity (whether by acceleration or otherwise), and, if the applicable Interest Period is longer than three months, on each day occurring every three months after the date such Loan is made.

“Adjusted LIBOR” means, for any Borrowing of Eurodollar Loans, a rate per annum determined in accordance with the following formula:

	LIBOR
Adjusted LIBOR =	100%—Eurodollar Reserve Percentage

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“LIBOR” means, for each Interest Period, (a) the LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of the rates of interest per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which deposits in U.S. Dollars in immediately available funds are offered to the Agent at 11:00 a.m. (London, England time) 2 Business Days before the beginning of such Interest Period by 3 or more major banks in the interbank eurodollar market selected by the Agent for a period equal to such Interest Period and in an amount equal or comparable to the applicable LIBOR Portion scheduled to be outstanding from the Agent during such Interest Period. “LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a period equal to such Interest Period which appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time) on the date 2 Business Days before the commencement of such Interest Period. “Telerate Page 3750” means the display designated as “Page 3750” on the Telerate Service (or such other page as may replace Page 3750 on that service or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Banker’s Association Interest Settlement Rates for U.S. Dollar deposits).

“Eurodollar Reserve Percentage” means, for any Borrowing of Eurodollar Loans, the daily average for the applicable Interest Period of the maximum rate at which reserves (including, without limitation, any supplemental, marginal and emergency reserves) are imposed during such Interest Period by the Board of Governors of the Federal Reserve System (or any successor) under Regulation D on “eurocurrency liabilities”, as defined in such Board’s Regulation D (or in respect of any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Loans is determined or any category of extension of credit or other assets that include loans by non-United States offices of any Bank to United States residents) subject to any amendments of such reserve requirement by such Board or its successor, taking into account any transitional adjustments thereto. For purposes of this definition, the Eurodollar Loans shall be deemed to be “eurocurrency liabilities” as defined in Regulation D without benefit of or credit for any prorations, exemptions or offsets under Regulation D.

“Eurodollar Margin” means 2.00% per annum.

(c) Rate Determinations. The Agent shall determine each interest rate applicable to the Loans hereunder, and its determination thereof shall be conclusive and binding except in the case of manifest error.

Section 2.2 Minimum Borrowing Amounts. Each Borrowing of Domestic Rate Loans shall be in an amount not less than $300,000, or any larger amount which is an integral multiple of $50,000. Each Borrowing of Eurodollar Loans shall be in an amount not less than $2,000,000, or any larger amount that is an integral multiple of $250,000.

Section 2.3 Borrowing Procedures. (a) Notice to the Agent. The Borrower shall give telephonic or telecopy notice to the Agent (which notice shall be irrevocable once given and, if by telephone, shall be promptly confirmed in writing) by no later than 11:00 A.M. (Chicago time) (i) on the date at least three (3) Business Days prior to the date of each requested

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Borrowing of Eurodollar Loans and (ii) on the date of any requested Borrowing of Domestic Rate Loans. Each such notice shall specify the date of the requested Borrowing (which shall be a Business Day), the amount of the requested Borrowing, the type of Loans to comprise such Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the Interest Period applicable thereto. The Borrower agrees that the Agent may rely on any such telephonic or telecopy notice given by any person it in good faith believes is authorized to request loans on behalf of the Borrower without the necessity of independent investigation, and, in the event any notice by such means conflicts with the written confirmation, such notice shall govern if the Agent has acted in reliance thereon.

(b) Notice to the Banks. The Agent shall give prompt (but in any event by 12:00 Noon (Chicago time)) telephonic or telecopy notice to each of the Banks of any borrowing request received pursuant to Section 2.3(a) above and, if such notice requests the Banks to make Eurodollar Loans, the Agent shall give notice to the Borrower and each of the Banks by like means of the interest rate applicable thereto (but, if such notice is given by telephone, the Agent shall confirm such rate in writing) promptly after the Agent has made such determination.

(c) Borrower’s Failure to Notify. If the Borrower fails to give notice pursuant to Section 2.3(a) above of the continuation or conversion of any outstanding principal amount of a Borrowing of Eurodollar Loans before the last day of its then current Interest Period within the period required by Section 2.3(a) for a Borrowing of Eurodollar Loans or, whether or not such notice has been given, a Default or Event of Default then exists and such Borrowing is not prepaid, such Borrowing shall automatically be converted into a Borrowing of Domestic Rate Loans.

(d) Disbursement of Loans. Not later than 1:00 p.m. (Chicago time) on the date of any Borrowing of Loans, each Bank shall make available its Loan in funds immediately available in Chicago, Illinois at the principal office of the Agent, except to the extent such Borrowing is a continuation or conversion of any outstanding principal amount of a Borrowing, in whole or in part, in which case each Bank shall record on its books or records or on a schedule to the appropriate Note such continuation or conversion. Subject to Section 7 hereof, the Agent shall make the proceeds of each advance of a new Borrowing available to the Borrower at the Agent’s principal office in Chicago, Illinois not later than close of business on the date of such Borrowing.

Section 2.4 Interest Periods. As provided in Section 2.3 hereof, at the time of each request for the Borrowing of Eurodollar Loans hereunder, the Borrower shall select an Interest Period applicable to such Loans from among the available options. The term “Interest Period” means the period commencing on the date a Borrowing of Eurodollar Loans is made and ending, the date, as the Borrower may select, 1, 2, 3 or 6 months thereafter; provided, however, that:

(a) the Borrower may not select an Interest Period that extends beyond the Termination Date;

(b) whenever the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall be extended to the next succeeding Business Day, provided that if such extension would cause the last day of

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such Interest Period to occur in the following calendar month, the last day of such Interest Period shall be the immediately preceding Business Day; and

(c) for purposes of determining the Interest Period for a Borrowing of Eurodollar Loans, a month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no numerically corresponding day in the month in which such an Interest Period is to end or if such an Interest Period begins on the last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which such Interest Period is to end.

Section 2.5 Maturity of Loans. Each Loan shall mature and become due and payable by the Borrower on the Termination Date.

Section 2.6 Prepayments. (a) Voluntary. The Borrower shall have the privilege of prepaying without premium or penalty and in whole or in part (but, if in part, then: (i) in an amount not less than $100,000 in the case of Domestic Rate Loans, and in an amount not less than $500,000 in the case of Eurodollar Loans and (ii) in an amount such that the minimum amount required for a Borrowing pursuant to Section 2.2 hereof remains outstanding) any Borrowing of Loans at any time on any Business Day upon prior notice to the Agent (which shall advise each Bank thereof promptly thereafter) by no later than 11:00 a.m. (Chicago time) (x) on the date three (3) Business Days prior to the date of each prepayment of a Eurodollar Loan and (y) on the date of each prepayment of a Domestic Rate Loan, such prepayment to be made by the payment of the principal amount to be prepaid and, in the case of Eurodollar Loans, any compensation required by Section 2.10 hereof.

(b) Mandatory. (i) Concurrently with each reduction of the Commitments (whether voluntarily pursuant to Section 2.9 or otherwise) the Borrower shall prepay the Notes by the amount, if any, necessary so that the aggregate outstanding principal balance of the Notes shall not exceed the Commitments as so reduced, each such prepayment to be made by the payment of the principal amount to be prepaid, and, in the case of Eurodollar Loans, any compensation required by Section 2.10 hereof.

(ii) The Borrower covenants and agrees that in the event that the outstanding principal amount of the Notes shall at any time and for any reason exceed the Available Borrowing Base as then determined and computed, the Borrower shall immediately upon the demand of the Agent or the Required Banks pay over the amount of the excess to the Agent for the account of the Banks as and for a mandatory prepayment on the Notes together with any compensation required by Section 2.10 hereof.

(c) Reborrowings. Any amount paid or prepaid on the Loans on or before the Termination Date may, subject to the terms and conditions of this Agreement, be borrowed, repaid and borrowed again.

Section 2.7 Default Rate. If any payment of principal on any Loan is not made when due (whether by acceleration or otherwise), such Loan shall bear interest (computed on the basis

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of a year of 360 days and actual days elapsed) from the date such payment was due until paid in full, payable on demand, at a rate per annum equal to:

(a) with respect to any Domestic Rate Loan, the sum of two percent (2%) plus the Domestic Rate from time to time in effect; and

(b) with respect to any Eurodollar Loan, the sum of two percent (2%) plus the rate of interest in effect thereon at the time of such default until the end of the Interest Period applicable thereto and, thereafter, at a rate per annum equal to the sum of two percent (2%) plus the Domestic Rate from time to time in effect.

Section 2.8 The Notes. (a) The Loans made to the Borrower by a Bank shall be evidenced by a promissory note of the Borrower in the form of Exhibit A hereto. Each such promissory note as the same may from time to time be amended together with any notes executed in replacement thereof are hereinafter referred to individually as a “Note” and collectively as the “Notes”. Such Note shall be dated the date of issuance thereof and payable to the order of each Bank in the principal amount of its Commitment.

(b) Each Bank shall record on its books or records or on a schedule to the Note held by it the amount of each Loan made by it to the Borrower, the Interest Period applicable thereto in the case of Eurodollar Loans, all payments of principal and interest and the principal balance from time to time outstanding thereon, in respect of any Eurodollar Loan, the interest rate applicable thereto, and, in respect of any Loan, the type of such Loan; provided that prior to the transfer of any Note all such amounts shall be recorded on a schedule to such Note. The record thereof, whether shown on such books or records of a Bank or on a schedule to any Note, shall be prima facie evidence as to all such amounts; provided, however, that the failure of any Bank to record any of the foregoing or any error in any such record shall not limit or otherwise affect the obligation of the Borrower to repay all Loans made to it hereunder together with accrued interest thereon.

Section 2.9 Commitment Terminations. (a) The Borrower shall have the right at any time and from time to time, upon five (5) Business Days’ prior written notice to the Agent to terminate without premium or penalty, in whole or in part, the Commitments (which notice shall designate whether such termination relates to the Base Revolving Credit Commitments or the Seasonal Revolving Credit Commitments), any partial termination to be in an amount not less than $2,000,000 or any larger amount that is an integral multiple of $1,000,000, and to reduce ratably the respective Commitments of each Bank; provided that the Commitments may not be reduced to an amount less than the aggregate principal amount of Loans then outstanding.

(b) Upon the Agent’s receipt of the proceeds of any sale or disposition of the Collateral, or any part thereof, applied to the Obligations pursuant to Section 10.4(c) of the Company Security Agreement or Section 10.4(c) of the Subsidiary Security Agreement, the Commitments shall automatically and without notice be ratably reduced (based on the Commitment of each Bank) by the amount of such proceeds.

(c) Any termination of Commitments pursuant to this Section 2.9 may not be reinstated.

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Section 2.10 Funding Indemnity. In the event any Bank shall incur any loss, cost or expense (including, without limitation, any loss of profit, and any loss, cost or expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired by such Bank to fund or maintain any Eurodollar Loan or the relending or reinvesting of such deposits or amounts paid or prepaid to such Bank) as a result of:

(a) any payment or prepayment of a Eurodollar Loan on a date other than the last day of its Interest Period,

(b) any failure (because of a failure to meet the conditions of Section 7 or otherwise) by the Borrower to borrow a Eurodollar Loan on the date specified in a notice given pursuant to Section 2.3 hereof,

(c) any failure by the Borrower to make any payment of principal on any Eurodollar Loan when due (whether by acceleration or otherwise), or

(d) any acceleration of the maturity of a Eurodollar Loan as a result of the occurrence of any Event of Default hereunder,

then, upon the demand of such Bank, the Borrower shall pay to such Bank such amount as will reimburse such Bank for such loss, cost or expense. If any Bank makes such a claim for compensation, it shall provide to the Borrower, with a copy to the Agent, a certificate executed by an officer of such Bank setting forth the amount of such loss, cost or expense in reasonable detail (including an explanation of the basis for and the computation of such loss, cost or expense) and the amounts shown on such certificate shall be conclusive absent manifest error.

Section 3. FEES, EXTENSIONS AND APPLICATIONS.

Section 3.1 Commitment Fee. The Borrower shall pay to the Agent for the ratable account of the Banks a commitment fee at the rate of three-eighths of one percent (3/8 of 1%) per annum commencing September 30, 1997 (computed on the basis of a year of 360 days and the actual number of days elapsed) on the average daily unused portion of the maximum amount of the Commitments hereunder. Such commitment fee is payable in arrears on the last day of each March, June, September and December in each year (commencing September 30, 1997) and on the Termination Date, unless the Commitments are terminated in whole on an earlier date, in which event the fees for the period to the date of such termination in whole shall be paid on the date of such termination.

Section 3.2 Closing Fee. (a) The Borrower shall pay to the Agent for the benefit of each Bank which is not a “Bank” under the Original Credit Agreement, a closing fee in the amount equal to such Bank’s Commitment on the date hereof multiplied by 1/8 of 1% (0.125%).

(b) The Borrower shall pay to the Agent for the benefit of each Bank which is also a “Bank” under the Original Credit Agreement, a closing fee in the amount equal to such Bank’s “Commitment” on the date hereof multiplied by 1/10th of 1% (0.1%).

Section 3.3 Agent’s Fees. The Borrower shall pay to the Agent for its own account an agent’s fee as mutually agreed upon by the Borrower and the Agent.

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Section 3.4 Extension of the Commitments. The Borrower shall have the option to request extensions to the Termination Date pursuant to this Section 3.4. No less than 90 days prior to, but no more than 120 days prior to, September 30, 1998 (and, if the Termination Date has been extended pursuant to this Section 3.4, September 30 of each year thereafter), the Borrower may advise the Agent in writing of the Borrower’s desire to extend the Termination Date for an additional 12 months and the Agent shall promptly notify the Banks of each such request. If the Borrower makes any such request, each Bank agrees to notify the Borrower and the Agent within 60 days of such request stating whether such Bank is declining or consenting to any such request, or consenting to such request subject to specified terms and conditions. In the event that a Bank fails to so notify the Agent and the Borrower during such period, such Bank shall be deemed to have refused the requested extension. In the event that each Bank is agreeable to such extension (it being understood that the Banks may accept or decline such a request in their sole discretion and on such terms as they may elect), the Borrower and the Banks shall enter into such documents as the Agent may reasonably deem necessary or appropriate to reflect such extension, and all costs and expenses incurred by the Agent in connection therewith (including attorneys’ fees) shall be paid by the Borrower. In the event any Bank declines a request to extend the Termination Date as provided above, the Borrower shall have the option to require, at the Borrower’s expense, such Bank to assign, at par plus accrued interest and fees, without recourse all of its interests, rights and obligations hereunder (including all of its Commitment and the Loans and other amounts at the time owing to it hereunder and its Note) to another Bank or to another bank, financial institution or other entity specified by the Borrower willing to provide such financing, provided that (i) such assignment shall not conflict with or violate any law, rule or regulation or order of any court or other governmental authority, (ii) the Borrower shall have received the written consent of the Agent to such assignment (which will not be unreasonably withheld), (iii) the Borrower shall have paid to the assigning Bank all monies other than such principal, interest and fees accrued and owing hereunder to it, and (iv) the assignment is entered into in accordance with the requirements of Section 12.9 hereof.

Section 3.5 Place and Application of Payments. All payments of principal of and interest on the Loans and all payments of fees and all other amounts payable under this Agreement shall be made to the Agent by no later than 1:00 p.m. (Chicago time) at the principal office of the Agent in Chicago, Illinois (or such other location in the State of Illinois as the Agent may designate to the Borrower) for the benefit of the Banks. Any payments received after such time shall be deemed to have been received by the Agent on the next Business Day. All such payments shall be made in lawful money of the United States of America, in immediately available funds at the place of payment, without set-off or counterclaim. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest on Loans or fees ratably to the Banks and like funds relating to the payment of any other amount payable to any Bank to such Bank, in each case to be applied in accordance with the terms of this Agreement.

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Anything contained herein to the contrary notwithstanding, all payments and collections received in respect of the indebtedness evidenced by the Notes, and all proceeds of the Collateral and payments or collections on any guaranties received, in each instance, by the Agent or any of the Banks after the occurrence of an Event of Default shall be remitted to the Agent and distributed as follows:

(a) first, to the payment of any outstanding costs and expenses incurred by the Security Trustee or the Agent in monitoring, verifying, protecting, preserving or enforcing the Liens on the Collateral or in protecting, preserving or enforcing rights under this Agreement or any other Loan Document, and in any event including all costs and expenses of a character which the Borrower has agreed to pay to the Agent and the Security Trustee under Sections 9.5 and 12.12 hereof (such funds to be retained by the Agent or the Security Trustee, as the case may be for its own account unless it has previously been reimbursed for such costs and expenses by the Banks, in which event such amounts shall be remitted to the Banks to reimburse them for payments therefor made to the Agent or the Security Trustee);

(b) second, to the payment of any outstanding interest or other fees or amounts due under the Notes or this Agreement other than for principal, ratably as among the Agent and the Banks in accord with the amount of such interest and other fees or amounts owing each;

(c) third, to the payment of the principal of the Notes, pro rata as among the Banks in accord with the then respective unpaid principal balances thereof;

(d) fourth, to the Agent and the Banks ratably in accord with the amounts of any other indebtedness, obligations or liabilities of the Borrower owing to each of them and secured by the Collateral Documents unless and until all such indebtedness, obligations and liabilities have been fully paid and satisfied;

(e) fifth, to the Borrower or whoever the Required Banks reasonably determine to be lawfully entitled thereto.

Section 4. THE COLLATERAL AND GUARANTIES.

Section 4.1 The Collateral. The Notes and the other obligations of the Borrower hereunder and under the other Loan Documents shall be secured by valid and perfected first priority Liens pursuant to the Company Security Agreement and the Subsidiary Security Agreement in favor of the Security Trustee for the benefit of the Banks and the Note Purchasers and the Subordinated Note Purchasers (with the priority as between such creditors as set forth in such Collateral Documents) on all of the Borrower’s and each of its Restricted Subsidiaries’ (other than the Insurance Subsidiary’s) now existing and hereafter arising or acquired accounts, general intangibles, instruments, documents, chattel paper, investment property, inventory, equipment and other goods together with all records and proceeds relating thereto as well as on all capital stock or other equity interests of each Restricted Subsidiary (other than the Insurance Subsidiary as to which 65% of the capital stock shall be subject to such Lien) and all proceeds thereof. The Borrower covenants and agrees that it will, and will cause each of such Restricted Subsidiaries to, comply with all terms and conditions of each of the Collateral Documents and that it will, and will cause each of its Restricted Subsidiaries to, at any time and from time to time, at the request of the Agent or the Required Banks, execute and deliver such instruments and documents and do such acts and things as the Agent or the Required Banks may reasonably request in order to provide for or protect or perfect the Lien of the Security Trustee in the Collateral.

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Section 4.2 Subsidiary Guaranties. Payment of the Notes and the other obligations of the Borrower hereunder and under the other Loan Documents shall at all times be guarantied by each of the Restricted Subsidiaries (other than the Insurance Subsidiary) pursuant to that certain Amended and Restated Guaranty Agreement dated as of June 30, 1997, issued by the Restricted Subsidiaries and otherwise in form and substance satisfactory to the Agent and the Banks (such guaranty agreement as the same may from time to time be amended, together with any supplements thereto delivered pursuant to the terms thereof is hereinafter referred to as the “Subsidiary Guaranty Agreement”).

Section 5. DEFINITIONS; INTERPRETATION.

Section 5.1 Definitions. The following terms when used herein have the following meanings:

“Adjusted LIBOR” is defined in Section 2.1(b) hereof.

“Affiliate” shall mean any Person (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Borrower, (ii) which beneficially owns or holds 5% or more of any class of the Voting Stock (determined by number of shares or by number of votes) of the Borrower or (iii) 5% or more of the Voting Stock (determined by number of shares or by number of votes) (or in the case of a Person which is not a corporation, 5% or more of the equity interest) of which is beneficially owned or held by the Borrower or a Subsidiary. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise.

“Agent” means Harris Trust and Savings Bank and any successor pursuant to Section 11.8 hereof.

“Availability Period” means the period from and including November 15 of each year through and including March 31 of the immediately succeeding year.

“Available Borrowing Base” means, as of any time the same is to be determined, the Borrowing Base less the principal amount then outstanding under the Note Purchase Agreements.

“Available Borrowing Base” means, as of any time the same is to be determined, the Borrowing Base less the principal amount then outstanding under the Subordinated Note Purchase Agreement.

“Bank” means each bank signatory hereto and each assignee bank or other financial institution pursuant to Section 12.9(c) hereof.

“Base Revolving Credit Commitment” means, as to any Bank, the obligation of such Bank to make Loans under the Revolving Credit in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Bank’s name on Schedule 1.1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrower and the Banks acknowledge and

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agree that the Base Revolving Credit Commitments of the Banks aggregate $152,000,000 on August 21, 2003.

“Borrower” means World Acceptance Corporation, a South Carolina corporation.

“Borrowing” means the total of Loans of a single type made by one or more Banks to the Borrower on a single date and, with respect to Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made ratably from each of the Banks according to their Commitments. A Borrowing is “continued” on the date a new Interest Period for the same type of Loans commences for such Borrowing, and is “converted” when such Borrowing is changed from one type of Loan to another, all as determined in accordance with this Agreement.

“Borrowing Base” means, as of any time it is to be determined, the product of 85% multiplied by the remainder of (x) the then outstanding unpaid amount of Eligible Finance Receivables minus (y) all unearned finance charges, unearned insurance premiums and insurance commissions applicable to such Eligible Finance Receivables.

“Business Day” means any day other than a Saturday or Sunday on which Banks are not authorized or required to close in Chicago, Illinois and, if the applicable Business Day relates to the borrowing or payment of a Eurodollar Loan, on which banks are dealing in United States Dollar deposits in the interbank market in London, England.

“Capitalized Lease” means any lease the obligation for Rentals with respect to which is required to be capitalized on the balance sheet of the lessee in accordance with GAAP.

“Capitalized Rentals” of any Person means, as of the date of any determination thereof, the amount at which the aggregate Rentals due and to become due under all Capitalized Leases under which such Person is a lessee would be required to be reflected under GAAP as a liability on the balance sheet of such Person.

“Change of Control” means any of (a) the acquisition by any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) at any time of beneficial ownership of 40% or more of the outstanding capital stock or other equity interests of the Borrower on a fully-diluted basis, or (b) the failure of individuals who are members of the board of directors (or similar governing body) of the Borrower on the Effective Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the directors who were either directors on the Effective Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of the Borrower, shall occur.

“Co-Agent” means Bank One, N.A., and its successors as co-agent hereunder.

“Code” means the Internal Revenue Code of 1986, as amended and any successor statute thereto.

“Collateral” means all properties, rights, interests and privileges from time to time subject to the Liens granted to the Security Trustee for the benefit of the Banks pursuant to the Collateral Documents.

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“Collateral Documents” means the Company Security Agreement, the Subsidiary Security Agreement and all other security agreements, financing statements and other documents as shall from time to time secure the Notes or any other Obligations of the Borrower or any Subsidiary hereunder or under any other Loan Document.

“Commitment” means, as of any time the same is to be determined for any Bank, such Bank’s Base Revolving Credit Commitment and, if then available and in effect, such Bank’s Seasonal Revolving Credit Commitment.

“Commitments” is defined in Section 1.1 hereof.

“Company Security Agreement” means that certain Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as of June 30, 1997, between the Borrower and the Security Trustee which shall be satisfactory to the Agent and the Banks, as the same may from time to time be amended.

“Consolidated Adjusted Net Worth” at any date means:

(a) as to any corporation, the amount of capital stock liability plus (or minus in the case of a deficit) the capital surplus and earned surplus of the Borrower and its Restricted Subsidiaries on a consolidated basis, and as to any partnership or limited liability company, the capital account of the Borrower and its Restricted Subsidiaries on a consolidated basis; less (without duplication)

(b) the net book value, after deducting any reserves applicable thereto, of all items of the following character which are included in the assets of the Borrower and its Restricted Subsidiaries, to wit:

(i) all real property, fixed assets, unamortized leasehold improvements and furniture, fixtures and equipment other than property held for immediate sale, lease or other liquidation which has been held by the Borrower or a Restricted Subsidiary for less than 90 days;

(ii) all deferred charges (other than deferred Federal income taxes and deferred investment tax credits) and prepaid expenses other than prepaid interest, prepaid taxes and prepaid insurance premiums;

(iii) treasury stock;

(iv) unamortized debt discount and capitalized expense and unamortized stock discount and capitalized expense;

(v) good will, organizational or experimental expense, patents, trademarks, copyrights, trade names and other intangibles;

(vi) Minority Interests;

(vii) “direct loan origination costs” as set forth in FASB 91;

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(viii) all Restricted Investments;

(ix) the excess, if any, of (A) net charge-offs of the Borrower and its Restricted Subsidiaries over the twelve-month period ending with such date over (B) reserves for credit losses of the Borrower and its Restricted Subsidiaries as at such date; and

(x) any surplus resulting from any write-up in the book value of assets of the Borrower or any Restricted Subsidiary subsequent to March 31, 1997.

“Consolidated Net Income” for any period shall mean the gross revenues of the Borrower and its Restricted Subsidiaries for such period less all expenses and other proper charges (including taxes on income), determined on a consolidated basis in accordance with GAAP consistently applied and after eliminating earnings or losses attributable to outstanding Minority Interests, but excluding in any event:

(a) any gains or losses on the sale or other disposition of investments or fixed or capital assets, and any taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses;

(b) the proceeds of any life insurance policy;

(c) net earnings and losses of any Restricted Subsidiary accrued prior to the date it became a Restricted Subsidiary;

(d) net earnings and losses of any Person (other than a Restricted Subsidiary), substantially all the assets of which have been acquired in any manner, realized by such other Person prior to the date of such acquisition;

(e) net earnings and losses of any Person (other than a Restricted Subsidiary) with which the Borrower or a Restricted Subsidiary shall have consolidated or which shall have merged into or with the Borrower or a Restricted Subsidiary prior to the date of such consolidation or merger;

(f) net earnings of any business entity (other than a Restricted Subsidiary) in which the Borrower or any Restricted Subsidiary has an ownership interest unless such net earnings shall have actually been received by the Borrower or such Restricted Subsidiary in the form of cash distributions;

(g) any portion of the net earnings of any Restricted Subsidiary (other than the Insurance Subsidiary) which for any reason is unavailable for payment of dividends to the Borrower or any other Restricted Subsidiary;

(h) earnings resulting from any reappraisal, revaluation or write-up of assets;

(i) any deferred or other credit representing any excess of the equity in any Subsidiary at the date of acquisition thereof over the amount invested in such Subsidiary;

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(j) any gain arising from the acquisition of any Securities of the Borrower or any Restricted Subsidiary;

(k) any reversal of any contingency reserve, except to the extent that provision for such contingency reserve shall have been made from income arising during such period; and

(l) any portion of the net earnings of the Insurance Subsidiary in excess of $500,000 (on a cumulative basis) which has not actually been distributed to the Borrower in the form of cash.

“Consolidated Net Worth” means, as of the date of any determination thereof, the total assets of the Borrower and its Restricted Subsidiaries less the total liabilities of the Borrower and its Restricted Subsidiaries determined in accordance with GAAP.

“Consolidated Tangible Net Worth” means, as of the date of any determination thereof, Consolidated Net Worth less intangible assets of the Borrower and its Restricted Subsidiaries determined in accordance with GAAP.

“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

“Default” means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.

“Determination Date” means the last day of the fiscal quarter of the Borrower occurring after the date of this Agreement in which the Borrower has maintained a Consolidated Tangible Net Worth in excess of $42,000,000 at the end of such fiscal quarter.

“Domestic Rate” is defined in Section 2.1(a) hereof.

“Domestic Rate Loan” means a Loan bearing interest at the rate specified in Section 2.1(a) hereof.

“EBIT” for any period shall mean the sum of (i) Consolidated Net Income during such period plus (to the extent deducted in determining Consolidated Net Income), (ii) all provisions for any Federal, state or other income taxes made by the Borrower and its Restricted Subsidiaries during such period and (iii) all Interest Charges on all Indebtedness (including the interest component of Capitalized Rentals) of the Borrower and its Restricted Subsidiaries.

“Eligible Finance Receivables” means and includes each Finance Receivable of the Borrower or any Restricted Subsidiary (excluding any Insurance Subsidiary) that:

(a) is payable in U.S. dollars and is the valid, binding and legally enforceable obligation of the debtor obligated thereon and such debtor is not (i) an Affiliate of the Borrower or of any Restricted Subsidiary, (ii) a shareholder, director, officer or employee

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of the Borrower or of any Restricted Subsidiary or of any Affiliate of the Borrower or any Restricted Subsidiary, (iii) the United States of America or any department, agency or instrumentality thereof unless the Borrower or such Restricted Subsidiary has complied with the Assignment of Claims Act to the satisfaction of the Agent, (iv) a debtor under any proceeding under the United States Bankruptcy Code or any other comparable bankruptcy or insolvency law applicable under the law of any other country or political subdivision thereof, or (v) an assignor for the benefit of creditors;

(b) is assignable and not evidenced by an instrument or chattel paper unless the same has been endorsed and delivered to the Security Trustee (except that, until a Default or Event of Default has occurred and is continuing and thereafter until otherwise notified by the Security Trustee pursuant to the Company Security Agreement or the Subsidiary Security Agreement, as appropriate, the same shall not be required to be delivered to the Security Trustee if a legend shall have been placed thereon in accordance with the Company Security Agreement or the Subsidiary Security Agreement, as appropriate);

(c) is subject to a perfected, first priority Lien pursuant to the Company Security Agreement or the Subsidiary Security Agreement, as appropriate, in favor of the Security Trustee for the benefit of the Banks, and is free and clear of any other Lien other than the Lien in favor of the Subordinated Note Purchasers and Liens permitted under Sections 8.11(e) and 8.11(g) of this Agreement;

(d) is net of any credit or allowance given by the Borrower or such Restricted Subsidiary to such account debtor;

(e) is not subject to any offset, counterclaim or other defense with respect thereto;

(f) is not owed by an account debtor who is obligated on accounts owed to the Borrower or such Restricted Subsidiary any portion of which is unpaid more than 60 days after the contractual due date (which must be issued in accordance with the Borrower’s or such Restricted Subsidiary’s business practices in effect as of the date hereof) unless the Agent has approved the continued eligibility thereof; and

(g) is subject to loan and security documentation which complies in all respects with all applicable federal, state and local laws, rules and regulations.

“Environmental Legal Requirement” shall mean any international, Federal, state or local statute, law, regulation, order, consent decree, judgment, permit, license, code, covenant, deed restriction, common law, treaty, convention, ordinance or other requirement relating to public health, safety or the environment, including without limitation, those relating to releases, discharges or emissions to air, water, land or ground water, to the withdrawal or use of groundwater, to the use and handling of polychlorinated biphenyls or asbestos, to the disposal, treatment, storage or management of hazardous or solid waste, or Hazardous Substances or crude oil, or any fraction thereof, or to exposure to toxic or hazardous materials, to the handling, transportation, discharge or release of gaseous or liquid Hazardous Substances and any

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regulation, order, notice or demand issued pursuant to such law, statute or ordinance, in each case applicable to the property of the Borrower or any of its Subsidiaries or the operation, construction or modification of any thereof, including, without limitation, the following: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials Transportation Act, as amended, the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water Control Act, the Clean Air Act of 1966, as amended, the Toxic Substances Control Act of 1976, the Occupational Safety and Health Act of 1977, as amended, the Emergency Planning and Community Right-to-Know Act of 1986, the National Environmental Policy Act of 1975 and the Oil Pollution Act of 1990 and any similar or implementing state law, and any state statute and any further amendments to these laws, providing for financial responsibility for cleanup or other actions with respect to the release or threatened release of Hazardous Substances or crude oil, or any fraction thereof and all rules, regulations, guidance documents and publication promulgated thereunder.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute.

“Eurodollar Loan” means a Loan bearing interest at the rate specified in Section 2.1(b) hereof.

“Eurodollar Margin” is defined in Section 2.1(b) hereof.

“Eurodollar Reserve Percentage” is defined in Section 2.1(b) hereof.

“Event of Default” means any of the events or circumstances specified in Section 9.1 hereof.

“Finance Receivable” means each Receivable of the Borrower or any Restricted Subsidiary which arises in the ordinary course of its finance company business and represents amounts due in respect of loans made by the Borrower or such Restricted Subsidiary to the debtor obligated thereon.

“Fixed Asset Financing” means the acquisition by the Borrower of one or more fixed assets in an aggregate amount not to exceed $1,500,000, which financing (x) shall amortize over time and not be subject to being re-borrowed and (y) may be secured by the fixed assets so acquired.

“Fixed Charges” for any period means, on a consolidated basis, the sum of (i) all Rentals (other than Capitalized Rentals) payable during such period by the Borrower and its Restricted Subsidiaries, and (ii) all Interest Charges on all Indebtedness (including the interest component of Capitalized Rentals) of the Borrower and its Restricted Subsidiaries.

“GAAP” means generally acceptable accounting principles at the time in the United States.

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“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.

“Guaranties” by any Person shall mean all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation, of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (i) to purchase such Indebtedness or obligation or any property or assets constituting security therefor, (ii) to advance or supply funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii) to lease property or to purchase Securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the primary obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof. For the purposes of all computations made under this Agreement, a Guaranty in respect of any Indebtedness for Borrowed Money shall be deemed to be Indebtedness equal to the principal amount of such Indebtedness for Borrowed Money which has been guaranteed, and a Guaranty in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend.

“Hazardous Substances” means any hazardous or toxic material, substance or waste pollutant or contaminant which is regulated as such under any statute, law, ordinance, rule or regulation of any Federal, regional, state or local authority having jurisdiction over the property of the Borrower or any Subsidiary or its use, including but not limited to any material, substance or waste which is: (a) defined as a hazardous substance under Section 311 of the Federal Water Pollution Control Act (33 U.S.C. §1317), as amended; (b) regulated as a hazardous waste under Section 1004 of the Federal Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), as amended; (c) defined as a hazardous substance under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, as amended, (d) defined or regulated as a hazardous substance or hazardous waste under any rules or regulations promulgated under any of the foregoing statutes or (e) petroleum or products derived therefrom.

“Indebtedness” of any Person means and includes all obligations of such Person which in accordance with GAAP should be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all (i) obligations of such Person for borrowed money or which have been incurred in connection with the acquisition of property or assets, (ii) obligations secured by any Lien upon property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations, (iii) obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under such agreement in the event of default are limited to repossession or sale of property, (iv) Capitalized Rentals (v) all obligations of such Person on or with respect to letters of credit, bankers’ acceptances and other extensions of credit whether or

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not representing obligations for borrowed money and (vi) Guaranties of obligations of others of the character referred to in this definition.

“Indebtedness for Borrowed Money” of any Person means (a) all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets, (b) all Capitalized Rentals of such Person, and (c) all Guaranties by such Person of Indebtedness for Borrowed Money of others, it being understood that Indebtedness for Borrowed Money shall not include trade payables in the ordinary course of business.

“Insurance Subsidiary” means any one Subsidiary (i) which is organized under the laws of the British Virgin Islands or such other jurisdiction as shall be consented to in writing by the Required Banks; (ii) which conducts substantially all of its business and has substantially all of its assets within the British Virgin Islands or such other jurisdiction as shall be consented to in writing by the Required Banks; (iii) of which 100% (by number of votes) of the Voting Stock (except for directors’ qualifying shares) is owned by the Borrower; and (iv) which is engaged in the business of reinsuring the credit insurance written by the Subsidiaries of the Borrower.

“Interest Charges” for any period means all interest and all amortization of debt discount and expense on any particular Indebtedness for which such calculations are being made.

“Interest Period” is defined in Section 2.4 hereof.

“Investments” means all investments, in cash or by delivery of property made, directly or indirectly in any Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or Securities or by loan, advance, capital contribution or otherwise; provided, however, that “Investments” shall not mean or include routine investments in property to be used or consumed in the ordinary course of business.

“Junior Subordinated Debt” means all unsecured Indebtedness for Borrowed Money of the Borrower which (i) pursuant to its terms matures on a date later than the Termination Date or such later date required by the terms of the Subordinated Note Purchase Agreement to constitute

“Junior Subordinated Debt” thereunder and (ii) contains or has applicable thereto subordination provisions substantially in the form set forth in Exhibit B-2 hereto but with appropriate adjustments therein so as to provide that such Junior Subordinated Debt be subordinate and junior to all Senior Debt and Senior Subordinated Debt (but not to any other Indebtedness of the Borrower) rather than only to Senior Debt or such other provisions as may be approved in writing by the Banks and, to the extent applicable, the other holders of the Senior Debt and the holders of the Senior Subordinated Debt (exclusive of any Senior Debt or Senior Subordinated Debt held by a Subsidiary or other Affiliate).

“Lending Office” is defined in Section 10.4 hereof.

“LIBOR” is defined in Section 2.1(b) hereof.

“Lien” means 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

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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.

“Loan” means and includes loans made under the Revolving Credit, and each of them singly, and the term “type” of Loan refers to its status as a Domestic Rate Loan or Eurodollar Loan.

“Loan Documents” means this Agreement, the Notes, the Subsidiary Guaranty Agreement and the Collateral Documents.

“Margin Stock” means “margin stock” as defined in Regulation U of the Board of Governors of the Federal Reserve System.

“Minority Interests” means any shares of stock, partnership interests, membership interests or other equity interests of any class of a Restricted Subsidiary (other than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one or more of its Restricted Subsidiaries. Minority Interests shall be valued by valuing Minority Interests constituting preferred stock at the voluntary or involuntary liquidating value of such preferred stock, whichever is greater, by valuing Minority Interests constituting common stock at the book value of the capital and surplus applicable thereto adjusted, if necessary, to reflect any changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in preferred stock, and by valuing Minority Interests constituting partnership or limited liability company membership interests at the book value of such interest.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Multiemployer Plan” shall have the same meaning as in ERISA.

“Net Income Available for Fixed Charges” for any period means the sum of (i) Consolidated Net Income during such period plus (to the extent deducted in determining Consolidated Net Income), (ii) all provisions for any Federal, state or other income taxes made by the Borrower and its Restricted Subsidiaries during such period and (iii) Fixed Charges of the Borrower and its Restricted Subsidiaries during such period.

“Notes” is defined in Section 2.8 hereof.

“Note Purchase Agreements” shall mean, collectively, the separate Amended and Restated Note Agreements, each dated as of June 30, 1997, as amended from time to time between the Borrower and the respective note purchasers named therein.

“Note Purchasers” means the Purchasers as defined in the Note Purchase Agreements.

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“Obligations” means all unpaid principal of and accrued and unpaid interest on the Notes, all accrued and unpaid fees and all other obligations of the Borrower or any Subsidiary to the Banks or any Bank or the Agent or the Security Trustee arising under the Loan Documents.

“Operating Margin” means, as of the date of any determination thereof, the sum of the pretax net operating income of the Borrower and its Restricted Subsidiaries plus amortization of intangible assets of the Borrower and its Restricted Subsidiaries divided by the total revenue of the Borrower and its Restricted Subsidiaries, in each case, determined on a consolidated basis in accordance with GAAP.

“PBGC” is defined in Section 6.12 hereof.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof.

“Plan” means with respect to the Borrower and each Subsidiary at any time an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group, (ii) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, or (iii) under which a member of the Controlled Group has any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years or by reason of being deemed a contributing sponsor under Section 4064 of ERISA.

“Pledged Collateral” shall have the meaning as defined in the Company Security Agreement or the Subsidiary Security Agreement, as the context may require.

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, whether now owned or hereafter acquired.

“Receivable” means 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.

“Rentals” means, as of the date of any determination thereof, all fixed payments (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the Property) payable by the Borrower or a Restricted Subsidiary, as lessee or sublessee, under a lease of real or personal property, but shall be exclusive of any amounts required to be paid by the Borrower or a Restricted Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under any so-called “percentage leases” shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues.

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“Required Banks” means, as of the date of determination thereof, those Banks holding at least 66 2/3% of the Commitments or, in the event that no Commitments are outstanding hereunder, those Banks holding at least 66 2/3% in aggregate principal amount of the Loans outstanding hereunder.

“Restricted Investments” means all Investments other than the Investments permitted by paragraphs (a) through (f), both inclusive, of Section 8.18 hereof.

“Restricted Subsidiary” means the Insurance Subsidiary, if any, and any other Subsidiary (i) which is organized under the laws of the United States or any State thereof; (ii) which conducts substantially all of its business and has substantially all of its assets within the United States; and (iii) of which 100% (by number of votes) of the Voting Stock is owned by the Borrower and/or one or more Restricted Subsidiaries.

“Revolving Credit” is defined in Section 1.1 hereof.

“S&P” shall mean Standard & Poor’s Ratings Services Group, a division of The McGraw-Hill Companies, Inc.

“Seasonal Revolving Credit Commitment” means, as to any Bank and available only during the Availability Period, the obligation of such Bank to make Loans under the Revolving Credit in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Bank’s name on Schedule 1.1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrower and the Banks acknowledge and agree that the Seasonal Revolving Credit Commitments of the Banks aggregate $15,000,000 on August 13, 2001.

“Security” shall have the same meaning as in Section 2(1) of the Securities Act of 1933, as amended.

“Security Trustee” means Harris Trust and Savings Bank, an Illinois banking corporation, and its successors and assigns under the Company Security Agreement and the Subsidiary Security Agreement.

“Senior Debt” shall mean (i) the Senior Notes, (ii) the Voyager Note, (iii) all other Indebtedness for Borrowed Money of the Borrower which is not expressed to be subordinate or junior to any other Indebtedness of the Borrower and (iv) all Indebtedness for Borrowed Money of Restricted Subsidiaries (other than the Subsidiary Senior Subordinated Guaranty Agreement and the Subsidiary Guaranty Agreement).

“Senior Notes” means the Notes and the Senior Secured Notes.

“Senior Secured Notes” means the Senior Secured Notes due December 1, 1999, issued in the original aggregate principal amount of $20,000,000 pursuant to the Note Purchase Agreements, as reduced by principal payments thereon, as such notes may from time to time be amended pursuant to the terms thereof and of the Note Purchase Agreements, and any notes issued in replacement therefor.

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“Senior Subordinated Debt” means (i) the Senior Subordinated Notes and (ii) all other unsecured Indebtedness for Borrowed Money of the Borrower which (x) pursuant to its terms matures on a date later than the Termination Date or such later date required by the terms of the Subordinated Note Purchase Agreement to constitute “Senior Subordinated Debt” thereunder and (y) contains or has applicable thereto subordination provisions substantially in the form set forth in Exhibit B-1 hereto or such other provisions as may be approved in writing by the Banks and, to the extent required by the applicable contract terms, the other holders of the Senior Debt and the holders of the Senior Subordinated Notes (exclusive of any Senior Debt or any Senior Subordinated Notes held by a Subsidiary or other Affiliate).

“Senior Subordinated Notes” shall mean the Senior Subordinated Secured Notes of the Borrower in the aggregate original principal amount of $10,000,000 issued pursuant to the Subordinated Note Purchase Agreement.

“Set-off” is defined in Section 12.6 hereof.

“Subordinated Note Purchase Agreement” means that certain Note Agreement dated as of June 30, 1997, between the Borrower and Principal Mutual Life Insurance Company, as the purchaser signatory thereto, as the same may from time to time be further amended pursuant to the terms thereof.

“Subordinated Note Purchasers” means the Purchaser(s) as defined in the Subordinated Note Purchase Agreement.

“Subsidiary” means any corporation or other entity of which more than fifty percent (50%) of the outstanding Voting Stock or comparable equity interests (including interests as a limited partner in a limited partnership) is at the time directly or indirectly owned by the Borrower, by one or more of its Subsidiaries, or by the Borrower and one or more of its Subsidiaries.

“Subsidiary Guaranty Agreement” is defined in Section 4.2 hereof.

“Subsidiary Security Agreement” means that certain Amended and Restated Security Agreement, Pledge, and Indentures of Trust dated as of June 30, 1997, among each of the Restricted Subsidiaries (other than the Insurance Subsidiary) and the Security Trustee which shall be satisfactory to the Agent and the Banks, as the same may from time to time be amended.

“Subsidiary Senior Subordinated Guaranty Agreement” means the Guaranty Agreement dated as of June 30, 1997, of each Restricted Subsidiary (other than Insurance Subsidiary) for the benefit of the holders of the Senior Subordinated Notes and as the same may from time to time be amended pursuant to the terms thereof.

“Termination Date” shall mean September 30, 2005, or such later date to which the Commitments are extended pursuant to Section 3.4 hereof, or such earlier date on which the Commitments are terminated in whole pursuant to Sections 2.9, 9.3 or 9.4 hereof.

“Trigger Date” means the last day of the fiscal quarter of the Borrower occurring after the date of this Agreement in which the Borrower has maintained (i) a Consolidated Tangible

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Net Worth in excess of $42,000,000 throughout such fiscal quarter and (ii) an Operating Margin in excess of 25% throughout the four consecutive fiscal quarter period ending on such date.

“Unfunded Vested Liabilities” means, with respect to any Plan at any time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.

“Unrestricted Subsidiary” means any Subsidiary which is not a Restricted Subsidiary.

“Voting Stock” means 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).

“Voyager Note” means the 10% Senior Debenture of the Borrower, dated October 23, 1989, payable to Voyager Life Insurance Company, without taking into account any amendment thereof other than any amendment which extends the maturity date thereof.

“Weingarten Lien” means the Lien of Weingarten Realty Investors as in effect on the date of this Agreement and as reflected on the UCC-1 financing statement filed with the Secretary of State of the State of Texas on August 21, 1989 against World Finance Corporation of Texas under document number 189822 and continued by the UCC-3 financing statement filed with the Secretary of State of the State of Texas on July 15, 1994 under document number 685105.

“Welfare Plan” means a “welfare plan,” as said term is defined in Section 3(1) of ERISA.

“Wholly-Owned” means a Subsidiary of which all of the issued and outstanding shares of stock (other than directors’ qualifying shares as required by law) or other comparable equity interests shall be owned by the Borrower and/or one or more of its Wholly-Owned Subsidiaries.

Section 5.2 Interpretation. The foregoing definitions shall be equally applicable to both the singular and plural forms of the terms defined. All references to times of day herein shall be references to Chicago, Illinois time unless otherwise specifically provided. 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.

Section 6. REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Banks as follows:

Section 6.1 Organization and Qualification. The Borrower is duly organized and validly existing in good standing under the laws of the State of South Carolina, has full and adequate corporate power to carry on its business as now conducted, is duly licensed or qualified

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and in good standing in each jurisdiction in which the nature of its business conducted or the nature of the Property owned or leased by it makes such licensing or qualification necessary.

Section 6.2 Subsidiaries. Each Subsidiary is a corporation, partnership, limited liability company or other entity duly organized and validly existing in good standing under the laws of the jurisdiction in which it was incorporated or organized, has full and adequate corporate or other power to carry on its business as conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of its business as now conducted or proposed to be conducted or the nature of the Property owned or leased by it makes such licensing or qualification necessary. Schedule 6.2 hereto identifies each Subsidiary of the Borrower as of the date hereof, the jurisdiction of its organization, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by the Borrower and the Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class of its authorized capital stock or other equity interests and the number of shares or units of each class issued and outstanding. All of the issued and outstanding shares of capital stock or other equity interest of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares are owned, beneficially and of record, by the Borrower or the relevant Restricted Subsidiary, all as set forth on said Schedule 6.2, free of any Lien except for Lien granted to the Security Trustee under the Company Security Agreement and, to the extent applicable, Subsidiary Security Agreement and Liens permitted pursuant to Sections 8.11(e) and 8.11(g) hereof. As of the date hereof, each Subsidiary is a Restricted Subsidiary. There are no outstanding commitments or other obligations of any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Subsidiary.

Section 6.3 Corporate Authority and Validity of Obligations. The Borrower has full right and authority to enter into the Loan Documents to which it is a party, to make the borrowings herein provided for, to grant to the Security Trustee, for the benefit of the Banks, the Liens described in the Collateral Documents, to issue its Notes and to perform all of its obligations hereunder and under the other Loan Documents. Each Restricted Subsidiary has full right and authority to enter into the Loan Documents entered into by it, to grant to the Security Trustee, for the benefit of the Banks, the Liens described in the Collateral Documents to which it is a party and to perform all of its obligations thereunder and under the other Loan Documents. The Loan Documents delivered by the Borrower, and by each Restricted Subsidiary, have been duly authorized, executed and delivered by such Person and constitute valid and binding obligations of such Person enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law) and to the discretion of the court before which any proceedings may be brought; and the Loan Documents do not, nor does the performance or observance by the Borrower or any Restricted Subsidiary of any of the matters or things herein or therein provided for, contravene any provision of law or any charter or by-law provision of the Borrower or any Subsidiary or any covenant, indenture or agreement of or affecting the Borrower or any Subsidiary or a substantial portion of their respective Properties.

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Section 6.4 Not an Investment Company. Neither the Borrower nor any Subsidiary is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

Section 6.5 Use of Proceeds; Margin Stock. The Loans hereunder shall be used by the Borrower for general working capital purposes. Neither the Borrower nor any of its Subsidiaries is engaged principally, or as one of its primary activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and neither the Borrower nor any of its Subsidiaries will use the proceeds of any Loan in a manner that violates any provision of Regulation U, G or X of the Board of Governors of the Federal Reserve System.

Section 6.6 Financial Reports. The consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at March 31, 1997, and the related statements of consolidated earnings, consolidated changes in shareholders’ equity and consolidated cash flows of the Borrower and its Subsidiaries for the year then ended and accompanying notes thereto, which financial statements are accompanied by the report of KPMG Peat Marwick, independent public accountants, have been prepared in accordance with GAAP applied on a consistent basis and fairly present the consolidated financial condition of the Borrower and its Subsidiaries as of such dates and the consolidated results of their operations and cash flows for the periods then ended.

Section 6.7 No Material Adverse Change. Since March 31, 1997, there has been no change in the condition, financial or otherwise, or business prospects of the Borrower and its Subsidiaries except changes in the ordinary course of business, none of which individually or in the aggregate have been materially adverse.

Section 6.8 Litigation. Except as disclosed on Schedule 6.8 attached hereto, there is no litigation or governmental proceeding pending, nor to the knowledge of the Borrower threatened, against the Borrower or any Subsidiary which if adversely determined would (a) impair the validity or enforceability of, or impair the ability of the Borrower or any Restricted Subsidiary to perform its obligations under, this Agreement or any other Loan Document or (b) result in any material adverse change in the financial condition or Property, business or operations of the Borrower and its Subsidiaries taken as a whole.

Section 6.9 Taxes. All tax returns required to be filed by the Borrower or any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the Borrower or any Subsidiary or upon any of their respective properties, income or franchises, which are shown to be due and payable in such returns have been paid. The Borrower does not know of any proposed additional tax assessment against it for which adequate provision in accordance with GAAP has not been made on its accounts. The Federal income tax liability of the Borrower and its Subsidiaries has either been finally determined by the Internal Revenue Service and satisfied for all taxable years up to and including the taxable year ended December 31, 1993, or the applicable statute of limitations therefor has expired and, except as disclosed on Schedule 6.9 attached hereto, no material controversy in respect of additional income taxes due since said date is pending or to the knowledge of the Borrower threatened. Adequate provisions in accordance with GAAP for taxes on the books of the Borrower and each Subsidiary have been made for all open years, and for its current fiscal period.

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Section 6.10 Approvals. No authorization, consent, license, or exemption from, or filing or registration with, any court or governmental department, agency or instrumentality, or any approval or consent of the stockholders of the Borrower or from any other Person, is necessary to the valid execution, delivery or performance by the Borrower or any Restricted Subsidiary of this Agreement or any of the other Loan Documents.

Section 6.11 Indebtedness and Liens. Schedule 6.11 attached hereto correctly describes all Indebtedness for Borrowed Money of the Borrower and its Subsidiaries outstanding as of the date hereof. There are no Liens on any of the Property of the Borrower or any Subsidiary, except those which are permitted by Section 8.11 of this Agreement.

Section 6.12 ERISA. The Borrower and each Subsidiary are in compliance in all material respects with ERISA, to the extent applicable to them and have received no notice to the contrary from the Pension Benefit Guaranty Corporation (“PBGC”) or any other governmental entity or agency. As of December 31, 1996, the liability of the Borrower and its Subsidiaries to PBGC in respect of Unfunded Vested Liabilities would not have been in excess of $0 if all employee pension benefit plans maintained by the Borrower and its Subsidiaries had been terminated as of such date. No condition exists or event or transaction has occurred with respect to any Plan which could reasonably be expected to result in the incurrence by the Borrower or any Subsidiary of any material liability, fine or penalty. Neither the Borrower nor any Subsidiary has any contingent liability with respect to any post-retirement benefits under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA and liability for post-retirement medical and life insurance benefits.

Section 6.13 Material Agreements. Neither the Borrower nor any Subsidiary is a party to any agreement or instrument or subject to any charter or other corporate restriction materially and adversely affecting its business, properties or assets, operations or condition (financial or otherwise). Neither the Borrower nor any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default might have a material adverse effect on the business, properties or assets, operations, or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole or (ii) any agreement or instrument evidencing or governing Indebtedness.

Section 6.14 Compliance with Laws. (a) Environmental. (i) The business and operation of the Borrower and its Subsidiaries comply in all respects with all applicable Environmental Legal Requirements, except to the extent that such noncompliance would not have a material adverse effect on the business, operations, properties, assets or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.

(ii) Neither the Borrower nor any Subsidiary has given, nor should it give, nor has it received, any notice, letter, citation, order, warning, complaint, inquiry, claim or demand that: (i) the Borrower or such Subsidiary has violated, or is about to violate, any federal, state, regional, county or local environmental, health or safety statute, law, rule, regulation, ordinance, judgment or order; (ii) there has been a release, or there is a threat of release, of Hazardous Substances (including, without limitation, petroleum, its by-products or derivatives, or other hydrocarbons) from the Borrower’s or such Subsidiary’s property, facilities, equipment or vehicles; (iii) the Borrower or such Subsidiary may be or is liable, in whole or in part, for the

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costs or cleaning up, remediating or responding to a release of Hazardous Substances (including, without limitation, petroleum, its by-products or derivatives, or other hydrocarbons); (iv) any of the Borrower’s or such Subsidiary’s property or assets are subject to a Lien in favor of any governmental entity for any liability, costs or damages, under any federal, state or local environmental law, rule or regulation arising from, or costs incurred by such governmental entity in response to, a release of a Hazardous Substance (including, without limitation, petroleum, its by-products or derivatives, or other hydrocarbons), except to the extent that such violation, release, liability or Lien could not have a material adverse effect on the business, operations, properties, assets or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.

(b) Other Laws. The Borrower and its Subsidiaries are in compliance with all other federal, state and local laws, rules and regulations applicable to or pertaining to the Properties or business operations of the Borrower or any Subsidiary (including without limitation all applicable state consumer credit and protection laws, the Federal Fair Credit Reporting Act, the Federal Truth In Lending Act, the Federal Fair Debt Collection Practices Act, laws regulating shall loan companies, the Occupational Safety and Health Act of 1970 and the Americans with Disabilities Act of 1990), non-compliance with which could have a material adverse effect on the business, operations, properties, assets or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.

Section 6.15 Full Disclosure. The financial statements referred to in Section 6.6 do not, nor do the written statements or information, if any, furnished by the Borrower to any Bank in connection with the negotiation of or its participation in this Agreement contain any untrue statement of a material fact or omit a material fact necessary to make the material statements contained therein not misleading.

Section 6.16 No Defaults. No Default or Event of Default has occurred and is continuing.

Section 6.17 Note Purchase Agreements. All representations and warranties of the Borrower set forth in the Note Purchase Agreements and the Subsidiary Note Purchase Agreement are true and correct.

Section 7. CONDITIONS PRECEDENT.

The obligation of the Banks to make any Loan or any other financial accommodation hereunder shall be subject to the following conditions precedent to the satisfaction of the Agent and the Required Banks:

Section 7.1 Initial Borrowing. Prior to the making of the initial Borrowing hereunder:

(a) The Agent shall have received for each Bank the favorable written opinions of Robinson, Bradshaw & Hinson, P.A., counsel to the Borrower and World Finance Corporation of South Carolina, WFC of South Carolina, Inc., World Acceptance Corporation of Alabama, World Acceptance Corporation of Missouri, World Finance Corporation of Illinois and World Finance Corporation of New Mexico and of local counsel to World Finance Corporation of Georgia, World Finance Corporation of

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Louisiana, World Acceptance Corporation of Oklahoma, Inc., World Finance Corporation of Tennessee, World Finance Corporation of Texas and WFC Limited Partnership, in form and substance satisfactory to the Required Banks;

(b) The Agent shall have received for each Bank (i) certified copies of resolutions of the Board of Directors of the Borrower and of each Restricted Subsidiary authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party, indicating the authorized signers of this Agreement and the other Loan Documents and all other documents relating thereto, the persons authorized to request Borrowings hereunder and to select the interest rate options with respect thereto and the specimen signatures of such signers, and (ii) one original certificate of good standing (with copies for each Bank) certified by the appropriate governmental officer in the jurisdiction of the Borrower’s and each Restricted Subsidiaries’ incorporation and each state in which it is authorized to do business as a foreign corporation;

(c) The Agent shall have received for the Banks this Agreement, the Notes, the Subsidiary Guaranty Agreement and the Collateral Documents, together with any financing statements requested by the Agent in connection therewith;

(d) The Agent shall have received for the Banks copies (executed or certified, as may be appropriate) of all legal documents or proceedings taken in connection with the execution and delivery of this Agreement and the other Loan Documents; and

(e) The Agent shall have received for the account of the Banks a borrowing base certificate in the form attached hereto as Exhibit C showing the computation of the Available Borrowing Base as of the close of business on May 31, 1997.

(f) All conditions precedent under Section 4 of the Note Purchase Agreements and under Section 4 of the Subordinated Note Purchase Agreement shall have been satisfied or waived by the Note Purchasers or Subordinated Note Purchasers, as the case may be.

Section 7.2 All Loans. As of the time of the making of each advance of a new Borrowing (including the initial Borrowing):

(a) The Agent shall have received for each Bank the Notes of the Borrower and the notice required by Section 2.3 hereof;

(b) Each of the representations and warranties of the Borrower set forth in Section 6 hereof shall be true and correct in all material respects as of said time, except to the extent that any such representation or warranty relates solely to an earlier date;

(c) The Borrower and its Restricted Subsidiaries shall be in full compliance with all of the terms and conditions hereof and of the other Loan Documents, and no Default or Event of Default shall have occurred and be continuing or would occur as a result of making such Borrowing;

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(d) After giving effect to the Borrowing the aggregate principal amount of all Loans hereunder shall not exceed the lesser of (i) the Available Borrowing Base or (ii) Commitments; and

(e) Such Borrowing shall not violate any order, judgment or decree of any court or other authority or any provision of law or regulation applicable to any Bank (including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System) as then in effect.

Each request for a Borrowing hereunder shall be deemed to be a representation and warranty by the Borrower on the date of such Borrowing as to the facts specified in this Section 7.2.

Section 8. COVENANTS.

Section 8.1 Existence, Etc. The Borrower will preserve and keep in force and effect, and will cause each Subsidiary to preserve and keep in force and effect, its legal existence and all licenses and permits necessary to the proper conduct of its business, provided that the foregoing shall not prevent any transaction permitted by Section 8.13 hereof.

Section 8.2 Insurance. The Borrower will maintain, and will cause each Subsidiary to maintain, insurance coverage by financially sound and reputable insurers accorded a rating of A or better by A.M. Best Company, Inc. (the “Best Rating”) at the time of the issuance of any such policy and in such forms and amounts and against such risks as are customary for corporations of established reputation engaged in the same or a similar business and owning and operating similar properties with each such policy requiring renewal of such policy at intervals of no greater than one year from the date of issuance or renewal thereof; provided, however, that if during the term of any such insurance policy the rating accorded any insurer shall be less than a Best Rating of A, the Borrower will, on the date of renewal of any such policy (or, if such change in rating shall occur within 90 days prior to such renewal date, within 90 days of the date of such change in rating), obtain such insurance policy from an insurer accorded a Best Rating of A or better.

Section 8.3 Taxes, Claims for Labor and Materials. The Borrower will promptly pay and discharge, and will cause each Subsidiary promptly to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon the Borrower or such Subsidiary, respectively, or upon or in respect of all or any part of the property or business of the Borrower or such Subsidiary (including, but not limited to the Collateral), all trade accounts payable in accordance with usual and customary business terms, and all claims for work, labor or materials, which if unpaid might become a lien or charge upon any property of the Borrower or such Subsidiary (including, but not limited to the Collateral); provided the Borrower or such Subsidiary shall not be required to pay any such tax, assessment, charge, levy, account payable or claim if (i) the validity, applicability or amount thereof is being contested in good faith by appropriate actions or proceedings which will prevent the forfeiture or sale of any property of the Borrower or such Subsidiary or any material interference with the use thereof by the Borrower or such Subsidiary, and (ii) the Borrower or such Subsidiary shall set aside on its books reserves adequate in accordance with GAAP with respect thereto.

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Section 8.4 Compliance with Laws. The Borrower will promptly comply, and will cause each Subsidiary to comply, with all laws, ordinances or governmental rules and regulations to which it is subject, including without limitation, ERISA and all Environmental Legal Requirements the violation of which could, individually or in the aggregate, materially and adversely affect the properties (including the Collateral), business, prospects, profits or condition of the Borrower and its Subsidiaries or could, individually or in the aggregate, result in any lien or charge upon any property of the Borrower or any Subsidiary.

Section 8.5 Maintenance, Etc. The Borrower will maintain, preserve and keep, and will cause each Subsidiary to maintain, preserve and keep, its properties which are used or useful in the conduct of its business (whether owned in fee or a leasehold interest) in good repair and working order (ordinary wear and tear excepted) and from time to time will make all necessary repairs, replacements, renewals and additions so that at all times the efficiency thereof shall be maintained.

Section 8.6 Nature of Business. Neither the Borrower nor any Restricted Subsidiary will engage in any business if, as a result, the general nature of the business, taken on a consolidated basis, which would then be engaged in by the Borrower and its Restricted Subsidiaries (including, but not limited to, the Insurance Subsidiary) would be substantially changed from the general nature of the business engaged in by the Borrower and its Restricted Subsidiaries on the date of this Agreement.

Section 8.7 Consolidated Net Worth. The Borrower will at all times keep and maintain Consolidated Net Worth at an amount not less than the Minimum Net Worth.

For purposes of this Section 8.7, “Minimum Net Worth” (i) for the fiscal quarter of the Borrower ending March 31, 2001, shall be $72,000,000 and (ii) for each fiscal quarter thereafter shall be the sum of the Minimum Net Worth for the immediately preceding fiscal quarter plus 50% of Consolidated Net Income for such fiscal quarter (but without deduction in the case of any deficit in Consolidated Net Income for such fiscal quarter).

Section 8.8 Fixed Charge Coverage Ratio; Loan Loss Reserves. The Borrower will at the end of each fiscal quarter have a ratio of Net Income Available for Fixed Charges to Fixed Charges for each period of four consecutive fiscal quarters then ending at not less than 1.5 to 1. As of the end of each fiscal quarter, the Borrower’s provision for loan losses for the four fiscal quarters then ending shall equal or exceed the net loan charge off for the corresponding period.

Section 8.9 Permitted Indebtedness. The Borrower will not, and will not permit any Restricted Subsidiary to, incur, create, issue, assume or permit to exist any Indebtedness for Borrowed Money other than:

(a) Senior Debt;

(b) Senior Subordinated Debt;

(c) Junior Subordinated Debt; and

(d) debt incurred in connection with permitted Fixed Asset Financing.

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Section 8.10 Limitations on Indebtedness. (a) The Borrower will not at any time permit:

(i) The aggregate unpaid principal amount of Senior Debt, on a consolidated basis, to exceed 400% of the sum of (A) Consolidated Adjusted Net Worth, (B) the aggregate unpaid principal amount of Junior Subordinated Debt, and (C) the aggregate unpaid principal amount of Senior Subordinated Debt;

(ii) The sum of (A) the aggregate unpaid principal amount of Senior Subordinated Debt, and (B) the aggregate unpaid principal amount of Junior Subordinated Debt to exceed 125% of Consolidated Adjusted Net Worth; or

(iii) The aggregate unpaid principal amount of Junior Subordinated Debt to exceed 50% of Consolidated Adjusted Net Worth; or

(iv) The aggregate amount of unused credit then available from the Banks under this Agreement or otherwise from banks and trust companies under firmly committed lines of credit from a lending group of not fewer than two lenders to be less than the sum of the (A) aggregate outstanding amount of its commercial paper and (B) payments of principal then scheduled to become due during the eight-month period then commencing on all Indebtedness for Borrowed Money of the Borrower and its Restricted Subsidiaries (excluding obligations under the Notes and this Agreement).

(b) The Borrower will not permit, (i) at any time on or before the Trigger Date, the ratio of Indebtedness for Borrowed Money of the Borrower and its Restricted Subsidiaries to Consolidated Adjusted Net Worth to exceed 4.5 to 1 for any month; provided that the ratio of Indebtedness for Borrowed Money of the Borrower and its Restricted Subsidiaries to Consolidated Adjusted Net Worth may exceed 4.5 to 1 for no more than 4 months of any consecutive 12-month period so long as such ratio does not exceed 5.5 to 1 at any such time, and (ii) at any time after the Trigger Date, the ratio of Indebtedness for Borrowed Money of the Borrower and its Restricted Subsidiaries to Consolidated Adjusted Net Worth to exceed 5.5 to 1 for any month; provided that the ratio of Indebtedness for Borrowed Money of the Borrower and its Restricted Subsidiaries to Consolidated Adjusted Net Worth may exceed 5.5 to 1 for no more than 4 months of any consecutive 12-month period so long as such ratio does not exceed 6.5 to 1.

(c) The Borrower will not create, assume, or incur or otherwise become liable in respect of any Senior Subordinated Debt (other than the Senior Subordinated Notes) or Junior Subordinated Debt unless such Senior Subordinated Debt or Junior Subordinated Debt shall have a Weighted Average Life to Maturity equal to or greater than the remaining Weighted Average Life to Maturity of the Senior Subordinated Notes. For purposes of this Section 8.10, “Weighted Average Life to Maturity” of the principal amount of any Indebtedness of the Borrower shall mean, as of the time of any determination thereof, the number of years obtained by dividing the then Remaining Dollar-years of such Indebtedness by the then outstanding principal amount of such Indebtedness; and the “Remaining Dollar-years” of any Indebtedness means at any time the amount obtained by (a) multiplying the amount of each then remaining installment, sinking fund, serial maturity or other required principal payment, including payment at final maturity, by

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the number of years (calculated to the nearest one-twelfth) which will elapse between the time in question and the making of that payment and (b) totaling all of the products obtained in (a).

(d) The Borrower will not permit any Restricted Subsidiary to create, assume or incur, or otherwise be or become liable in respect of any Indebtedness for Borrowed Money (other than the Subsidiary Senior Subordinated Guaranty Agreement and the Subsidiary Guaranty Agreement) to any Person (other than to the Borrower or another Restricted Subsidiary) in an aggregate amount for all Restricted Subsidiaries in excess of $1,000,000 at any time outstanding.

Section 8.11 Limitation on Liens. The Borrower will not, and will not permit any Restricted Subsidiary to, create, assume or suffer to exist any Lien upon any of its Property (including, but not limited to, the Collateral), whether now owned or hereafter acquired; provided, however, that the foregoing restriction and limitation shall not apply to the following Liens:

(a) Liens created under the Collateral Documents;

(b) Liens existing as of the date hereof and reflected on Schedule 8.11 hereto;

(c) Liens existing on property at the time acquired by the Borrower or any Restricted Subsidiary thereof or existing on the property of a corporation at the time it becomes a Restricted Subsidiary, or placed upon property within 120 days after the date of acquisition thereof by the Borrower or any Restricted Subsidiary to secure a portion of the purchase price thereof, but only if (i) such Lien shall attach solely to the property acquired, purchased or constructed and (ii) such Lien does not exceed the lesser of the fair market value or cost of such property;

(d) Liens constituting renewals, extensions or refundings of Liens permitted by clause (b) or (c) above, provided that the principal amount of the Indebtedness secured by any such new Lien does not exceed the principal amount of the Indebtedness being renewed, extended or refunded at the time of renewal, extension or refunding thereof and that such new Lien attaches only to the same property theretofore subject to such earlier Lien;

(e) Liens securing taxes, assessments or governmental charges or levies, or the claims or demands of materialmen, mechanics, carriers, workmen, repairmen, warehousemen, landlords and other like persons, provided that payment thereof is not at the time required by Section 8.3 hereof;

(f) other Liens incidental to the conduct of its business or the ownership of its property and assets when not incurred in connection with the borrowing of money or the obtaining of advances of credit, and which do not in the aggregate materially detract from the value of its property or assets, or materially impair the use thereof in the operation of its business;

(g) attachment, judgment and other similar Liens arising in connection with court proceedings, provided that (i) execution or other enforcement of such Liens is

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effectively stayed, (ii) the claims secured thereby are being actively contested in good faith by appropriate proceedings, (iii) adequate reserves in conformity with GAAP have been provided on the books of the Borrower or such Restricted Subsidiary and (iv) the aggregate amount of the liabilities of the Borrower and all Restricted Subsidiaries so secured, including interest and penalties thereon, shall not be in excess of $100,000 at any one time outstanding;

(h) Liens on property of a Restricted Subsidiary of the Borrower to secure obligations of such Restricted Subsidiary to the Borrower or to another Restricted Subsidiary; and

(i) Liens granted to secure the Fixed Asset Financing, provided that such Liens (x) only extend to the fixed assets acquired with the proceeds of such Fixed Asset Financing, (y) only secure the original purchase price of such fixed assets, as reduced by repayments thereon, and (z) do not extend to or cover any other Property of the Borrower or any Subsidiary.

Section 8.12 Dividends, Stock Purchases. The Borrower will not except as hereinafter provided:

(a) Declare or pay any dividends, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of capital stock of the Borrower); or

(b) Directly or indirectly, or through any Subsidiary, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than in exchange for or out of the net cash proceeds to the Borrower from the substantially concurrent issue or sale of other shares of capital stock of the Borrower or warrants, rights or options to purchase or acquire any shares of its capital stock); or

(c) Make any other payment or distribution, either directly or indirectly or through any Subsidiary, in respect of its capital stock; or

(d) Make any payment of principal, interest or premium on any Senior Subordinated Debt or Junior Subordinated Debt other than any regularly scheduled payment of principal or interest on the Senior Subordinated Debt or the Junior Subordinated Debt;

(such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options, and all such other distributions and such payments on Senior Subordinated Debt and Junior Subordinated Debt being herein collectively called “Restricted Payments”), if, after giving effect thereto, (i) a Default or Event of Default has occurred and is continuing or (ii) the aggregate amount of Restricted Payments made during the period after March 31, 2003, to and including the date of the making of the Restricted Payment in question, would exceed the sum of (x) $15,000,000, plus (y) the net cash proceeds received by the Borrower from the issuance or sale subsequent to March 31, 2003, of shares of common stock of the Borrower or warrants, rights or options to purchase or acquire any shares of its

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common stock, plus (z) 50% of Consolidated Net Income for the period commencing April 1, 2003, and ending on the last day of the fiscal quarter immediately preceding the date of the making of the Restricted Payment in question, computed on a cumulative basis for said entire period (or if such Consolidated Net Income is a deficit figure, then minus 100% of such deficit); provided that at all times after the Determination Date and after giving effect to such Restricted Payment, Consolidated Tangible Net Worth exceeds $95,000,000. For the purposes of this Section 8.12 the amount of any Restricted Payment declared, paid or distributed in property of the Borrower shall be deemed to be the greater of the book value or fair market value (as determined in good faith by the Board of Directors of the Borrower) of such property at the time of the making of the Restricted Payment in question. The Borrower will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof.

Section 8.13 Mergers, Consolidations and Sales or Transfers of Assets. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any transaction of merger or consolidation or transfer, sell, assign, lease, or otherwise dispose of all or a substantial part of its properties or assets to any Person, except that:

(1) any Restricted Subsidiary may merge or consolidate with or into the Borrower or any other Restricted Subsidiary (other than the Insurance Subsidiary) so long as in any merger or consolidation involving the Borrower, the Borrower shall be the surviving or continuing corporation;

(2) the Borrower may merge or consolidate with any other corporation provided that (i) the Borrower shall be the surviving and continuing corporation; and (ii) at the time of such consolidation or merger and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing;

(3) any Restricted Subsidiary may sell or convey all or substantially all of its assets to the Borrower or to another Restricted Subsidiary (other than the Insurance Subsidiary); and

(4) the Borrower or any Restricted Subsidiary may sell all or a substantial part of the assets of the Borrower and its Restricted Subsidiaries pursuant to, and in compliance with, Section 10.4 of the Company Security Agreement and Section 10.4 of the Subsidiary Security Agreement.

(b) The Borrower will not permit any Restricted Subsidiary to issue or sell any shares of stock of any class or any partnership interest, membership interest or other equity interest of any type (including for the purposes of this Section 8.13, any warrants, rights or options to purchase or otherwise acquire any such equity interest or other Securities exchangeable for or convertible into any such equity interest) of such Restricted Subsidiary to any Person other than the Borrower or a Restricted Subsidiary (other than the Insurance Subsidiary), except for the purpose of qualifying directors.

(c) The Borrower will not sell, transfer, or otherwise dispose of any shares of stock, partnership interest, membership interest or other equity interest in any Restricted Subsidiary

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(except (i) to qualify directors and (ii) the pledge of the Pledged Collateral under the Company Security Agreement and any transfer or sale thereof pursuant to, and in compliance with, Section 10.4 of the Company Security Agreement) or any Indebtedness of any Restricted Subsidiary, and will not permit any Restricted Subsidiary to sell, transfer or otherwise dispose of (except (i) to the Borrower or a Restricted Subsidiary or (ii) the pledge of the Pledged Collateral under the Subsidiary Security Agreement and any transfer or sale thereof pursuant to, and in compliance with, Section 10.4 of the Subsidiary Security Agreement) any such shares of stock, partnership interest, membership interest or other equity interest or any Indebtedness of any other Restricted Subsidiary, unless:

(1) simultaneously with such sale, transfer, or disposition, all such interests and all Indebtedness of such Restricted Subsidiary at the time owned by the Borrower and by every other Restricted Subsidiary shall be sold, transferred or disposed of as an entirety;

(2) the Board of Directors of the Borrower shall have determined, as evidenced by a resolution thereof, that the retention of such interest and Indebtedness is no longer in the best interests of the Borrower or the holders of the Notes;

(3) such interest and Indebtedness is sold, transferred or otherwise disposed of to a Person, for a cash consideration and on terms reasonably deemed by the Board of Directors to be adequate and satisfactory;

(4) the Restricted Subsidiary being disposed of shall not have any continuing investment in the Borrower or any other Restricted Subsidiary not being simultaneously disposed of; and

(5) such sale or other disposition does not involve a substantial part (as hereinafter defined) of the assets of the Borrower and its Restricted Subsidiaries.

(d) As used in this Section 8.13, in the case of the sale, lease or other disposition of any assets, such assets shall be deemed to be a “substantial part” of the assets of the Borrower and its Restricted Subsidiaries if (x) such assets, together with all other assets (i) sold, leased or otherwise disposed of by the Borrower and its Restricted Subsidiaries or (ii) subject to any waiver or supplemental agreement of the Company Security Agreement or the Subsidiary Security Agreement without the consent of the holders of at least a majority of the then outstanding principal amount of the Senior Subordinated Notes or, if such waiver or supplemental agreement is described in clauses (B), (C), (E) or (F) of Section 9.2(a) of the Company Security Agreement or the Subsidiary Security Agreement, without the consent of all of the holders of the Senior Subordinated Notes, in each case, during the period of 12 months ending with the date of such sale, lease or disposition, contributed more than 15% of EBIT of the Borrower and its Restricted Subsidiaries determined as of the end of the fiscal year immediately preceding such sale or disposition, (y) the book value of such assets, when added to the book value of all other assets of the Borrower and its Restricted Subsidiaries (i) sold or otherwise disposed of by the Borrower and its Restricted Subsidiaries or (ii) subject to any waiver or supplemental agreement of the Company Security Agreement or the Subsidiary Security Agreement without the consent of the holders of at least a majority of the then outstanding

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principal amount of the Senior Subordinated Notes or, if such waiver or supplemental agreement is described in clauses (B), (C), (E) or (F) of Section 9.2(a) of the Company Security Agreement or the Subsidiary Security Agreement, without the consent of all of the holders of the Senior Subordinated Notes, in each case, during the period of 12 months ending with the date of such sale or disposition, exceeds 10% of the book value of all Receivables determined as of the end of the fiscal year immediately preceding such sale or disposition, or (z) the book value of such assets, when added to the book value of all other assets of the Borrower and its Restricted Subsidiaries (i) sold or otherwise disposed of by the Borrower and its Restricted Subsidiaries or (ii) subject to any waiver or supplemental agreement of the Company Security Agreement or the Subsidiary Security Agreement without the consent of the holders of at least a majority of the then outstanding principal amount of the Senior Subordinated Notes or, if such waiver or supplemental agreement is described in clauses (B), (C), (E) or (F) of Section 9.2(a) of the Company Security Agreement or the Subsidiary Security Agreement, without the consent of all of the holders of the Senior Subordinated Notes, in each case, during the entire period commencing on April 1, 1997, and ending with the date of such sale or disposition, exceeds 25% of the book value of all Receivables determined as of the end of the fiscal year immediately preceding such sale or disposition.

(e) Nothing in this Section 8.13 shall prohibit the Borrower from transferring, selling, assigning, leasing, subleasing or otherwise disposing of an insubstantial part of its properties or assets, excluding Receivables of the Borrower and its Restricted Subsidiaries, to any Person from time to time, in the ordinary course.

Section 8.14 Lease-Backs. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into any arrangements, directly or indirectly, with any Person, whereby the Borrower or any Restricted Subsidiary shall sell or transfer any Property, whether now owned or hereafter acquired, used or useful in their respective businesses in connection with the rental or lease of the Property so sold or transferred or of other Property which the Borrower or any Restricted Subsidiary intends to use for substantially the same purpose or purposes as the Property so sold or transferred.

Section 8.15 Guaranties. The Borrower will not and will not permit any Restricted Subsidiary to become or be liable in respect of any Guaranty except: (i) Guaranties of the Borrower which are limited in amount to a stated maximum dollar exposure and are permitted under Section 8.10; (ii) the Subsidiary Senior Subordinated Guaranty Agreement; and (iii) the Subsidiary Guaranty Agreement.

Section 8.16 Limitation on Restrictions. Except as provided herein, the Borrower shall not and shall not permit any of its Restricted Subsidiaries directly or indirectly to create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to: (1) pay dividends or make any other distribution on any of such Restricted Subsidiary’s capital stock or other equity interests owned by the Borrower or any Restricted Subsidiary of the Borrower; (2) pay any indebtedness owed to the Borrower or any other Restricted Subsidiary; (3) make loans or advances to the Borrower or any other Restricted Subsidiary; or (4) transfer any of its property or assets to the Borrower or any other Restricted Subsidiary. The Borrower shall not enter into any indenture, instrument, or other agreement for Indebtedness for Borrowed Money which contains, or amend any terms of

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any such indenture, instrument, or agreement which would result in any such indenture, instrument, or agreement having, covenants or defaults more burdensome on the Borrower or any Restricted Subsidiary than the covenants and defaults provided for in this Agreement and the other Loan Documents.

Section 8.17 Transactions with Affiliates. The Borrower will not, and will not permit any Restricted Subsidiary to, enter into or be a party to, any transaction or arrangement with any Affiliate (including without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any Affiliate), except in the ordinary course of and pursuant to the reasonable requirements of the Borrower’s or such Restricted Subsidiary’s business and upon fair and reasonable terms no less favorable to the Borrower or such Restricted Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person other than an Affiliate.

Section 8.18 Investments. The Borrower will not, and will not permit any Restricted Subsidiary to make any Investment except:

(a) Investments in obligations of the United States of America (or any agency thereof for which the full faith and credit of the United States of America is pledged for the repayment of principal and interest thereof) maturing in twelve months or less from the date of acquisition thereof;

(b) certificates of deposit of any banking institution with combined capital and surplus of at least $500,000,000, maturing in twelve months or less from the date of acquisition thereof which, at the time of acquisition by the Borrower or any Restricted Subsidiary, is accorded the rating of A or better by S&P and A2 or better by Moody’s, or if S&P and/or Moody’s is no longer rating any such certificates of deposit, then an equivalent rating by any other nationally recognized credit rating agency of similar standing;

(c) Loans, advances and extensions of credit to or for the benefit of consumer/borrowers in the ordinary course of business in accordance with Section 8.6 hereof;

(d) Investments by the Borrower or any Restricted Subsidiary in and to any other Restricted Subsidiary provided, however, Investments by the Borrower or any Restricted Subsidiary in and to the Insurance Subsidiary shall not exceed $500,000 in the aggregate;

(e) Investments in commercial paper maturing in 270 days or less from the date of issuance thereof which, at the time of acquisition by the Borrower or any Restricted Subsidiary, is accorded the rating of P1 or better by S&P and A1 or better by Moody’s, or if S&P and/or Moody’s is no longer rating any such commercial paper, then an equivalent rating by any other nationally recognized credit rating agency of similar standing; or

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(f) other Investments (in addition to those permitted in clauses (a) through (e) above) provided that the aggregate amount of all such Investments shall not at any time exceed 10% of Consolidated Adjusted Net Worth.

Section 8.19 Termination of Pension Plans. The Borrower will not and will not permit any Subsidiary to withdraw from any Multiemployer Plan or permit any employee benefit plan maintained by it to be terminated if such withdrawal or termination could result in withdrawal liability (as described in Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a Lien on any Property of the Borrower or any Subsidiary pursuant to Section 4068 of ERISA.

Section 8.20 Reports and Rights of Inspection. The Borrower will keep, and will cause each Subsidiary to keep, proper books of record and account in which full and correct entries will be made of all dealings or transactions of or in relation to the business and affairs of the Borrower or such Subsidiary, in accordance with GAAP consistently maintained (except for changes disclosed in the financial statements furnished to the Banks pursuant to this Section 8.20 and concurred in by the independent public accountants referred to in paragraph (b) hereof), and will furnish to each holder of a Note and the Security Trustee (in duplicate if so specified below or otherwise requested):

(a) Quarterly Statements. As soon as available and in any event within 45 days after the end of each quarterly fiscal period (except the last) of each fiscal year, a copy of:

(1) consolidated and consolidating balance sheets of the Borrower and its Restricted Subsidiaries as of the close of such quarter and, in the case of the consolidated balance sheets, setting forth in comparative form the amount for the corresponding period of the preceding fiscal year,

(2) consolidated and consolidating statements of income and retained earnings of the Borrower and its Restricted Subsidiaries for the portion of the fiscal year ending with such quarter and, in the case of the consolidated statements of income and retained earnings, setting forth in comparative form the amount for the corresponding period of the preceding fiscal year,

(3) consolidated and consolidating statements of changes in financial position of the Borrower and its Restricted Subsidiaries for the portion of the fiscal year ending with such quarter and, in the case of the consolidated statements of changes in financial position, setting forth in comparative form the amount for the corresponding period of the preceding fiscal year, and

(4) consolidated and consolidating statements of cash flows of the Borrower and its Restricted Subsidiaries for the portion of the fiscal year ending with such quarter and, in the case of the consolidated statements of cash flows, setting forth in comparative form the consolidated figures for the corresponding period of the preceding fiscal year, all in reasonable detail and certified as complete and correct, by an authorized financial officer of the Borrower;

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(b) Annual Statements. As soon as available and in any event within 90 days after the close of each fiscal year of the Borrower, a copy of:

(1) consolidated and consolidating balance sheets of the Borrower and its Restricted Subsidiaries as of the close of such fiscal year,

(2) consolidated and consolidating statements of income and retained earnings and changes in financial position of the Borrower and its Restricted Subsidiaries for such fiscal year, and

(3) consolidated and consolidating statements of changes in cash flows of the Borrower and its Restricted Subsidiaries for such fiscal year,

in each case setting forth in comparative form the consolidated figures for the preceding fiscal year, all in reasonable detail and accompanied by an opinion, unqualified as to scope limitations imposed by the Borrower and otherwise without qualification except as therein noted, thereon of a firm of independent public accountants of recognized national standing selected by the Borrower to the effect that the consolidated financial statements have been prepared in accordance with GAAP consistently applied (except for noted changes in application in which such accountants concur) and present fairly the financial condition of the Borrower and its Restricted Subsidiaries and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards and accordingly, includes such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances;

(c) Audit Reports. Promptly upon receipt thereof, one copy of each interim or special audit made by independent accountants of the books of the Borrower or any Restricted Subsidiary and any management letter received from such accountants and the Borrower’s response, if any, to such management letter;

(d) SEC and Other Reports. Promptly upon their becoming available, one copy of each financial statement, report, notice, proxy statement or statement of additional information sent by the Borrower to stockholders generally and of each regular or periodic report, and any registration statement or prospectus filed by the Borrower or any Subsidiary with any securities exchange or the Securities and Exchange Commission or any successor agency, and copies of any orders in any proceedings to which the Borrower or any of its Subsidiaries is a party, issued by any governmental agency, Federal or state, having jurisdiction over the Borrower or any of its Subsidiaries;

(e) Requested Information. With reasonable promptness, such other data and information as any holder of any Note or the Security Trustee may reasonably request;

(f) Officers’ Certificates. Within the periods provided in paragraphs (a) and (b) above, a certificate of an authorized financial officer of the Borrower stating that he has reviewed the provisions of this Agreement and setting forth: (i) the information and computations (in sufficient detail) required in order to determine whether the Borrower was in compliance with the requirements of Sections 8.7 through Sections 8.18, both

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inclusive, at the end of the period covered by the financial statements then being furnished, and (ii) whether, to the best of such officer’s knowledge, there existed as of the date of such financial statements and whether, to the best of such officer’s knowledge, there exists on the date of the certificate or existed at any time during the period covered by such financial statements any Default or Event of Default and, if any such condition or event exists on the date of the certificate, specifying the nature and period of existence thereof and the action the Borrower is taking and proposes to take with respect thereto;

(g) Accountant’s Certificates. Within the period provided in paragraph (b) above, a certificate of the accountants who render an opinion with respect to such financial statements, stating that they have reviewed this Agreement and stating further, whether in making their audit, such accountants have become aware of any Default or Event of Default under any of the terms or provisions of this Agreement insofar as any such terms or provisions pertain to or involve accounting matters or determinations, and if any such condition or event then exists, specifying the nature and period of existence thereof;

(h) Unrestricted Subsidiaries. Within the respective periods provided in paragraph (b) above, financial statements of the character and for the dates and periods as in said paragraph (b) provided covering each Unrestricted Subsidiary (or groups of Unrestricted Subsidiaries on a consolidated basis);

(i) Loan Loss Reserve Report. On or before the twenty-fifth day of every month, a loan loss reserve report with respect to the Borrower and its Restricted Subsidiaries for the immediately preceding month in form and substance reasonably satisfactory to the Required Banks;

(j) Loan Charge-off Recovery Report. On or before the twenty-fifth day of every month, a loan charge-off recovery report with respect to the Borrower and its Restricted Subsidiaries for the prior month in form and substance reasonably satisfactory to the Required Banks;

(k) Borrowing Base Certificate. On or before the twenty-fifth day of every month, a Borrowing Base Certificate substantially in the form attached hereto as Exhibit C calculated as of the last day of the immediately preceding month; and

(l) Annual Budget. As soon as available, and in any event within 90 days after the close of each fiscal year of the Borrower, a copy of the Borrower’s consolidated annual budget for the current fiscal year, such annual budget to show the Borrower’s projected consolidated revenues, expenses, and balance sheet on month-by-month basis, such annual budget to be in reasonable detail prepared by the Borrower and in form reasonably satisfactory to the Required Banks; and

(m) Notice of Change of Control. Promptly upon the occurrence of any Change of Control, notice of such Change of Control.

Without limiting the foregoing, the Borrower will permit each Bank and the Security Trustee (or such Persons as any Bank or the Security Trustee may designate) to visit and inspect, any of the

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properties of the Borrower or any Subsidiary, to inspect any other Collateral, to examine all their books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees, and independent public accountants (and by this provision the Borrower authorizes said accountants to discuss with such Persons the finances and affairs of the Borrower and its Subsidiaries) all at such reasonable times and as often as may be reasonably requested. Any visitation, inspection or discussion shall be at the sole cost and expense of the Borrower; provided, however, that prior to the occurrence of a Default or Event of Default, the Borrower shall bear such costs and expenses not more frequently than once every semi-annual fiscal period.

Section 9. EVENTS OF DEFAULT AND REMEDIES.

Section 9.1 Events of Default. Any one or more of the following shall constitute an Event of Default:

(a) Default shall occur in the payment of interest on any Note or any other sums (other than for principal on the Note) required to be paid pursuant to this Agreement or any other Loan Document when the same shall have become due and such default shall continue for more than five days; or

(b) Default shall occur in the making of any required prepayment of principal on any of the Notes when due; or

(c) Default shall occur in the making of any other payment of the principal of any Note thereon at the expressed or any accelerated maturity date or at any date fixed for prepayment; or

(d) Default shall occur in the observance or performance of any covenant or agreement contained in Sections 8.7 through 8.18 hereof, both inclusive; or

(e) The Borrower shall, without the prior written consent of the Required Banks, make any voluntary prepayment, or enter into any amendment changing any payment due dates, on the notes of the Borrower issued pursuant to any Note Purchase Agreement or the Subordinated Note Purchase Agreement, or enter into any amendment increasing the interest rate otherwise payable on the notes of the Borrower issued pursuant to the Subordinated Note Purchase Agreement, or shall make any voluntary prepayment on any Senior Subordinated Debt or on any Junior Subordinated Debt except as permitted by this Agreement; or

(f) Default shall occur in the observance or performance of any other provision of this Agreement or any other Loan Document which is not remedied within 30 days after the earlier to occur of (i) the date on which such failure shall first become known to any officer of the Borrower or (ii) the date on which notice thereof is given to the Borrower; or

(g) An “Event of Default” shall occur under any Note Purchase Agreement or the Subordinated Note Purchase Agreement or under any other indenture, instrument, or

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agreement setting forth the terms and conditions applicable to any Senior Subordinated Debt or Junior Subordinated Debt; or

(h) Default shall occur under any interest rate or currency protection agreement entered into by the Borrower or any Subsidiary with any bank or other financial institution; or

(i) Default shall be made in the payment when due (whether by lapse of time, by declaration, by call for redemption or otherwise) of the principal of or interest or premium on any Indebtedness for Borrowed Money in excess of $1,000,000 (other than the Notes, the Senior Secured Notes of the Borrower issued pursuant to the Note Purchase Agreements, and the Senior Subordinated Notes of the Borrower issued pursuant to the Subordinated Note Purchase Agreement) of the Borrower or any Subsidiary, individually or in the aggregate, and such default shall continue beyond the period of grace, if any, allowed with respect thereto; or

(j) Default or the happening of any event shall occur under any indenture, agreement, or other instrument under which any Indebtedness for Borrowed Money in excess of $1,000,000 of the Borrower or any Subsidiary (other than this Agreement, the Note Purchase Agreements, the Subordinated Note Purchase Agreement, the Subsidiary Senior Subordinated Guaranty Agreements or the Subsidiary Guaranty Agreements), individually or in the aggregate, may be issued and such default or event shall continue for a period of time sufficient to permit the acceleration of the maturity of any Indebtedness for Borrowed Money of the Borrower or any Subsidiary outstanding thereunder; or

(k) Any representation or warranty made by the Borrower or any Restricted Subsidiary herein or in any other Loan Document or made by the Borrower or any Restricted Subsidiary in any statement or certificate furnished by the Borrower or any Restricted Subsidiary in connection with the execution and delivery of the Notes or furnished by the Borrower or any Restricted Subsidiary pursuant hereto or pursuant to any other Loan Document is untrue in any material respect as of the date of the issuance or making thereof; or

(l) The Subsidiary Guaranty Agreement shall be held by a court of competent jurisdiction to be invalid or unenforceable in whole or in part in any respect or shall otherwise cease to be in full force and effect or the Borrower or any Restricted Subsidiary takes any action for the purpose of repudiating or rescinding any Loan Document or the obligations of the Borrower or any Restricted Subsidiary, respectively, thereunder or the Borrower or any Restricted Subsidiary declares that the obligations of the Borrower or any Restricted Subsidiary under any Loan Document are unenforceable; or

(m) The Collateral Documents shall cease to be in full force and effect, or shall cease to give the Security Trustee the Liens purported to be created thereby or, in the reasonable judgment of the Required Banks, the practical realization of the benefits of the Liens purported to be created thereby; or

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(n) Final judgment or judgments for the payment of money aggregating in excess of $100,000 is or are outstanding against the Borrower or any Subsidiary or against any property or assets of either and any one of such judgments has remained unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of 30 days from the date of its entry; or

(o) The Borrower or any member of its Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $100,000 which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities in excess of $100,000 (collectively, a “Material Plan”) shall be filed under Title IV of ERISA by the Borrower or any other member of its Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be instituted by a fiduciary of any Material Plan against the Borrower or any member of its Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; or

(p) A custodian, trustee or receiver is appointed for the Borrower or any Subsidiary or for the major part of the property of either and is not discharged within 45 days after such appointment; or

(q) The Borrower or any Subsidiary becomes insolvent or bankrupt, is generally not paying its debts as they become due or makes an assignment for the benefit of creditors, or the Borrower or any Subsidiary causes or suffers an order for relief to be entered with respect to it under applicable Federal bankruptcy law or applies for or consents to the appointment of a custodian, trustee or receiver for the Borrower or such Subsidiary or for the major part of the property of either; or

(r) Bankruptcy, reorganization, arrangement or insolvency proceedings, or other proceedings for relief under any bankruptcy or similar law or laws for the relief of debtors, are instituted by or against the Borrower or any Subsidiary and, if instituted against the Borrower or any Subsidiary, are consented to or are not dismissed within 60 days after such institution; or

(s) any Change of Control shall occur.

Section 9.2 Notice to Banks. When any Default or Event of Default described in the foregoing Section 9.1 has occurred, or if any Bank or the holder of any other evidence of Indebtedness of the Borrower gives any notice or takes any other action with respect to a claimed default, the Borrower agrees to give notice within three business days (except as otherwise specifically provided herein) of such event to all Banks, such notice to be in writing and sent by registered or certified mail or by telegram.

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Section 9.3 Non-Bankruptcy Defaults. When any Event of Default other than those described in Sections (p), (q) or (r) of Section 9.1 hereof has occurred and is continuing, the Agent shall, if so directed by the Required Banks, by notice to the Borrower, take either or both of the following actions:

(a) terminate the remaining Commitments of the Banks hereunder on the date stated in such notice (which may be the date thereof); and

(b) declare the principal of and the accrued interest on all outstanding Notes of the Borrower to be forthwith due and payable and thereupon all of said Notes, including both principal and interest, shall be and become immediately due and payable together with all other amounts payable under this Agreement and the other Loan Documents without further demand, presentment, protest or notice of any kind.

The Agent, after giving notice to the Borrower pursuant to this Section 9.3, shall also promptly send a copy of such notice to the other Banks, but the failure to do so shall not impair or annul the effect of such notice.

Section 9.4 Bankruptcy Defaults. When any Event of Default described in Sections (p), (q) or (r) of Section 9.1 hereof has occurred and is continuing, then all outstanding Notes, both for principal and interest, shall immediately become due and payable together with all other amounts payable under this Agreement and the other Loan Documents without presentment, demand, protest or notice of any kind, and the obligation of the Banks to extend further credit pursuant to any of the terms hereof shall immediately terminate.

Section 9.5 Expenses. The Borrower agrees to pay to the Agent and each Bank, or any other holder of any Note outstanding hereunder, all costs and expenses incurred or paid by the Agent and such Bank or any such holder, including reasonable attorneys’ fees and court costs, in connection with any Default or Event of Default by the Borrower hereunder or in connection with the enforcement of any of the terms hereof or of the other Loan Documents.

Section 10. CHANGE IN CIRCUMSTANCES.

Section 10.1 Change of Law. Notwithstanding any other provisions of this Agreement or any Note, if at any time after the date hereof any change in applicable law or regulation or in the interpretation thereof makes it unlawful for any Bank to make or continue to maintain Eurodollar Loans or to give effect to its obligations as contemplated hereby, such Bank shall promptly give notice thereof to the Borrower, with a copy to the Agent, and such Bank’s obligations to make or maintain Eurodollar Loans under this Agreement shall terminate and shall not revive until it is no longer unlawful for such Bank to make or maintain Eurodollar Loans. The Borrower shall prepay on demand the outstanding principal amount of any such affected Eurodollar Loans, together with all interest accrued thereon and all other amounts then due and payable to such Bank under this Agreement; provided, however, subject to all of the terms and conditions of this Agreement, the Borrower may then elect to borrow the principal amount of the affected Eurodollar Loan from such Bank by means of a Domestic Rate Loan from such Bank that shall not be made ratably by the Banks but only from such affected Bank.

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Section 10.2 Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for any Borrowing of Eurodollar Loans:

(a) the Agent advises the Borrower that deposits in United States Dollars (in the applicable amounts) are not being offered to it in the off-shore U.S. Dollar interbank market for such Interest Period, or

(b) Banks having 51% or more of the aggregate amount of the Commitments advise the Agent that LIBOR as determined by the Agent will not adequately and fairly reflect the cost to such Banks of funding their Eurodollar Loans for such Interest Period,

then the Agent shall forthwith give notice thereof to the Borrower and the Banks, whereupon until the Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Banks to make Eurodollar Loans shall be suspended.

Section 10.3 Increased Cost and Reduced Return. (a) If on or after the date hereof the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

(i) shall subject any Bank (or its Lending Office) to any tax, duty or other charge with respect to its Eurodollar Loans, its Notes or its obligation to make Eurodollar Loans, or shall change the basis of taxation of payments to any Bank (or its Lending Office) of the principal of or interest on its Eurodollar Loans or any other amounts due under this Agreement in respect of its Eurodollar Loans or its obligation to make Eurodollar Loans (except for changes in the rate of tax on the overall net income of such Bank or its Lending Office imposed by the jurisdiction in which such Bank’s principal executive office or Lending Office is located); or

(ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Eurodollar Loans any such requirement included in an applicable Eurodollar Reserve Percentage) against assets of, deposits with or for the account of, or credit extended by, any Bank (or its Lending Office) or shall impose on any Bank (or its Lending Office) or on the interbank market any other condition affecting its Eurodollar Loans, its Notes or its obligation to make Eurodollar Loans;

and the result of any of the foregoing is to increase the cost to such Bank (or its Lending Office) of making or maintaining any Eurodollar Loan, or to reduce the amount of any sum received or receivable by such Bank (or its Lending Office) under this Agreement or under its Notes with respect thereto, by an amount deemed reasonably and in good faith by such Bank to be material, then, within fifteen (15) days after demand by such Bank (with a copy to the Agent), the Borrower shall be obligated to pay to such Bank such additional amount or amounts as will

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compensate such Bank for such increased cost or reduction (computed commencing on the effective date of any event mentioned herein). Each Bank agrees to use its best efforts to give the Borrower notice of the occurrence of any event mentioned herein.

(b) If after the date hereof any Bank shall have determined that the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Bank (or its Lending Office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Bank’s capital, or on the capital of any corporation controlling such Bank, as a consequence of its obligations hereunder to a level below that which such Bank could have achieved but for such adoption, change or compliance (taking into consideration such Bank’s policies with respect to capital adequacy) by an amount deemed by such Bank to be material, then from time to time, within fifteen (15) days after demand by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank such additional amount or amounts as will compensate such Bank for such reduction.

Section 10.4 Lending Offices. Each Bank may, at its option, elect to make its Loans hereunder at the branch, office or affiliate specified on the appropriate signature page hereof (each a “Lending Office”) for each type of Loan available hereunder or at such other of its branches, offices or affiliates as it may from time to time elect and designate in a notice to the Borrower and the Agent.

Section 10.5 Discretion of Bank as to Manner of Funding. Notwithstanding any other provision of this Agreement, each Bank shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if each Bank had actually funded and maintained each Eurodollar Loan through the purchase of deposits in the interbank market having a maturity corresponding to such Loan’s Interest Period and bearing an interest rate equal to LIBOR for such Interest Period.

Section 11. THE AGENT.

Section 11.1 Appointment and Authorization. Each Bank hereby irrevocably appoints Harris Trust and Savings Bank its Agent under this Agreement and the other Loan Documents and hereby authorizes the Agent to take such action as Agent and on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto.

Section 11.2 Agent and Affiliates. The Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any other Bank and may exercise or refrain from exercising the same as though it were not an Agent, and the Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or affiliate of the Borrower as if it were not an Agent hereunder and thereunder.

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Section 11.3 Action by Agent. The Agent shall in all cases be fully justified in failing or refusing to act hereunder and under the other Loan Documents unless the Agent shall be indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. In all cases in which this Agreement does not require the Agent to take certain actions, the Agent shall be fully justified in using its discretion in failing to take or in taking any action hereunder or under the other Loan Documents. Without limiting the generality of the foregoing, the Agent shall not be required to take any action with respect to any Event of Default, except as expressly provided in Section 9.3. The Agent shall be acting as an independent contractor hereunder and nothing herein shall be deemed to impose on the Agent any fiduciary obligations to the Banks or the Borrower.

Section 11.4 Consultation with Experts. The Agent may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

Section 11.5 Liability of Agent. No Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Banks or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing hereunder or any other Loan Document; (ii) the performance or observance of any of the covenants or agreements of the Borrower or any Subsidiary in any Loan Document; (iii) the satisfaction of any condition specified in Section 7, except receipt of items required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes, any other Loan Document or any other instrument or writing furnished in connection herewith or of the collectibility of the Obligations or the value, worth, priority, or perfection of the Collateral or the Liens provided for by the Loan Documents. The Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, request or statement (whether written or oral) or other documents believed by it to be genuine or to be signed by the proper party or parties and, in the case of legal matters, in relying on the advice of counsel (including counsel for the Borrower). The Agent need not verify the worth or existence of the Collateral and may rely exclusively on reports of the Borrower in computing the Available Borrowing Base. The Agent may treat the Banks that are named herein as the holders of the Notes and the indebtedness contemplated herein.

Section 11.6 Indemnification. Each Bank shall, ratably in accordance with its Commitments (or, if the Commitments have been terminated in whole, ratably in accordance with its outstanding Loans), indemnify the Agent (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsels’ fees and disbursements), claim, demand, action, loss, obligation, damages, penalties, judgments, suits or liability (except such as result from the Agent’s gross negligence or willful misconduct) that the Agent may suffer or incur in connection with this Agreement or any other Loan Document or any action taken or omitted by the Agent hereunder or thereunder.

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Section 11.7 Credit Decision. Each Bank acknowledges that it has, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Bank also acknowledges that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement or any other Loan Document.

Section 11.8 Resignation of the Agent. Subject to the appointment and acceptance of a successor Agent as provided below, the Agent may, with the prior written consent of the Borrower (such consent not to be unreasonably withheld), resign at any time by giving written notice thereof to the Banks and the Borrower. Upon any such resignation of the Agent, the Required Banks shall have the right to appoint, with the consent of the Borrower (such consent not to be unreasonably withheld), a successor Agent. If no successor Agent shall have been so appointed by the Required Banks, and shall have accepted such appointment, within thirty (30) days after the retiring Agent’s giving of notice of resignation, then the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $200,000,000. Upon the acceptance of its appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent.

Section 11.9 Payments. Unless the Agent shall have been notified by a Bank prior to the date on which such Bank is scheduled to make payment to the Agent of the proceeds of a Loan (which notice shall be effective upon receipt) that such Bank does not intend to make such payment, the Agent may assume that such Bank has made such payment when due and the Agent may in reliance upon such assumption (but shall not be required to) make available to the Borrower the proceeds of the Loan to be made by such Bank and, if any Bank has not in fact made such payment to the Agent, such Bank shall, on demand, pay to the Agent the amount made available to the Borrower attributable to such Bank together with interest thereon in respect of each day during the period commencing on the date such amount was made available to the Borrower and ending on (but excluding) the date such Bank pays such amount to the Agent at a rate per annum equal to the Federal Funds Rate (as hereinafter defined). If such amount is not received from such Bank by the Agent immediately upon demand, the Borrower will, on demand, repay to the Agent the proceeds of the Loan attributable to such Bank with interest thereon at a rate per annum equal to the interest rate applicable to the relevant Loan, but without such payment being considered a payment or prepayment of a Loan, so that the Borrower will have no liability under Section 2.10 hereof with respect to such payment. “Federal Funds Rate” shall mean the rate determined by the Agent to be the average (rounded upwards, if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the Agent at approximately 10:00 A.M. (Chicago time) (or as soon thereafter as is practicable) on such date (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or more Federal funds brokers selected by the Agent for the sale to the Agent at face value of Federal Funds in an

48

amount equal or comparable to the principal amount owed to the Agent for which such rate is being determined hereof.

Section 11.10 Co-Agent. Each Bank acknowledges Bank One, N.A., has been appointed Co-Agent under this Agreement; provided, however, that the Co-Agent shall not have any right, power, obligation or duty under this Agreement or any other Loan Document other than those applicable to it as a Bank.

Section 12. MISCELLANEOUS.

Section 12.1 No Waiver of Rights. No delay or failure on the part of the Agent or any Bank or on the part of the holder or holders of any Note in the exercise of any power or right shall operate as a waiver thereof or as an acquiescence in any default, nor shall any single or partial exercise thereof preclude any other or further exercise of any other power or right. The rights and remedies hereunder of the Agent and the Banks and of the holder or holders of any Notes are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have.

Section 12.2 Non-Business Day. If any payment hereunder becomes due and payable on a day which is not a Business Day, the due date of such payment shall be extended to the next succeeding Business Day on which date such payment shall be due and payable. In the case of any payment of principal falling due on a day which is not a Business Day, interest on such principal amount shall continue to accrue during such extension at the rate per annum then in effect, which accrued amount shall be due and payable on the next scheduled date for the payment of interest.

Section 12.3 Documentary Taxes. The Borrower agrees that it will pay any documentary, stamp or similar taxes payable in respect to this Agreement or any other Loan Document, including interest and penalties, in the event any such taxes are assessed irrespective of when such assessment is made and whether or not any credit is then in use or available hereunder.

Section 12.4 Survival of Representations. All representations and warranties made herein or in certificates given pursuant hereto shall survive the execution and delivery of this Agreement and of the Notes, and shall continue in full force and effect with respect to the date as of which they were made as long as any credit is in use or available hereunder.

Section 12.5 Survival of Indemnities. All indemnities and all other provisions relative to reimbursement to the Banks of amounts sufficient to protect the yield of the Banks with respect to the Loans, including, but not limited to, Section 2.10 and Section 10.3 hereof, shall survive the termination of this Agreement and the payment of the Loans and the Notes.

Section 12.6 Sharing of Set-Off. Each Bank agrees with each other Bank a party hereto that if on or after the date of the occurrence of an Event of Default and the acceleration of the maturity of the Notes pursuant to Section 9.3 or 9.4 hereof such Bank shall receive and retain any payment, whether by set-off or application of deposit balances or otherwise (“Set-off”), on any of the Obligations outstanding under this Agreement in excess of its ratable share of payments on all Obligations then outstanding to the Banks, then such Bank shall purchase for

49

cash at face value, but without recourse, ratably from each of the other Banks such amount of the Obligations held by each such other Bank (or interest therein) as shall be necessary to cause such Bank to share such excess payment ratably with all the other Banks; provided, however, that if any such purchase is made by any Bank, and if such excess payment or part thereof is thereafter recovered from such purchasing Bank, the related purchases from the other Banks shall be rescinded ratably and the purchase price restored as to the portion of such excess payment so recovered, but without interest. Each Bank’s ratable share of any such Set-off shall be determined by the proportion that the aggregate amount of Loans then due and payable to such Bank bears to the total aggregate amount of the Loans then due and payable to all the Banks.

Section 12.7 Notices. Except as otherwise specified herein, all notices hereunder shall be in writing (including cable or telecopy) and shall be given to the relevant party at its address or telecopier number set forth below, in the case of the Borrower, or on the appropriate signature page hereof, in the case of the Banks and the Agent, or such other address or telecopier number as such party may hereafter specify by notice to the Agent and the Borrower, given by United States certified or registered mail, by telecopy or by other telecommunication device capable of creating a written record of such notice and its receipt. Notices hereunder to the Borrower shall be addressed to:

World Acceptance Corporation

108 Frederick Street

Greenville, South Carolina 29607-2532

Attention: Chief Financial Officer

Telephone: (803) 277-4570

Telecopy: (803) 277-1440

Each such notice, request or other communication shall be effective (i) if given by telecopier, when such telecopy is transmitted to the telecopier number specified in this Section and a confirmation of such telecopy has been received by the sender, (ii) if given by mail, five (5) days after such communication is deposited in the mail, certified or registered with return receipt requested, addressed as aforesaid or (iii) if given by any other means, when delivered at the addresses specified in this Section; provided that any notice given pursuant to Section 2 hereof shall be effective only upon receipt.

Section 12.8 Counterparts. This Agreement may be executed in any number of counterparts, and by the different parties on different counterparts, each of which when executed shall be deemed an original but all such counterparts taken together shall constitute one and the same instrument.

Section 12.9 Successors and Assigns. (a) General. This Agreement shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of each of the Banks and the benefit of their respective successors and assigns, including any subsequent holder of any Note; provided, however, that the Borrower may not assign any of its rights or obligations hereunder without the written consent of all of the Banks.

(b) Participations. Each Bank shall have the right, without the consent of the Borrower, at its own cost to grant participations in the Loans made and/or Commitments held by

50

such Bank to one or more financial institutions at any time and from time to time; provided, however, that (i) such participations shall be in a minimum amount of $5,000,000, (ii) no such participation shall relieve any Bank of any of its obligations under this Agreement, (iii) the participant financial institutions shall be entitled to the benefits of Sections 2.10 and 10.3 hereof but shall not be entitled to any greater payment under any of such Sections than the Bank granting such participation would have been entitled to receive with respect to the rights transferred and (iv) the Borrower, the Agent and the other Banks shall continue to deal solely and directly with such Bank in connection with this Agreement and such Bank shall retain the sole right to enforce the obligations of the Borrower relating to the Loans and to approve any amendment, modification or waiver of this Agreement or any other Loan Document, provided that such participation agreement may provide that such Bank will not agree to any amendment, modification or waiver of this Agreement or any other Loan Document without the consent of such participant, that would reduce the amount of or postpone the date for payment of any principal of or interest on any Loan hereunder.

(c) Assignments. Each Bank may, from time to time, with the consent of the Agent (which will not be unreasonably withheld) and upon notice to the Borrower, assign to other financial institutions part (but in no event less than $10,000,000) of the indebtedness evidenced by the Notes then owned by it together with an equivalent proportion of its obligation to make Loans hereunder pursuant to written agreements executed by the assignor, the assignee and the Borrower, which agreements shall specify in each instance the portion of the indebtedness evidenced by the Notes which is to be assigned to each such assignee and the portion of the Commitments of the assignor to be assumed by it (the “Assignment Agreements”). Upon the execution of each Assignment Agreement by the assignor, the assignee and the Borrower (i) such assignee shall thereupon become a “Bank” for all purposes of this Agreement with Commitments in the amounts set forth in such Assignment Agreement and with all the rights, powers and obligations afforded a Bank hereunder, (ii) the assignor shall have no further liability for funding the portion of its Commitments assumed by such other Bank and no other liability hereunder and (iii) the address for notices to such Bank shall be as specified in the Assignment Agreement executed by it. Concurrently with the execution and delivery of such Assignment Agreement, and, upon return to the Borrower of the outstanding Notes of the assignor, the Borrower shall execute and deliver Notes to the assignee Bank in the amount of its Commitments and new Notes to the assignor Bank in the amount of its Commitments after giving effect to the reduction occasioned by such assignment, all such Notes to constitute “Notes” for all purposes of this Agreement.

Section 12.10 Amendments. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by (a) the Borrower, (b) the Required Banks, and (c) if the rights or duties of the Agent are affected thereby, the Agent, as applicable; provided that:

(i) no amendment or waiver pursuant to this Section shall (A) increase any Commitment of any Bank without the consent of such Bank, (B) release any substantial part of the Collateral or any Subsidiary Guaranty Agreement or (C) reduce the amount of or postpone the date for payment of any principal of or interest on any Loan or of any fee payable hereunder without the consent of the Bank to which such payment is owing or which has committed to make such Loan or other credit hereunder; and

51

(ii) no amendment or waiver pursuant to this Section shall, unless signed by each Bank, change the provisions of this Section, the definition of Required Banks or Termination Date, or the provisions of Section 9.4, or affect the number of Banks required to take any action hereunder.

Section 12.11 Non-Reliance on Margin Stock. Each of the Banks represents to the Agent and to each of the other Banks that it in good faith is not relying upon any Margin Stock as collateral in the extension or maintenance of the credit provided for in this Agreement.

Section 12.12 Fees and Indemnification. (a) The Borrower agrees to pay the reasonable fees and disbursements of counsel to the Agent, in connection with the preparation and execution of this Agreement and the other Loan Documents, and any amendment, waiver or consent related hereto, whether or not the transactions contemplated herein are consummated.

(b) The Borrower further agrees to indemnify the Agent and each Bank, their respective directors, officers and employees against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitations, all reasonable expenses of litigation or preparation therefor whether or not the Agent or any Bank is a party thereto) which any of them may pay or incur arising out of or relating to this Agreement, any other Loan Document, the transactions contemplated hereby or thereby or the direct or indirect application or proposed application of the proceeds of any Loan hereunder, other than those which arise from the gross negligence or willful misconduct of the party claiming indemnification. The obligations of the Borrower under this Section shall survive the termination of this Agreement.

Section 12.13 Governing Law. This Agreement and the Notes, and the rights and duties of the parties hereto and thereto, shall be construed and determined in accordance with the laws of the State of Illinois, without regard to the internal laws thereof with respect to conflicts of law.

Section 12.14 Headings. Section headings used in this Agreement are for reference only and shall not affect the construction of this Agreement.

Section 12.15 Entire Agreement. This Agreement constitutes the entire understanding of the parties hereto with respect to the subject matter hereof and any prior or contemporaneous agreements, whether written or oral, with respect thereto are superseded hereby.

Section 12.16 Terms of Collateral Documents not Superseded. Nothing contained herein shall be deemed or construed to permit any act or omission which is prohibited by the terms of any Collateral Document, the covenants and agreements contained herein being in addition to and not in substitution for the covenants and agreements contained in the Collateral Documents.

Section 12.17 Submission to Jurisdiction; Waiver of Jury Trial. The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Northern District of Illinois and of any Illinois State court sitting in the City of Chicago for purposes of all legal proceedings arising out of or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. THE BORROWER, THE AGENT

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AND EACH BANK HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

[SIGNATURE PAGES TO FOLLOW]

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Upon execution hereof by all the parties, this Agreement shall be a contract among the parties for the purposes hereinabove set forth.

Dated as of June 30, 1997.

WORLD ACCEPTANCE CORPORATION
By	/s/    A. ALEXANDER MCLEAN III
Its	Executive Vice President/Chief Financial Officer

Accepted and Agreed to as of the day and year last above written.

HARRIS TRUST AND SAVINGS BANK, in its individual capacity as a Bank and as Agent
By	/s/    JEROME P. CROKIN
Its	Vice President

Address:

111 West Monroe Street

Chicago, Illinois 60690

Attention: Michael Cameli

Telecopy: (312) 765-8382

Telephone: (312) 461-2396

Lending Offices:

Domestic Rate Loans:

111 West Monroe Street

Chicago, Illinois

Eurodollar Loans:

111 West Monroe Street

Chicago, Illinois

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BANK ONE, N.A.
By	/s/    NELSON ALBRECHT
Its	Assistant Vice President

Address:

One First National Plaza, 16th Floor

Chicago, Illinois 60670-0084

Attention: Nelson Albrecht

Telecopy: (312) 732-6222

Telephone: (312) 732-8104

Lending Offices:

Domestic Rate Loans:

One First National Plaza, 16th Floor

Chicago, Illinois 60670-0084

Eurodollar Loans:

One First National Plaza, 16th Floor

Chicago, Illinois 60670-0084

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LASALLE BANK NATIONAL ASSOCIATION
By	/s/     DAVID H. SHERER
Its	Loan Officer

Address:

135 South LaSalle Street

Chicago, Illinois 60674-9135

Attention: David H. Sherer

Telecopy: (312) 904-2903

Telephone: (312) 904-2722

Lending Offices:

Domestic Rate Loans:

135 South LaSalle Street

Chicago, Illinois 60674-9135

Eurodollar Loans:

135 South LaSalle Street

Chicago, Illinois 60674-9135

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HIBERNIA NATIONAL BANK
By	/s/     ERIC TRAINOR
Its	Senior Vice President

Address:

440 Third Street, 5th Floor

Baton Rouge, LA 70802

Attention: Eric Trainor

Telecopy: (225) 381-7570

Telephone: (225) 381-2428

Lending Offices:

Domestic Rate Loans:

440 Third Street, 5th Floor

Baton Rouge, LA 70802

Eurodollar Loans:

440 Third Street, 5th Floor

Baton Rouge, LA 70802

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WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC. (as successor in interest to Washington Mutual Bank, F.A., f/k/a Bank United)
By	/s/    MERLE BECKER
Its	Vice President

Address:

1760 Market Street, Suite 300

Mail Code: F6544-011

Philadelphia, PA 19103

Attention: Merle Becker

Telecopy: (215) 569-0251

Telephone: (215) 606-1404

Lending Offices:

Domestic Rate Loans:

1760 Market Street, Suite 300

Mail Code: F6544-011

Philadelphia, PA 19103

Eurodollar Loans:

1760 Market Street, Suite 300

Mail Code: F6544-011

Philadelphia, PA 19103

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CAROLINA FIRST BANK
By	/s/    KEVIN M. SHORT
Its	Senior Vice President

Address:

104 South Main Street, 10th Floor

Greenville, SC 29601

Attention: Kevin Short

Telecopy: (864) 255-8991

Telephone: (864) 255-8965

Lending Offices:

Domestic Rate Loans:

104 South Main Street, 10th Floor

Greenville, SC 29601

Eurodollar Loans:

104 South Main Street, 10th Floor

Greenville, SC 29601

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EXHIBIT A

REVOLVING CREDIT NOTE

U.S. $                                         , 1997

FOR VALUE RECEIVED, the undersigned, WORLD ACCEPTANCE CORPORATION, a South Carolina corporation (the “Borrower”), promises to pay to the order of                                                                                                        (the “Bank”) on the Termination Date of the hereinafter defined Credit Agreement, at the principal office of Harris Trust and Savings Bank in Chicago, Illinois, in immediately available funds, the principal sum of                                                                                                        Dollars ($                    ) or, if less, the aggregate unpaid principal amount of all Loans made by the Bank to the Borrower under its Commitment pursuant to the Credit Agreement and with each such Loan to mature and become payable as provided in the Credit Agreement, together with interest on the principal amount of each such Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Credit Agreement.

The Bank shall record on its books or records or on a schedule attached to this Note, each Loan made by it pursuant to its Commitment, together with all payments of principal and interest and the principal balances from time to time outstanding hereon, whether the Loan is a Domestic Rate Loan or a Eurodollar Loan and the interest rate and, in the case of a Eurodollar Loan, the Interest Period applicable thereto, provided that prior to the transfer of this Note all such amounts shall be recorded on a schedule attached to this Note. The record thereof, whether shown on such books or records or on the schedule to this Note, shall be prima facie evidence of the same, provided, however, that the failure of the Bank to record any of the foregoing or any error in any such record shall not limit or otherwise affect the obligation of the Borrower to repay all Loans made to it under the Revolving Credit pursuant to the Credit Agreement together with accrued interest thereon.

This Note is one of the Notes referred to in the Amended and Restated Credit Agreement dated as of June 30 1997, among the Borrower, Harris Trust and Savings Bank, as Agent, and others (such Credit Agreement as the same may from time to time be amended being referred to as the “Credit Agreement”) and payment hereof is secured by the Loan Documents, and this Note and the holder hereof are entitled to all the benefits provided for thereby or referred to therein, to which Credit Agreement and Loan Documents reference is hereby made for a statement thereof. All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Credit Agreement. This Note shall be governed by and construed in accordance with the laws of the State of Illinois.

Prepayments may be made hereon, certain prepayments are required to be made hereon and this Note may be declared due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Credit Agreement and Collateral Documents.

The Borrower hereby waives demand, presentment, protest or notice of any kind hereunder.

WORLD ACCEPTANCE CORPORATION

By

Its

ATTEST:

___________________________________________

Its                                                                   Secretary

2

EXHIBIT B-1

PERMITTED SENIOR SUBORDINATED DEBT

SUBORDINATION PROVISIONS APPLICABLE TO

SENIOR SUBORDINATED DEBT

AND JUNIOR SUBORDINATED DEBT

The indebtedness evidenced by the subordinated notes or related thereto and any renewals or extensions thereof (the “Subordinated Indebtedness”) shall at all times be wholly subordinate and junior in right of payment to any and all indebtedness of the Borrower and the Restricted Subsidiaries [here insert description of indebtedness to which Subordinated Indebtedness is subordinate which in all events must include all indebtedness, obligations and liabilities of the Borrower and the Restricted Subsidiaries under the Revolving Credit Agreement, the Note Purchase Agreements, the Subsidiary Guaranty Agreement, the Senior Notes and the Company Security Agreement and the Subsidiary Security Agreement as each relates to the Senior Notes and, with respect to Senior Subordinated Debt under the Subordinated Note Purchase Agreement, the Subsidiary Senior Subordinated Guaranty Agreement, the Senior Subordinated Notes and the Company Security Agreement and the Subsidiary Security Agreement as each relates to the Senior Subordinated Notes (the “Senior Indebtedness”) in the manner and with the force and effect hereinafter set forth:

1. So long as any Senior Indebtedness shall remain outstanding and unpaid, no payment either of principal, interest or premium (notwithstanding the expressed maturity or any time for the payment of principal of, interest or premium on any Subordinated Indebtedness) shall be made on Subordinated Indebtedness except with the prior written consent of all of the holders of the Notes and the holders of the Subordinated Indebtedness will take no steps, whether by suit or otherwise to compel or enforce the collection of Subordinated Indebtedness, nor will the holders of the Subordinated Indebtedness use Subordinated Indebtedness by way of counterclaim, setoff, recoupment or otherwise so as to diminish, discharge or otherwise satisfy in whole or in part any indebtedness or liability of the holders of the Subordinated Indebtedness to the Borrower, whether now existing or hereafter arising and howsoever evidenced, provided, however, that the Borrower may pay interest on Subordinated Indebtedness accrued to and payable on the date of any such payment so long as (i) the Borrower shall not be in default in the payment of principal of, interest or premium on Senior Indebtedness, (ii) the Borrower has not received written notice from any holder of the Senior Indebtedness that some other default has occurred and is continuing under any promissory note or agreement pertaining to Senior Indebtedness or any collateral security therefor, and (iii) none of the events hereinafter set forth in paragraph numbered 2 hereof has occurred.

2. In the event of any distribution, dividend, or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the assets of the Borrower or of the proceeds thereof to the creditors of the Borrower or upon any indebtedness of the Borrower, occurring by reason of the liquidation, dissolution, or other winding up of the Borrower, or by reason of any execution sale, or bankruptcy, receivership, reorganization, arrangement, insolvency, liquidation or foreclosure proceeding of or for the Borrower or involving its property, no dividend, payment, distribution or application shall be made, and the holders of the Subordinated Indebtedness shall not be entitled to receive or retain any payment, dividend, distribution, or application on or in respect of the Subordinated Indebtedness, unless and until all of the Senior Indebtedness then outstanding shall have been paid and satisfied in

full, and in any such event any dividend, payment, distribution or application otherwise payable in respect of Subordinated Indebtedness shall be paid and applied on Senior Indebtedness until such Senior Indebtedness has been fully paid and satisfied.

3. The holders of Senior Indebtedness need not at any time give the holders of the Subordinated Indebtedness notice of any kind of the creation or existence of any Senior Indebtedness, nor of the amount or terms thereof, all such notice being hereby expressly waived. Also, the holders of Senior Indebtedness may at any time from time to time, without the consent of or notice to the holders of Subordinated Indebtedness, without incurring responsibility to the holders of the Subordinated Indebtedness, and without impairing or releasing the obligation of the undersigned under this agreement (i) renew, refund or extend the maturity of any Senior Indebtedness, or any part thereof, or otherwise revise, amend or alter the terms and conditions thereof, (ii) sell, exchange, release or otherwise deal with any property by whomsoever at any time pledged, mortgaged or otherwise hypothecated or subjected to a lien to secure any Senior Indebtedness, and (iii) exercise or refrain from exercising any rights against the Borrower and others, including the holders of the Subordinated Indebtedness.

4. The holders of the Subordinated Indebtedness will not sell, assign or otherwise transfer any Subordinated Indebtedness, or any part thereof, except subject to and in accordance with the terms hereof and upon the agreement of the transferee or assignee to abide by and be bound by the terms hereof.

5. The holders of the Subordinated Indebtedness undertake and agree for the benefit of each holder of Senior Indebtedness to execute, verify, deliver and file any proofs of claim which any holder of Senior Indebtedness may at any time require in order to prove and realize upon any rights or claims pertaining to the Subordinated Indebtedness to effectuate the full benefit of the subordination contained herein; and upon failure of the holder of any Subordinated Indebtedness so to do, any such holder of Senior Indebtedness shall be deemed to be irrevocably appointed the agent and attorney-in-fact of the holder of such Subordinated Indebtedness to execute, verify, deliver and file any such proofs of claim.

6. No right of any holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time or in any way be affected or impaired by any failure to act on the part of the Borrower or the holders of Senior Indebtedness, or by any noncompliance by the Borrower with any of the terms, provisions and covenants applicable to the Subordinated Indebtedness, regardless of any knowledge thereof that any such holder of Senior Indebtedness may have or be otherwise charged with.

7. The Borrower agrees, for the benefit of the holders of Senior Indebtedness, that in the event that any Subordinated Indebtedness is declared due and payable before its expressed maturity because of the occurrence of a default hereunder, (i) the Borrower will give prompt notice in writing of such happening to the holders of Senior Indebtedness and (ii) all Senior Indebtedness shall forthwith become immediately due and payable upon demand, regardless of the expressed maturity thereof.

8. These subordination provisions shall be continuing and binding until written notice of its discontinuance shall be actually received by the holders of the Subordinated

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Indebtedness, and also shall continue to remain in full force and effect until all Senior Indebtedness created or existing prior to the receipt of such notice shall have been fully paid and satisfied.

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EXHIBIT B-2

PERMITTED JUNIOR SUBORDINATED DEBT

SUBORDINATION PROVISIONS APPLICABLE TO

SENIOR SUBORDINATED DEBT

AND JUNIOR SUBORDINATED DEBT

The indebtedness evidenced by the subordinated notes or related thereto and any renewals or extensions thereof (the “Subordinated Indebtedness”) shall at all times be wholly subordinate and junior in right of payment to any and all indebtedness of the Borrower and the Restricted Subsidiaries [here insert description of indebtedness to which Subordinated Indebtedness is subordinate which in all events must include all indebtedness, obligations and liabilities of the Borrower and the Restricted Subsidiaries under the Revolving Credit Agreement, the Note Purchase Agreements, the Subsidiary Guaranty Agreement, the Senior Notes and the Company Security Agreement and the Subsidiary Security Agreement as each relates to the Senior Notes and, with respect to Senior Subordinated Debt under the Subordinated Note Purchase Agreement, the Subsidiary Senior Subordinated Guaranty Agreement, the Senior Subordinated Notes and the Company Security Agreement and the Subsidiary Security Agreement as each relates to the Senior Subordinated Notes (the “Senior Indebtedness”) in the manner and with the force and effect hereinafter set forth:

1. So long as any Senior Indebtedness shall remain outstanding and unpaid, no payment either of principal, interest or premium (notwithstanding the expressed maturity or any time for the payment of principal of, interest or premium on any Subordinated Indebtedness) shall be made on Subordinated Indebtedness except with the prior written consent of all of the holders of the Notes and the holders of the Subordinated Indebtedness will take no steps, whether by suit or otherwise to compel or enforce the collection of Subordinated Indebtedness, nor will the holders of the Subordinated Indebtedness use Subordinated Indebtedness by way of counterclaim, setoff, recoupment or otherwise so as to diminish, discharge or otherwise satisfy in whole or in part any indebtedness or liability of the holders of the Subordinated Indebtedness to the Borrower, whether now existing or hereafter arising and howsoever evidenced, provided, however, that the Borrower may pay interest on Subordinated Indebtedness accrued to and payable on the date of any such payment so long as (i) the Borrower shall not be in default in the payment of principal of, interest or premium on Senior Indebtedness, (ii) the Borrower has not received written notice from any holder of the Senior Indebtedness that some other default has occurred and is continuing under any promissory note or agreement pertaining to Senior Indebtedness or any collateral security therefor, and (iii) none of the events hereinafter set forth in paragraph numbered 2 hereof has occurred.

2. In the event of any distribution, dividend, or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the assets of the Borrower or of the proceeds thereof to the creditors of the Borrower or upon any indebtedness of the Borrower, occurring by reason of the liquidation, dissolution, or other winding up of the Borrower, or by reason of any execution sale, or bankruptcy, receivership, reorganization, arrangement, insolvency, liquidation or foreclosure proceeding of or for the Borrower or involving its property, no dividend, payment, distribution or application shall be made, and the holders of the Subordinated Indebtedness shall not be entitled to receive or retain any payment, dividend, distribution, or application on or in respect of the Subordinated Indebtedness, unless and until all of the Senior Indebtedness then outstanding shall have been paid and satisfied in

full, and in any such event any dividend, payment, distribution or application otherwise payable in respect of Subordinated Indebtedness shall be paid and applied on Senior Indebtedness until such Senior Indebtedness has been fully paid and satisfied.

3. The holders of Senior Indebtedness need not at any time give the holders of the Subordinated Indebtedness notice of any kind of the creation or existence of any Senior Indebtedness, nor of the amount or terms thereof, all such notice being hereby expressly waived. Also, the holders of Senior Indebtedness may at any time from time to time, without the consent of or notice to the holders of Subordinated Indebtedness, without incurring responsibility to the holders of the Subordinated Indebtedness, and without impairing or releasing the obligation of the undersigned under this agreement (i) renew, refund or extend the maturity of any Senior Indebtedness, or any part thereof, or otherwise revise, amend or alter the terms and conditions thereof, (ii) sell, exchange, release or otherwise deal with any property by whomsoever at any time pledged, mortgaged or otherwise hypothecated or subjected to a lien to secure any Senior Indebtedness, and (iii) exercise or refrain from exercising any rights against the Borrower and others, including the holders of the Subordinated Indebtedness.

4. The holders of the Subordinated Indebtedness will not sell, assign or otherwise transfer any Subordinated Indebtedness, or any part thereof, except subject to and in accordance with the terms hereof and upon the agreement of the transferee or assignee to abide by and be bound by the terms hereof.

5. The holders of the Subordinated Indebtedness undertake and agree for the benefit of each holder of Senior Indebtedness to execute, verify, deliver and file any proofs of claim which any holder of Senior Indebtedness may at any time require in order to prove and realize upon any rights or claims pertaining to the Subordinated Indebtedness to effectuate the full benefit of the subordination contained herein; and upon failure of the holder of any Subordinated Indebtedness so to do, any such holder of Senior Indebtedness shall be deemed to be irrevocably appointed the agent and attorney-in-fact of the holder of such Subordinated Indebtedness to execute, verify, deliver and file any such proofs of claim.

6. No right of any holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time or in any way be affected or impaired by any failure to act on the part of the Borrower or the holders of Senior Indebtedness, or by any noncompliance by the Borrower with any of the terms, provisions and covenants applicable to the Subordinated Indebtedness, regardless of any knowledge thereof that any such holder of Senior Indebtedness may have or be otherwise charged with.

7. The Borrower agrees, for the benefit of the holders of Senior Indebtedness, that in the event that any Subordinated Indebtedness is declared due and payable before its expressed maturity because of the occurrence of a default hereunder, (i) the Borrower will give prompt notice in writing of such happening to the holders of Senior Indebtedness and (ii) all Senior Indebtedness shall forthwith become immediately due and payable upon demand, regardless of the expressed maturity thereof.

8. These subordination provisions shall be continuing and binding until written notice of its discontinuance shall be actually received by the holders of the Subordinated

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Indebtedness, and also shall continue to remain in full force and effect until all Senior Indebtedness created or existing prior to the receipt of such notice shall have been fully paid and satisfied.

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EXHIBIT C

BORROWING BASE CERTIFICATE

WORLD ACCEPTANCE CORPORATION

AND RESTRICTED SUBSIDIARIES

AS OF                     ,             

	TOTAL COMPANY		UNSECURED		SECURED
1.       Gross Finance Receivables	$	_________	$	_________	$	_________
2.       Less Credits/Allowances	$	_________	$	_________	$	_________
3.       Net Finance Receivables:	$	_________	$	_________	$	_________
Ineligibles
Affiliate Receivables	$	_________	$	_________	$	_________
Shareholder/Employee Receivables	$	_________	$	_________	$	_________
Government Receivables	$	_________	$	_________	$	_________
Bankruptcy	$	_________	$	_________	$	_________
Subject to claims, offsets or defenses	$	_________	$	_________	$	_________
60 days past due	$	_________	$	_________	$	_________
4.       Total Ineligibles	$	_________	$	_________	$	_________
5.       Eligible Finance Receivables	$	_________	$	_________	$	_________
6.       Unearned Finance Charges	$	_________	$	_________	$	_________
			$	_________
7.       Eligible Finance Receivables, Net	$	_________	$	_________	$	_________
8.       Borrowing Base
(a)       85% of Secured Eligible Receivables					$	_________
(b)       Lesser of:
(i)       $15,000,000			$	_________
(ii)      11.11% of (a) above			$	_________
(iii)     50% of Eligible Unsecured, Net			$	_________
Lesser			$	_________
9.       Total Borrowing Base (a+b)	$	_________
10.     Current Maximum	$	_________
11.     Current Outstanding Balance of Term Notes	$	_________
12.     Available Borrowing Base	$	_________
13.     Current Outstanding Balance of Revolving Credit	$	_________
14.     Current Availability	$	_________

SCHEDULE 1.1

COMMITMENTS

NAME OF BANK	BASE REVOLVING CREDIT COMMITMENTS		SEASONAL REVOLVING CREDIT COMMITMENTS		TOTAL COMMITMENTS
Harris Trust and Savings Bank	$	31,856,287.44	$	3,143,712.56	$	35,000,000
Bank One, NA	$	29,125,748.50	$	2,874,251.50	$	32,000,000
LaSalle Bank National Association	$	25,485,029.94	$	2,514,970.06	$	28,000,000
Hibernia National Bank	$	18,203,592.81	$	1,796,407.19	$	20,000,000
Wells Fargo Financial Preferred Capital, Inc.	$	29,125,748.50	$	2,874,251.50	$	32,000,000
Carolina First Bank	$	18,203,592.81	$	1,796,407.19	$	20,000,000
TOTAL	$	152,000,000	$	15,000,000	$	167,000,000

SCHEDULE 6.2

SUBSIDIARIES

NAME	JURISDICTION OF ORGANIZATION	OWNER	% OWNERSHIP
WAC Insurance Company, Ltd.	British Virgin Islands	World Acceptance Corporation (WAC)	65%
WFC of South Carolina, Inc.	South Carolina	WAC	100%
WFC Limited Partnership	Texas	World Finance Corporation of South Carolina	1% general partner
		World Acceptance Corporation of Oklahoma, Inc.	99% limited partner
World Acceptance Corporation of Alabama	Alabama	WAC	100%
World Acceptance Corporation of Missouri	Missouri	WAC	100%
World Acceptance Corporation of Oklahoma, Inc.	Oklahoma	World Finance Corporation of Texas	100%
World Finance Corporation of Georgia	Georgia	WAC	100%
World Finance Corporation of Illinois	Illinois	WAC	100%
World Finance Corporation of Louisiana	Louisiana	WAC	100%
World Finance Corporation of New Mexico	New Mexico	WAC	100%

World Finance Corporation of South Carolina	South Carolina	WAC	100%
World Finance Corporation of Tennessee	Tennessee	WAC	100%
World Finance Corporation of Texas	Texas	WAC	100%

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SCHEDULE 6.8

PENDING LITIGATION

(1) World Acceptance Corporation and World Finance Corporation of Georgia are named as co-defendants with 46 other finance companies, merchants and insurance companies in a class action lawsuit, Jordan, et al. v. AVCO Financial Services, Inc., et al., (Case No. 96-CL-1557N, MDL No. 1130, U.S. District Court, Middle District of Alabama), that challenges the defendants’ practices with respect to non-filing insurance. The action was filed on April 18, 1995, in U.S. District Court for the Middle District of Georgia, in Columbus, Georgia, and by order dated October 11, 1996 was consolidated for pre-trial proceedings before Judge U.W. Clemon of the U.S. District Court for the Middle District of Alabama by the Judicial Panel on Multidistrict Litigation. Non-filing insurance is a product that lenders can purchase as an alternative to filing UCC-1 financing statements to perfect the lenders’ security interest in borrowers’ collateral. Borrowers are charged a fee representing the amount of the non-filing insurance premium. In the Jordan action, the plaintiffs have alleged that non-filing insurance is not true, legitimate insurance and that non-filing fees charged to borrowers are not being disclosed properly under the federal Truth-in-Lending Act. The plaintiffs also have alleged violations of RICO and the federal antitrust laws. The plaintiffs originally asserted state law claims for breach of contract, conversion and fraud, but subsequently dismissed those claims without prejudice. The plaintiffs seek damages, permanent injunctive relief, and attorneys’ fees. If the Company’s non-filing insurance practices are found to be unlawful, the Company could be required to refund non-filing insurance fees, pay other damages to the plaintiffs, and change its non-filing insurance practices going forward.

World has denied that its non-filing practices are unlawful and is defending the case vigorously. Discovery in the case is ongoing, and pursuant to court order, will continue through March 1998. On June 23, 1997, Judge Clemon issued a Class Certification Order that certified a nationwide class of plaintiffs who, on or after April 18, 1991, were charged a non-filing insurance fee. The order applies only to the liability aspects of the case.

(2) The Company has been named as a defendant in an action, Turner v. World Acceptance Corp., pending in District Court for the Fourteenth Judicial District, Tulsa County, Oklahoma (No. CJ-97-1921). The action was commenced against the Company on May 20, 1997, names numerous other consumer finance companies as defendants, and seeks certification as a statewide class action. The action alleges that World and other consumer finance defendants collected excess finance charges in connection with refinancing certain consumer finance loans in Oklahoma and seeks money damages and an injunction against further collection of such charges. The Company has filed an answer in the action denying liability, and discovery has not commenced. The plaintiff’s claim is based on a recent opinion of the Oklahoma Attorney General interpreting a provision of the Oklahoma Consumer Credit Code with respect to the permitted amount of certain loan refinance charges in a manner contrary to prior regulatory practice in Oklahoma. Enforcement of the Oklahoma Attorney General’s opinion has been enjoined, and such action is currently pending before the Oklahoma Supreme Court. In addition, the State of Oklahoma has recently enacted legislation to clarify the interpretation of the disputed provision of the Oklahoma Consumer Credit Code consistent with prior regulatory practice. World intends to vigorously defend this action.

SCHEDULE 6.9

TAXES

The Internal Revenue Service has issued a preliminary determination that WAC Insurance Company, Ltd. is not engaged in a bona fide reinsurance business and thus, that its earnings are not excludable from the taxable earnings of World Acceptance Corporation and its subsidiaries. World Acceptance Corporation is appealing this matter.

SCHEDULE 6.11

EXISTING INDEBTEDNESS FOR BORROWED MONEY

Capitalized terms used herein have the meanings set forth in the revolving Credit agreement unless otherwise indicated.

Indebtedness of World Acceptance Corporation (“World”) evidenced by this Revolving Credit Agreement, the Senior Note Purchase Agreements, the Subordinated Note Agreement and all notes issued pursuant to the above-listed agreements.

Indebtedness of each of World Finance Corporation of Alabama, World Finance Corporation of Georgia, World Finance Corporation of Illinois, World Finance Corporation of Louisiana, World Acceptance Corporation of Missouri, World Finance Corporation of New Mexico, World Acceptance Corporation of Oklahoma, Inc., World Finance Corporation of South Carolina, WFC of South Carolina, Inc., World Finance Corporation of Tennessee, World Finance Corporation of Texas and WFC Limited Partnership, under the Subsidiary Senior Guaranty Agreement, the Subsidiary Senior Subordinated Guaranty Agreement and the Subsidiary Security Agreement.

Indebtedness evidenced by World’s 10 Percent Senior Debenture in the principal amount of $482,000, payable to Voyager Life Insurance Company.

Indebtedness evidenced by World Finance Corporation of Georgia’s 8% Subordinated Promissory Note(s) in the principal amount of $9,924,000, payable to World Finance Corporation of Texas.

Indebtedness evidenced by World Finance Corporation of Louisiana’s 8% Subordinated Promissory Note(s) in the principal amount of $3,158,000, payable to World Finance Corporation of Texas.

Indebtedness evidenced by World Acceptance Corporation of Oklahoma’s 8% Subordinated Promissory Note(s) in the principal amount of $5,220,000, payable to World Finance Corporation of Texas.

Indebtedness evidenced by World Finance Corporation of South Carolina’s 8% Subordinated Promissory Note(s) in the principal amount of $23,894,000, payable to World Finance Corporation of Texas.

Indebtedness evidenced by WFC of South Carolina, Inc.’s 8% Subordinated Promissory Note(s) in the principal amount of $295,000, payable to World Finance Corporation of Texas.

Indebtedness evidenced by World Finance Corporation of Tennessee’s 8% Subordinated Promissory Note(s) in the principal amount of $4,268,000, payable to World Finance Corporation of Texas.

SCHEDULE 8.11

EXISTING LIENS

Lien of Weingarten Realty Investors on certain property of World Finance Corporation of Texas, evidenced by UCC-1 financing statement No. 189822, filed August 21, 1989 in the Office of the Texas Secretary of State and continued by UCC-3 continuation statement No. 685105, filed July 15, 1994 in the Office of the Texas Secretary of State.

Liens consisting of immaterial utility easements and similar immaterial encumbrances on the real property of World Acceptance Corporation located at 108 Frederick Street, Greenville, South Carolina 29607. See Schedule B to owner’s title policy attached.

EX-4.5

Exhibit 4.5

TENTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

To Each of the Banks Signatory Hereto

Ladies and Gentlemen:

Reference is hereby made to that certain Amended and Restated Revolving Credit Agreement dated as of June 30, 1997, as amended (the “Credit Agreement”), between the undersigned, World Acceptance Corporation, a South Carolina corporation, the Banks party thereto, and Harris Trust and Savings Bank, as Agent for the Banks. All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.

The Borrower and the Banks have agreed to increase the Base Revolving Credit Commitments to $152,000,000, increase the Eurodollar Margin, and make certain other amendments to the Credit Agreement under the terms and conditions set forth in this agreement (herein, the “Amendment”).

Section 1. AMENDMENTS.

Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement shall be and hereby is amended as follows:

1.1 The definition of “Eurodollar Margin” appearing in Section 2.1(b) of the Credit Agreement shall be amended and restated in its entirety to read as follows:

“Eurodollar Margin” means 2.00% per annum.

1.2 The definitions of “Base Revolving Credit Commitment”, “Borrowing Base” and “Termination Date” appearing in Section 5.1 of the Credit Agreement shall be amended and restated in their entirety to read as follows:

“Base Revolving Credit Commitment” means, as to any Bank, the obligation of such Bank to make Loans under the Revolving Credit in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Bank’s name on Schedule 1.1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrower and the Banks acknowledge and agree that the Base Revolving Credit Commitments of the Banks aggregate $152,000,000 on August 21, 2003.

“Borrowing Base” means, as of any time it is to be determined, the product of 85% multiplied by the remainder of

(x) the then outstanding unpaid principal amount of Eligible Finance Receivables minus (y) all unearned finance charges, unearned insurance premiums and insurance commissions applicable to such Eligible Finance Receivables.

“Termination Date” shall mean September 30, 2005, or such later date to which the Commitments are extended pursuant to Section 3.4 hereof, or such earlier date on which the Commitments are terminated in whole pursuant to Sections 2.9, 9.3 or 9.4 hereof.

1.3 Section 5.1 of the Credit Agreement is hereby further amended by inserting the following new defined terms in proper alphabetical order:

“Change of Control” means any of (a) the acquisition by any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) at any time of beneficial ownership of 40% or more of the outstanding capital stock or other equity interests of the Borrower on a fully diluted basis, or (b) the failure of individuals who are members of the board of directors (or similar governing body) of the Borrower on the Effective Date (together with any new or replacement directors whose initial nomination for election was approved by a majority of the directors who were either directors on the Effective Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of the Borrower, shall occur.

“Fixed Asset Financing” means the acquisition by the Borrower of one or more fixed assets in an aggregate amount not to exceed $1,500,000, which financing (x) shall amortize over time and not be subject to being re-borrowed and (y) may be secured by the fixed assets so acquired.

1.4 Section 8.9 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Section 8.9. Permitted Indebtedness. The Borrower will not, and will not permit any Restricted Subsidiary to, incur, create, issue, assume or permit to exist any Indebtedness for Borrowed Money other than:

(a) Senior Debt;

(b) Senior Subordinated Debt;

(c) Junior Subordinated Debt; and

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(d) debt incurred in connection with permitted Fixed Asset Financing.

1.5 Section 8.11 of the Credit Agreement is hereby amended by (i) deleting the word “and” appearing in the eighth line of clause (g), and (ii) deleting the period (.) at the end of clause (h) and replacing it with “; and”. Section 8.11 of the Credit Agreement is hereby further amended by adding the following clause at the end thereof:

(i) Liens granted to secure the Fixed Asset Financing, provided that such Liens (x) only extend to the fixed assets acquired with the proceeds of such Fixed Asset Financing, (y) only secure the original purchase price of such fixed assets, as reduced by repayments thereon, and (z) do not extend to or cover any other Property of the Borrower or any Subsidiary.

1.6 Section 8.12 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Section 8.12. Dividends, Stock Purchases. The Borrower will not except as hereinafter provided:

(a) Declare or pay any dividends, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of capital stock of the Borrower); or

(b) Directly or indirectly, or through any Subsidiary, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than in exchange for or out of the net cash proceeds to the Borrower from the substantially concurrent issue or sale of other shares of capital stock of the Borrower or warrants, rights or options to purchase or acquire any shares of its capital stock); or

(c) Make any other payment or distribution, either directly or indirectly or through any Subsidiary, in respect of its capital stock; or

(d) Make any payment of principal, interest or premium on any Senior Subordinated Debt or Junior Subordinated Debt other than any regularly scheduled payment of principal or interest on the Senior Subordinated Debt or the Junior Subordinated Debt;

(such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options, and all such other distributions and such payments on Senior Subordinated Debt and Junior Subordinated Debt being

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herein collectively called “Restricted Payments”), if, after giving effect thereto, (i) a Default or Event of Default has occurred and is continuing or (ii) the aggregate amount of Restricted Payments made during the period after March 31, 2003, to and including the date of the making of the Restricted Payment in question, would exceed the sum of (x) $15,000,000, plus (y) the net cash proceeds received by the Borrower from the issuance or sale subsequent to March 31, 2003, of shares of common stock of the Borrower or warrants, rights or options to purchase or acquire any shares of its common stock, plus (z) 50% of Consolidated Net Income for the period commencing April 1, 2003, and ending on the last day of the fiscal quarter immediately preceding the date of the making of the Restricted Payment in question, computed on a cumulative basis for said entire period (or if such Consolidated Net Income is a deficit figure, then minus 100% of such deficit); provided that at all times after the Determination Date and after giving effect to such Restricted Payment, Consolidated Tangible Net Worth exceeds $95,000,000.

For the purposes of this Section 8.12 the amount of any Restricted Payment declared, paid or distributed in property of the Borrower shall be deemed to be the greater of the book value or fair market value (as determined in good faith by the Board of Directors of the Borrower) of such property at the time of the making of the Restricted Payment in question.

The Borrower will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof.

1.7 Section 8.20 of the Credit Agreement is hereby amended by deleting the period (.) at the end of Section 8.20(l) and replacing it with “; and” and by inserting the following subsection in proper alphabetical order at the end of Section 8.20:

(m) Notice of Change of Control. Promptly upon the occurrence of any Change of Control, notice of such Change of Control.

1.8 Section 9.1 of the Credit Agreement is hereby amended by deleting the period (.) at the end of Section 9.1(r) and replacing it with “; or” and by inserting the following subsection in proper alphabetical order at the end of Section 9.1:

(s) any Change of Control shall occur.

1.9 Schedule 1.1 to the Credit Agreement is hereby amended and restated effective as of August 21, 2003, to read as set forth on Schedule 1.1 to this Amendment.

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Section 2. CONDITIONS PRECEDENT.

The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:

2.1 The Borrower, the Banks, and the Agent shall have executed and delivered this Amendment.

2.2 The Agent shall have received for each Bank a new Note in the amount of such Bank’s Commitment (such Notes to be substantially in the form attached to the Credit Agreement as Exhibit A, with appropriate insertions).

2.3 The Restricted Subsidiaries parties to the Subsidiary Guaranty shall have executed and delivered to the Agent their consent to this Amendment in the form set forth below.

2.4 The Borrower shall have furnished to the Agent evidence that the holders of the Senior Subordinated Notes have (a) amended the Subordinated Note Purchase Agreement conforming covenants therein to Sections 1.4, 1.5 and 1.6 above and (b) consented in writing to this Amendment and the transactions contemplated hereby, including, without limitation, agreeing that the base amount of Maximum Principal Amount as defined in each of the Company Security Agreement, the Subsidiary Security Agreement and the Subordinated Note Purchase Agreement shall be deemed increased to $167,000,000.

2.5 The Agent shall have received copies of resolutions of the Borrower’s Board of Directors (or other governing body) authorizing the execution, delivery and performance of this Amendment and a consummation of the transactions contemplated hereby, together with specimen signatures of a person authorized to execute such documents on the Borrower’s behalf, all certified in each instance by its Secretary or other officer acceptable to the Agent and its counsel.

2.6 Legal matters incident to the execution and delivery of this Amendment shall be satisfactory to the Agent and its counsel; and the Agent shall have received for each Bank the favorable written opinion of counsel to the Borrower and each Restricted Subsidiary (other than the Insurance Subsidiary), in form and substance satisfactory to the Agent.

2.7 The Agent shall have received an executed copy of (a) an amendment to the Company Security Agreement between the Borrower and the Agent, and (b) an amendment to the Subsidiary Security Agreement by and among the existing Restricted Subsidiaries and the Agent, in each case agreed to by the noteholders referred to therein.

Section 3. EQUALIZATION OF OUTSTANDING LOANS.

On August 21, 2003, each Bank shall fund its percentage of the outstanding Loans under the Commitments to the Agent so that after giving effect thereto each Bank holds a pro rata share of the Loans outstanding under the Commitments (in proportion to its Commitment) and, in

5

connection therewith, the Borrower shall prepay all outstanding Eurodollar Loans under the Commitments and pay to each Bank all amounts due such Bank under Section 2.10 of the Credit Agreement (it being understood that the Borrower may, subject to the conditions precedent and notice requirements set forth in the Credit Agreement, make a new Borrowing of Loans under the Commitments concurrently with such prepayment).

Section 4. REPRESENTATIONS.

In order to induce the Banks to execute and deliver this Amendment, the Borrower hereby represents to the Agent and the Banks that as of the date hereof, and after giving effect to this Amendment, the representations and warranties set forth in Section 6 of the Credit Agreement are and shall be and remain true and correct (except that the representations contained in Section 6.6 shall be deemed to refer to the most recent financial statements of the Borrower delivered to the Banks) and the Borrower is in full compliance with all of the terms and conditions of the Credit Agreement and no Default or Event of Default has occurred and is continuing under the Credit Agreement or shall result after giving effect to this Amendment.

Section 5. MISCELLANEOUS.

5.1 Except as specifically amended herein, the Credit Agreement shall continue in full force and effect in accordance with its original terms. Reference to this specific Amendment need not be made in the Credit Agreement, the Notes, or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.

5.2 The Borrower heretofore executed and delivered, among other things, the Company Security Agreement and hereby acknowledges and agrees that the security interests and liens created and provided for therein continue to secure the payment and performance of the Obligations of the Borrower under the Credit Agreement as amended hereby entitled to all of the benefits and privileges set forth therein.

5.3 The Borrower agrees to pay on demand all costs and expenses of or incurred by the Agent in connection with the negotiation, preparation, execution and delivery of this Amendment and the other instruments and documents to be executed and delivered in connection herewith, including the fees and expenses of counsel for the Agent.

5.4 This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. This Amendment shall be governed by the internal laws of the State of Illinois (without regard to principles of conflicts of laws).

[SIGNATURE PAGES TO FOLLOW]

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This Tenth Amendment to Amended and Restated Credit Agreement is dated as of August 21, 2003.

WORLD ACCEPTANCE CORPORATION
By	[signature]
	Name
	Title

Accepted and agreed to as of the date and year last above written.

HARRIS TRUST AND SAVINGS BANK, individually and as Agent
By	[signature]
	Name
	Title

BANK ONE, NA, individually and as Co Agent
By	[signature]
	Name
	Title

LASALLE BANK NATIONAL ASSOCIATION
By	[signature]
	Name
	Title

HIBERNIA NATIONAL BANK
By	[signature]
	Name
	Title

7

WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC.
By	[signature]
	Name
	Title

CAROLINA FIRST BANK
By	[signature]
	Name
	Title

8

ACKNOWLEDGEMENT AND CONSENT

Each of the undersigned is a Restricted Subsidiary of World Acceptance Corporation who has executed and delivered to the Agent and the Banks the Subsidiary Guaranty and the Subsidiary Security Agreement. Each of the undersigned hereby acknowledges and consents to the Tenth Amendment to Amended and Restated Credit Agreement set forth above and confirms that the Loan Documents executed by it, and all of its obligations thereunder, remain in full force and effect after giving effect to the Amendment. Without limiting the foregoing, each of the undersigned acknowledges and agrees that the indebtedness under the Credit Agreement as amended by the Tenth Amendment to Amended and Restated Credit Agreement constitutes indebtedness guaranteed by it under the terms of the Subsidiary Guaranty Agreement and Secured Indebtedness under the terms of the Subsidiary Security Agreement entitled to all of the benefits of and privileges set forth therein. Each of the undersigned acknowledges that the Agent and the Banks are relying on the foregoing in entering into the Amendment.

Dated as of August 21, 2003.

WORLD ACCEPTANCE CORPORATION OF ALABAMA WORLD ACCEPTANCE CORPORATION OF MISSOURI WORLD FINANCE CORPORATION OF GEORGIA WORLD FINANCE CORPORATION OF LOUISIANA WORLD ACCEPTANCE CORPORATION OF OKLAHOMA, INC. WORLD FINANCE CORPORATION OF SOUTH CAROLINA WORLD FINANCE CORPORATION OF TENNESSEE WFC OF SOUTH CAROLINA, INC. WORLD FINANCE CORPORATION OF ILLINOIS WORLD FINANCE CORPORATION OF NEW MEXICO WORLD FINANCE CORPORATION OF KENTUCKY WFC SERVICES, INC.
By	[signature]
	A. Alexander McLean III Its Executive Vice President

WFC LIMITED PARTNERSHIP
By	WFC of South Carolina, Inc., as sole general partner
	By	[signature]
		A. Alexander McLean III Its Executive Vice President

WORLD FINANCE CORPORATION OF TEXAS
By	[signature]
	Charles F. Gardner, Jr. Its President

SCHEDULE 1.1

COMMITMENTS

NAME OF BANK	BASE REVOLVING CREDIT COMMITMENTS		SEASONAL REVOLVING CREDIT COMMITMENTS		TOTAL COMMITMENTS
Harris Trust and Savings Bank	$	31,856,287.44	$	3,143,712.56	$	35,000,000
Bank One, NA	$	29,125,748.50	$	2,874,251.50	$	32,000,000
LaSalle Bank National Association	$	25,485,029.94	$	2,514,970.06	$	28,000,000
Hibernia National Bank	$	18,203,592.81	$	1,796,407.19	$	20,000,000
Wells Fargo Financial Preferred Capital, Inc.	$	29,125,748.50	$	2,874,251.50	$	32,000,000
Carolina First Bank	$	18,203,592.81	$	1,796,407.19	$	20,000,000
TOTAL	$	152,000,000	$	15,000,000	$	167,000,000

EX-4.7

Exhibit 4.7

FIRST AMENDMENT TO NOTE AGREEMENT

THIS FIRST AMENDMENT dated as of August 21, 2003 to the Note Agreement dated as of June 30, 1997 is among World Acceptance Corporation, a South Carolina corporation (the “Company”), and Principal Life Insurance Company, formerly known as Principal Mutual Life Insurance Company (“Purchaser”).

RECITALS:

A. The Company and the Purchaser have heretofore entered into a Note Agreement dated as of June 30, 1997 (the “Note Agreement”). The Company has heretofore issued to the Purchaser the U.S. $10,000,000 10.0% Senior Subordinated Secured Notes due June 30, 2004 (the “Notes”) dated June 30, 1997, pursuant to the Note Agreement. The Purchaser is the holder of 100% of the outstanding principal amount of the Notes.

B. The Company and the Purchaser now desire to amend the Note Agreement in the respects, but only in the respects, hereinafter set forth.

C. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require.

D. All requirements of law have been fully complied with and all other acts and things necessary to make this First Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed.

NOW, THEREFORE, the Company and the Purchaser, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows:

SECTION 1. AMENDMENTS

1. Section 5.9 of the Note Agreement shall be and is hereby amended by deleting the section in its entirety and replacing it to read as follows:

“Section 5.9. Permitted Indebtedness. The Company will not, and will not permit any Restricted Subsidiary to, incur, create, issue, assume or permit to exist any Indebtedness for Borrowed Money other than:

(a) Senior Debt;

(b) Senior Subordinated Debt;

(c) Junior Subordinated Debt; and

(d) Debt incurred in connection with permitted Fixed Asset Financing.”

2. Section 5.11 of the Note Agreement is amended (i) by deleting the word “and” appearing in the eighth line of clause (g) and (ii) deleting the period (.) at the end of clause (h) and replacing it with “; and.” Section 5.11 of the Note Agreement is further amended by adding the following clause at the end thereof:

“(i) Liens granted to secure the Fixed Asset Financing, provided that such Liens (x) only extend to the fixed assets acquired with the proceeds of such Fixed Asset Financing, (y) only secure the original purchase price of such fixed assets, as reduced by repayments thereon, and (z) do not extend to or cover any other property of the Company or any Subsidiary.”

3. Section 5.12 of the Note Agreement is hereby amended by deleting such section in its entirety and replacing it to read as follows:

“Section 5.12. Dividends, Stock Purchases. The Company will not except as hereinafter provided:

(a) Declare or pay any dividends, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of capital stock of the Company); or

(b) Directly or indirectly, or through any Subsidiary, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than in exchange for or out of the net cash proceeds to the Company from the substantially concurrent issue or sale of other shares of capital stock of the Company or warrants, rights or options to purchase or acquire any shares of its capital stock); or

(c) Make any other payment or distribution, either directly or indirectly or through any Subsidiary, in respect of its capital stock; or

(d) Make any payment of principal, interest or premium on any Senior Subordinated Debt or Junior Subordinated Debt other than any regularly scheduled payment of principal or interest on the Senior Subordinated Debt or the Junior Subordinated Debt; (such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options, and all such other distributions and such payments on Senior Subordinated Debt and Junior Subordinated Debt being herein collectively called “Restricted Payments”), if, after giving effect thereto, (i) a Default or Event of Default has occurred and is continuing or (ii) the aggregate amount of Restricted Payments made during the period after March 31, 2003, to and including the date of the making of the Restricted Payment in question, would exceed the sum of (x) $15,000,000, plus (y) the net cash proceeds received by the Company from the issuance or sale subsequent to March 31, 2003, of shares of common stock of the Company or warrants, rights or options to purchase or acquire any share of its

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common stock, plus (z) 50% of Consolidated Net Income for the period commencing April 1, 2003, and ending on the last day of the fiscal quarter immediately preceding the date of the making of the Restricted Payment in question, computed on a cumulative basis for said entire period (or if such Consolidated Net Income is a deficit figure, then minus 100% of such deficit); provided that at all times after the Determination Date and after giving effect to such Restricted Payment, Consolidated Tangible Net Worth exceeds $95,000,000.

For the purposes of this Section 5.12 the amount of any Restricted Payment declared, paid or distributed in property of the Company shall be deemed to be the greater of the book value or fair market value (as determined in good faith by the Board of Directors of the Company) of such property at the time of the making of the Restricted Payment in question.

The Company will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof.

4. Section 8.1 of the Note Agreement hereby is amended by adding the following new defined term:

“Fixed Asset Financing” means the acquisition by the Company of one or more fixed assets in an aggregate amount not to exceed $1,500,000, which financing (x) shall amortize over time and not be subject to being re-borrowed and (y) may be secured by the fixed assets so acquired.

SECTION 2. MISCELLANEOUS

1. In order to induce the Purchaser to execute and deliver this Amendment, the Company hereby represents to the Purchaser that as of the date hereof, and after giving effect to this Amendment, the representations and warranties set forth on Exhibit C of the Note Agreement are and shall be and remain true and correct (except that the representations contained in Paragraph 3 of Exhibit C shall be deemed to refer to the most recent financial statements of the Company delivered to the Purchaser) and the Company is in full compliance with all of the terms and conditions of the Note Agreement and no Default or Event of Default has occurred and is continuing under the Note Agreement or shall result after giving effect to this Amendment.

2. This First Amendment shall be construed in connection with and as part of the Note Agreement, and except as modified and expressly amended by this First Amendment, all terms, conditions and covenants contained in the Note Agreement, the Notes and any related documents are hereby ratified and shall be and remain in full force and effect.

3. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this First Amendment may refer to the Note Agreement without making specific reference to this First Amendment but nevertheless all such references shall include this First Amendment unless the context otherwise requires.

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4. The descriptive headings of the various Sections or parts of this First Amendment are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.

5. This First Amendment shall be governed by and construed in accordance with the laws of the State of Illinois.

6. The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this First Amendment may be executed in any number of counterparts, each executed counterpart constituting an original, but all together only one agreement.

WORLD ACCEPTANCE CORPORATION
By:	[signature]
Its:

PRINCIPAL LIFE INSURANCE COMPANY
By:	[signature]
Its:

By:	[signature]
Its:

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EX-4.9

Exhibit 4.9

SECOND AMENDMENT TO AMENDED AND RESTATED

SECURITY AGREEMENT, PLEDGE AND INDENTURE OF TRUST

Reference is hereby made to that certain Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as of June 30, 1997 (as the same may be amended, the “Company Security Agreement”), from World Acceptance Corporation (the “Company”) to Harris Trust and Savings Bank, as Security Trustee. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Company Security Agreement.

The Company and the Security Trustee, acting at the direction of the Noteholders, have agreed to amend the definition of “Receivables” as set forth in the Company Security Agreement to reflect changes in Article 9 of the Uniform Commercial Code, and this instrument shall constitute an agreement between the Company and the Security Trustee amending the Company Security Agreement in the respects, but only in the respects, hereinafter set forth:

1. The definition of “Receivables” appearing in Section 1.1 of the Company Security Agreement shall be amended and restated in its entirety to read as follows:

“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.

2. As collateral security for the indebtedness, obligations, and liabilities of the Company set forth in Section 2 of the Company Security Agreement, the Company hereby grants and reaffirms to the Security Trustee a continuing lien on and security interest in, and acknowledges and agrees that the Security Trustee has and shall continue to have a continuing lien on and security interest in, all of the Collateral described therein, including all Receivables as defined above whether now existing or hereafter arising or acquired. Neither the Company nor the Security Trustee intends by this Amendment to in any way impair or otherwise affect the lien of the Company Security Agreement on such of the Collateral which was subject to the Company Security Agreement prior to giving effect to this Amendment.

3. The Company hereby repeats and reaffirms all of its covenants, agreements, representations and warranties contained in the Company Security Agreement, each and all of which shall be applicable to all of the properties, rights, interests and privileges subject to the lien of the Company Security Agreement after giving effect to this Amendment. The Company hereby certifies that no Event of Default

or event which, with notice or lapse of time or both, would constitute an Event of Default exists under the Company Security Agreement after giving effect to this Amendment.

4. No reference to this Amendment need be made in any note, instrument or other document at any time referring to the Company Security Agreement, any reference in any of such to the Company Security Agreement to be deemed to reference to the Company Security Agreement as modified hereby.

5. Except as specifically modified hereby, all the terms and conditions of the Company Security Agreement shall stand and remain unchanged and in full force and effect.

PLEDGOR:
WORLD ACCEPTANCE CORPORATION
By	[signature]
	Name
	Title

Acknowledged and agreed to as of the date first above written.

HARRIS TRUST AND SAVINGS BANK, as Security Trustee
By	[signature]
	Name
	Title

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EX-4.10

Exhibit 4.10

THIRD AMENDMENT TO AMENDED AND RESTATED

SECURITY AGREEMENT, PLEDGE AND INDENTURE OF TRUST

Reference is hereby made to that certain Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as of June 30, 1997 (as the same may be amended, the “Company Security Agreement”), from World Acceptance Corporation (the “Company”) to Harris Trust and Savings Bank, as Security Trustee. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Company Security Agreement.

Subsequent to the Company’s delivery of the Company Security Agreement, the Company and the Security Trustee have agreed to add Deposit Accounts (as defined below), whether now owned or existing or hereafter created, acquired or arising, as Collateral under the Company Security Agreement. The Company and the Security Trustee now desire to amend the Company Security Agreement to reflect such addition.

Section 1. AMENDMENTS.

Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Company Security Agreement shall be and is hereby amended as follows:

1.1 Section 2.9 of the Company Security Agreement shall be amended and restated in its entirety to read as follows:

Section 2.9. Deposit Accounts. All Deposit Accounts, as such term is defined in the Uniform Commercial Code; and

1.2 Section 2 of the Company Security Agreement shall be further amended by inserting the following subsection in proper numerical order:

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.

1.3 Section 3 of the Company Security Agreement shall be amended by inserting the following subsection in proper numerical order:

Section 3.11. Deposit Accounts. The Company 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 Company sweeps or periodically transfers collections from the Subsidiary Local Accounts in the ordinary course of business (“Concentration Accounts”). All Concentration Accounts of the Company as of August 21, 2003, are listed and identified (by account number and depository institution) on Schedule IV attached hereto and made a part hereof. The Company shall promptly notify the Security Trustee of any other Concentration Account opened or maintained by the Company after the date hereof, and shall submit to the Security Trustee a supplement to Schedule IV to reflect such

additional accounts (provided the Company’s failure to do so shall not impair the Security Trustee’s security interest therein). So long as no Event of Default has occurred and is continuing, the Security Trustee’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 Security Trustee, and as a condition to the establishment and maintenance of any such Concentration Account, at all times on and after December 31, 2003, the Company and such depository institution shall have executed and delivered to the Security Trustee an account control agreement in form and substance satisfactory to the Security Trustee which provides, among other things, for the depository institution’s agreement that it will comply with instructions originated by the Security Trustee directing the disposition of the funds in the Concentration Account(s) at such depository institution without further consent by the Company.

1.4 Schedule IV is hereby added to the Company Security Agreement, to read as set forth on Schedule IV to this Amendment.

Section 2. REPRESENTATIONS, WARRANTIES AND COVENANTS.

The Company hereby repeats and reaffirms all of its covenants, agreements, representations and warranties contained in the Company Security Agreement, each and all of which shall be applicable to all of the properties, rights, interests and privileges subject to the lien of the Company Security Agreement after giving effect to this Amendment. The Company hereby certifies that no Event of Default or event which, with notice or lapse of time or both, would constitute an Event of Default exists under the Company Security Agreement after giving effect to this Amendment.

Section 3. MISCELLANEOUS.

3.1 No reference to this Amendment need be made in any note, instrument or other document at any time referring to the Company Security Agreement, any reference in any of such to the Company Security Agreement to be deemed to reference to the Company Security Agreement as modified hereby.

3.2 Except as specifically modified hereby, all the terms and conditions of the Company Security Agreement shall stand and remain unchanged and in full force and effect.

3.3 This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart pages, all of which taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. This Amendment shall be governed by the laws of the State of South Carolina.

[SIGNATURE PAGES TO FOLLOW]

This Third Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust is dated as of August 21, 2003.

WORLD ACCEPTANCE CORPORATION
By	[signature]
	Name
	Title

Acknowledged and agreed to as of the date first above written.

HARRIS TRUST AND SAVINGS BANK, as Security Trustee
By	[signature]
	Name
	Title

SCHEDULE IV

CONCENTRATION ACCOUNTS

ACCOUNT NUMBER	DEPOSITORY INSTITUTION
[Omitted]	Wachovia Bank

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, D. R. Jones, certify that:

1. I have reviewed this quarterly report on Form 10-Q of World Acceptance Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 14, 2003	/s/    D. R. Jones
		D. R. Jones, President and Chief Executive Officer

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EX-31.2

Exhibit 31.2

I, A. A. McLean III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of World Acceptance Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 14, 2003	/s/ A. A. McLean III
		A. A. McLean III, Executive Vice President and Chief Financial Officer

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EX-32.1

Exhibit #32.1

CERTIFICATION OF PERIODIC REPORT

I, D.R. Jones, of World Acceptance Corporation, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that (to my knowledge):

(1) the Quarterly Report of form 10-Q of the Company for the quarter ended September 30, 2003, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:    November 14, 2003

/s/    D.R. Jones        

D.R. Jones

President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to World Acceptance Corporation and will be retained by World Acceptance Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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EX-32.2

Exhibit #32.2

CERTIFICATION OF PERIODIC REPORT

I, A.A. McLean, III, of World Acceptance Corporation, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that (to my knowledge):

(3) the Quarterly Report of form 10-Q of the Company for the quarter ended September 30, 2003, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(4) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:    November 14, 2003

/s/    A.A. McLean III        

A.A. McLean III

Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to World Acceptance Corporation and will be retained by World Acceptance Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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