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, 2004

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 incorporation or organization)	(I.R.S. Employer Identification 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 8, 2004.

Common Stock, no par value	18,743,389
(Class)	(Outstanding)

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited):
	Consolidated Balance Sheets as of September 30, 2004 and March 31, 2004	3
	Consolidated Statements of Operations for the three month periods and six month periods ended September 30, 2004 and September 30, 2003	4
	Consolidated Statements of Shareholders’ Equity for the year ended March 31, 2004 and the six months ended September 30, 2004	5
	Consolidated Statements of Cash Flows for the three month periods and six month periods ended September 30, 2004 and September 30, 2003	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	14
Item 4.	Controls and Procedures	15
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 4.	Submission of Matters to a Vote of Security Holders	16
Item 6.	Exhibits	17
Signatures		19

2

WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2004			March 31, 2004
ASSETS
Cash	$	5,318,405		4,314,107
Gross loans receivable		349,401,986		310,130,665
Less:
Unearned interest and fees		(84,135,764	)	(73,602,603	)
Allowance for loan losses		(20,421,599	)	(17,260,750	)
Loans receivable, net		244,844,623		219,267,312
Property and equipment, net		9,634,081		9,273,602
Other assets, net		14,784,907		13,600,296
Intangible assets, net		17,484,270		15,514,003
Total assets	$	292,066,286		261,969,320
LIABILITIES & SHAREHOLDERS’ EQUITY
Liabilities:
Senior notes payable		109,300,000		91,350,000
Subordinated notes payable		—		2,000,000
Other notes payable		1,000,000		1,682,000
Accounts payable and accrued expenses		14,673,191		10,356,983
Total liabilities		124,973,191		105,388,983
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, 2004 and March 31, 2004, respectively
Additional paid-in capital		9,164,163		12,822,906
Retained earnings		157,928,932		143,757,431
Total shareholders’ equity		167,093,095		156,580,337
	$	292,066,286		261,969,320

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,
	2004		2003	2004	2003
Revenues:
Interest and fee income	$	43,478,424	36,548,719	84,078,823	70,954,197
Insurance and other income		6,275,537	5,127,116	13,153,446	10,984,945
Total revenues		49,753,961	41,675,835	97,232,269	81,939,142
Expenses:
Provision for loan losses		11,281,929	9,328,087	19,909,337	17,257,444
General and administrative expenses:
Personnel		17,477,784	14,510,675	35,184,031	29,860,318
Occupancy and equipment		3,112,277	2,442,725	6,026,700	4,744,729
Data processing		399,201	445,904	867,182	922,556
Advertising		1,369,504	1,171,208	2,949,790	2,454,172
Amortization of intangible assets		633,202	566,456	1,264,515	1,121,798
Other		3,539,102	2,823,854	6,657,892	5,499,707
		26,531,070	21,960,822	52,950,110	44,603,280
Interest expense		1,067,112	927,946	2,056,321	1,918,947
Total expenses		38,880,111	32,216,855	74,915,768	63,779,671
Income before income taxes		10,873,850	9,458,980	22,316,501	18,159,471
Income taxes		3,968,000	3,358,000	8,145,000	6,447,000
Net income	$	6,905,850	6,100,980	14,171,501	11,712,471
Net income per common share:
Basic	$	.37	.34	.76	.65
Diluted	$	.36	.32	.73	.62
Weighted average common shares outstanding:
Basic		18,593,156	18,107,073	18,631,457	17,937,455
Diluted		19,429,018	19,163,252	19,459,166	18,961,520

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, 2003	$	1,048,721		114,992,309	116,041,030
Proceeds from exercise of stock options (1,238,146 shares), including tax benefit of $3,774,332		11,744,185		—	11,774,185
Net income		—		28,765,122	28,765,122
Balances at March 31, 2004	$	12,822,906		143,757,431	156,580,337
Proceeds from exercise of stock options (289,142 shares), including tax benefit of $1,404,693		3,651,736		—	3,651,736
Common stock repurchases (433,000 shares)		(7,310,479	)	—	(7,310,479	)
Net income		—		14,171,501	14,171,501
Balances at September 30, 2004	$	9,164,163		157,928,932	167,093,095

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,
	2004			2003		2004		2003
Cash flows from operating activities:
Net income	$	6,905,850		6,100,980		14,171,501		11,712,471
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		11,281,929		9,328,087		19,909,337		17,257,444
Amortization of intangible assets		633,202		566,456		1,264,515		1,121,798
Amortization of loan costs and discounts		—		36,718		31,079		80,820
Depreciation		494,409		418,541		962,194		823,347
Change in accounts:
Other assets, net		(58,026	)	154,604		(1,215,690	)	664,217
Accounts payable and accrued expenses		5,020,388		(2,922,499	)	5,720,901		(3,243,667	)
Net cash provided by operating activities		24,277,752		13,682,887		40,843,837		28,416,430
Cash flows from investing activities:
Increase in loans, net		(12,564,217	)	(10,448,691	)	(30,303,223	)	(23,495,259	)
Net assets acquired from office acquisitions, primarily loans		(8,203,569	)	(673,403	)	(15,356,107	)	(2,928,841	)
Purchase of premises and equipment		(642,076	)	(278,721	)	(1,149,991	)	(724,304	)
Purchases of intangible assets		(2,097,926	)	(428,522	)	(3,234,782	)	(827,128	)
Net cash used in investing activities		(23,507,788	)	(11,829,337	)	(50,044,103	)	(27,975,532	)
Cash flows from financing activities:
Proceeds (repayment) of senior notes payable, net		50,000		(5,300,000	)	17,950,000		(4,300,000	)
Repayment of senior subordinated notes		—		—		(2,000,000	)	(2,000,000	)
Proceeds (repayment) from senior subordinated notes		(482,000	)	—		(682,000	)	1,200,000
Proceeds from exercise of stock options		2,188,534		2,216,649		2,247,043		3,769,348
Common stock repurchases		—		—		(7,310,479	)	—
Net cash provided by (used in) financing activities		1,756,534		(3,083,351	)	10,204,564		(1,330,652	)
Increase (decrease) in cash		2,526,498		(1,229,801	)	1,004,298		(889,754	)
Cash, beginning of period		2,791,907		4,362,733		4,314,107		4,022,686
Cash, end of period	$	5,318,405		3,132,932		5,318,405		3,132,932
Supplemental disclosure of cash flow information:
Cash paid for interest expense	$	1,110,909		889,488		2,031,385		1,841,989
Cash paid for income taxes		7,037,328		7,183,928		10,234,178		9,459,472
Supplemental schedule of noncash financing activities:
Tax benefits from exercise of stock options		1,373,059		897,114		1,404,693		1,352,508

See accompanying notes to consolidated financial statements.

6

WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2004

NOTE 1 - BASIS OF PRESENTATION

The consolidated financial statements of the Company at September 30, 2004, 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, 2004, 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, 2004 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 2004 to conform with fiscal 2005 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, 2004, included in the Company’s 2004 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,
	2004			2003		2004		2003
Balance at beginning of period	$	18,644,931		16,247,662		17,260,750		15,097,780
Provision for loan losses		11,281,929		9,328,087		19,909,337		17,257,444
Loan losses		(10,832,335	)	(9,252,416	)	(19,518,114	)	(16,858,374	)
Recoveries		849,807		687,238		1,852,345		1,384,184
Allowance on acquired loans, net of specific charge-offs		477,267		42,106		917,281		171,643
Balance at end of period	$	20,421,599		17,052,677		20,421,599		17,052,677

For the three months ended September 30, 2004 and 2003, the Company recorded gross adjustments of approximately $482,000, and $42,000, respectively, to the allowance for loan losses in connection with its acquisitions in accordance with generally accepted accounting principles. These adjustments were $922,000 and $183,000 for the six months ended September 30, 2004 and 2003, 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,
	2004	2003	2004	2003
Basic:
Weighted average common shares outstanding (denominator)	18,593,156	18,107,073	18,631,457	17,937,455
Diluted:
Weighted average common shares outstanding	18,593,156	18,107,073	18,631,457	17,937,455
Dilutive potential common shares	835,862	1,056,179	827,709	1,024,065
Weighted average diluted shares outstanding (denominator)	19,429,018	19,163,252	19,459,166	18,961,520

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

For the six months ended	Number of Shares	Exercise Price
September 30, 2004	50,000	22.25
September 30, 2003	—	—

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)	2004		2003	2004	2003
Net income
Net income, as reported	$	6,906	6,101	14,172	11,712
Deduct:
Total stock-based employee compensation expense determined under fair value based method for all option awards, net of related income tax effect		202	179	539	358
Pro forma net income	$	6,704	5,922	13,633	11,354
Basic earnings per share
As reported	$	0.37	0.34	0.76	0.765
Pro forma	$	0.36	0.33	0.73	0.63
Diluted earnings per share
As reported	$	0.36	0.32	0.73	0.62
Pro forma	$	0.35	0.31	0.70	0.60

8

NOTE 6 – ACQUISITIONS

The following table sets forth the acquisition activity of the Company for the six months ended September 30, 2004 and 2003:

	2004		2003
Number of offices purchased		46	13
Merged into existing offices		18	8
Purchase Price	$	18,590,889	3,755,969
Tangible assets:
Net loans		15,183,425	2,889,841
Furniture, fixtures & equipment		172,682	39,000
Total tangible assets	$	15,356,107	2,928,841
Customer lists		1,611,513	441,392
Non-compete agreements		195,000	42,000
Goodwill		1,428,269	343,736
Total intangible assets	$	3,234,782	827,128

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,
	2004			2003		2004		2003
	(Dollars in thousands)
Average gross loans receivable (1)	$	340,829		282,578		331,614		276,957
Average net loans receivable (2)		258,705		213,684		252,119		209,822
Expenses as a % of total revenue:
Provision for loan losses		22.7	%	22.4	%	20.5	%	21.1	%
General and administrative		53.3	%	52.7	%	54.5	%	54.4	%
Total interest expense		2.1	%	2.2	%	2.1	%	2.3	%
Operating margin (3)		24.0	%	24.9	%	25.1	%	24.5	%
Return on average assets (annualized)		9.9	%	10.4	%	10.2	%	10.1	%
Offices opened or acquired, net		31		13		49		16
Total offices (at period end)		575		486		575		486

⁽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, 2004, Versus

Three Months Ended September 30, 2003

Interest and fee income for the quarter ended September 30, 2004, increased by $6.9 million, or 19.0%, over the same period of the prior year. This increase resulted from a $45.0 million increase, or 21.1%, in average net loans receivable over the two corresponding periods. The increase in interest and fee income was less 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, 2004, small loans (those less than $1,000 in original balance) grew by 18.9% and the larger loans grew by 34.9%. Smaller loans generally carry higher interest rates and fees (and will have higher losses) than the larger loans. At September 30, 2004, the portfolios mix was as follows: Small – 69.5%; Large – 28.5%; and Sales Finance - 2.0%. This compares to a mix at September 30, 2003 of: Small – 72.0%; Large – 26.1%; and Sales Finance – 1.9%.

Insurance commissions and other income increased by $1.1 million, or 22.4%, when comparing the two quarterly periods. Insurance commissions increased by $962,000, or 32.5%, due to the increased loan volume in those states where credit insurance may be sold. Other income increased by $187,000, or 8.6%. 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 higher during the most recent quarter due to the overall increase in the customer base.

10

WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

Comparison of Three Months Ended September 30, 2004, Versus

Three Months Ended September 30, 2003, continued

Total revenues rose to $49.8 million during the quarter ended September 30, 2004, a 19.4% increase over the $41.7 million for the corresponding quarter of the previous year. Revenues from the 465 offices open throughout both quarters increased by approximately 7.8%, primarily due to increased balances of loans receivable in those offices. At September 30, 2004, the Company had 575 offices in operation, an increase of 89 offices from September 30, 2003 and an increase of 49 offices since the beginning of the fiscal year.

The provisions for loan losses during the quarter ended September 30, 2004, increased by $2.0 million, or 20.9% 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 $10.0 million, a 16.5% increase over the $8.6 million charged off during the same quarter of fiscal 2004. As a percentage of average net loans receivable, net charge-offs decreased from 16.0% on an annualized basis for three months ended September 30, 2003, to 15.4% annualized for the current quarter. Management does not currently believe that loan losses will 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, 2004, increased by $4.6 million, or 20.8% over the same quarter of fiscal 2004. This increase is due primarily to the addition of 89 net new offices between September 30, 2003 and the end of the current quarter. The incremental revenue from new offices is less than the incremental expenses for the first year or so, especially for de novo openings. Overall, general and administrative expenses as a percent of total revenues increased from 52.7% during the quarter ended September 30, 2003 to 53.3% during the most recent quarter.

Interest expense increased by $139,000, or 15.0%, as a result of a 9.8% increase in average debt outstanding when comparing the two quarterly periods, combined with an increase in short term interest rates during the most recent quarter.

The Company’s effective income tax rate increase from 35.5% during the prior fiscal year to 36.5% during the current fiscal year due to an expected increase in state income taxes.

Comparison of Six Months Ended September 30, 2004,

Versus Six Months Ended September 30, 2003

For the six-month period ended September 30, 2004, net income amounted to $14.2 million. This represents a $2.5 million, or 21.0%, increase when comparing the two six-month periods. Operating income (revenues less the provision for loan losses and general and administrative expenses) increased by $4.3 million, or 21.4%, over the two periods. This increase was offset by an increase in interest expense, and by an increase in income taxes.

Total revenues amounted to $97.2 million during the current six-month period, an increase of $15.3 million, or 18.7%, over the prior-year period. This increase resulted from increases in interest and fee income of 18.5%, insurance commissions of 34.8% and other income of 1.4%. The increase in interest and fee income resulted from the increase in average net loans receivable of 20.2% when comparing the two six-month periods. Revenues from the 465 offices open throughout both six-month periods increased approximately 10.5%.

11

The provision for loan losses increased by $2.7 million, or 15.4%, during the current six-month period when compared to the same period of fiscal 2004. This increase resulted primarily from an increase in loan losses over these two periods. Net charge-offs increased to $17.7 million during the six-months ended September 30, 2004, a $2.2 million, or 14.2%, increase over the $15.5 million charged-off during the September 30, 2003 period. As a percentage of average net loans receivable, annualized net charge-offs decreased from 14.7% during the prior period to 14.0% during the most recent six month period.

General and administrative expenses increased by $8.3 million, or 18.7%, over the two six-month periods. This increase resulted from the 89 net new offices added during the 12 month period ending September 30, 2004. As a percent of total revenues, general and administrative expenses increased slightly from 54.4% during the six month of fiscal 2003 to 54.5% 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 3.8% when comparing the two-six month periods.

Interest expense increased by $137,000 when comparing the two six-month periods, an increase of 7.2%. This results from a 5.8% increase in average debt outstanding when comparing the two six-month periods combined with the recent rise in interest rates.

Critical Accounting Policies

The Company’s accounting and reporting policies are in accordance with accounting principles generally accepted in the United States of America and conform to general practices within the finance company industry. The significant accounting policies used in the preparation of the consolidated financial statements are discussed in Note 1 to the consolidated financial statements. Certain critical accounting policies involve significant judgment by the Company’s management, including the use of estimates and assumptions which affect the reported amounts of assets, liabilities, revenues, and expenses. As a result, changes in these estimates and assumptions could significantly affect the Company’s financial position and results of operations. The Company considers its policies regarding the allowance for loan losses to be its most critical accounting policy due to the significant degree of management judgment. The Company has developed policies and procedures for assessing the adequacy of the allowance for loan losses that take into consideration various assumptions and estimates with respect to the loan portfolio. The Company’s assumptions and estimates may be affected in the future by changes in economic conditions, among other factors.

Liquidity and Capital Resources

The Company has financed its operations, acquisitions and office expansion through a combination of cash flow from operations and borrowings from its institutional lenders. 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. As the Company’s gross loans receivable increased from $210.9 million at March 31, 2001 to $310.1 million at March 31, 2004, net cash provided by operating activities for fiscal years 2002, 2003 and 2004 was $48.3 million, $55.1 million and $70.4 million, respectively.

The Company repurchased 1,986,000 shares of its common stock under its repurchase program, for an aggregate purchase price of approximately $16.0 million, between February 1996 and October 1996. Because of certain loan agreement restrictions, the Company suspended its stock repurchases in October 1996. The stock repurchase program was reinstated in January 2000, and 144,000 shares were repurchased in fiscal 2000, 275,000 shares in fiscal 2001, 252,000 shares in fiscal 2002 and 1,623,549 shares in fiscal 2003 for respective aggregate purchase prices of $724,000, $1,434,000, $2,179,000 and $12,000,000. During the first six months of fiscal 2005, the Company repurchased 433,000 shares for an aggregate purchase price of $7,310,479. The Company believes stock 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. In addition, 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 $25,000 per office during fiscal 2005. New offices have also required from $100,000 to $400,000 to fund outstanding loans receivable originated during their first 12 months of operation.

The Company acquired 28 offices and a number of loan portfolios from competitors in seven states in 11 separate transactions during the first six months of fiscal 2005. Gross loans receivable purchased in these transactions were approximately $18.6 million in the aggregate at the dates of purchase. The Company believes that

12

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.

In the second quarter ended September 30, 2004, the Company renewed its revolving credit facility, which provides for a base commitment of $152.0 million from 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, 2006. 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 2.00% per annum. At September 30, 2004, the interest rate on borrowings under the revolving credit facility was 3.85%. 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 receivable. On September 30, 2004, $109.3 million was outstanding under this facility, and there was $42.7 million of unused borrowing availability under the borrowing base limitations.

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 Company was in compliance with these agreements as of September 30, 2004 and does not believe that these agreements will materially limit its business and expansion strategy.

The Company believes that cash flow from operations and borrowings under its revolving credit facility will be adequate to fund the expected cost of opening or acquiring new offices, 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 other notes payable. 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.

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.

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WORLD ACCEPTANCE CORPORATION

MANAGEMENTS’ DISCUSSION AND ANALYSIS, CONTINUED

Recently Issued Accounting Pronouncements

Accounting for Loans or Certain Debt Securities Acquired in a Transfer

Statement of Position 03-1 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 a transfer if those differences are attributable, at least in part, to credit quality. It includes such loans acquired in purchase business combinations and applies to all nongovernmental entities, including not-for-profit organizations. This SOP does not apply to loans originated by the entity. This SOP limits the yield that may be accreted (accretable yield) to the excess of the investor’s estimate of undiscounted expected principal, interest, and other cash flows (cash flows expected at acquisitions to be collected) over the investor’s initial investment in the loan. This SOP requires that the excess of contractual cash flows over cash flows expected to be collected (nonaccretable difference) not be recognized as an adjustment of yield loss accrual, or valuation allowance.

This SOP prohibits “carrying over” or creation of valuation allowances in the initial accounting of all loans acquired in a transfer that are within the scope of this SOP. 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. This SOP is effective for loans acquired in fiscal years beginning after December 15, 2004.

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,” any variations of the foregoing 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. The Company does not undertake to update any forward-looking statements it makes.

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 other note 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 $1.0 million note payable have variable rates based on a margin over LIBOR and reprice with any changes in LIBOR. The Company’s outstanding debt under its floating rate notes was $110.3 million at September 30, 2004. 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, 2004, a change of 1% in the interest rate would cause a change in interest expense of approximately $1.1 million on an annual basis.

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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, 2004. 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.

15

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. Unregistered Sales of Equity Securities and Use of Proceeds

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.”

Issuer Repurchases of Equity Securities

The Company made no repurchase of its equity securities during the second quarter of fiscal 2005.

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

(a) The 2004 Annual Meeting of Shareholders was held on August 4, 2004.

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

(c) At the 2004 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 2004 Annual Meeting of Shareholders:

	VOTES IN FAVOR	VOTES WITHHELD*
Ken R. Bramlett, Jr.	16,621,578	318,005
James R. Gilreath	16,701,864	237,719
William S. Hummers III	12,233,217	4,706,366
Douglas R. Jones	16,673,264	266,319
A. Alexander McLean III	16,305,610	633,973
Charles D. Walters	16,651,169	288,414
Charles D. Way	16,621,578	318,005

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

VOTES IN FAVOR	VOTES AGAINST	ABSTENTIONS*
16,675,551	261,130	2,902

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

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WORLD ACCEPTANCE CORPORATION

AND SUBSIDIARIES

PART II. OTHER INFORMATION, CONTINUED

Item 6. Exhibits

(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	4.4	9-30-03 10-Q
4.5	Eleventh Amendment to Amended and restated Revolving Credit Agreements, dated as of August 21, 2003	*	Filed herewith
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	4.7	9-30-03 10-Q
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	Third Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as of August 27, 2004 (Subsidiary Security Agreement)	*	Filed herewith
4.10	Fourth Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust, dated as of August 27, 2004 (Company Security Agreement)	*	Filed herewith
10.1+	Amended and Restated Employment Agreement of Charles D. Walters, effective as of June 1, 2003	10.1	6-30-03 10-Q

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10.2+	Amended Agreement of Amended and Restated Employment Agreement of Charles D. Walters, effective as of January 28, 2004	10.2	6-30-04 10-Q
10.23	Employment Agreement of A. Alexander McLean, III, effective April 1, 1994	10.2	1994 10-K
10.4+	First Amendment to Employment Agreement of A. Alexander McLean, III, effective as of June 1, 2003	10.3	6-30-03 10-Q
10.5+	Amended and Restated Employment Agreement of Douglas R. Jones, effective as of June 1, 2003	10.4	6-30-03 10-Q
10.6+	Securityholders’ Agreement, dated as of September 19, 1991, between the Company and certain of its securityholders	10.5	33-42879
10.7+	World Acceptance Corporation Supplemental Income Plan	10.7	2000 10-K
10.8+	Board of Directors Deferred Compensation Plan	10.6	2000 10-K
10.9+	1992 Stock Option Plan of the Company	4	33-52166
10.10+	1994 Stock Option Plan of the Company, as amended	10.6	1995 10-K
10.11+	2002 Stock Option Plan of the Company	Appendix A	Definitive Proxy Statement on Schedule 14A for the 2002 Annual Meeting
10.12+	The Company’s Executive Incentive Plan	10.6	1994 10-K
10.13+	World Acceptance Corporation Retirement Savings Plan	4.1	333-14399
10.14+	Executive Deferral Plan	10.12	2001 10-K
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	*
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	*
32.1	Section 1350 Certification of Chief Executive Officer	*
32.2	Section 1350 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.

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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 8, 2004	/s/ D. R. Jones
	D. R. Jones, President and Chief Executive Officer
Dated: November 8, 2004	/s/ A. A. McLean III
	A. A. McLean III, Executive Vice President
	and Chief Financial Officer

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EX-4.5

Exhibit 4.5

ELEVENTH 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 extend the Termination Date, amend certain financial covenants, 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. Section 4.1 of the Credit Agreement shall be amended and restated in its entirety to read as follows:

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 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, deposit accounts, 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.

1.2. Section 5.1 of the Credit Agreement shall be amended by (a) deleting the definition of “Junior Subordinated Debt”, (b) inserting in appropriate alphabetical order the definition of “Subordinated Debt”, and (c) amending and restating in their entirety the definitions of “Senior Debt,” “Senior Notes,” and “Termination Date”, each of which in the case of (b) and (c) above shall read as follows:

“Senior Debt” shall mean (i) the Senior Notes, (ii) the Voyager Note, (iii) all other Indebtedness for Borrowed Money of the Borrower other than the Subordinated Debt, and (iv) all Indebtedness for Borrowed Money of Restricted Subsidiaries (other than such Indebtedness for Borrowed Money arising from the Subsidiary Guaranty Agreement).

“Senior Notes” means the Notes issued hereunder.

“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 and (ii) contains or has applicable thereto subordination provisions substantially in the form set forth in Exhibit B hereto or such other provisions as are approved in writing by the Required Banks.

“Termination Date” shall mean September 30, 2006, 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. Subsection (c) of the definition of Eligible Finance Receivables appearing in Section 5.1 of the Credit Agreement shall be amended and restated in its entirety to read as follows:

(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 Liens permitted under Sections 8.11(e) and 8.11(g) of this Agreement;

1.4. Section 5.1 of the Credit Agreement shall be further amended by deleting the definitions of “Available Borrowing Base,” “Note Purchase Agreements,” “Note

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Purchasers,” “Senior Secured Notes,” “Senior Subordinated Debt,” “Senior Subordinated Notes,” “Subordinated Note Purchase Agreement,” “Subordinated Note Purchasers,” “Subsidiary Senior Subordinated Guaranty Agreement,” and “Trigger Date.” In addition, all references to the term “Available Borrowing Base” in the Credit Agreement shall from and after the date hereof be deemed a reference to the Borrowing Base.

1.5. Section 6.17 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

Section 6.17. Intentionally deleted.

1.6. Section 8.7 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

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, “Minimum Net Worth” (i) for the fiscal quarter of the Borrower ending March 31, 2004, shall be $110,000,000 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).

1.7. Sections 8.9 and 8.10 of the Credit Agreement are hereby amended and restated in their 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) the Notes issued hereunder, and the Subsidiary Guaranty Agreement relating thereto;

(b) Subordinated Debt;

(c) debt incurred in connection with permitted Fixed Asset Financing;

(d) unsecured Indebtedness for Borrowed Money owing between the Borrower and its Restricted Subsidiaries in the ordinary course of business, provided that the aggregate amount of Indebtedness for Borrowed Money at any one time owing either by or to the Insurance Subsidiary shall not exceed $1,000,000; and

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(e) other unsecured Indebtedness for Borrowed Money to any Person (other than to the Borrower or another Restricted Subsidiary) in an aggregate amount for the Borrower and all Restricted Subsidiaries not exceeding $1,000,000 at any time outstanding.

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

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

(b) The aggregate unpaid principal amount of Subordinated Debt to exceed 50% of Consolidated Adjusted Net Worth.

1.8. Subsection (d) of Section 8.12 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

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

and the parenthetical phrase immediately following subsection (d) shall be amended and restated in its entirety to read as follows:

(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 Subordinated Debt being herein collectively called “Restricted Payments”)

1.9. Subsection (d) of Section 8.13 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(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, in each case during the period of 12 months ending with the date of such sale, lease or

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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, or (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, 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.

1.10. Section 8.15 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

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 and (ii) the Subsidiary Guaranty Agreement.

1.11. Subsections (e), (g), (i), and (j) of Section 9.1 of the Credit Agreement are each hereby amended and restated in its entirety to read as follows:

(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 any Subordinated Debt except as permitted by this Agreement; or

(g) An “Event of Default” shall occur under any indenture, instrument, or agreement setting forth the terms and conditions applicable to any Subordinated Debt; 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) 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

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the Borrower or any Subsidiary (other than this Agreement or the Subsidiary Guaranty Agreement), 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

1.12. Section 12.9(c) of the Credit Agreement shall be amended by striking the amount of “$10,000,000” appearing in the third line therein and inserting the amount “$5,000,000” in lieu thereof.

1.13. Exhibits B-1 and B-2 to the Credit Agreement shall be deleted, and in their place a new Exhibit B shall be inserted which shall read as set forth on Exhibit B attached hereto and made a part hereof.

SECTION2. 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 Restricted Subsidiaries parties to the Subsidiary Guaranty Agreement shall have executed and delivered to the Agent their consent to this Amendment in the form set forth below.

2.3. World Finance Corporation of Colorado shall have executed and delivered to the Agent a Security Agreement Supplement and Guaranty Supplement in form and substance acceptable to the Agent.

2.4. The Borrower and the Security Trustee shall have executed and delivered an amendment to the Company Security Agreement in form and substance acceptable to the Agent, and the Restricted Subsidiaries and the Security Trustee shall have executed and delivered an amendment to the Subsidiary Security Agreement in form and substance acceptable to the Agent, in each case agreed to by the noteholders referred to therein.

2.5. The Agent shall have received original stock certificates evidencing the Borrower’s ownership interest in World Finance Corporation of Colorado, together with duly executed stock powers therefor.

2.6. 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.

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2.7. The Agent shall have received copies of resolutions of the World Finance Corporation of Colorado’s Board of Directors (or other governing body) authorizing the execution, delivery and performance of the Subsidiary Security Agreement and Subsidiary Guaranty Agreement and a consummation of the transactions contemplated hereby, together with certified copies of such Subsidiary’s articles of incorporation and by-laws and specimen signatures of a person authorized to execute such documents on such Subsidiary’s behalf, all certified in each instance by its Secretary or other officer acceptable to the Agent and its counsel.

2.8. The Agent shall have received good standing certificates for each of the Borrower and World Finance Corporation of Colorado certified by the Secretary of the States of South Carolina and Colorado, respectively.

2.9. 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.

SECTION3. REPRESENTATIONS.

In order to induce the Banks to execute and deliver this Amendment, the Borrower hereby represents to the Agent and the Banks that (a) all Indebtedness for Borrowed Money issued under the Note Purchase Agreements, including the Senior Secured Notes and the Senior Subordinated Notes, has been paid in full and (b) 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 4. MISCELLANEOUS.

4.1. 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.

4.2. The Borrower heretofore executed and delivered, among other things, the Company Security Agreement and hereby acknowledges and agrees that the security interests and liens

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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.

4.3. 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.

4.4. 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 Eleventh Amendment to Amended and Restated Credit Agreement is dated as of August 27, 2004.

WORLD ACCEPTANCE CORPORATION
By
Name	/s/ A. A. McLean III
Title	Executive Vice President and CFO

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

HARRIS TRUST AND SAVINGS BANK, individually and as Agent
By
Name	Michael S. Cameli
Title	Vice President
BANK ONE, NA, individually and as Co-Agent
By
Name	/s/ Michael M. Tolentino
Title	Director
LASALLE BANK NATIONAL ASSOCIATION
By
Name	/s/ David H. Sherer
Title	First Vice President
HIBERNIA NATIONAL BANK
By
Name	/s/ Eric Trainor
Title	Vice President

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WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC.
By
Name	/s/ William M. Laird
Title	Senior Vice President
CAROLINA FIRST BANK
By
Name	/s/ Kevin M. Short
Title	Senior Vice President

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Exhibit 4.5

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 Eleventh 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 Eleventh 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     , 2004.

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.

WORLD FINANCE CORPORATION OF COLORADO

By	/s/ A. Alexander McLean III
	A. Alexander McLean III
	Its Executive Vice President

WFC LIMITED PARTNERSHIP
By	WFC of South Carolina, Inc., as sole general partner
By	/s/ A Alexander McLean III
	A. Alexander McLean III
	Its Executive Vice President
WORLD FINANCE CORPORATION OF TEXAS
By	/s/ Charles F. Gardner, Jr.
	Charles F. Gardner, Jr.
	Its President

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EXHIBIT B

SUBORDINATION PROVISIONS APPLICABLE TO 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, obligations and liabilities of the Company and the Restricted Subsidiaries under the Revolving Credit Agreement, the Notes issued from time to time under or pursuant to the Revolving Credit Agreement, the Subsidiary Guaranty Agreement, and the Company Security Agreement and the Subsidiary Security Agreement as each relates to the Notes issued from time to time under or pursuant to the Revolving Credit Agreement (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 Company, whether now existing or hereafter arising and howsoever evidenced, provided, however, that the Company may pay interest on Subordinated Indebtedness accrued to and payable on the date of any such payment so long as (i) the Company shall not be in default in the payment of principal of, interest or premium on Senior Indebtedness, (ii) the Company 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 Company or of the proceeds thereof to the creditors of the Company or upon any indebtedness of the Company, occurring by reason of the liquidation, dissolution, or other winding up of the Company, or by reason of any execution sale, or bankruptcy, receivership, reorganization, arrangement, insolvency, liquidation or foreclosure proceeding of or for the Company 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.

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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 Company 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 Company or the holders of Senior Indebtedness, or by any noncompliance by the Company 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 Company 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 Company 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 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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EX-4.9

Exhibit 4.9

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 “Subsidiary Security Agreement”), from 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, World Finance Corporation of Texas, WFC Limited Partnership, WFC of South Carolina, Inc., World Finance Corporation of Illinois, World Finance Corporation of New Mexico, World Finance Corporation of Kentucky, WFC Services, Inc., and World Finance Corporation of Colorado (the “Companies” and individually a “Company”) to Harris Trust and Savings Bank, as Security Trustee. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Subsidiary Security Agreement.

Subsequent to the Companies’ delivery of the Subsidiary Security Agreement, the Senior Secured Notes and the Senior Subordinated Notes have been paid in full. The Companies and the Security Trustee now desire to amend the Subsidiary Security Agreement to reflect such changes and to make certain other amendment to the Subsidiary Security Agreement as provided for herein.

SECTION 1. AMENDMENTS.

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

1.1. On or about June 30, 2004, the Senior Subordinated Notes were paid in full and are no longer outstanding. On or about December 31, 1999, the Senior Secured Notes were paid in full and are no longer outstanding. Accordingly, any and all references in the Subsidiary Security Agreement to the terms “Senior Note Agreements,” “Senior Secured Notes,” “Senior Subordinated Notes,” and “Senior Subordinated Note Agreement” shall be deleted.

1.2. Recital I to the Subsidiary Security Agreement shall be amended and restated in its entirety to read as follows:

World has also entered into the Amended and Restated Revolving Credit Agreement dated as of June 30, 1997 (the “Revolving Credit Agreement”), which Revolving Credit Agreement amends and restates the Original Revolving Credit Agreement and the Original Revolving Credit Notes and provides for borrowings, whether or not such borrowings are evidenced by promissory notes and as the same may from time to time be amended or restated pursuant to the terms thereof and any notes executed in replacement thereof (the “Revolving Credit Notes”).

In addition, all references to the terms “Senior Notes” and “Notes” in the Subsidiary Security Agreement shall from and after the date hereof be deemed a reference to the Revolving Credit Notes.

1.3. The definitions of “Aggregate Principal Amount of the Outstanding Notes,” “Consolidated Adjusted Net Worth,” “Make-Whole Amount,” “Material Event of Default,” “Maximum Principal Amount,” appearing in Section 1.1 of the Subsidiary Security Agreement shall be deleted.

1.4. All references to the phase “holders of a majority of the Aggregate Principal Amount of the Outstanding Notes” or words of like import in the Subsidiary Security Agreement shall from and after the date hereof be deemed a reference to the Required Banks as hereinafter defined.

1.5. The definitions of “Company,” “Indebtedness for Borrowed Money,” “Secured Indebtedness,” and “Subsidiary Guaranty Agreements” appearing in Section 1.1 of the Subsidiary Security Agreement shall be amended and restated in their entirety to read as follows:

“Company” shall mean each of World Acceptance Corporation of Alabama, an Alabama corporation, World Acceptance Corporation of Missouri, a Missouri corporation, World Finance Corporation of Georgia, a Georgia corporation, World Finance Corporation of Louisiana, a Louisiana corporation, World Acceptance Corporation of Oklahoma, Inc., an Oklahoma corporation, World Finance Corporation of South Carolina, a South Carolina corporation, World Finance Corporation of Tennessee, a Tennessee corporation, World Finance Corporation of Texas, a Texas corporation, WFC Limited Partnership, a Texas limited partnership, WFC of South Carolina, Inc., a South Carolina corporation, World Finance Corporation of Illinois, an Illinois corporation, World Finance Corporation of New Mexico, a New Mexico corporation, World Finance Corporation of Kentucky, a Kentucky corporation, WFC Services, Inc., a Tennessee corporation, and World Finance Corporation of Colorado, a Colorado corporation, any entity that executes and delivers a Security Agreement Supplement in the form attached hereto as Exhibit A (or in such other form approved by the Security Trustee and the Agent), and any Person which succeeds to all, or substantially all of the assets and business of any such entity.

“Indebtedness for Borrowed Money” shall have the same meaning herein as such term is defined in the Revolving Credit Agreement.

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“Secured Indebtedness” shall mean the “Obligations,” as such term is defined in the Revolving Credit Agreement, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.

“Subsidiary Guaranty Agreement” shall mean the Amended and Restated Guaranty Agreement dated as of June 30, 1997, of each Restricted Subsidiary existing on such date and each other Restricted Subsidiary which has executed a Guaranty Supplement in the form of Exhibit A thereto pursuant to the terms thereof and Section 3.9 of the World Security Agreement (or in such other form agreed to by the Agent), in each case, for the benefit of the Security Trustee and the holders of the Senior Notes, as the same may from time to time be amended, restated, modified, supplemented or waived pursuant to the terms thereof.

1.6. Section 1.1 of the Subsidiary Security Agreement shall be amended by adding in appropriate alphabetical order the following definition:

“Required Banks” shall have the same meaning herein as such term is defined in the Revolving Credit Agreement.

1.7. Section 9.2 of the Subsidiary Security Agreement shall be amended and restated to read as follows:

Section 9.2. Waivers and Consents by Noteholders; Supplemental Security Agreements with Noteholders’ Consent. (a) Upon the waiver or consent of the Agent (acting at the direction or with the consent of the Required Banks under the Revolving Credit Agreement), the Company and the Security Trustee may enter into an agreement or agreements supplemental hereto for the purpose of waiving, adding, changing or eliminating any provisions of this Agreement or of any agreement supplemental hereto or modifying in any manner the rights and obligations of the holders of the Notes and the Company.

1.8. Section 10.4 of the Subsidiary Security Agreement shall be amended and restated to read as follows:

Section 10.4. Release. The Security Trustee shall release fully or partially, as the case may be, the Lien granted by this Agreement under and only under the following circumstances:

(a) Upon the presentation of satisfactory evidence that all Secured Indebtedness has been irrevocably fully paid or

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discharged and all obligations of the holders of Notes to extend Secured Indebtedness to World have terminated or otherwise expired, the Security Trustee shall release the Lien and security interest of this Agreement by proper instrument or instruments;

(b) So long as no Default or Event of Default then exists, upon the sale or other disposition of any assets of World and its Restricted Subsidiaries which the Chief Financial Officer of World certifies to the Security Trustee and the Noteholders in writing does not constitute a “substantial part” of the assets of World and its Restricted Subsidiaries (as defined in Section 8.13 of the Revolving Credit Agreement), the Security Trustee shall, upon the written direction of World and without the consent of the Noteholders (unless the Security Trustee has been notified in writing by a Noteholder prior to such release that such Noteholder in good faith believes that the conditions set forth above have not been satisfied, in which case no such release shall be issued), release the Lien of this Agreement on such assets by proper instrument or instruments. If any such sale or other disposition of assets constituting less than a “substantial part” of the assets of World and its Restricted Subsidiaries pursuant to this §10.4(b) results in the sale or other disposition of the capital stock or other equity interest in a Restricted Subsidiary, the Subsidiary Guaranty Agreement with respect to, and only with respect to, such Restricted Subsidiary shall automatically be released and the Security Trustee and the Noteholders agree to execute and deliver such further instruments and do such further acts as World may deem necessary or proper to carry out more effectively the foregoing;

(c) Upon the sale or other disposition by World of a “substantial part” of the assets of World and its Restricted Subsidiaries (as defined in Section 8.13 of the Revolving Credit Agreement) after the occurrence and during the continuance of an Event of Default, the Security Trustee shall, upon the written direction of the Company and the written consent of the Required Banks, release the Lien of this Agreement on such assets by proper instrument or instruments, provided, that, (i) such sale or other disposition is not to an Affiliate, (ii) the sale price for such assets is determined by World in good faith to be reasonable, as evidenced by a resolution of the board of directors of World, (iii) the proceeds of any such sale or other disposition are applied to the satisfaction of Secured Indebtedness and, if such application results in the prepayment of any obligations under the Revolving Credit Agreement, such application permanently reduces the amount of the commitment under the Revolving Credit Agreement (unless the

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Required Banks agree otherwise), (iv) each Noteholder shall have received written notice of such sale or other disposition at least ten days prior to the date of such sale or other disposition and (v) the Security Trustee and the Noteholders receive a certificate of the Chief Financial Officer of World certifying to each of the foregoing. If any such sale or other disposition of assets of World and its Restricted Subsidiaries pursuant to this §10.4(c) results in the sale or other disposition of the capital stock or other equity interest in a Restricted Subsidiary, the Subsidiary Guaranty Agreement with respect to, and only with respect to, such Restricted Subsidiary shall automatically be released and the Security Trustee and the Noteholders agree to execute and deliver such further instruments and do such further acts as World may deem necessary or proper to carry out more effectively the foregoing;

(d) Upon the sale or other disposition of the Collateral or any part thereof pursuant to and in accordance with §7.2 and conducted in a commercially reasonable manner, the Security Trustee shall release the Lien of this Agreement on the Collateral or such part, as the case may be, by proper instrument or instruments; and

(e) With the prior written consent of each Noteholder, the Security Trustee shall release the Lien of this Agreement or on any assets covered by this Agreement by proper instrument or instruments.

1.9. Section 10.9 of the Subsidiary Security Agreement shall be amended and restated to read as follows:

Section 10.9. Intentionally Deleted.

SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS.

Each Company hereby represents and warrants to the Security Trustee and the Noteholders that the Senior Secured Notes and the Senior Subordinated Notes (as defined prior to giving effect to this Amendment) have been paid in full and the Senior Note Agreements and Senior Subordinate Note Agreement have terminated in accordance with their terms. Each Company hereby repeats and reaffirms all of its covenants, agreements, representations and warranties contained in the Subsidiary 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 Subsidiary Security Agreement after giving effect to this Amendment. Each 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 Subsidiary Security Agreement after giving effect to this Amendment.

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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 Subsidiary Security Agreement, any reference in any of such to the Subsidiary Security Agreement to be deemed to reference to the Subsidiary Security Agreement as modified hereby.

3.2. Except as specifically modified hereby, all the terms and conditions of the Subsidiary 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]

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This Third Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust is dated as of August 27, 2004.

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.

WORLD FINANCE CORPORATION OF COLORADO

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

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WORLD FINANCE CORPORATION OF TEXAS
By	/s/ Charles F. Gardner, Jr.
	Charles F. Gardner, Jr.
	Its President
HARRIS TRUST AND SAVINGS BANK, as Security Trustee
By
Name	/s/ Michael S. Cameli
Title	Vice President

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NOTEHOLDERS’ CONSENT

Pursuant to Section 9.2 of the Subsidiary Security Agreement, the undersigned Noteholders hereby consent to the Third Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust, and direct the Security Trustee to execute such Amendment.

HARRIS TRUST AND SAVINGS BANK
By
Its	/s/ Michael S. Cameli
BANK ONE, NA
By
Its	/s/ Michael M. Tolentino
LASALLE BANK NATIONAL ASSOCIATION
By
Its	/s/ David H. Sherer
HIBERNIA NATIONAL BANK
By
Its	/s/ Eric Trainor
WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC.
By
Its	/s/ William M. Laird
CAROLINA FIRST BANK
By
Its	/s/ Kevin M. Short

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EX-4.10

Exhibit 4.10

FOURTH 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.

Subsequent to the Company’s delivery of the Company Security Agreement, (a) certain shares of stock have been added as Pledged Collateral under the Company Security Agreement and, as a result of such addition, Schedule I of the Company Security Agreement does not accurately describe the shares of capital stock currently held by, or to be held by, the Security Trustee as Collateral under the Company Security Agreement and (b) the Senior Secured Notes and the Senior Subordinated Notes have been paid in full. The Company and the Security Trustee now desire to amend the Company Security Agreement to reflect such changes and to make certain other amendment to the Company Security Agreement as provided for herein.

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. Schedule I of the Company Security Agreement shall be and hereby is amended and as so amended shall be restated in its entirety to read as Schedule I attached hereto. 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 the shares of capital stock of each issuer listed and described on Schedule I attached hereto and all the other properties, rights, interests and privileges comprising the Pledged Collateral (as such term is defined in the Company Security Agreement after giving effect to this Amendment), to the same extent and with the same force and effect as if the shares of stock described on Schedule I had originally been included on Schedule I to the Company Security Agreement. The foregoing granting clause is in addition to and supplemental of and not in substitution for the granting clause contained in the Company Security Agreement. 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.

1.2. On or about June 30, 2004, the Senior Subordinated Notes were paid in full and are no longer outstanding. On or about December 31, 1999, the Senior Secured Notes were paid in full and are no longer outstanding. Accordingly, any and all

references in the Company Security Agreement to the terms “Senior Note Agreements,” “Senior Secured Notes,” “Senior Subordinated Notes,” and “Senior Subordinated Note Agreement” shall be deleted.

1.3. Recital C to the Company Security Agreement shall be amended and restated in its entirety to read as follows:

C. The Company has authorized borrowings pursuant to the Revolving Credit Agreement, whether or not such borrowings are evidenced by promissory notes and as the same may from time to time be amended or restated pursuant to the terms thereof and any notes executed in replacement thereof (the “Revolving Credit Notes”).

In addition, all references to the terms “Senior Notes” and “Notes” in the Company Security Agreement shall from and after the date hereof be deemed a reference to the Revolving Credit Notes.

1.4. The definitions of “Aggregate Principal Amount of the Outstanding Notes,” “Consolidated Adjusted Net Worth,” “Make-Whole Amount,” “Material Event of Default,” “Maximum Principal Amount,” appearing in Section 1.1 of the Company Security Agreement shall be deleted.

1.5. All references to the phase “holders of a majority of the Aggregate Principal Amount of the Outstanding Notes” or words of like import in the Company Security Agreement shall from and after the date hereof be deemed a reference to the Required Banks as hereinafter defined.

1.6. The definitions of “Indebtedness for Borrowed Money,” “Secured Indebtedness,” and “Subsidiary Guaranty Agreements” appearing in Section 1.1 of the Company Security Agreement shall be amended and restated in their entirety to read as follows:

“Indebtedness for Borrowed Money” shall have the same meaning herein as such term is defined in the Revolving Credit Agreement.

“Secured Indebtedness” shall mean the “Obligations,” as such term is defined in the Revolving Credit Agreement, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.

“Subsidiary Guaranty Agreement” shall mean the Amended and Restated Guaranty Agreement dated as of June 30, 1997 of each Restricted Subsidiary existing on such date and each other Restricted Subsidiary which has executed a Guaranty Supplement

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in the form of Exhibit A thereto pursuant to the terms thereof and §3.9 (or in such other form agreed to by the Agent), in each case, for the benefit of the Security Trustee and the holders of the Senior Notes, as the same may from time to time be amended, restated, modified, supplemented or waived pursuant to the terms thereof.

1.7. Section 1.1 of the Company Security Agreement shall be amended by adding in appropriate alphabetical order the following definition:

“Required Banks” shall have the same meaning herein as such term is defined in the Revolving Credit Agreement.

1.8. Section 9.2 of the Company Security Agreement shall be amended and restated to read as follows:

Section 9.2. Waivers and Consents by Noteholders; Supplemental Security Agreements with Noteholders’ Consent. (a) Upon the waiver or consent of the Agent (acting at the direction or with the consent of the Required Banks under the Revolving Credit Agreement), the Company and the Security Trustee may enter into an agreement or agreements supplemental hereto for the purpose of waiving, adding, changing or eliminating any provisions of this Agreement or of any agreement supplemental hereto or modifying in any manner the rights and obligations of the holders of the Notes and the Company.

1.9. Section 10.4 of the Company Security Agreement shall be amended and restated to read as follows:

Section 10.4. Release. The Security Trustee shall release fully or partially, as the case may be, the Lien granted by this Agreement under and only under the following circumstances:

(a) Upon the presentation of satisfactory evidence that all Secured Indebtedness has been irrevocably fully paid or discharged and all obligations of the holders of Notes to extend Secured Indebtedness to the Company have terminated or otherwise expired, the Security Trustee shall release the Lien and security interest of this Agreement by proper instrument or instruments;

(b) So long as no Default or Event of Default then exists, upon the sale or other disposition of any assets of the Company and its Restricted Subsidiaries which the Chief Financial Officer of the Company certifies to the Security Trustee and the Noteholders in writing does not constitute a “substantial part” of

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the assets of the Company and its Restricted Subsidiaries (as defined in Section 8.13 of the Revolving Credit Agreement), the Security Trustee shall, upon the written direction of the Company and without the consent of the Noteholders (unless the Security Trustee has been notified in writing by a Noteholder prior to such release that such Noteholder in good faith believes that the conditions set forth above have not been satisfied, in which case no such release shall be issued), release the Lien of this Agreement on such assets by proper instrument or instruments. If any such sale or other disposition of assets constituting less than a “substantial part” of the assets of the Company and its Restricted Subsidiaries pursuant to this §10.4(b) results in the sale or other disposition of the capital stock or other equity interest in a Restricted Subsidiary, the Subsidiary Guaranty Agreement with respect to, and only with respect to, such Restricted Subsidiary shall automatically be released and the Security Trustee and the Noteholders agree to execute and deliver such further instruments and do such further acts as the Company may deem necessary or proper to carry out more effectively the foregoing;

(c) Upon the sale or other disposition by the Company of a “substantial part” of the assets of the Company and its Restricted Subsidiaries (as defined in Section 8.13 of the Revolving Credit Agreement) after the occurrence and during the continuance of an Event of Default, the Security Trustee shall, upon the written direction of the Company and the written consent of the Required Banks, release the Lien of this Agreement on such assets by proper instrument or instruments, provided, that, (i) such sale or other disposition is not to an Affiliate, (ii) the sale price for such assets is determined by the Company in good faith to be reasonable, as evidenced by a resolution of the board of directors of the Company, (iii) the proceeds of any such sale or other disposition are applied to the satisfaction of Secured Indebtedness and, if such application results in the prepayment of any obligations under the Revolving Credit Agreement, such application permanently reduces the amount of the commitment under the Revolving Credit Agreement (unless the Required Banks agree otherwise), (iv) each Noteholder shall have received written notice of such sale or other disposition at least ten days prior to the date of such sale or other disposition and (v) the Security Trustee and the Noteholders receive a certificate of the Chief Financial Officer of the Company certifying to each of the foregoing. If any such sale or other disposition of assets of the Company and its Restricted Subsidiaries pursuant to this §10.4(c) results in the sale or other disposition of the capital stock or other equity interest in a Restricted Subsidiary, the Subsidiary Guaranty Agreement with

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respect to, and only with respect to, such Restricted Subsidiary shall automatically be released and the Security Trustee and the Noteholders agree to execute and deliver such further instruments and do such further acts as the Company may deem necessary or proper to carry out more effectively the foregoing;

(d) Upon the sale or other disposition of the Collateral or any part thereof pursuant to and in accordance with §7.2 and conducted in a commercially reasonable manner, the Security Trustee shall release the Lien of this Agreement on the Collateral or such part, as the case may be, by proper instrument or instruments; and

(e) With the prior written consent of each Noteholder, the Security Trustee shall release the Lien of this Agreement or on any assets covered by this Agreement by proper instrument or instruments.

1.10. Section 10.9 of the Company Security Agreement shall be amended and restated to read as follows:

Section 10.9. Intentionally Deleted.

SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS.

The Company hereby represents and warrants to the Security Trustee and the Noteholders that the Senior Secured Notes and the Senior Subordinated Notes (as defined prior to giving effect to this Amendment) have been paid in full and the Senior Note Agreements and Senior Subordinate Note Agreement have terminated in accordance with their terms. 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.

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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]

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This Fourth Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust is dated as of August 27, 2004.

WORLD ACCEPTANCE CORPORATION
By
Name	/s/ A. Alexander McLean III
Title	Executive Vice President and CFO
HARRIS TRUST AND SAVINGS BANK, as     Security Trustee
By
Name	/s/ Michael S. Cameli
Title	Vice President

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NOTEHOLDERS’ CONSENT

Pursuant to Section 9.2 of the Company Security Agreement, the undersigned Noteholders hereby consent to the Fourth Amendment to Amended and Restated Security Agreement, Pledge and Indenture of Trust, and direct the Security Trustee to execute such Amendment.

HARRIS TRUST AND SAVINGS BANK
By
Its	/s/ Michael S. Cameli
BANK ONE, NA
By
Its	/s/ Michael M. Tolentino
LASALLE BANK NATIONAL ASSOCIATION
By
Its	/s/ David H. Sherer
HIBERNIA NATIONAL BANK
By
Its	/s/ Eric Trainor
WELLS FARGO FINANCIAL PREFERRED CAPITAL, INC.
By
Its	/s/ William S. Laird
CAROLINA FIRST BANK
By
Its	/s/ Kevin M. Short

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Exhibit 4.10

SCHEDULE I

DESCRIPTION OF PLEDGED SHARES

SUBSIDIARY	DESCRIPTION	NUMBER OF SHARES		STOCK CERTIFICATE NO.
WAC Insurance Company, Ltd.	Common, $1 par	325	*	1
WFC of South Carolina, Inc.	Common, $.01 par	10,000		1
World Acceptance Corporation of Alabama	Common, $.01 par	1,000		1
World Acceptance Corporation of Missouri	Common, $.01 par	1,000		1
World Finance Corporation of Georgia	Common, $1 par	25,000 25,000		1 2
World Finance Corporation of Illinois	Common, $.01 par	1,000		1
World Finance Corporation of Louisiana	Common, no par	25		1
World Finance Corporation of New Mexico	Common, $.01 par	1,000		3
World Finance Corporation of South Carolina	Common, $1 par	3,750		1
World Finance Corporation of Tennessee	Common, $.01 par	1,000		1
World Finance Corporation of Texas	Class A Common, $1 par	125,000		A-1
	Class B Common, par	5,802		B-2
WFC Services, Inc.	No par	1,000		1
World Finance Corporation of Kentucky	No par	1,000		1
World Finance Corporation of Colorado	Common, no par	1,000		1

* Constituting 65% of the outstanding stock

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 other 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 fiscal quarter ended September 30, 2004 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 function):

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 8, 2004	/s/ D.R. Jones
	D.R. Jones
	President and CEO

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 procedure, as of the end of the period covered by the 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 fiscal quarter ended September 30, 2004 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 function):

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 8, 2004	/s/ A. A. McLean III
	A.A. McLean III
	Executive Vice President and CFO

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 on form 10-Q of the Company for the quarter ended September 30, 2004, (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.

Date: November 8, 2004

/s/ D.R. Jones

D.R. Jones

President and CEO

A signed original 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.

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):

(1) the Quarterly Report on form 10-Q of the Company for the quarter ended September 30, 2004, (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.

Date: November 8, 2004

/s/ A. A. McLean III

A.A. McLean III

Executive Vice President and CFO

A signed original 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.