Re: $10,000,000 10% Senior Subordinated Secured Notes

Agreement dated as of June 30, 1997 by 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, and World Finance Corporation of New Mexico, a New Mexico corporation (collectively, the “Guarantors” and individually a “Guarantor” ).

A.      Each Guarantor is, directly or indirectly, a wholly-owned subsidiary of World Acceptance Corporation, a South Carolina corporation (the “Company” ).

B.      The Company has entered into that certain Note Agreement dated as of June 30, 1997, as the same may from time to time be amended or restated pursuant to the terms thereof (the “Senior Subordinated Note Agreement” ) with Principal Mutual Life Insurance Company providing for the issuance and sale by the Company of its $10,000,000 principal amount 10% Senior Subordinated Secured Notes due June 30, 2004, as the same may from time to time be amended or restated pursuant to the terms thereof and any note executed in replacement thereof (the “Notes” ).

C.      The Company has entered into that certain Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as of June 30, 1997, as the same may from time to time be amended or restated pursuant to the terms thereof (the “Company Security Agreement” ) with Harris Trust and Savings Bank, an Illinois banking corporation, as security trustee (the “Security Trustee” ) whereby the Company has granted to the Security Trustee, inter alia ,  for the benefit of the holders of the Notes, all of its right, title and interest in the Collateral (as defined therein) as security for the Notes.  

D.      Each of the Guarantors has entered into that certain Amended and Restated Security Agreement, Pledge and Indenture of Trust dated as of June 30, 1997, as the same may from time to time be amended or restated pursuant to the terms thereof (the “Subsidiary Security Agreement” ) with the Security Trustee whereby each of the Guarantors has granted to the Security Trustee, inter alia ,  for the benefit of the holders of the Notes, all of its right, title and interest in the Collateral (as defined therein) as security for the Notes and the obligations of each of the Guarantors hereunder.  The Company Security Agreement and the Subsidiary Security Agreement are collectively referred to herein as the “Security Agreements” .

E.      The holders of the Notes have required, as an inducement to and a condition of the execution and delivery by such holders of the Senior Subordinated Note Agreement, that the Guarantors execute and deliver this Agreement.

F.      The Guarantors and the Company are engaged in related and mutually dependent businesses and the Guarantors will derive substantial direct benefits from the issuance of the Notes by the Company.

G.      Capitalized terms used herein and not otherwise defined shall have the meanings assigned in the Senior Subordinated Note Agreement.

Now, Therefore, in consideration of the premises and the mutual covenants herein contained and to aid the sale of the Notes and to induce the holders of the Notes to purchase the Notes, the Guarantors hereby jointly and severally covenant and agree as follows:

The Guarantors hereby jointly and severally unconditionally guarantee for the benefit of each and every holder of a Note from time to time outstanding under the Senior Subordinated Note Agreement (collectively “Holders” and individually “Holder” ) (1) the due and punctual payment at maturity, whether at stated maturity, by acceleration, by notice of prepayment or otherwise, of the principal of and premium, if any, and interest on the Notes in accordance with the terms and conditions thereof and of the Senior Subordinated Note Agreement and each Security Agreement, (2) the prompt performance and compliance by the Company with each of its other obligations under the Senior Subordinated Note Agreement and the Company Security Agreement, (3) the prompt performance and compliance by each other Guarantor with each of its obligations under the Subsidiary Security Agreement and (4) the due and punctual payment of any other amounts due under the Senior Subordinated Note Agreement and each Security Agreement.  Such guaranty is an absolute, unconditional, present and continuing guaranty of payment and not of collectibility and is in no way conditioned or contingent upon any attempt to collect from the Company or from any other Guarantor or upon any other condition or contingency.  If the Company shall fail to pay punctually any amount guaranteed hereby, when and as the same shall become due and payable, the Guarantors will upon demand immediately pay the same to the holders of the Notes to whom such payment is payable.

Each Guarantor agrees that, if any of the following events occurs, i.e.,

(a)      the entry of a decree or order by a court having jurisdiction in the premises for relief in respect of such Guarantor, or adjudging such Guarantor a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, adjustment or composition of or in respect of such Guarantor under the Federal Bankruptcy Code or any other applicable Federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of or for such Guarantor or any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

(b)      the commencement by such Guarantor of a voluntary case, or the institution by it of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization, arrangement or relief under the Federal Bankruptcy Code or any other applicable Federal or state law, or the consent or acquiescence by it to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Guarantor or any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability or its failure to pay its debts generally as they become due, or the taking of corporate action by such Guarantor in furtherance of any such action;

such Guarantor will forthwith pay to the Holders, without demand or notice and whether or not there has been any other default under either Security Agreement, the Senior Subordinated Note Agreement or the Notes, the whole amount of the principal of the Notes then outstanding and any unpaid interest thereon and premium with respect thereto (to the extent any premium would be payable upon the acceleration of the Notes under the Security Agreements or the Senior Subordinated Note Agreement).

Each Guarantor assents to all the terms, covenants and conditions of the Notes, the Senior Subordinated Note Agreement and the Security Agreements, and irrevocably waives presentation, demand for payment, or protest, of any of the Notes, any and all notice of any such presentation, demand or protest, notice of any Default or Event of Default under any Security Agreement or the Senior Subordinated Note Agreement, notice of acceptance of this Agreement or of the terms and provisions thereof by any Holder or the Security Trustee, any requirement of diligence or promptness on the part of any Holder or the Security Trustee in the enforcement of rights under the provisions hereof, of any Security Agreement, of the Senior Subordinated Note Agreement or of the Notes, or any right to require any Holder or the Security Trustee to proceed first against the Company or any other Guarantor.  The obligations of each Guarantor hereunder shall be unconditional irrespective of the genuineness, validity, regularity or enforceability of any Security Agreement, the Senior Subordinated Note Agreement or the Notes or of any other circumstance which might otherwise constitute a legal or equitable discharge of a surety or guarantor.  The obligations of each Guarantor hereunder shall not be affected by:

(a)      the recovery of any judgment against the Company or any other Guarantor, or by the levy of any writ or process of execution under any such judgment, or by any action or proceeding taken by the Security Trustee or any Holder, either under the Notes, any Security Agreement, or the Senior Subordinated Note Agreement for the enforcement thereof, or hereof, or in the exercise of any right or power given or conferred thereby, or hereby, or

(b)      any delay, failure or omission upon the part of the Security Trustee or any Holder to enforce any of the rights or powers given or conferred hereby or by any Security Agreement, the Senior Subordinated Note Agreement or the Notes, or by any delay, failure or omission upon the part of the Security Trustee or any Holder to enforce any right of the Security Trustee or any Holder against the Company or any other Guarantor, or by any action by the Security Trustee or any Holder in granting indulgence to the Company or any other Guarantor, or in waiving or acquiescing in any Default or Event of Default upon the part of the Company or any other Guarantor under any Security Agreement or the Senior Subordinated Note Agreement, or

(c)      the consolidation or merger of the Company or any of its Subsidiaries with or into any other corporation or corporations or any sale, lease or other disposition of the Company or any of its Subsidiaries properties as an entirety or substantially as an entirety to any other corporation, or

(d)      the acceptance of any additional security or other guaranty, the advance of additional  money to the Company or any other Person, the renewal or extension of any amounts guaranteed hereby, or the sale, release, substitution or exchange of any security for the amounts guaranteed hereby, or

(e)      any defense (other than the full and indefeasible performance by the Company of its obligations under the Company Security Agreement, the Senior Subordinated Note Agreement and the Notes) whatsoever that the Company, any other Guarantor or any other Person might have to the payment of any of the amounts or obligations guaranteed hereby or to the performance or observance of any of the provisions of any Security Agreement, the Senior Subordinated Note Agreement, the Notes or this Agreement, whether through the satisfaction or purported satisfaction by the Company, any other Guarantor or any other Person of its debts due to any cause such as bankruptcy, insolvency, receivership, merger, consolidation, reorganization, dissolution, liquidation, winding-up or otherwise, or

(f)      impossibility or illegality of performance on the part of the Company, any other Guarantor or any other Person of its obligations under any Security Agreement, the Senior Subordinated Note Agreement, the Notes or this Agreement, or

(g)      any renewal, extension, refunding, amendment or modification of or addition or supplement to or deletion from any of the terms of any Security Agreement, the Senior Subordinated Note Agreement or the Notes, or any other agreement which may be made relating to any such instruments which does not specifically amend or specifically modify the terms of this Agreement, or

(h)      any amendment, compromise, release or consent or other action or inaction in respect of any of the terms of any Security Agreement, the Senior Subordinated Note Agreement or the Notes (other than any such amendment, compromise, release or consent or other action which, by its t