**FIFTEENTH AMENDED AND RESTATED GUARANTY AGREEMENT**     FOR VALUE RECEIVED, and in consideration of credit given or to be given, advances made or tobe made, or other financial accommodation from time to time afforded or to be afforded to **DIRECTGENERAL FINANCIAL SERVICES, INC.**, a Tennessee corporation (f/k/a Direct Financial Services, Inc.)and **DIRECT GENERAL PREMIUM FINANCE COMPANY**, a Tennessee corporation (hereinafter, collectively, the“Debtors”), by **FIRST TENNESSEE BANK NATIONAL ASSOCIATION**, Memphis, Tennessee (“FTB”), **CAPITAL ONEBANK, N.A.**(successor by merger to Hibernia National Bank), Baton Rouge, Louisiana (“Capital One”),**U.S. BANK, NATIONAL ASSOCIATION**, St. Louis, Missouri (“U.S. Bank”), **JPMORGAN CHASE BANK, N.A.**(successor by merger to Bank One, NA (Main Office Chicago)), Baton Rouge, Louisiana (“JPMorgan”),**CAROLINA FIRST BANK**, Greenville, South Carolina (“Carolina First”), **NATIONAL CITY BANK OF KENTUCKY**,Louisville, Kentucky (“National City Bank”), **FIFTH THIRD BANK, N.A. (Tennessee),**Franklin,Tennessee (“Fifth Third”), **REGIONS BANK,**Birmingham, Alabama (“Regions”), and **MIDFIRST BANK**,Oklahoma City, Oklahoma (“MidFirst”) (hereinafter, collectively, the “Banks”), the undersigned**DIRECT GENERAL CORPORATION**, a Tennessee corporation, **DIRECT GENERAL INSURANCE AGENCY, INC.**, aTennessee corporation, **DIRECT GENERAL INSURANCE AGENCY, INC.**, an Arkansas corporation, **DIRECTGENERAL INSURANCE AGENCY, INC.**, a Mississippi corporation, **DIRECT GENERAL INSURANCE AGENCY OFLOUISIANA, INC.**, a Louisiana corporation, **DIRECT GENERAL AGENCY OF KENTUCKY, INC.**, a Kentuckycorporation, **DIRECT ADMINISTRATION, INC.**, a Tennessee corporation, **DIRECT ADJUSTING COMPANY, INC.**,a Tennessee corporation, **DIRECT GENERAL INSURANCE AGENCY, INC.**, a Texas corporation, and **DIRECTGENERAL CONSUMER PRODUCTS, INC.**, a Tennessee corporation (hereinafter, collectively, the“Guarantors”), hereby jointly and severally, for themselves, their heirs, executors, administratorsand successors absolutely and unconditionally guarantee(s) the full and prompt payment to theBanks, at maturity (whether by acceleration or otherwise) and at all times thereafter, of each andall of the following:     1. the indebtedness (and interest thereon) evidenced by that certain Tenth RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Forty MillionDollars ($40,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of FTB, at the offices of FTB, 165 Madison Avenue,Memphis, Tennessee 38103, as agent for itself and other lenders, or at such other place asthe holder may designate in writing, being executed by the Debtors, and being given forvalue received;     2. the indebtedness (and interest thereon) evidenced by that certain Restated SwingLine Note dated as of June 30, 2006, in the principal sum of Thirty Million Dollars($30,000,000.00) (said Swing Line Note evidencing debt which is a portion of the foregoing$40,000,000.00 debt to FTB), bearing interest from date at the rate specified in said note,said note being payable to the order of FTB, at the offices of FTB, 165 Madison Avenue,Memphis, Tennessee 38103, as agent for itself and other lenders, or at such other place asthe holder may designate in writing, being executed by the Debtors, and being given forvalue received;
 

 
     3. the indebtedness (and interest thereon) evidenced by that certain Eleventh RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Twenty-Five MillionDollars ($25,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of Capital One, at the offices of FTB, 165 MadisonAvenue, Memphis, Tennessee 38103, as agent for itself and other lenders, or at such otherplace as the holder may designate in writing, being executed by the Debtors, and being givenfor value received;     4. the indebtedness (and interest thereon) evidenced by that certain Eleventh RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Thirty MillionDollars ($30,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of U.S. Bank, at the offices of FTB, 165 MadisonAvenue, Memphis, Tennessee 38103, as agent for itself and other lenders, or at such otherplace as the holder may designate in writing, being executed by the Debtors, and being givenfor value received;     5. the indebtedness (and interest thereon) evidenced by that certain Seventh RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Thirty-Five MillionDollars ($35,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of JPMorgan (formerly Bank One), at the offices of FTB,165 Madison Avenue, Memphis, Tennessee 38103, as agent for itself and other lenders, or atsuch other place as the holder may designate in writing, being executed by the Debtors, andbeing given for value received;     6. the indebtedness (and interest thereon) evidenced by that certain Sixth RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Twenty MillionDollars ($20,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of Carolina First, at the offices of FTB, 165 MadisonAvenue, Memphis, Tennessee 38103, as agent for itself and other lenders, or at such otherplace as the holder may designate in writing, being executed by the Debtors, and being givenfor value received;     7. the indebtedness (and interest thereon) evidenced by that certain Fourth RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Thirty MillionDollars ($30,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of Regions, at the offices of FTB, 165 Madison Avenue,Memphis, Tennessee 38103, as agent for itself and other lenders, or at such other place asthe holder may designate in writing, being executed by the Debtors, and being given forvalue received;     8. the indebtedness (and interest thereon) evidenced by that certain Third RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sum of Twenty MillionDollars ($20,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of National City Bank, at the offices of FTB, 165Madison Avenue, Memphis, Tennessee 38103, as agent for itself and other lenders, or at suchother place as the holder may designate in writing, being executed by the Debtors, and beinggiven for value received;
2

 
     9. the indebtedness (and interest thereon) evidenced by that certain Third RestatedRevolving Credit Note dated as of June 30, 2006, in the principal sun of Fifteen MillionDollars ($15,000,000.00), bearing interest from date at the rate specified in said note,said note being payable to the order of Fifth Third Bank, N.A. (Tennessee), at the officesof FTB, 165 Madison Avenue, Memphis, Tennessee 38103, as agent for itself and other lenders,or at such other place as the holder may designate in writing, being executed by theDebtors, and being given for value received;     10. the indebtedness (and interest thereon) evidenced by that certain Revolving CreditNote dated as of June 30, 2006, in the principal sum of Ten Million Dollars($10,000,000.00), bearing interest from date at the rate specified in said note, said notebeing payable to the order of MidFirst at the offices of FTB, 165 Madison Avenue, Memphis,Tennessee 38103, as agent for itself and other lenders, or at such other place as the holdermay designate in writing, being executed by the Debtors, and being given for value received;     11. all obligations of the Debtors pursuant to any and all renewals, modifications, orextensions, in whole or in part, of any of said notes (all of said promissory notes,together with any such renewal, modification or extension being herein called the “Notes”);     12. all obligations of the Debtors under and pursuant to that certain Eighth Amendedand Restated Loan Agreement dated as of October 31, 2002, as amended by that First Amendmentto Eighth Amended and Restated Loan Agreement dated as of March 31, 2003, as amended by thatSecond Amendment to Eighth Amended and Restated Loan Agreement dated as of May 28, 2003, asamended by that Third Amendment to Eighth Amended and Restated Loan Agreement dated as ofJune 30, 2003, as amended by that Fourth Amendment to Eighth Amended and Restated LoanAgreement dated on or about July 17, 2003, as amended by that Fifth Amendment to EighthAmended and Restated Loan Agreement dated as of November 26, 2003, as amended by that SixthAmendment to Eighth Amended and Restated Loan Agreement dated as of June 30, 2004, asamended by that Seventh Amendment to Eighth Amended and Restated Loan Agreement dated as ofDecember 3, 2004, and as amended by that certain Eighth Amendment to Eighth Amended andRestated Loan Agreement of even date herewith (as amended, the “Loan Agreement”), among theDebtors, the Banks, First Tennessee Bank National Association, as Agent, and the Guarantors,and any security agreement or other security document (the Loan Agreement and such securityagreement or other security documents collectively herein called “Security Documents”) whichnow or hereafter secures the payment of the indebtedness guaranteed pursuant to thisGuaranty Agreement or evidenced by the Notes; and     13. all obligations of the Debtors pursuant to any and all renewals, modifications, orextensions, in whole or in part, of any of the Security Documents; together with allexpenses, legal and/or otherwise (including court costs and reasonable attorney’s fees)incurred by the Banks in collecting or endeavoring to collect the indebtedness evidenced andsecured, respectively, by the Notes and the Security Documents (or any renewals,modifications, amendments or extensions of any thereof, in whole or in part), or any part ofsaid indebtedness, in protecting any collateral, and in
3

 
     enforcing the Loan Agreement or this Guaranty (all of which is hereinafter collectivelyreferred to as the “Indebtedness”).     THIS GUARANTY SHALL BE A CONTINUING, ABSOLUTE AND UNCONDITIONAL GUARANTY, and shall remain infull force and effect until the Indebtedness (and interest thereon and expenses in connectiontherewith), and all renewals, modifications, or extensions thereof, in whole or in part, shall havebeen fully paid and satisfied and shall remain in full force and effect until written notice of itsdiscontinuance, addressed to First Tennessee Bank National Association, 165 Madison Avenue,Memphis, Tennessee 38103, Attention: Metropolitan Division, shall be actually received by FirstTennessee Bank National Association, as Agent for Banks (the burden of proof of receipt by saidAgent of such notice being in all cases upon the Guarantors), and also until any and all saidIndebtedness, or any extensions or renewals thereof, existing before receipt of such notice, andexpenses in connection therewith, shall be fully paid. Regardless of when a renewal or extensionof pre-termination debt occurs (with or without adjustment of interest rate or other terms), thedebt is deemed to have been incurred prior to termination to the extent of the renewal orextension, and to be fully covered by this Guaranty. The death, dissolution or withdrawal of theGuarantors (or any of them) shall not terminate this Guaranty until notice of any such death,dissolution or withdrawal, given as above provided, shall have actually been received by Agent, anduntil all of said Indebtedness, or any extensions or renewals thereof, existing before receipt ofsuch notice shall be fully paid. In the event of any such death, dissolution or withdrawal andnotice thereof to Agent, as aforesaid, this Guaranty shall, notwithstanding, continue and remain inforce against any surviving Guarantor until discontinued as hereinabove provided.     Subject to the limitations of Section 10.1 of the Loan Agreement, the Banks are herebyexpressly authorized to make from time to time, without notice to anyone: any renewals,modifications or extensions, whether such renewals, modifications or extensions be in whole or inpart and without limit as to the number of such extensions or of the renewal periods thereof, andwithout notice to or further assent from the undersigned, sales, pledges, surrenders, compromises,settlements, releases, indulgences, alterations, substitutions, exchanges, changes in,modifications, or other dispositions including, without limitation, cancellations, of all or anypart of the collateral pledged to secure the Indebtedness or any part of said Indebtedness, eitherexpress or implied, or of any contracts or instruments evidencing any thereof, or of any securityor collateral therefor, and/or to take any security for or other guaranties upon any of saidIndebtedness; and the liability of the Guarantors (or any of them) shall not be in any manneraffected, diminished or impaired thereby, or by any lack of diligence, failure, neglect or omissionon the part of the Banks, the Agent or any of them to make any demand or protest, or give anynotice of dishonor or default, or to realize upon or protect any of said Indebtedness, or anycollateral or security therefor, or to exercise any lien upon or right of appropriation or (subjectto the limitations set forth in Section 10.7 of the Loan Agreement) setoff of any moneys, accounts,credits, or property of said Debtors, possessed by the Banks, towards the liquidation of saidIndebtedness, or by any application of payments or credits thereon. The Banks shall have theexclusive right to determine how, when and what application of payments and credits, if any, shallbe made on said Indebtedness, or any part thereof, and shall be under no obligation, at any time,to first resort to, make demand on, file a claim against, or exhaust its remedies against theDebtors, or any one or more of the Guarantors, or other persons or corporations, their propertiesor estates, or to resort to or exhaust its remedies against, any collateral, security, property,liens
4

 
or other rights whatsoever. It is expressly agreed that the Banks may at any time make demandfor payment on, or bring suit against the Guarantors (or any of them), or any other guarantors, maycompound with the Guarantors or any other guarantor for such sums or on such terms as the Banks maysee fit and release the Guarantors (or any of them) or any other guarantor from all furtherliability to the Banks, without thereby impairing the rights of the Bank in any respect to demand,sue for and collect the balance of the Indebtedness from any guarantor not so released; and thatany claims against the Debtors, against any other guarantor, or against any collateral, accruing tothe Guarantors (or any of them) by reason of payments made hereunder shall be in all respectsjunior and subordinate to any obligation then or subsequently owed by the Debtors or by such otherguarantor to the Banks. In addition, the liability of the Guarantors (or each of them) shall notbe affected by any lack of validity or enforceability of the guaranteed debt. As security for theundertakings and obligations of the Guarantors hereunder, the Guarantors (or each of them)expressly grants and gives to the Banks, subject to Section 10.7 of the Loan Agreement, a right ofimmediate setoff, without demand or prior notice, of the balance of every deposit account, now orat any time hereafter existing, of the Guarantors (or each of them) with the Banks (but with promptpost setoff notice), and a general lien upon, and security interest in all money, negotiableinstruments, commercial paper, notes, bonds, stocks, credits and/or choses in action, or anyinterest therein, and any other property, rights, and interests of the Guarantors (or each of them)or any evidence thereof, which have or any time shall come into the possession, custody, or controlof the Banks, and, in the event of default hereunder, the Banks may sell or cause to be sold atpublic or private sale in any manner which may be lawful, for cash or credit and upon such terms asthe Banks may see fit, and (except as may be otherwise expressly provided by the Uniform CommercialCode, or other applicable law) without demand or notice to the Guarantors (or each of them), all orany of such security, and the Banks (unless prohibited by the Uniform Commercial Code from sodoing) or any other person may purchase such property, rights or interests so sold and thereafterhold the same free of any claim or right of whatsoever kind, including any right or equity orredemption, of the Guarantors (or each of them), such demand, notice, right or equity of redemptionbeing hereby expressly waived and released.     In the event of the death, incompetency, dissolution, liquidation, insolvency (howeverevidenced) of the Debtors, or institution of bankruptcy or receivership proceedings by the Debtors,or in the event that any involuntary bankruptcy or receivership proceedings filed against theDebtors shall not be dismissed within sixty (60) days following the institution of suchproceedings, then and in any such event all of the Indebtedness shall, for the purposes of thisGuaranty, and at the option of the Banks, immediately become due and payable from the Guarantor;and, in such event, any and all sums or payments of any nature which may be or become due andpayable by the Debtors to the undersigned are hereby assigned to the Banks, and shall becollectible by the Banks, without necessity for other authority than this instrument, until theIndebtedness shall be fully paid and discharged, but such collection by the Banks shall not in anyrespect affect, impair or diminish any other rights of the Banks. The granting of credit from timeto time by the Banks to the Debtors, in excess of the amount to which right of recovery under thisGuaranty is limited and without notice to the Guarantors (or any of them), is hereby expresslyauthorized and shall in no way affect or impair this Guaranty; and, in the event that theobligations of the Debtors to the Banks shall so exceed the amount to which this Guaranty islimited, any payment by the Debtors or any collections or recovery by the Banks from any
5

 
sources other than this Guaranty may first be applied by the Banks to any obligations of theDebtors which exceed the limits of this Guaranty.     The Guarantors (or each of them) will not exercise any rights that Guarantors (or any of them)may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise,until all of the Indebtedness shall have been paid in full. If any amount shall be paid to theGuarantors (or any of them) on account of such subrogation rights at any time when all theIndebtedness shall not have been paid in full, such amount shall be held in trust for the benefitof the Banks and shall forthwith be paid to the Banks to be credited and applied upon theIndebtedness.     **Notwithstanding any provision of the preceding paragraph to the contrary, if at any time theGuarantors (or any of them) is or becomes an “insider” (as defined from time to time in Section 101of the Federal Bankruptcy Code) with respect to the Debtors, then such Guarantor or Guarantorsirrevocably and absolutely waives any and all rights of subrogation, contribution, indemnification,reimbursement or any similar rights against the Debtors with respect to this Guaranty, whether suchrights arise under an express or implied contract or by operation of law, it being the intention ofthe parties that the Guarantors shall not be deemed to constitute a “creditor” (as defined inSection 101 of the Federal Bankruptcy Code) of the Debtors, by reason of the existence of thisGuaranty in the event that the Debtors become debtors in any proceeding under the FederalBankruptcy Code.**     Notwithstanding any other provision of this Guaranty to the contrary, if the obligations ofthe Guarantors hereunder would otherwise be held or determined by a court of competent jurisdictionin any action or proceeding involving any state corporate law or any state or Federal bankruptcy,insolvency, reorganization, moratorium, fraudulent conveyance or other law affecting the rights ofcreditors generally, to be void, invalid or unenforceable to any extent on account of the amount ofthe Guarantors’ (or each of them) liability under this Guaranty, then notwithstanding any otherprovision of this Guaranty to the contrary, the amount of such liability shall, without any furtheraction by the Guarantors (or each of them) or any other person, be automatically limited andreduced to the highest amount which is valid and enforceable as determined in such action orproceeding.     The Banks may without any notice whatsoever to anyone, sell, assign or transfer all or anypart of said Indebtedness; and in that event each and every immediate and successive assignee,transferee or holder of all or any part of said Indebtedness shall have the right to enforce thisGuaranty, by suit or otherwise, for the benefit of such assignee, transferee or holder, as fully asthough such assignee, transferee or holder were herein by name given such rights, powers andbenefits; but the Banks shall have an unimpaired right, prior and superior to that of any saidassignee, transferee or holder, to enforce this Guaranty for the benefit of the Banks, as to somuch of said Indebtedness that has not been sold, assigned or transferred.     No act of commission or omission of any kind, or at any time, on the part of the Banks inrespect of any matter whatsoever shall in any way affect or impair this Guaranty. This Guaranty isin addition to and not in substitution for or discharge of any other Guaranty held by the Banks.The Guarantors (or each of them) waives any rights of action Guarantors (or any of them) might
6

 
have against the Banks because of the exercise by the Banks in any manner howsoever of anyrights granted to the Banks herein.     This Guaranty contains the entire agreement between the parties and every part thereof shallbe binding upon the Guarantors (or each of them), Guarantors’ heirs, executors, administrators,personal representatives, successors and assigns, as fully as though everywhere specificallymentioned, and shall inure to the benefit of the Banks, and their successors and assigns, and shallbe construed according to the laws of the State of Tennessee, in which state it is accepted by theBanks.     If any provision hereof is invalid or unenforceable, the remaining provisions hereof shall notbe affected by such invalidity or unenforceability. Each term and provision contained hereinshall, however, be valid and enforceable to the fullest extent permitted by applicable law.     The Guarantors (or each of them) acknowledge that this Guaranty Agreement is and shall beeffective against such Guarantors upon execution by such Guarantors (regardless of whether anyother person named herein as Guarantor shall sign), and delivery hereof to the Banks, or its Agent;and that it shall not be necessary for the Banks to execute any acceptance hereof or otherwise tosignify or express their acceptance hereof.     ALL OF THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIMBROUGHT BY ANY OF THE PARTIES AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANYWAY CONNECTED WITH THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENTDELIVERED (OR WHICH MAY BE DELIVERED IN THE FUTURE) IN CONNECTION HEREWITH OR ARISING FROM ANYBANKING RELATIONSHIP BETWEEN THE PARTIES TO THIS AGREEMENT.     This Fifteenth Amended and Restated Guaranty Agreement supersedes and replaces that certainFourteenth Amended and Restated Guaranty Agreement and all prior Guaranty Agreements entered intowith respect to the Indebtedness.**[SEPARATE SIGNATURE PAGE FOLLOWS]**
7

 
SIGNATURE PAGE