EX-10.8



 Exhibit 10.8 
 GUARANTEE AGREEMENT 
 between 

FIRST ACCEPTANCE CORPORATION, 
 As Guarantor, 
 And 

WILMINGTON TRUST COMPANY, 
 As Guarantee Trustee 
 Dated as of June 15, 2007 

FIRST ACCEPTANCE STATUTORY TRUST I 







 TABLE OF CONTENTS 

 

							
	 ARTICLE I
	 	INTERPRETATION AND DEFINITIONS	  	 	2	  
	 SECTION 1.1
	 	Interpretation	  	 	2	  
	 SECTION 1.2
	 	Definitions	  	 	2	  
			
	 ARTICLE II
	 	REPORTS	  	 	6	  
	 SECTION 2.1
	 	List of Holders	  	 	6	  
	 SECTION 2.2
	 	Periodic Reports to the Guarantee Trustee	  	 	6	  
	 SECTION 2.3
	 	Event of Default; Waiver	  	 	6	  
	 SECTION 2.4
	 	Event of Default; Notice	  	 	7	  
			
	 ARTICLE III
	 	POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE	  	 	7	  
			
	 SECTION 3.1
	 	Powers and Duties of the Guarantee Trustee	  	 	7	  
	 SECTION 3.2
	 	Certain Rights of the Guarantee Trustee	  	 	8	  
	 SECTION 3.3
	 	Compensation	  	 	10	  
	 SECTION 3.4
	 	Indemnity	  	 	10	  
	 SECTION 3.5
	 	Securities	  	 	11	  
			
	 ARTICLE IV
	 	GUARANTEE TRUSTEE	  	 	11	  
	 SECTION 4.1
	 	Guarantee Trustee; Eligibility	  	 	11	  
	 SECTION 4.2
	 	Appointment, Removal and Resignation of the Guarantee Trustee	  	 	12	  
			
	 ARTICLE V
	 	GUARANTEE	  	 	12	  
	 SECTION 5.1
	 	Guarantee	  	 	12	  
	 SECTION 5.2
	 	Waiver of Notice and Demand	  	 	13	  
	 SECTION 5.3
	 	Obligations Not Affected	  	 	13	  
	 SECTION 5.4
	 	Rights of Holders	  	 	14	  
	 SECTION 5.5
	 	Guarantee of Payment	  	 	14	  
	 SECTION 5.6
	 	Subrogation	  	 	14	  
	 SECTION 5.7
	 	Independent Obligations	  	 	15	  
	 SECTION 5.8
	 	Enforcement	  	 	15	  
			
	 ARTICLE VI
	 	COVENANTS AND SUBORDINATION	  	 	15	  
	 SECTION 6.1
	 	Dividends, Distributions and Payments	  	 	15	  
	 SECTION 6.2
	 	Subordination	  	 	16	  
	 SECTION 6.3
	 	Pari Passu Guarantees	  	 	16	  
			
	 ARTICLE VII
	 	TERMINATION	  	 	17	  
	 SECTION 7.1
	 	Termination	  	 	17	  
			
	 ARTICLE VIII
	 	MISCELLANEOUS	  	 	17	  
	 SECTION 8.1
	 	Successors and Assigns	  	 	17	  
	 SECTION 8.2
	 	Amendments	  	 	17	  


  
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	 SECTION 8.3
	 	Notices	  	 	18	  
	 SECTION 8.4
	 	Benefit	  	 	19	  
	 SECTION 8.5
	 	Governing Law	  	 	19	  
	 SECTION 8.6
	 	Submission to Jurisdiction	  	 	19	  
	 SECTION 8.7
	 	Counterparts; Facsimile	  	 	19	  


  
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 GUARANTEE AGREEMENT, dated as of June 15, 2007, executed
and delivered by FIRST ACCEPTANCE CORPORATION, a Delaware corporation (the “Guarantor”) having its principal office at 3322 West End Avenue Suite 1000, Nashville, Tennessee 37203, and WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as trustee (in such capacity, the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of
First Acceptance Statutory Trust I, a Delaware statutory trust (the “Issuer”). 
 W I
T N E S S E T H : 
 WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as of the date hereof (the “Trust Agreement”), among the Guarantor, as Depositor, the Property Trustee,
the Delaware Trustee and the Administrative Trustees named therein and the holders from time to time of the Preferred Securities (as hereinafter defined), the Issuer is issuing $40,000,000 aggregate Liquidation Amount (as defined in the Trust
Agreement) of its Preferred Securities (Liquidation Amount $1,000 per preferred security) (the “Preferred Securities”) representing preferred undivided beneficial interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement; 
 WHEREAS, the Preferred Securities will be issued by the Issuer and the proceeds
thereof, together with the proceeds from the issuance of the Issuer’s Common Securities (as defined below), will be used to purchase the Notes (as defined in the Trust Agreement) of the Guarantor; and 

WHEREAS, as incentive for the Holders to purchase Preferred Securities the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth herein, to pay to the Holders of the Preferred Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein. 

NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement to provide as follows for the benefit of the Holders from time to time of the Preferred Securities: 

  
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 ARTICLE I 
 INTERPRETATION AND DEFINITIONS 
 SECTION 1.1
Interpretation.  
 In this Guarantee Agreement, unless the context otherwise requires: 

(a) capitalized terms used in this Guarantee Agreement but not defined in the preamble hereto have the respective meanings assigned to
them in Section 1.2; 
 (b) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”; 
 (c) all references to “the Guarantee Agreement”
or “this Guarantee Agreement” are to this Guarantee Agreement as modified, supplemented or amended from time to time; 

(d) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified; 
 (e) the words “hereby”, “herein”, “hereof” and “hereunder” and
other words of similar import refer to this Guarantee Agreement as a whole and not to any particular Article, Section or other subdivision; 
 (f) a reference to the singular includes the plural and vice versa; and 
 (g) the
masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. 
 SECTION 1.2 Definitions.

 As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the
following meanings: 
 “Affiliate” of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified Person; provided, that the Issuer shall not be deemed to be an Affiliate of the Guarantor. For the purposes of this definition,
“control,” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and 
 “controlled” have meanings correlative to the foregoing.

 “Beneficiaries” means any Person to whom the Issuer is or hereafter becomes indebted or liable. 

  
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 “Board of Directors” means either the board of directors of the Guarantor
or any duly authorized committee of that board. 
 “Common Securities” means the securities representing common
undivided beneficial interests in the assets of the Issuer. 
 “Debt” means, with respect to any Person,
whether recourse is to all or a portion of the assets of such Person, whether currently existing or hereafter incurred, and whether or not contingent and without duplication, (i) every obligation of such Person for money borrowed including fees
and expenses related to all such obligations, including reasonable attorney’s fees; (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person; (iv) every
obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable arising in the ordinary course of business); (v) every capital lease obligation of such Person;
(vi) all indebtedness of such Person, whether incurred on or prior to the date of this Guarantee Agreement or thereafter incurred, for claims in respect of derivative products, including interest rate, foreign exchange rate and commodity
forward contracts, options, swaps and similar arrangements; (vii) every obligation of the type referred to in clauses (i) through (vi) of another Person and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise; and (viii) any renewals, extensions, refundings, amendments or modifications of any obligation of the type referred to in clauses
(i) through (vii). 
 “Event of Default” means a default by the Guarantor on any of its payment or other
obligations under this Guarantee Agreement; provided, that except with respect to a default in payment of any Guarantee Payments, the Guarantor shall have received notice of default from the Guarantee Trustee and shall not have cured such default
within thirty (30) days after receipt of such notice. 
 “Guarantee Payments” means the following payments
or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions (as defined in the Trust Agreement) required to be paid
on the Preferred Securities, to the extent the Issuer shall have funds on hand available therefor at such time, (ii) the Redemption Price (as defined in the Trust Agreement) with respect to any Preferred Securities to the extent the Issuer
shall have funds on hand available therefor at such time, and (iii) upon a voluntary or involuntary termination, winding up or liquidation of the Issuer, unless Notes are distributed to the Holders, the lesser of (a) the aggregate of the
Liquidation Amount of $1,000 per Preferred Security plus accumulated and unpaid 

  
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Distributions on the Preferred Securities to the date of payment, to the extent that the Issuer shall have funds available therefor at such time and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer after satisfaction of liabilities to creditors of the Issuer in accordance with applicable law (in either case, the “Liquidation Distribution”).

 “Guarantee Trustee” means Wilmington Trust Company in its capacity as trustee hereunder, until a Successor
Guarantee Trustee, as defined below, has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement, and thereafter means each such Successor Guarantee Trustee. 

“Holder” means any holder, as registered on the books and records of the Issuer, of any Preferred Securities;
provided, that, in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, “Holder” shall not include the Guarantor, the Guarantee Trustee or
any Affiliate of the Guarantor or the Guarantee Trustee. 
 “Indenture” means the Junior Subordinated
Indenture, dated as of the date hereof, as supplemented and amended, between the Guarantor and Wilmington Trust Company, as trustee. 
 “List of Holders” has the meaning specified in Section 2.1.  
 “Majority in Liquidation Amount of the Preferred Securities” means the Holder(s) of more than fifty percent (50%) of the aggregate Liquidation Amount of all then outstanding
Preferred Securities issued by the Issuer. 
 “Obligations” means any costs, expenses or liabilities (but not
including liabilities related to taxes) of the Issuer, other than obligations of the Issuer to pay to holders of any Trust Securities the amounts due such holders pursuant to the terms of the Trust Securities. 

“Officers’ Certificate” means, with respect to any Person, a certificate signed by the Chief Executive Officer,
Chief Financial Officer, President or a Vice President of such Person, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any Officers’ Certificate
delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement (other than the certificate provided pursuant to Section 2.4) shall include: 

(a) a statement by each officer signing the Officers’ Certificate that such officer has read the covenant or condition and the
definitions relating thereto; 
 (b) a brief statement of the nature and scope of the examination or investigation undertaken by
such officer in rendering the Officers’ Certificate; 

  
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 (c) a statement that such officer has made such examination or investigation as, in such
officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
 (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. 
 “Person” means a legal person, including any individual, corporation, company, estate, partnership, joint venture, association, joint stock company, limited liability company, trust,
unincorporated association or government, or any agency or political subdivision thereof, or any other entity of whatever nature. 
 “Responsible Officer” means, with respect to the Guarantee Trustee, any Senior Vice President, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, any Financial Services Officer or Assistant Financial Services Officer or any other officer in the Corporate Trust Office of the Guarantee Trustee with direct responsibility for the administration of this
Guarantee Agreement and also means, with respect to a particular corporate trust matter, any other officer of the Guarantee Trustee to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular
subject. 
 “Senior Debt” means the principal of and any premium and interest on (including interest accruing
on or after the filing of any petition in bankruptcy or for reorganization relating to the Guarantor whether or not such claim for post-petition interest is allowed in such proceeding) all Debt of the Guarantor, including fees and expenses
(including reasonable attorney’s fees) related to such Debt of the Guarantor, whether incurred on or prior to the date of the Indenture or thereafter incurred, unless it is provided in the instrument creating or evidencing the same or pursuant
to which the same is outstanding that such obligations are not superior in right of payment to the Preferred Securities; provided, that Senior Debt shall not include any other debt securities, or guarantees in respect of such debt securities,
issued to any trust other than the Issuer (or a trustee of such trust), partnership or other entity affiliated with the Guarantor that is a financing vehicle of the Guarantor (a “financing entity”), in connection with the issuance by such
financing entity of equity securities or other securities that rank pari passu with or junior in right of payment to this Guarantee Agreement. 
 “Successor Guarantee Trustee” means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.1. 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended and as in effect on the date of this Guarantee
Agreement. 

  
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 Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement as in effect on the date hereof. 
 ARTICLE II 

REPORTS 
 SECTION
2.1 List of Holders.  
 The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee at such times as
the Guarantee Trustee may request in writing, within thirty (30) days after the receipt by the Guarantor of any such request, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders (the
“List of Holders”) as of a date not more than fifteen (15) days prior to the time such list is furnished, in each case to the extent such information is in the possession or control of the Guarantor and is not identical to a
previously supplied list of Holders or has not otherwise been received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. 

SECTION 2.2 Periodic Reports to the Guarantee Trustee.  
 The Guarantor shall deliver to the Guarantee Trustee, within one hundred and twenty (120) days after the end of each fiscal year of the Guarantor ending after the date of this Guarantee Agreement, an
Officers’ Certificate covering the preceding fiscal year, stating whether or not to the knowledge of the signers thereof the Guarantor is in default in the performance or observance of any of the terms or provisions or any of the conditions of
this Guarantee Agreement (without regard to any period of grace or requirement of notice provided hereunder) and, if the Guarantor shall be in default thereof, specifying all such defaults and the nature and status thereof of which they have
knowledge. 
 SECTION 2.3 Event of Default; Waiver.  
 The Holders of a Majority in Liquidation Amount of the Preferred Securities may, on behalf of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any
right consequent therefrom. 

  
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 SECTION 2.4 Event of Default; Notice.  

(a) The Guarantee Trustee shall, within ninety (90) days after the occurrence of a default, transmit to the Holders notices of all
defaults actually known to the Guarantee Trustee, unless such defaults have been cured or waived before the giving of such notice, provided, that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee
shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Guarantee Trustee in good faith determine that the withholding of
such notice is in the interests of the Holders. For the purpose of this Section 2.4, the term “default” means any event that is, or after notice or lapse of time or both would become, an Event of Default. 

(b) The Guarantee Trustee shall not be deemed to have knowledge of any default or Event of Default unless the Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the administration of this Guarantee Agreement shall have received written notice, of such default or Event of Default from the Guarantor or a Holder. 

ARTICLE III 

POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE 
 SECTION 3.1 Powers and Duties of the Guarantee Trustee.  

(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising its rights pursuant to Section 5.4(d) or to a Successor Guarantee Trustee upon acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. 
 (b) The rights, immunities, duties and responsibilities of the Guarantee Trustee shall be as provided by this Guarantee Agreement and there shall be no other duties or obligations, express or implied, of
the Guarantee Trustee. Notwithstanding the foregoing, no provisions of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not herein
expressly so 

  
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provided, every provision of this Guarantee Agreement relating to the conduct or affecting the liability of or affording protection to the Guarantee Trustee shall be subject to the provisions of
this Section 3.1. To the extent that, at law or in equity, the Guarantee Trustee has duties and liabilities relating to the Guarantor or the Holders, the Guarantee Trustee shall not be liable to any Holder for the Guarantee
Trustee’s good faith reliance on the provisions of this Guarantee Agreement. The provisions of this Guarantee Agreement, to the extent that they restrict the duties and liabilities of the Guarantee Trustee otherwise existing at law or in
equity, are agreed by the Guarantor and the Holders to replace such other duties and liabilities of the Guarantee Trustee. 

(c) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent
action, negligent failure to act or own willful misconduct, except that: 
 (i) the Guarantee Trustee shall not
be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; and

 (ii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement. 
 SECTION 3.2 Certain Rights of the
Guarantee Trustee.  
 (a) Subject to the provisions of Section 3.1: 

(i) the Guarantee Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in good
faith and in accordance with the terms hereof upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; 
 (ii) any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officers’ Certificate unless otherwise prescribed herein; 

(iii) the Guarantee Trustee may consult with counsel, and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted to be taken 

  
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by it hereunder in good faith and in reliance thereon and in accordance with such advice. Such counsel may be counsel to the Guarantee Trustee, the Guarantor or any of its Affiliates and may be
one of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction; 

(iv) the Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee reasonable security or indemnity against the costs, expenses (including reasonable attorneys’ fees and expenses) and
liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided, that, nothing contained in this Section 3.2(a)(iv)
shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee Agreement; 

(v) the Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and if the Guarantee Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Guarantor, personally
or by agent or attorney; 
 (vi) the Guarantee Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its agents, attorneys, custodians or nominees and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney, custodian or
nominee appointed with due care by it hereunder; 
 (vii) whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right hereunder, the Guarantee Trustee (A) may request instructions from the Holders of a Majority in Liquidation Amount of
the Preferred Securities, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received and (C) shall be protected in acting in accordance with such instructions; 

(viii) except as otherwise expressly provided by this Guarantee Agreement, the Guarantee Trustee shall not be under any
obligation to take any action that is discretionary under the provisions of this Guarantee Agreement; 

  
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 (ix) whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an Officers’ Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor; and 

(x) the Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument or other
writing (or any rerecording, refiling or reregistration thereof). 
 (b) No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be
construed to be a duty to act in accordance with such power and authority. 
 SECTION 3.3 Compensation.  

The Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provisions of law in regard to the compensation of a trustee of an express trust) and to reimburse the Guarantee Trustee upon request for all documented reasonable expenses, disbursements and advances
(including the documented reasonable fees and expenses of its external attorneys and agents) incurred or made by the Guarantee Trustee in accordance with any provisions of this Guarantee Agreement. 

SECTION 3.4 Indemnity.  

The Guarantor agrees to indemnify and hold harmless the Guarantee Trustee (including in its individual capacity) and any of its Affiliates
and any of their officers, directors, shareholders, employees, representatives or agents from and against any loss, damage, liability, tax (other than income, franchise or other taxes imposed on amounts paid pursuant to Section 3.3),
penalty, expense or claim of any kind or nature whatsoever incurred without negligence, bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its rights, powers or duties hereunder. The Guarantee Trustee will not claim or exact any lien or charge on any


  
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Guarantee Payments as a result of any amount due to it under this Guarantee Agreement. This indemnity shall survive the termination of this Agreement or the resignation or removal of the
Guarantee Trustee. 
 In no event shall the Guarantee Trustee be liable for any indirect, special, punitive or consequential loss or damage of
any kind whatsoever, including, but not limited to, lost profits, even if the Guarantee Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 
 In no event shall the Guarantee Trustee be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited to, acts
of God, flood, war (declared or undeclared), terrorism, fire, riot, embargo or government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services
contemplated by this Guarantee Agreement. 
 SECTION 3.5 Securities.  

The Guarantee Trustee or any other agent of the Guarantee Trustee, in its individual or any other capacity, may become the owner or
pledgee of Common Securities or Preferred Securities. 
 ARTICLE IV 

GUARANTEE TRUSTEE 
 SECTION 4.1 Guarantee Trustee; Eligibility. 
 (a) There shall at all times
be a Guarantee Trustee which shall: 
 (i) not be an Affiliate of the Guarantor; and 

(ii) be a corporation or national association organized and doing business under the laws of the United States or of any
State thereof or of the District of Columbia, authorized to exercise corporate trust powers, having a combined capital and surplus of at least fifty million dollars ($50,000,000), subject to supervision or examination by Federal, State or District
of Columbia authority and having an office within the United States. If such corporation or national association publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority,
then, for the purposes of this Section 4.1, the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published. 
 (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a),
the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.2(c). 

  
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 (c) If the Guarantee Trustee has or shall acquire any “conflicting interest”
within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee shall either eliminate such interest or resign in the manner and with the effect set out in Section 4.2(c). 

SECTION 4.2 Appointment, Removal and Resignation of the Guarantee Trustee.  

(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor,
except during an Event of Default. 
 (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. 
 (c) The Guarantee Trustee appointed hereunder shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. 
 (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.2 within thirty (30) days after delivery to the Guarantor of an
instrument of resignation, the resigning Guarantee Trustee may petition, at the expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper, appoint a Successor Guarantee Trustee. 
 ARTICLE V 

GUARANTEE 

SECTION 5.1 Guarantee.  

(a) The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense (except for the defense of payment by the Issuer), right of set-off or counterclaim which the Issuer may have or assert. The Guarantor’s
obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such 

  
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amounts to the Holders. The Guarantor shall give prompt written notice to the Guarantee Trustee in the event it makes any direct payment to the Holders hereunder. 

(b) The Guarantor hereby also agrees to assume any and all Obligations of the Issuer, and, in the event any such Obligation is not so
assumed, subject to the terms and conditions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to each Beneficiary the full payment, when and as due, of any and all Obligations to such Beneficiaries. This Guarantee is intended
to be for the Beneficiaries who have received notice hereof. 
 SECTION 5.2 Waiver of Notice and Demand.  

The Guarantor hereby waives notice of acceptance of the Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and
all other notices and demands. 
 SECTION 5.3 Obligations Not Affected.  

The obligations, covenants, agreements and duties of the Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following: 
 (a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer; 

(b) the extension of time for the payment by the Issuer of all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment period on the Notes as provided in the Indenture), Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Preferred Securities or
the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities; 
 (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; 
 (d) the voluntary
or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer; 

  
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 (e) any invalidity of, or defect or deficiency in, the Preferred Securities; 

(f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or 

(g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 
 There shall be no obligation of the Holders to give notice to, or obtain the consent of, the Guarantor with respect to the happening of any of the foregoing. 

SECTION 5.4 Rights of Holders.  
 The Guarantor expressly acknowledges that: (a) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (b) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (c) the Holders of a Majority in Liquidation Amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (d) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without first instituting a legal proceeding against the Guarantee Trustee, the Issuer or any other Person. 
 SECTION 5.5 Guarantee of Payment.  
 This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Issuer) or upon distribution of Notes to Holders
as provided in the Trust Agreement. 
 SECTION 5.6 Subrogation.  
 The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.1; provided, that, the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. 

  
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 SECTION 5.7 Independent Obligations.  

The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3. 
 SECTION 5.8 Enforcement.  

A Beneficiary may enforce the Obligations of the Guarantor contained in Section 5.1(b) directly against the Guarantor, and the
Guarantor waives any right or remedy to require that any action be brought against the Issuer or any other person or entity before proceeding against the Guarantor. 
 ARTICLE VI 
 COVENANTS AND
SUBORDINATION 
 SECTION 6.1 Dividends, Distributions and Payments. 

So long as any Preferred Securities remain outstanding, if there shall have occurred and be continuing an Event of Default or the
Guarantor shall have entered into an Extension Period as provided for in the Indenture and such period, or any extension thereof, shall have commenced and be continuing, then the Guarantor may not (a) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of the Guarantor’s Equity Interests (as defined in the Indenture), (b) vote in favor of or permit or otherwise allow any of its Subsidiaries
(as defined in the Indenture) to declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to or otherwise retire, any of such Subsidiary’s Equity Interests entitling the holders
thereof to a stated rate of return other than dividends or distributions on Equity Interests payable to the Guarantor or any Subsidiary thereof (for the avoidance of doubt, whether such Equity Interests are perpetual or otherwise), or (c) make
any payment of principal of or any interest or premium on or repay, repurchase or redeem any debt securities of the Guarantor that rank pari passu in all respects with or junior in interest to the junior subordinated notes issued by the
Guarantor pursuant to the Indenture (other than (i) repurchases, redemptions or other acquisitions of Equity Interests of the Guarantor in connection with (1) any employment contract, benefit plan or other similar arrangement with or for
the benefit of any one or more employees, officers, directors or consultants, (2) a dividend reinvestment or stockholder stock purchase or similar plan with respect to any Equity Interests or (3) the issuance of Equity Interests of the
Guarantor (or securities convertible into or exercisable for such Equity Interests) as consideration in an acquisition transaction entered into prior to the applicable Event of Default or the applicable Extension Period, (ii) as a result of an
exchange or conversion of any class or series of the Guarantor’s Equity Interests (or any Equity Interests of a Subsidiary of the Guarantor) for any class or series of the Guarantor’s Equity Interests or any class of series of the
Guarantor’s 

  
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indebtedness for any class or series of the Guarantor’s Equity Interests, (iii) the purchase of fractional interests in Equity Interests of the Guarantor pursuant to the conversion or
exchange provisions of such Equity Interests or the security being converted or exchanged, (iv) any declaration of a dividend in connection with any rights plan, the issuance of rights, Equity Interests or other property under any rights plan
or the redemption or repurchase of rights pursuant thereto, or (v) any dividend in the form of Equity Interests, warrants, options or other rights where the dividend Equity Interests or the Equity Interests issuable upon exercise of such
warrants, options or other rights are the same Equity Interests as those on which the dividend is being paid or rank pari passu with or junior to such Equity Interests). 
 SECTION 6.2 Subordination.  
 The obligations of the Guarantor under this
Guarantee Agreement will constitute unsecured obligations of the Guarantor and will rank subordinate and junior in right of payment to all Senior Debt of the Guarantor. 
 SECTION 6.3 Pari Passu Guarantees.  
 (a) The obligations of the Guarantor
under this Guarantee Agreement shall rank pari passu with the obligations of the Guarantor under any similar guarantee agreements issued by the Guarantor with respect to preferred securities (if any) similar to the Preferred Securities,
issued by trusts other than the Issuer established or to be established by the Guarantor (if any), in each case similar to the Issuer. 
 (b) The right of the Guarantor to participate in any distribution of assets of any of its subsidiaries upon any such subsidiary’s liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent the Guarantor may itself be recognized as a creditor of that subsidiary. Accordingly, the Guarantor’s obligations under this Guarantee will be effectively subordinated to all existing
and future liabilities of the Guarantor’s subsidiaries, and claimants should look only to the assets of the Guarantor for payments hereunder. This Guarantee does not limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Debt of the Guarantor, under any indenture or agreement that the Guarantor may enter into in the future or otherwise. 

  
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 ARTICLE VII 
 TERMINATION 
 SECTION 7.1 Termination.  

This Guarantee Agreement shall terminate and be of no further force and effect upon (a) full payment of the Redemption Price, as
defined in the Trust Agreement, of all Preferred Securities, (b) the distribution of Notes to the Holders in exchange for all of the Preferred Securities or (c) full payment of the amounts payable in accordance with the Trust Agreement
upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to
Preferred Securities or this Guarantee Agreement. The obligations of the Guarantor under Sections 3.3 and 3.4 shall survive any such termination or the resignation and removal of the Guarantee Trustee. 

ARTICLE VIII 

MISCELLANEOUS 

SECTION 8.1 Successors and Assigns.  
 All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article VIII of the Indenture and pursuant to which the successor or assignee agrees in
writing to perform the Guarantor’s obligations hereunder, the Guarantor shall not assign its rights or delegate its obligations hereunder without the prior approval of the Holders of a Majority in Liquidation Amount of the Preferred Securities.

 SECTION 8.2 Amendments.  
 Except with respect to any changes that do not adversely affect the rights of the Holders in any material respect (in which case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Guarantor, the Guarantee Trustee and the Holders of a Majority in Liquidation Amount of the Preferred Securities. The provisions of Article VI of the Trust Agreement concerning meetings or consents of
the Holders shall apply to the giving of such approval. 

  
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 SECTION 8.3 Notices.  
 Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows: 
 (a) if given to the Guarantor, to the address or facsimile number set forth below or such other address,
facsimile number or to the attention of such other Person as the Guarantor may give by notice to the Guarantee Trustee and the Holders: 
 FIRST ACCEPTANCE CORPORATION 
 3322 West End Avenue Suite 1000 

Nashville, Tennessee 37203 
 Facsimile No.: (615) 844-2806 
 Attention: Chief Financial Officer

 (b) if given to the Issuer, at the Issuer’s address or facsimile number set forth below or such other address, facsimile
number or to the attention of such other Person as the Issuer may give by notice to the Guarantee Trustee and the Holders: 

First Acceptance Statutory Trust I 
 c/o FIRST ACCEPTANCE CORPORATION 
 3322 West End Avenue Suite 1000 

Nashville, Tennessee 37203 
 Facsimile No.: (615) 844-2806 
 Attention: Administrative Trustee 

(c) if given to the Guarantee Trustee, at the address or facsimile number set forth below or such other address, facsimile number or to
the attention of such other Person as the Guarantee Trustee may give by notice to the Guarantor and the Holders: 
 Wilmington
Trust Company 
 Rodney Square North, 1100 North Market Street 

Wilmington, Delaware 19890-0001 
 Facsimile No.: (302) 636-4140 
 Attention: Corporate Capital Markets

 (d) if given to any Holder, at the address set forth on the books and records of the Issuer. 

All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the
date of such refusal or inability to deliver. 

  
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 SECTION 8.4 Benefit.  
 This Guarantee Agreement is solely for the benefit of the Holders and is not separately transferable from the Preferred Securities. 
 SECTION 8.5 Governing Law.  
 This Guarantee Agreement and the rights and
obligations of each party hereto shall be construed and enforced in accordance with and governed by the laws of the State of New York without reference to its conflict of laws provisions (other than Section 5-1401 of the General Obligations
Law). 
 SECTION 8.6 Submission to Jurisdiction.  
 ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR
THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTEE AGREEMENT. 

SECTION 8.7 Counterparts; Facsimile.  
 This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same
instrument. Delivery of an executed signature page of this Guarantee Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. 

[THE NEXT PAGE IS THE SIGNATURE PAGE] 

  
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 IN WITNESS WHEREOF, the undersigned have
executed this Guarantee Agreement as of the date first above written. 
  

			
	FIRST ACCEPTANCE CORPORATION
		
	By:	 	 /s/

	Name	 	
	Title:	 	
	
	WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Guarantee Trustee
		
	By:	 	 /s/

	Name	 	
	Title:	 	



  
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