Exhibit 10.45

FIRST AMENDMENT TO SECOND LIEN CREDIT AGREEMENT

This FIRST AMENDMENT TO SECOND LIEN CREDIT AGREEMENT (this “Amendment”) is dated
as of December 31, 2013 and effective as of December 30, 2013, and entered into
by and among AFFIRMATIVE INSURANCE HOLDINGS, INC., a Delaware corporation
(“Borrower”), the lenders listed on the signature pages hereto, JCF AFFM DEBT
HOLDINGS L.P., as Administrative Agent (in such capacity, “Administrative
Agent”) and as Collateral Agent (in such capacity, the “Collateral Agent”), and
for purposes of Section 6 hereof, the other Loan Parties listed on the signature
pages hereto. Capitalized terms used but not defined herein having the meaning
given them in the Credit Agreement, hereinafter defined.

Recitals

Whereas, Borrower, the Lenders from time to time party thereto, the Agents and
the other parties thereto have entered into that certain Second Lien Credit
Agreement dated as of September 30, 2013 (as amended, amended and restated,
extended, supplemented or otherwise modified from time to time, the “Credit
Agreement”);

Whereas, the Borrower has requested an amendment to the Credit Agreement,
pursuant to and in accordance with Section 9.08(a) of the Credit Agreement; and

Whereas, the Required Lenders and the Agents are willing to agree to the
amendment requested by the Borrower, on the terms and conditions set forth in
this Amendment;

Now Therefore, in consideration of the premises and the mutual agreements set
forth herein, the Borrower, Required Lenders and Agents agree as follows:

1. AMENDMENTS TO CREDIT AGREEMENT. Subject to the conditions and upon the terms
set forth in this Amendment and in reliance on the representations and
warranties of the Borrower set forth in this Amendment, the Credit Agreement is
hereby amended as follows:

1.1. Amendment to Section 1.01. Section 1.01 of the Credit Agreement shall be
amended as follows:

(a) The following definitions shall be added to Section 1.01 of the Credit
Agreement in the appropriate alphabetical order:

“ “EDPS LC Facility” shall mean a customary letter of credit facility governing
the obligations of Affirmative Insurance Company under the EDPS Letter of Credit
in form and substance reasonably acceptable to the Administrative Agent.”

“ “EDPS Letter of Credit” shall mean a letter of credit in favor of First
American Commercial Bancorp, Inc. or another counterparty to any Electronic Data
Processing Equipment and Software Sale and Leaseback Transaction issued by a
letter of credit issuer as required pursuant to the terms of any Electronic Data
Processing Equipment and Software Sale and Leaseback Transaction.”

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“ “Electronic Data Processing Equipment and Software Sale and Leaseback
Transaction” shall mean the sale of electronic data processing equipment and
software recorded on the balance sheet of Affirmative Insurance Company to First
American Commercial Bancorp, Inc. pursuant to that certain Master Lease
Agreement No. 2013415 by and between Affirmative Insurance Company and First
American Commercial Bancorp, Inc., and the simultaneous or subsequent entering
into an agreement to lease those same electronic data processing equipment and
software assets back.”

“ “First Amendment” shall mean that certain First Amendment to Credit Agreement,
dated as of December 31, 2013 and effective as of December 30, 2013, by and
among the Borrower, the Loan Parties, the Required Lenders, and JCF AFFM DEBT
HOLDINGS L.P., as administrative agent and collateral agent.”

“ “First Amendment Effective Date” shall have the meaning set forth in Section 4
of the First Amendment.”

“ “Value” shall mean, with respect to a sale and leaseback transaction, an
amount equal to the net present value of the lease payments with respect to the
term of the lease remaining on the date as of which the amount is being
determined, without regard to any renewal or extension options contained in the
lease, discounted at the weighted average interest rate on the Loans which are
outstanding on the effective date of such sale and leaseback transaction.”

1.2. Amendment to Section 2.13(b). Section 2.13(b) of the Credit Agreement shall
be amended by (i) deleting the phrase “(other than, subject to clause (a) above,
the Retail Sale)” contained therein and (ii) replacing it with the following:

“(other than, subject to clause (a) above, the Retail Sale or any Asset Sale
made in accordance with Section 6.05(b)(y))”

1.3. Amendment to Section 6.01(d). Section 6.01(d) of the Credit Agreement shall
be amended and restated in its entirety as follows:

“(i) Capital Lease Obligations and other purchase money indebtedness of
(x) Borrower or any Subsidiary Guarantor in an aggregate principal amount not
exceeding $6,000,000 at any time outstanding and (y) Borrower or any Subsidiary
in connection with the Electronic Data Processing Equipment and Software Sale
and Leaseback Transaction and (ii) Indebtedness under any EDPS LC Facility,
provided that, in the case of this subclause (ii), (A) the aggregate face amount
of all EDPS Letters of Credit covered by such EDPS LC Facilities shall not
exceed $5,000,000; and (B) such Indebtedness shall not be secured by any Lien
other than as permitted by Section 6.02(q)(ii) or guaranteed by any other
Person;”

1.4. Amendment to Section 6.02. Section 6.02 of the Credit Agreement shall be
amended by (i) deleting the “and” at the end of clause (o) thereof;
(ii) deleting the “.” At the end of clause (p) and replacing it with “; and” and
(iii) adding the following at the end thereof:

“(q) (i) Liens over the electronic data processing equipment and software sold
pursuant to the Electronic Data Processing Equipment and Software Sale and
Leaseback Transaction incurred in connection with the Electronic Data Processing
Equipment and Software Sale and Leaseback Transaction and (ii) Liens granted by
Affirmative Insurance Company securing its obligations under the EDPS LC
Facility; provided that, in the case of subclause (ii), (A) the assets subject
to such Liens shall be limited to cash, cash

 

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deposits, a certificate of deposit or deposit account maintaining such cash or a
securities account in which such cash is invested and (B) the aggregate amount
of all such assets subject to such Lien shall be limited to 105% of the
Indebtedness incurred in accordance with Section 6.01(d)(ii).”

1.5. Amendment to Section 6.05(b). Section 6.05(b) of the Credit Agreement shall
be amended and restated in its entirety as follows:

“Engage in any Asset Sale otherwise permitted under paragraph (a) above unless
(x)(i) such Asset Sale is for consideration at least 80% of which is cash (and
no portion of the remaining consideration shall be in the form of Indebtedness
of the Borrower or any Subsidiary), (ii) such consideration is at least equal to
the fair market value of the assets being sold, transferred, leased or disposed
of, and (iii) the fair market value of all assets sold, transferred, leased or
disposed of pursuant to this paragraph (b)(x) shall not exceed $1,200,000 in the
aggregate or (y)(i) such Asset Sale is in connection with the Electronic Data
Processing Equipment and Software Sale and Leaseback Transaction and is for
consideration at least 80% of which is cash (and no portion of the remaining
consideration shall be in the form of Indebtedness issued by the Borrower or any
Subsidiary), (ii) such consideration is at least equal to the fair market value
of the assets being sold, transferred, leased or disposed of and (iii) the Value
of the assets being sold, transferred, leased or disposed of pursuant to this
paragraph (b)(y) shall not exceed $5,000,000 in the aggregate.

Notwithstanding anything to the contrary contained herein, the Borrower or any
Subsidiary may consummate (i) any Asset Sale otherwise permitted under paragraph
(a) above in which the non-cash portion of the consideration for such Asset Sale
is in the form of Indebtedness of the applicable purchaser made in favor of the
Borrower or any Subsidiary and exceeds 20% of the total consideration for such
Asset Sale solely to the extent such non-cash portion does not exceed $1,200,000
and (ii) the Retail Sale.”

1.6 Amendment to Section 6.06(b)(A). Section 6.06(b)(A) of the Credit Agreement
shall be amended by adding the following at the end thereof: “or Electronic Data
Processing Equipment and Software Sale and Leaseback Transaction”.

2. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. In order to induce the
Required Lenders and the Agents to enter into this Amendment, the Borrower
represents and warrants to each Lender and the Agents that the following
statements are true, correct and complete:

2.1. Power and Authority. Each of the Loan Parties has all requisite corporate
or limited liability company power and authority to enter into this Amendment
and to carry out the transactions contemplated by, and to perform its
obligations under or in respect of, the Credit Agreement.

2.2. Corporate Action. The execution and delivery of this Amendment and the
performance of the obligations of each of the Loan Parties under or in respect
of the Credit Agreement as amended hereby have been duly authorized by all
necessary corporate or limited liability company action on the part of each of
the Loan Parties.

2.3. No Conflict or Violation or Required Consent or Approval. The execution and
delivery of this Amendment and the performance of the obligations of each of the
Loan Parties under or in respect of the Credit Agreement as amended hereby do
not and will not conflict with or violate (a) any

 

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provision of the certificate or articles of incorporation or other constitutive
documents or by-laws of any Loan Party or any of its Subsidiaries, (b) any
provision of any law or any governmental rule or regulation applicable to any
Loan Party or any of its Subsidiaries, (c) any order of any Governmental
Authority or arbitrator binding on any Loan Party or any of its Subsidiaries, or
(d) any indenture, agreement or instrument to which any Loan Party or any of its
Subsidiaries is a party or by which any Loan Party or any of its Subsidiaries,
or any property of any of them, is bound (except where such violation could not
reasonably be expected to have a Material Adverse Effect), and do not and will
not require any consent or approval of any Person (other than any approval or
consent obtained and is in full force and effect or approvals or consents the
failure to obtain could not reasonably be expected to have a Material Adverse
Effect or which are not material to the consummation of the transaction
contemplated hereby).

2.4. Execution, Delivery and Enforceability. This Amendment has been duly
executed and delivered by each Loan Party which is a party hereto and is the
legal, valid and binding obligation of such Loan Party, enforceable in
accordance with its terms, except as enforceability may be affected by
applicable bankruptcy, insolvency, and similar proceedings affecting the rights
of creditors generally, and general principles of equity. The Agents’ Liens in
all Collateral continue to be valid, binding and enforceable Liens which secure
the Obligations to the extent valid, binding and enforceable on the Closing
Date, except as enforceability may be affected by applicable bankruptcy,
insolvency and similar proceedings affecting the rights of creditors generally,
and general principles of equity.

2.5. No Default or Event of Default. After giving effect to this Amendment, no
event has occurred and is continuing or will result from the execution and
delivery of this Amendment that would constitute a Default or an Event of
Default.

2.6. No Material Adverse Effect. No event, change or condition has occurred
since the Closing Date that has caused, or could reasonably be expected to
cause, a Material Adverse Effect.

2.7. Representations and Warranties. Each of the representations and warranties
contained herein and in the Loan Documents is and will be true and correct in
all material respects (except that any representation and warrnaty that is
qualified by “materiality” or “Material Adverse Effect” shall be true and
correct in all respects) on and as of the date hereof and as of the effective
date of this Amendment, except to the extent that such representations and
warranties specifically relate to an earlier date, in which case they were true,
correct and complete in all material respects as of such earlier date (except
that any representation and warrnaty that is qualified by “materiality” or
“Material Adverse Effect” shall be true and correct in all respects).

3. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. This Amendment, and the
consents and approvals contained herein, shall be effective only if and when
signed by, and when counterparts hereof shall have been delivered to the Agents
(by hand delivery, mail, telecopy or other electronic transmission) by each Loan
Party, each Required Lender, and only if and when each of the following
conditions is satisfied or waived:

3.1. No Default or Event of Default; Accuracy of Representations and Warranties.
At the time of and immediately after giving effect to this Amendment, no Default
or Event of Default shall exist and each of the representations and warranties
made by the Loan Parties herein and in or pursuant to the Loan Documents shall
be true and correct in all material respects (except that any representation and
warranty that is qualified by “materiality” or “Material Adverse Effect” shall
be true and correct in all respects) as if made on and as of the date on which
this Amendment becomes effective (except that any such representation or
warranty that is expressly stated as being made only as of a specified earlier
date shall be true and correct in all material respects as of such earlier date
(except that any representation and warranty that is qualified by “materiality”
or “Material Adverse Effect” shall be true and correct in all respects as of
such earlier date)) and the Administrative Agent shall have received an
officer’s certificate from the Borrower confirming the same.

 

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3.2. Amendment to First Lien Credit Agreement. The Administrative Agent shall
have received a duly executed copy of an amendment to the First Lien Credit
Agreement substantially in the form attached as Exhibit A hereto, making
amendment thereto that correspond to those made herein and otherwise in form and
substance reasonably satisfactory to the Administrative Agent.

4. EFFECTIVE DATE. This Amendment shall become effective (the “First Amendment
Effective Date”) as of December 30, 2013 once the conditions set forth in
Section 3 of this Amendment are satisfied or waived.

5. EFFECT OF AMENDMENT; RATIFICATION. This Amendment is a Loan Document. From
and after the date on which this Amendment becomes effective, all references in
the Loan Documents to the Credit Agreement and other Loan Documents shall mean
the Credit Agreement as amended hereby. Except as expressly amended hereby, the
Credit Agreement and the other Loan Documents, including the Liens granted
thereunder, shall remain in full force and effect, and all terms and provisions
thereof are hereby ratified and confirmed.

6. MISCELLANEOUS. Each of the Loan Parties confirms that as amended hereby, each
of the Loan Documents to which it is a party is in full force and effect, and
that as of the date hereof, none of the Loan Parties has any defenses, setoffs
or counterclaims to its Obligations.

7. APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.

8. NO WAIVER. The execution, delivery and effectiveness of this Amendment does
not constitute a waiver of any Default or Event of Default, amend or modify any
provision of any Loan Document except as expressly set forth herein or
constitute a course of dealing or any other basis for altering the Obligations
of any Loan Party.

9. COMPLETE AGREEMENT. This Amendment sets forth the complete agreement of the
parties in respect of any amendment to any of the provisions of any Loan
Document.

10. CAPTIONS; COUNTERPARTS. The catchlines and captions herein are intended
solely for convenience of reference and shall not be used to interpret or
construe the provisions hereof. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts (including
by telecopy or other electronic transmission), all of which taken together shall
constitute but one and the same instrument.

[signatures follow; remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, each of the undersigned has duly executed this First
Amendment to Credit Agreement as of the date set forth above.

 

AFFIRMATIVE INSURANCE HOLDINGS, INC., as Borrower By:   /s/ Michael J. McClure  

 

  Name: Michael J. McClure   Title: CEO LOAN PARTIES: AFFIRMATIVE INSURANCE
HOLDINGS, INC. AFFIRMATIVE MANAGEMENT SERVICES, INC. AFFIRMATIVE SERVICES, INC.
AFFIRMATIVE INSURANCE GROUP, INC. AFFIRMATIVE UNDERWRITING SERVICES, INC.
AFFIRMATIVE INSURANCE SERVICES, INC. USAGENCIES, L.L.C. USAGENCIES MANAGEMENT
SERVICES, INC. By:   /s/ Michael J. McClure  

 

  Name: Michael J. McClure   Title: CEO

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JCF AFFM DEBT HOLDINGS L.P., as Administrative Agent, as Collateral Agent and
Lender By: JCF AFFM DEBT HOLDINGS GP LTD., its General Partner By:   /s/ David
Schamis   Name: David Schamis   Title: Authorized Signatory