Auction Rate Securities Option Rights Agreements



 Exhibit 10.32 
  

			
	

	  	 UBS Financial Services Inc.
 1200 Harbor Boulevard

 Weehawken, NJ 07086
  

		  	 James M. Pierce
 Co-Head
 Wealth Management Advisor Group US
  

	 Comerica Bank & Trust, N.A
 Custodian for the
Affirmative
 Insurance Company of Michigan
 500 Woodward Avenue

 MC 3300
 Detroit, Michigan 48226-3416
	  	 James D. Price
 Co-Head
 Wealth Management Advisor Group US
  
 www.ubs.com
  
 Octobers 8, 2008
  
 Branch Telephone Number
 +1-212-821-7000
  

		  	Account Number: __________

 We are pleased to offer you a way to liquidate certain of your auction rate securities (ARS). UBS has designed a
solution that gives you the option to hold your ARS or sell the securities back to UBS. This solution is available for ARS that were held in a UBS account on February 13, 2008, and that are not successfully clearing at auction (Eligible ARS).

 UBS is offering you “Auction Rate Securities Rights” (Rights) to sell Eligible ARS at par value to UBS at any time during a two-year time
period. These Rights are nontransferable securities registered with the U.S. Securities and Exchange Commission (SEC). This is a limited time offer that will expire on November 14, 2008. Accepting this offer may impact your legal rights. Not
accepting this offer may have repercussions on outstanding loans secured by Eligible ARS, As a result, it is important that you review the prospectus carefully. 
 The key features and terms of the offer are summarized below. For complete details, please see the enclosed prospectus. 
  

	 	•	 	 UBS is offering you nontransferable Rights to sell Eligible ARS, held in the UBS account identified above, at par value to UBS at any time during the period of
June 30, 2010, through July 2, 2012. 


  

	 	•	 	 You may instruct your UBS Financial Advisor to exercise these Rights at any time during this time period; 


  

	 	•	 	 If you do not exercise your Rights, the Eligible ARS will continue to accrue interest or dividends as determined by the auction process;



  

	 	•	 	 If you do not exercise your Rights before July 2, 2012, they will expire and UBS will have no further obligation to buy your Eligible ARS.



  

	 	•	 	 Clients who accept this offer give UBS the discretion to purchase or sell their Eligible ARS at any time after accepting the firm’s offer and without other
prior notice. 


  

	 	•	 	 UBS will purchase tax-exempt Auction Preferred Stock (a specific type of ARS also known as APS) at any time after clients accept the firm’s Rights offer;



  

	 	•	 	 UBS will only exercise its discretion to purchase or sell Eligible ARS for the purpose of restructurings, dispositions or other solutions that will provide clients
with par value for their Eligible ARS; 


  

	 	•	 	 In purchasing Eligible ARS or selling Eligible ARS on behalf of clients, including tax-exempt APS, UBS will act in its capacity as broker-dealer and will execute
these transactions on a principal basis regardless of the type of client accounts in which the Eligible ARS are held. Please see pages 27-28 in the enclosed prospectus for more information; 


  

	 	•	 	 UBS will pay clients par value for their Eligible ARS within one day of settlement of the transaction; 


  

	 	•	 	 Eligible ARS are subject to issuer redemptions at any time. 


 UBS AG has filed a registration statement (including a prospectus with the SEC for the offering to which this communication relates. Before you make an investment decision, you should read the prospectus in that registration statement and
other documents that UBS has filed with the SEC for more complete information about UBS and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service
Centre at +1-800-253-1974. 
  

			
	UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.	  	1C-ARS0









			
	

	  	UBS Financial Services Inc.

  

	 	•	 	 Clients who accept this offer release UBS and its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its
marketing and sale of ARS and expressly agree not to seek any damages or costs (punitive damages, attorney fees, etc.) other than consequential damages. Clients also will not serve as a class representative or receive benefits under any class action
settlement or investor fund. 


  

	 	•	 	 UBS will provide clients who accept the offer “no net cost” loans up to the par value of Eligible ARS until June 30, 2010. Please see pages 36-39 in
the enclosed prospectus for more information. 


  

	 	•	 	 UBS will reimburse all clients who participated in prior UBS ARS loan programs after February 13, 2008, for the difference between the cost of the loan and the
applicable interest paid on the Eligible ARS. 


 THIS OFFER EXPIRES ON NOVEMBER 14, 2008. Please complete, sign and date the
enclosed form and return it in the postage-paid envelope if you wish to accept this offer. We must receive your signed acceptance form no later than November 14, 2008. 
 You may receive multiple letters from us depending on the type of ARS you own or if you have ARS in multiple accounts. Please note you must return a form for each letter you receive to accept all
available offers relating to your ARS holdings. Please read each response form carefully as the terms may vary. 
 A list of your Eligible ARS in the
account identified on the first page of this letter is attached. Additional information about your Eligible ARS, including the most recent interest rates and dividend yields, is available at www.ubs.com/auctionratesecurities. 
 If you have any questions about your Eligible ARS or this offer, please contact your UBS Financial Advisor or Branch Manager at the telephone number listed at the top of
this letter. Please note that UBS Financial Advisors and Branch Managers cannot provide legal or tax advice regarding this offer. Instructions to exercise your Rights should be directed to your UBS Financial Advisor or Branch Manager. 
 We regret any hardship that the failure of the ARS markets may have caused you. We hope that the offer described above and discussed in detail in the prospectus provides
resolution for you regarding this matter. We look forward to continuing our relationship with you and to serving your future investment needs. 
 Thank you
for your business and for maintaining your relationship with UBS. 
  

					
	Sincerely,	 		 	
			
	/s/ James M. Pierce	 		 	/s/ James D. Price
	James M. Pierce	 		 	James D. Price

 UBS Financial Services Inc. serves as the clearing firm for UBS International Inc. Accordingly, the information
and terms contained in this letter and the accompanying materials are directed to clients of both UBS Financial Services Inc. and UBS International Inc. 
  

			
	UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.	  	1C-ARS0








 Current rate and dividend information 
 To allow you to view the current interest rates and/or dividends your holdings are earning, we have created an online tool available at www.ubs.com/auctionratesecurities. 
 Simply enter the nine-digit CUSIP number(s) shown below to obtain the most current information about your securities. Percentages displayed in the descriptions below are
as of September 30, 2008. 
  

							
	 CUSIP
	  	 Description
	  	 CUSIP
	  	 Description

				
	150543A82	  	 CEDAR RAPIDS IOWA HOSP
 ARC REV AMBAC
B/E/R/
 VARIABLE RATE
 RATE 03.028% MATURES
08/15/29
	  	646080HD6	  	 NEW JERSEY ST HGHR ED
 SER B REV MBIA BE/R/

VARIABLE RATE
 RATE 03.028% MATURES 12/01/41


  

			
		  	1C-ARS0








 ©2008
UBS Financial Services Inc. All rights reserved. Member SIPC. 
 www.ubs.com/financialservicesinc 
 080826-2033-Let/CUSIP 
  

			
	UBS Financial Services Inc. is a subsidiaries of UBS AG.	  	1C-ARS0









			
	

	  	UBS Financial Services Inc.

 Please complete and sign this form. We must receive it by November 14, 2008. 
 Acceptance of UBS’s offer relating to auction rate securities 
 By signing below and returning this form, I accept UBS’s offer of Rights relating to my Eligible ARS in the account listed below. I understand and acknowledge the following: 
  

	 	•	 	 All Eligible ARS must remain in my UBS account listed below until I exercise my Rights to sell my Eligible ARS to UBS or they are redeemed by the issuer or
purchased or sold on my behalf by UBS; 


  

	 	•	 	 I will instruct my UBS Financial Advisor or Branch Manager if and when I want to exercise my Rights and sell my Eligible ARS to UBS during the period of
June 30, 2010, through July 2, 2012; 


  

	 	•	 	 The acceptance of UBS’s offer constitutes consent (to the extent legally required) for UBS, acting as principal, to purchase my Eligible ARS or to sell them on
my behalf at any time in its sole discretion and without other prior notice to me, from the date that I accept this offer through July 2, 2012; 


  

	 	•	 	 If UBS purchases, sells or otherwise disposes of my Eligible ARS, it will deposit the par value in my account within one business day of settlement of the
transaction; 


  

	 	•	 	 I release UBS and its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its marketing and sale of ARS and
expressly agree that I will not seek any damages or costs (punitive damages, attorney fees, etc.) other than consequential damages. I also will not serve as a class representative or receive benefits under any class action settlement or investor
fund; 


  

	 	•	 	 If the account named below is in the name of a corporation, partnership, trust or other entity. I represent and warrant that I have the power and authority to
accept this offer on behalf of that entity. 


  

					
		  	Please complete and sign this form.
 We must receive it by November 14,
2008.

			
	 Comerica Bank & Trust, N.A
 Custodian for the
Affirmative
 Insurance Company of Michigan
 500 Woodward Avenue

 MC 3300
 Detroit, Michigan 48226-3416
	  	Mail
	  	 UBS Financial Services Inc.
 ATTN: ARS Group

1000 Harbor Boulevard
 Weehawken, NJ 07086

			
	Account Number: ________	  	Fax	  	+1-201-442-7766

  

							
				
	

	  	Account owner signature	  	/s/ Ralph Johnston	  	Date 11/7/08
		  		  	Ralph Johnston, Vice President	  	
				
		  	Additional party signature	  	 	  	Date ________________________
				
		  	Daytime telephone number	  	(313) 222-4053	  	

 If you have questions, please contact your UBS Financial Advisor or Branch Manager at +1-212-821-7000. 

Clients outside the U.S. may call +1-201-352-0105 collect. 
 We kindly
request that you do not include comments or questions on this form as it could delay processing of your instructions. 
 UBS AG has filed a registration
statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you make an investment decision, you should read the prospectus in that registration statement and other documents that UBS has filed with
the SEC for more complete information about UBS and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service Center at +1-800-253-1974. 
 UBS Financial Services Inc. serves as the clearing firm for UBS International Inc. Accordingly, the information and terms contained in this letter and the accompanying
materials are directed to clients both UBS Financial Services Inc. and UBS International Inc. 
  

			
	©2008 UBS Financial Services Inc. All rights reserved. Member SIPC,	  	1C-ARS0









			
	

	  	 UBS Financial Services Inc.
 1200 Harbor Boulevard

 Weehawken, NJ 07086
  
 James M. Pierce
 Co-Head
 Wealth
Management Advisor Group US

		
	 Comerica Bank & Trust, N.A
 Custodian for Insure P & C
 Insurance Company
 500 Woodward Avenue
 MC 3300
 Detroit, Michigan 48226-3416
	  	 James D. Price
 Co-Head
 Wealth Management Advisor Group US
  
 www.ubs.com
  
 November 4, 2008
  
 Branch Telephone Number
 +1-212-821-7000

		
		  	Account Number: _________

 We are pleased to offer you a way to liquidate certain of your auction rate securities (ARS). UBS has designed a
solution that gives you the option to hold your ARS or sell the securities back to UBS. This solution is available for ARS that were held in a UBS account on February 13, 2008, and that are not successfully clearing at auction (Eligible ARS).

 UBS is offering you “Auction Rate Securities Rights” (Rights) to sell Eligible ARS at per value to UBS at any time during a two-year time
period. These Rights are nontransferable securities registered with the U.S. Securities and Exchange Commission (SEC). This is a limited time offer that will expire on November 14, 2008. Accepting this offer may impact your legal rights. Not
accepting this offer may have repercussions on outstanding loans secured by Eligible ARS. As a result, it is important that you review the prospectus carefully. 
 The key features and terms of the offer are summarized below. For complete details, please see the enclosed prospectus. 
  

	 	•	 	 UBS is offering you nontransferable Rights to sell Eligible ARS, held in the UBS account identified above, at par value to UBS at any time during the period of June
30, 2010, through July 2, 2012. 


  

	 	•	 	 You may instruct your UBS Financial Advisor to exercise these Rights at any time during this time period; 


  

	 	•	 	 If you do not exercise your Rights, the Eligible ARS will continue to accrue interest or dividends as determined by the auction process;



  

	 	•	 	 If you do not exercise your Rights before July 2, 2012, they will expire and UBS will have no further obligation to buy your Eligible ARS.



  

	 	•	 	 Clients who accept this offer give UBS the discretion to purchase or sell their Eligible ARS at any time after accepting the firm’s offer and without other
prior notice. 


  

	 	•	 	 UBS will purchase tax-exempt Auction Preferred Stock (a specific type of ARS also known as APS) at any time after clients accept the firm’s Rights offer;



  

	 	•	 	 UBS will only exercise its discretion to purchase or sell Eligible ARS for the purpose of restructurings, dispositions or other solutions that will provide clients
with par value for their Eligible ARS; 


  

	 	•	 	 In purchasing Eligible ARS or selling Eligible ARS on behalf of clients, including tax-exempt APS, UBS will act in its capacity as broker-dealer and will execute
these transactions on a principal basis regardless of the type of client accounts in which the Eligible ARS are held. Please see pages 27-28 in the enclosed prospectus for more information; 


  

	 	•	 	 UBS will pay clients par value for their Eligible ARS within one day of settlement of the transaction; 


  

	 	•	 	 Eligible ARS are subject to issuer redemptions at any time. 


 UBS AG has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you make an investment decision, you should read the prospectus in that registration statement and
other documents that UBS has filed with the SEC for more complete information about UBS and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service
Center at +1-800-253-1974. 
  

			
	UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.	  	1C-ARS0









			
	

	  	UBS Financial Services Inc.

  

	 	•	 	 Clients who accept this offer release UBS and its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its
marketing and sale of ARS and expressly agree not to seek any damages or costs (punitive damages, attorney fees, etc.) other than consequential damages. Clients also will not serve as a class representative or receive benefits under any class action
settlement or investor fund. 


  

	 	•	 	 UBS will provide clients who accept the offer “no net cost” loans up to the par value of Eligible ARS until June 30, 2010. Please see pages 36-39 in the
enclosed prospectus for more information. 


  

	 	•	 	 UBS will reimburse all clients who participated in prior UBS ARS loan programs after February 13, 2008, for the difference between the cost of the loan and the
applicable interest paid on the Eligible ARS. 


 THIS OFFER EXPIRES ON NOVEMBER 14, 2008. Please complete, sign and date the
enclosed form and return it in the postage-paid envelope if you wish to accept this offer. We must receive your singed acceptance form no later than November 14, 2008. 
 You may receive multiple letters from us depending on the type of ARS you own or if you have ARS in multiple accounts. Please note you must return a form for each letter you receive to accept all
available offers relating to your ARS holdings. Please read each response form carefully as the terms may vary. 
 A list of your Eligible ARS in the
account identified on the first page of this letter is attached. Additional information about your Eligible ARS, including the most recent interest rates and dividend yields, is available at www.ubs.com/auctionratesecurities. 
 If you have any questions about your Eligible ARS or this offer, please contact your UBS Financial Advisor or Branch Manager at the telephone number listed at the top of
this letter. Please note that UBS Financial Advisors and Branch Managers cannot provide legal or tax advice regarding this offer. Instructions to exercise your Rights should be directed to your UBS Financial Advisor or Branch Manager. 
 We regret any hardship that the failure of the ARS markets may have caused you. We hope that the offer described above and discussed in detail in the prospectus provides
resolution for you regarding this matter. We look forward to continuing our relationship with you and to serving your future investment needs. 
 Thank you
for your business and for maintaining your relationship with UBS. 
  

					
	Sincerely,	 		 	
			
	/s/ James M. Pierce	 		 	/s/ James D. Price
	James M. Pierce	 		 	James D. Price

 UBS Financial Services Inc. serves as the clearing firm for UBS International Inc. Accordingly, the information
and terms contained in this latter and the accompanying materials are directed to clients of both UBS Financial Services Inc. and UBS International Inc. 
  

			
	UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.	  	1C-ARS0








 Current rate and dividend information 
 To allow you to view the current interest rates and/or dividends your holdings are earning, we have created an online tool available at www.ubs.com/auctionratesecurities. 
 Simply enter the nine-digit CUSIP number(s) shown below to obtain the most current information about your securities. 
 Percentages displayed in the descriptions below are as of November 4, 2008. 
  

											
	 CUSIP
	  	 Description
	  	 CUSIP
	  	 Description
	  	 CUSIP
	  	 Description

	647111D17	  	NEW MEXICO EDL ASSIST	  	040670BF7	  	ARIZ STU LN ACQSTN AUTH	  	462590GB0	  	IOWA STUD LN LQ ARC
		  	SER A-I REV AMT B/E /R/	  		  	REV AMT B/E/R/	  		  	(WED) 06 SER 1 AMT BE/R/
		  	VARIABLE RATE	  		  	VARIABLE RATE	  		  	VARIABLE RATE
		  	RATE 00.000% ASATURES 11/01/10	  		  	RATE 00.000% MATURES 05/01/29	  		  	RATE 04.060% MATURES 12/01/30
						
	917546E58	  	UTAH ST BRD OF REGT	  		  		  		  	
		  	SER G REV AMT B/E/R	  		  		  		  	
		  	VARIABLE RATE	  		  		  		  	
		  	RATE 04.060% MATURIES 05/01/33	  		  		  		  	

 1C-ARS0 







 ©2008
UBS Financial Inc. All rights reserved. Member SIPC. 
 www.ubs.com/financialserviceinc 
 080826-2033-Let/CUSIP 
 UBS Financial Services Inc. is a subsidiary of UBS AG. 
 1C-ARS0 








			
	

	  	UBS Financial Services Inc.

 Please complete and sign this form. 
 We must receive it by November 14, 2008. 
 Acceptance of UBS’s offer relating to auction rate securities 

 By signing below and returning this form, I accept UBS’s offer of Rights relating to my Eligible ARS in the account listed below. 
 I understand and acknowledge the following: 
  

	 	•	 	 All Eligible ARS must remain in my UBS account listed below until I exercise my Rights to sell my Eligible ARS to UBS or they are redeemed by the issuer or
purchased or sold on my behalf by UBS; 


  

	 	•	 	 I will instruct my UBS Financial Advisor or Branch Manager if and when I want to exercise my Rights and sell my Eligible ARS to UBS during the period of June 30,
2010, through July 2, 2012; 


  

	 	•	 	 The acceptance of UBS’s offer constitutes consent (to the extent legally required) for UBS, acting as principal, to purchase my Eligible ARS or to sell them on
my behalf at any time in its sole discretion and without other prior notice to me, from the date that I accept this offer through July 2, 2012; 


  

	 	•	 	 If UBS purchases, sells or otherwise disposes of my Eligible ARS, it will deposit the par value in my account within one business day of settlement of the
transaction; 


  

	 	•	 	 I release UBS and its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its marketing and sale of ARS and
expressly agree that I will not seek any damages or costs (punitive damages, attorney fees, etc.) other than consequential damages. I also will not serve as a class representative or receive benefits under any class action settlement or investor
fund; 


  

	 	•	 	 If the account named below is in the name of a corporation, partnership, trust or other entity, I represent and warrant that I have the power and authority to
accept this offer on behalf of that entity. 


  

			
	Comerica Bank & Trust, N.A	  	 Please complete and sign this form.
 We must
receive it by November 14, 2008.

		
	 Custodian for Insura P & C
 Insurance
Company
 500 Woodward Avenue
 MC 3300
 Detroit, Michigan 48226-3416
	  	 Mail     UBS Financial Services Inc.
               ATTN: ARS Group
               1000 Harbor Boulevard
               Weehawken, NJ 07086

		
	Account Number: _________	  	 Fax       +1-201-442-7766


  

							
	

	 	Account owner signature	 	/s/ Ralph Johnston	  	Date 11/7/08
		 		 	Ralph Johnston, Vice President	  	
				
		 	Additional party signature	 	 	  	Date ___________
				
		 	Daytime telephone number	 	(313) 222-9053	  	

 If you have question, please contact your UBS Financial Advisor or Branch Manager at +1-212-821-7000. 

Client outside the U.S. may call +1-201-352-0105 collect. 
 We kindly
request that you do not include comments or questions on this form as it could delay processing of your instructions. 
 UBS AG has filed a registration
statement including a prospectus with the SEC for the offering to which this communication relates. Before you make an investment decision, you should read the prospectus in that registration statement and other documents that UBS has filed with the
SEC for more complete information about UBS and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service Center at +1-800-253-1974. 
 UBS Financial Services Inc. serves as the clearing form for UBS International Inc. Accordingly the information and terms contained in this letter and the accompanying
materials are directed to clients of both UBS financial Services Inc and UBS International Inc. 
  

			
	©2008 UBS Financial Services Inc. All rights reserved. Member SIPC	  	1C-ARS0









			
	

	  	 UBS Financial Services Inc.
 1200 Harbor Boulevard

 Weehawken, NJ 07086

		
		  	 James M. Pierce
 Co-Head
 Wealth Management Advisor Group US

		
	 Comerica Bank & Trust, N.A.
 Custodian for

Affirmative Insurance Company
 500 Woodward Avenue
 MC 3300
 Detroit, Michigan 48226-3416
	  	 James D. Price
 Co-Head
 Wealth Management Advisor Group US
  
 www.ubs.com
  
 November 4, 2008
  
 Branch Telephone Number
 +1-212-821-7000
  
 Account Number:
_________

		  
		  

 We are pleased to offer you a way to liquidate certain of your auction rate securities (ARS). UBS has designed a
solution that gives you the option to hold your ARS or sell the securities back to UBS. This solution is available for ARS that were held in a UBS account on February 13, 2008, and that are not successfully clearing at auction (Eligible ARS).

 UBS is offering you “Auction Rate Securities Rights” (Rights) to sell Eligible ARS at par value to UBS at any time during a two-year time
period. These Rights are nontransferable securities registered with the U.S. Securities and Exchange Commission (SEC). This is a limited time offer that will expire on November 14, 2008. Accepting this offer may impact your legal rights. Not
accepting this offer may have repercussions on outstanding loans secured by Eligible ARS. As a result, it is important that you review the prospectus carefully. 
 The key features and terms of the offer are summarized below. For complete details, please see the enclosed prospectus. 
  

	 	•	 	 UBS is offering you nontransferable Rights to sell Eligible ARS, held in the UBS account identified above, at par value to UBS at any time during the period of
June 30, 2010, through July 2, 2012. 


  

	 	•	 	 You may instruct your UBS Financial Advisor to exercise these Rights at any time during this time period; 


  

	 	•	 	 If you do not exercise your Rights, the Eligible ARS will continue to accrue interest or dividends as determined by the auction process;



  

	 	•	 	 If you do not exercise your Rights before July 2, 2012, they will expire and UBS will have no further obligation to buy your Eligible ARS.



  

	 	•	 	 Clients who accept this offer give UBS the discretion to purchase or sell their Eligible ARS at any time after accepting the firm’s offer and without other
prior notice. 


  

	 	•	 	 UBS will purchase tax-exempt Auction Preferred Stock (a specific type of ARS also known as APS) at any time after clients accept the firm’s Rights offer;



  

	 	•	 	 UBS will only exercise its discretion to purchase or sell Eligible ARS for the purpose of restructurings, dispositions or other solutions that will provide clients
with par value for their Eligible ARS; 


  

	 	•	 	 In purchasing Eligible ARS or selling Eligible ARS on behalf of clients, including tax-exempt APS, UBS will act in its capacity as broker-dealer and will execute
these transactions on a principal basis regardless of the type of client accounts in which the Eligible ARS are held. Please see pages 27-28 in the enclosed prospectus for more information; 


  

	 	•	 	 UBS will pay clients par value for their Eligible ARS within one day of settlement of the transaction; 


  

	 	•	 	 Eligible ARS are subject to issuer redemptions at any time. 


 UBS AG has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you make an investment decision, you should read the prospectus in that registration statement and
other documents that UBS has filed with the SEC for more complete information about UBS and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service
Center at +1-800-253-1974. 
  

			
	UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.	  	1C-ARS0









			
	

	  	UBS Financial Services Inc.

  

	 	•	 	 Clients who accept this offer release UBS and its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its
marketing and sale of ARS and expressly agree not to seek any damages or costs (punitive damages, attorney fees, etc.) other than consequential damages. Clients also will not serve as a class representative or receive benefits under any class action
settlement or investor fund. 


  

	 	•	 	 UBS will provide clients who accept the offer “no net cost” loans up to the par value of Eligible ARS until June 30, 2010. Please see pages 36-39 in
the enclosed prospectus for more information. 


  

	 	•	 	 UBS will reimburse all clients who participated in prior UBS ARS loan programs after February 13, 2008, for the difference between the cost of the loan and the
applicable interest paid on the Eligible ARS. 


 THIS OFFER EXPIRES ON NOVEMBER 14, 2008. Please complete, sign and date the
enclosed form and return it in the postage-paid envelope if you wish to accept this offer. We must receive your signed acceptance form no later than November 14, 2008. 
 You may receive multiple letters from us depending on the type of ARS you own or if you have ARS in multiple accounts. Please note you must return a form for each letter you receive to accept all
available offers relating to your ARS holdings, Please read each response form carefully as the terms may vary. 
 A list of your Eligible ARS in the
account identified on the first page of this letter is attached. Additional information about your Eligible ARS, including the most recent interest rates and dividend yields, is available at www.ubs.com/auctionratesecurities. 
 If you have any questions about your Eligible ARS or this offer, please contact your UBS Financial Advisor or Branch Manager at the telephone number listed at the top of
this letter. Please note that UBS Financial Advisors and Branch Managers cannot provide legal or tax advice regarding this offer. Instructions to exercise your Rights should be directed to your UBS Financial Advisor or Branch Manager. 
 We regret any hardship that the failure of the ARS markets may have caused you. We hope that the offer described above and discussed in detail in the prospectus provides
resolution for you regarding this matter. We look forward to continuing our relationship with you and to serving your future investment needs. 
 Thank you
for your business and for maintaining your relationship with UBS. 
  

					
	Sincerely,	 		 	
			
	/s/ James M. Pierce	 		 	/s/ James D. Price
	James M. Pierce	 		 	James D. Price

 UBS Financial Services Inc. serves as the clearing firm for UBS international Inc. Accordingly, the information
and terms contained in this letter and the accompanying materials are directed to clients of both UBS Financial Services Inc and UBS International Inc. 
  

			
	UBS Financial Services Inc. and UBS International Inc. are subsidiaries of UBS AG.	  	1C-ARS0








 Current rate and dividend information 
 To allow you to view the current interest rates and/or dividends your holdings are earning, we have created an online tool available at www.ubs.com/auctionratesecurities. 
 Simply enter the nine-digit CUSIP number(s) shown below to obtain the most current information about your securities. 
 Percentages displayed in the descriptions below are as of November 4, 2008. 
  

											
	 CUSIP
	  	 Description
	  	 CUSIP
	  	 Description
	  	 CUSIP
	  	 Description

						
	010305EV8	  	 ALABAMA HGHR ED LN CORP
SER A-2 B/E/R/
 VARATE PUTBND
 RATE 09.975% MATURES 11/01/41
	  	040504DZ2	  	 ARIZONA EDUC LN MARKTG
 ARC5 SER A-4 REV
AMT/R/
 VARIABLE RATE
 RATE 03.593% MATURES
03/01/36
	  	340640AH4	  	 FLORIDA EDL LN MRKTG CRP
 EDL LN ARC B RV
B/E/R/
 VARIABLE RATE
 RATE 08.873% MATURES
12/01/36

						
	455900BB5	  	 INDIANA SECNDRY MRKT EDU
 SER 06-2 TAXABLE
B/E/R/
 VARIABLE RATE
 RATE 02.615% MATURES
05/01/46
	  	462590EJ5	  	 IOWA STUD LN LIQ REV
 SER R AMRAC AMT B/E/R/

VARIABLE RATE
 RATE 08.873% MATURES 12/01/35
	  	462590FB1	  	 IOWA STUD LN LIQ ARCS
 U REV AMBAC AMT B/E/R/

VARIABLE RATE
 RATE 08.488% MATURES 12/01/37

						
	49130NAC3	  	 RENTUCKY HIGHER ED STUD
 LN REV ARCS SER B
REV/R/
 VARIABLE RATE
 RATE 04.795% MATURES
05/01/28
	  	546395ZA5	  	 LOUSIANA PUB FACS AU 95
 HSP RV&REF ARCS
B/E/R/
 VARIABLE RATE
 RATE 04.795% MATURES
09/01/25
	  	57563RFH7	  	 MASS EDL FING AU ED LN
 RV(M)6A-1 AMBAC
AMTBE/R/
 VARIABLE RATE
 RATE 03.798% MATURES
01/01/36

						
	594520XC1	  	 MICHIGAN HGR ED STU-LOAN
 RFDG RV XVEL AMT
BER/R/
 VARIABLE RATE
 RATE 04.060% MATURES
03/01/39
	  	606072FP6	  	 MISSOURI HGR ED LN AUTH
 1999M REV TAXABLE
B/E/R/
 VARIABLE RATE
 RATE 03.368% MATURES
07/15/29
	  	606072GD2	  	 MISSOURI HGR EDUC LN
 SER A REV TAXABLE B/E/R/

VARIABLE RATE
 RATE 03.219% MATURES 06/01/31

						
	644614PC7	  	 NEW HAMPSHIRE HITH & EDU
 T/E SER 06A-1 AMT B/E/R/

 VARIABLE RATE
 RATE 05.845% MATURES 12/01/40
	  	644616AUB	  	 NEW HAMPSHIRE HGHR ED LN
 SER A-2 RV TAXABLE
B/E/R/
 VARIABLE RATE
 RATE 00.000% MATURES
12/01/40
	  	646080HD6	  	 NEW JERSEY ST HGHR ED
 SER B REV MBIA BE/R/
 VARIABLE RATE
 RATE 03.028% MATURES 12/01/41

						
	649787OH9	  	 NEW YORK ST GO REF BDS
 SER C (WED) C FSA
B/E/R/
 VARIABLE RATE
 RATE 01.862% MATURES
03/15/21
	  	709163821	  	 PAST H/E ASST AGY
 SER F-3 REV TXBLE B/E/R/
 VARIABLE RATE
 RATE 01.508% MATURES 10/01/40
	  	896224AV4	  	 TRIMBLE CO KY PCR 35 DAY
 02A REV AMBAC AMT
B/E/R/
 VARIABLE RATE
 RATE 03.413% MATURES
10/01/32

						
	917546ES8	  	 UTAH ST BRD OF REGT
 SER G REV AMT B/E/R/
 VARIABLE RATE
 RATE 04.060% MATURES 05/01/33
	  	917546EY5	  	 UTAH ST BRD OF REGT
 SER 1999K REV AMT B/E/R/

VARIABLE RATE
 RATE 04.060% MATURES 11/01/33
	  	92428CEB6	  	 VERMONT ST STUD ASST CRP
 REV AMBAC AMT B/E/R/

VARIABLE RATE
 RATE 04.795% MATURES 12/15/35

						
	985900BN8	  	 YAVAPI CO ARIZ INDL DEV
 7D MON T/E N/A REV
BE/R/
 VARIABLE RATE
 RATE 03.593% MATURES
12/01/39
	  		  		  		  	

 1C-ARS0 







 ©2008
UBS Financial Services Inc. All rights reserved. Member SIPC. 
 www.ubs.com/financialservicesinc 
 080826-2033-Let/CUSlP 
 UBS Financial Services Inc. is a subsidiary of UBS
AG. 
 1C-ARS0 








			
	

	  	UBS Financial Services Inc.

 Please complete and sign this form. 
 We must receive it by November 14, 2008. 
 Acceptance of UBS’s offer relating to auction rate securities 

 By signing below and returning this form, I accept UBS’s offer of Rights relating to my Eligible ARS in the account listed below. I understand and
acknowledged the following: 
  

	 	•	 	 All Eligible ARS must remain in my UBS account listed below until I exercise my Rights to sell my Eligible ARS to UBS or they are redeemed by the issuer or
purchased or sold on my behalf by UBS; 


  

	 	•	 	 I will instruct my UBS Financial Advisor or Branch Manager if and when I want to exercise my Rights and sell my Eligible ARS to UBS during the period of June 30,
2010, through July 2, 2012; 


  

	 	•	 	 The acceptance of UBS’s offer constitutes consent (to the extent legally required) for UBS, acting as principal, to purchase my Eligible ARS or to sell them on
my behalf at any time in its sole discretion and without other prior notice to me, from the date that I accept this offer through July 2, 2012; 


  

	 	•	 	 If UBS purchases, sells or otherwise disposes of my Eligible ARS, it will deposit the par value in my account within one business day of settlement of the
transaction; 


  

	 	•	 	 I release UBS and its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its marketing and sale of ARS and
expressly agree that I will not seek any damages or costs (punitive damages, attorney fess, etc.) other than consequential damages. I also will not serve as a class representative or receive benefits under any class action settlement or investor
fund; 


  

	 	•	 	 If the account named below is in the name of a corporation, partnership, trust or other entity, I represent and warrant that I have the power and authority to
accept this offer on behalf of that entity. 


  

					
		  	Please complete and sign this form.
 We must receive it by November 14,
2008.

			
	 Comerica Bank & Trust, N.A.
 Custodian for

Affirmative Insurance Company
 500 Woodward Avenue
 MC 3300
 Detroit, Michigan 48226-3416
	  	Mail
	  	 UBS Financial Services Inc.
 ATTN: ARS Group

1000 Harbor Boulevard
 Weehawken, NJ 07086

			
	Account Number: ________	  	Fax	  	+1-201-442-7766

  

							
				
	

	  	Account owner signature	  	/s/ Ralph Johnston	  	Date 11/7/08
		  		  	Ralph Johnston, Vice President	  	
				
		  	Additional party signature	  	 	  	Date ________________________
				
		  	Daytime telephone number	  	(313) 222-9053	  	

 If you have questions, please contact your UBS Financial Advisor or Branch Manager at +1-212-821-7000. 

Clients outside the U.S. may call +1-201-352-0105 collect. 
 We kindly
request that you do not include comments or questions on this form as it could processing of your instructions. 
 UBS AG has filed a registration
statement including a prospectus with the SEC for the offering to which this communication relates. Before you make an investment decision, you should read the prospectus in that registration statement are other documents that UBS has filed with the
SEC for more complete information about UBS and this offering. You may get these documents for free by vesting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service Center at +1-800-253-1974. 
 UBS Financial Services Inc. serves as the clearing firm for UBS International Inc. Accordingly, the information and terms contained in this letter and the accompanying
materials are directed to clients of both UBS Financial Services Inc. and UBS International Inc. 
  

			
	©2008 UBS Financial Services Inc. All rights reserved. Member SIPC	  	1C-ARS0