Document:

Executive Employment Agreement

 Exhibit 10.26 
 FIRST AMENDED AND RESTATED 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 THIS FIRST AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”)
is made and entered into as of the 30th day of March, 2009 (the “Effective Date”) by and between Affirmative Insurance Holdings, Inc. (the
“Company”) and Robert A. Bondi (“Executive”). 
 PRELIMINARY STATEMENTS 
  

	 	A.	The Company has employed Executive as Executive Vice President: Chief Operating Officer since November 27, 2006; 

  

	 	B.	In connection with such employment, the Company and Executive entered into an Executive Employment Agreement dated November 27, 2006 (the “Anniversary Date”);

  

	 	C.	The Company and Executive desire to extend the Term of and amend other terms of the Executive Employment Agreement; and 

  

	 	D.	Each party desires to set forth in writing the terms and conditions of their understandings and agreements. 

 NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, the Company hereby agrees to employ Executive and
Executive hereby accepts such employment upon the terms and conditions set forth in this Agreement: 
 STATEMENT OF AGREEMENT

 1. Position. 
 (a) The Company agrees to employ Executive in the position of Executive Vice President: Chief Operating Officer. Executive shall serve and perform the duties which may from time to time be assigned to him by the
Company’s Chief Executive Officer (“CEO”) and the Board of Directors (the “Board”). 
 (b) Executive
agrees to serve as Executive Vice President: Chief Operating Officer and agrees that he will devote his best efforts and substantially all of his business time and attention to all facets of the business of the Company and will faithfully and
diligently carry out the duties of these positions; provided, however that Executive may devote reasonable time to activities involving professional, charitable, and similar types of organizations, speaking engagements and memberships on the boards
of directors of other organizations, so long a such activities do not interfere with the performance of Executive’s duties hereunder, and do not represent a conflict of interest. Executive agrees to comply with all Company policies in effect
from time to time, and to comply with all laws, rules and regulations applicable to the Company, including, but not limited to, those established by the Department of Insurance, the Securities and Exchange Commission, or any self-regulatory
organization having jurisdiction or authority over the Executive or the Company. 
 (c) Executive agrees to travel as
reasonably necessary to perform his duties under this Agreement. 
 (d) The Company, in its sole discretion, may require that
Executive be designated an employee of one or more of the Company’s subsidiaries or affiliates for such purposes as payroll and benefits administration. The employment of Executive by any such subsidiary or affiliate to facilitate the
Company’s internal administrative purposes shall be considered employment by the Company within the meaning of this Agreement and shall not otherwise affect any of the rights or responsibilities of the Company or Executive hereunder, including,
but not limited to, Executive’s level of compensation. 
  

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 (e) The position of Executive Vice President: Chief Operating Officer shall be located at
the Company’s corporate office in Chicago, Illinois. 
 2. Term. 
 (a) Extension of Initial Term. The Initial Term of this Agreement shall be extended to seven (7) years from the Anniversary
Date (“Initial Term”), unless otherwise terminated pursuant to Section 5 of this Agreement. For the avoidance of doubt, absent a termination pursuant to Section 5, the Initial Term of this Agreement shall expire on
November 26, 2013. The Initial Term, and any further extension thereof shall be referred to herein as the “Term.” 
 (b) Expiration of Term. This Agreement will terminate automatically upon the expiration of the Term, or any extension thereof. The Company shall provide notice of its intention to renew or extend this Agreement to Executive at least
six (6) months before the last day of the Term. In the event that the Company and the Executive do not agree to a renewal or extension of this Agreement, then as of the last day of the Term: (1) One hundred percent (100%) of
Executive’s then-unvested stock options will immediately vest, (2) One hundred percent (100%) of Executive’s then-unvested restricted stock will immediately vest, and (3) Executive shall be entitled to an amount equal to the
previous year’s Bonus paid to Executive prorated on a daily basis for the number of days employed in the year of expiration of the Term, through the date of expiration of the Term. 
 3. Compensation and Benefits. 
 (a) Base Salary. The Company shall pay Executive an annual salary of at least Three Hundred Fifty Thousand Dollars ($350,000), with such amounts to be paid on a biweekly basis (“Base Salary”) pursuant to the Company’s
standard payroll practices. Executive’s Base Salary shall be reviewed at least annually for consideration of appropriate merit increases and, once established, the Base Salary shall not be decreased during the Term without the consent of
Executive. 
 (b) Bonus Opportunities. In addition to the Base Salary, Executive will be eligible to participate in the
Company’s bonus plan(s) (“Bonus”) with eligibility for a target annual bonus of 50% of Base Salary. Annual bonus amount to be determined based on achieving objectives as determined by the Board of Directors and the Compensation
Committee. 
 (c) Stock. Executive will also be eligible to participate in the Company’s 2004 Amended and Restated
Stock Incentive Plan (“Stock Plan”), as may be amended from time to time. Except as expressly provided herein, nothing in this Agreement shall affect, alter or amend any prior grants by the Company to Executive of restricted stock or stock
options pursuant to the Executive Employment Agreement. 
 (d) Payment. Payment of all compensation to Executive
hereunder shall be made in accordance with the terms of this Agreement and applicable Company policies in effect from time to time, including normal payroll practices, and shall be subject to all applicable withholdings and taxes. 
 (e) Benefits Generally. The Company shall make available to Executive, throughout the term of this Agreement, benefits as are
generally provided by the Company to its executive officers, including but not limited to any group life, health, dental, vision, disability or accident insurance, 401(k) plan, or other such benefit plan or policy which may presently be in effect or
which may hereafter be adopted by the Company for its executive officers and key management personnel; provided, however, that nothing herein contained shall be deemed to require the Company to adopt or maintain any particular plan or policy.

 (f) Vacation/Sick Time. Executive shall be entitled to paid time off (“PTO”) accruing at 8.31 hours per
period, or twenty seven (27) days when annualized, consistent with the policies then applicable to executive officers. 
  

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 4. Reimbursement of Expenses. The Company shall reimburse Executive for all business expenses,
which are reasonable and necessary and are incurred by Executive while performing his duties under this Agreement, upon presentation of expense statements, receipts and/or vouchers, or such other information and documentation as the Company may
reasonably require. The CEO reserves the right to deny any unreasonable business expense. 
 5. Termination. 
 (a) Termination by the Company. 
 (i) Without Cause. The Company may terminate this Agreement for any reason or no reason upon thirty (30) days written notice to Executive. If the Company terminates this Agreement pursuant to this
provision, the Company will pay Executive: (1) all earned but unpaid Base Salary and PTO (“Accrued Compensation”), (2) an additional severance payment equal to one (1) year of the sum of the Executive’s then-current
(a) Base Salary and (b) an amount equal to the previous year’s Bonus paid to Executive (“Additional Severance Payment”); and (3) Executive’s unvested stock options and restricted stock awards will immediately vest,
as provided in the Stock Option and Restricted Stock Agreements. Upon termination of this Agreement by the Company pursuant to Section 5(a)(i), the Company shall pay the cost to Executive as such costs become due for continuation coverage under
COBRA (hereinafter referred to as the “Termination COBRA Payments”) during the Continuation Period (as hereafter defined). If and when the COBRA coverage ceases during the Continuation Period, the Company will reimburse Executive for
comparable coverage as received under COBRA during the reminder of the Continuation Period. The Continuation Period shall be the period commencing on the date of termination of this Agreement and end twelve (12) months after the date of
termination of this Agreement. 
 (ii) For Cause. The Company may terminate this Agreement at any time for Cause. Upon
termination by the Company for Cause, Executive shall only be entitled to all earned but unpaid Base Salary. “Cause” means any of the following: 
 a) Executive’s commission of theft, embezzlement, any other act of dishonesty relating to his employment with the Company, or any material violation of Company policies (including the Company’s ethics
policies), or any law, rules, or regulations applicable to the Company, including, but not limited to, those established by the Department of Insurance, the Securities and Exchange Commission, or any self-regulatory organization having jurisdiction
or authority over Executive or the Company or any failure by the Executive to inform the Company of any violation of any law, rule or regulation by the Company or one of its direct or indirect subsidiaries of which the Executive has actual
knowledge; 
 b) Executive’s conviction of, or pleading guilty or nolo contendere to, a felony or any lesser crime having
as its predicate element fraud, dishonesty, misappropriation, or moral turpitude; 
 c) Executive’s neglect of duties or
failure to perform obligations under this Agreement (other than due to disability) that materially causes harm to the Company or that has materially damaged or interfered with the Company’s relationships with its customers, suppliers, employees
or other agents; provided, however, that the Company shall give the Executive written notice of any actions or omissions alleged to constitute Cause under this subsection (c) and the Executive shall have thirty (30) days to cure any such
alleged Cause; 
 d) Executive’s substance abuse or illegal use of drugs that impairs Executive’s performance, that
materially causes harm to the Company or that, in the reasonable judgment of the Board, has damaged or interfered with the Company’s relationships with its customers, suppliers, employees or other agents; 
 e) Executive’s commission of an act or acts in the performance of his duties under this Agreement amounting to gross negligence or
willful misconduct; or 
 f) Executive’s breach of Sections 7 or 8 of this Agreement; 
  

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 The Company may place Executive on paid administrative leave from work during any
investigation by the Company of a “cause” reason for Executive’s termination, and may prohibit Executive from coming into work, accessing the Company’s computer system, and contacting its employees or customers during this time;
provided, however, upon a failure of the Board of Directors to find that Cause exists, such placing of Executive on leave two times during the Term shall constitute Good Reason under Section 5 below. 
 (iii) Change in Control. If the Company terminates the Agreement following a Change in Control, which results in a substantial
diminution of Executive’s duties and responsibilities or a material reduction of compensation or benefits, the Company shall pay Executive: (1) Accrued Compensation, and (2) the Additional Severance Payment, and
(3) Executive’s unvested stock options and restricted stock awards will immediately vest, as provided in the Stock Option and Restricted Stock Agreements. “Change in Control” shall mean a transaction or event (or series of
transactions or events) as a result of which any “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act (other than any Excluded Person, the Company or any Company employee benefit plan, including its trustees)
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of all of the securities of the Company held by New Affirmative LLC held immediately prior to such transaction or event (or
series of transactions or events) and all director designees of New Affirmative LLC are no longer on the Company’s Board; provided, however, that in no event shall the distribution, sale, transfer, or acquisition of securities of the Company
held by New Affirmative LLC or any Excluded Persons (or any successor thereof) to any Excluded Person trigger a “Change in Control.” “Excluded Person” shall mean any of New Affirmative LLC, Affirmative Investment LLC, The Enstar
Group, Inc. and any of their respective stockholders, members, affiliates, subsidiaries, or any such persons under common control. 
 (b) Termination by Executive. 
 (i) No Good Reason. Executive may terminate this Agreement for any
reason upon providing thirty (30) days written notice to the Company. If Executive terminates this Agreement pursuant to this provision, the Company will pay Executive all earned but unpaid Base Salary. 
 (ii) For Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean termination of Executive’s
employment with the Company by the Executive by giving at least thirty (30) days advance written notice within thirty (30) days of the occurrence of one of the following events: 
 a) Executive’s removal from his position as Executive Vice President and Chief Operating Officer, other than for Cause or by death or
Disability, during the term of this Agreement; 
 b) without Executive’s written consent, a reduction in Executive’s
Base Salary or Target Bonus or any failure to pay Executive any compensation or benefits to which he is entitled within five (5) days of the date due; provided, however, that Executive shall give the Company written notice of any actions or
omissions alleged to constitute Good Reason under this subsection (b) and the Company shall have ten (10) business days to cure any such alleged Good Reason; 
 c) in the event of a requirement that Executive relocate Executive’s principal office to a location that is more than forty
(40) miles from the location of the Company’s administrative offices in Chicago, Illinois; provided, however, that travel as reasonably necessary to perform duties under this Agreement shall not be deemed a violation of this subsection
(c); 
 d) a materially adverse change in Executive’s duties and responsibilities or a material reduction of compensation
or benefits; 
 e) the Company’s material breach of any provision of this Agreement or any of the covenants contained
herein that, if capable of being cured, remains uncured after Executive has delivered a written notice of breach to the Company and after the Company has had thirty (30) days after receipt of such written notice to cure such breach; or

  

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 f) the failure of the Company to comply with and satisfy its obligations under
Section 25 hereof. 
 Upon termination for “Good Reason” pursuant to this provision, Executive shall be
entitled to all benefits and payments as provided in Section 5(a)(i) hereof for a termination by the Company without Cause. Executive shall only be required to give notice one time under this Section 5(b)(ii) and shall not be required to
provide notice and a cure period for any breach or other action that is not capable of cure. 
 (c) Disability. The
Company may terminate this Agreement at any time Executive shall be deemed by the Board to have sustained a “disability.” Executive shall be deemed to have sustained a “disability” if he shall have been unable to perform his
duties for a period of more than ninety (90) days in any twelve (12) month period. Upon termination of this Agreement for disability, the Company shall pay Executive his Accrued Compensation. 
 (d) Death. This Agreement will terminate automatically upon Executive’s death. Upon termination of this Agreement because of
Executive’s death, the Company shall pay Executive’s estate his Accrued Compensation. 
 (e) Employment. Upon
termination of this Agreement for any reason, including expiration of the Term, or a termination for a reason specified in this Section 5, Executive’s employment shall also terminate and cease, and Executive will voluntarily resign any
Director or Board positions he holds, unless otherwise requested by the Company. 
 (f) Transition Period. Upon
termination of this Agreement, and for a period of thirty (30) days thereafter (the “Transition Period”), Executive agrees to make himself available to assist the Company with transition projects assigned to him by the Board.
Executive will be paid at a daily rate of one-thousand five hundred and no/100 ($1,500.00) dollars for any work performed for the Company during the Transition Period. 
 (g) Severance Payment. Any payment to Executive under this Section 5 will be payable in monthly installments due on the first
day of each month during the course of the Non-Interference Period. Executive shall not be entitled to, and the Company shall not pay, any severance under any other plan, program or policy of the Company. 
 Notwithstanding the foregoing severance provisions, if the Board (or its delegate) determines in its or his discretion that Executive is a
“Specified Employee” (as defined in Section 409A of the United States Internal Revenue Code of 1986, as amended (“Section 409A”)), as of the date of termination, and that Section 409A applies with respect to any
payment(s) to Executive pursuant to any of the paragraphs of this Section 5, such payment(s) shall not begin until the six-month anniversary of the date of termination, and will continue in monthly installments thereafter through completion of
the Non-Interference Period (with each monthly installment being paid in the gross sum of the full payment divided by 6); provided, however, that if the Board (or its delegate) determines in its or his discretion that Executive is not a Specified
Employee as of the date of termination (or that Section 409A does not apply with respect to a payment to Executive pursuant to Section 5), such payment shall be made in accordance with the provisions of this Section 5, provided that
the requirements set forth in Section 6 have been met by Executive. 
 6. Release. Notwithstanding any other provision in this
Agreement to the contrary, as a condition precedent to receiving any payment set forth in Section 5 of this Agreement, Executive agrees to execute (and not revoke) a severance and release agreement acceptable to the Company (the
“Release”). If Executive fails to execute and deliver the Release, or revokes the Release, Executive agrees that he shall not be entitled to receive the above-stated severance payments. For purposes of this Agreement, the Release shall be
considered to have been executed by Executive if it is signed by his legal representative in the case of legal incompetence or on behalf of Executive’s estate in the case of his death. No payments shall be made under Section 5 until the
period to revoke the release has terminated. 
  

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 7. Nondisclosure. 
 (a) The Company shall, immediately after executing this Agreement, provide Executive with some or all of the Company’s various trade
secrets and confidential or proprietary information, including information he has not received before, consisting of, but not limited to, all information: that is non-public or proprietary to the Company, or its affiliates including, but not limited
to, information concerning its business activities including, but not limited to, the present marketing and administration of certain insurance business and processes, including but not limited to any and all information concerning non-standard
automobile insurance business, financial information, administrative procedures, pricing methods and policies, client lists and information, business and marketing strategies, claims and underwriting procedures and guidelines, claims and
underwriting files, utilization review and manuals, data format, data gathering retrieval systems and methods, ideas about current and future services. Confidential Information shall not include: (i) information that Executive may furnish to
third parties regarding his obligations under Sections 7 and 8; or (ii) information that becomes generally available to the public by means other than Executive’s breach of Section 7 (for example, not as a result of Executive’s
unauthorized release of marketing materials). 
 (b) Executive agrees that all Confidential Information, whether prepared by
Executive or otherwise coming into his possession, shall remain the exclusive property of the Company during Executive’s employment with the Company and thereafter. Executive further agrees that he shall not, without the prior written consent
of the Company, use or disclose to any third party any of the Confidential Information described herein, directly or indirectly, either during Executive’s employment with the Company or at any time following the termination of Executive’s
employment with the Company, except as Executive may be required by Court Order. If such Court Order is issued, Executive shall inform the Company a reasonable time prior to compliance. 
 (c) Upon termination of this Agreement, Executive agrees that all Confidential Information and other files, documents, materials, records,
notebooks, customer lists, business proposals, contracts, agreements and other repositories containing information concerning the Company or the business of the Company (including all copies thereof) in Executive’s possession, custody or
control, whether prepared by Executive or others, shall remain with or be returned to the Company promptly (within seventy-two (72) hours) after the termination or expiration of this Agreement for any reason. 
 8. Noncompete, Nonsolicitation, and Non-Disparagement. 
 (a) Business Relationships and Goodwill. Executive acknowledges and agrees that, as an employee and representative of the Company,
Executive will be given Confidential Information. Executive acknowledges and agrees that this creates a special relationship of trust and confidence between the Company, Executive and the Company’s current and prospective customers, limited
partners, and investors. Executive further acknowledges and agrees that there is a high risk and opportunity for any person given such responsibility and Confidential Information to misappropriate the relationship and goodwill existing between the
Company and the Company’s current and prospective customers, limited partners, and investors. Executive therefore acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect itself from the risk of such
misappropriation. Consequently, Executive agrees to the following noncompetition and nonsolicitation covenants. 
 (b)
Scope of Noncompetition Obligation. 
 (i) Executive acknowledges and agrees that the period of one (1) year
following the termination or expiration of this Agreement for any reason will constitute the non-compete, non-solicit and non-divert period (the “Non-Interference Period”). During his employment and during the Non-Interference Period,
Executive will not engage in duties or provide services to a Competitor which are substantially similar to those Executive provided to the Company under this Agreement, in any capacity, upon the termination or expiration of this Agreement in states
where the Company is doing business or has expended resources in pursuit of, or in preparation to do, business (the “Prohibited Market”); provided, however, that the foregoing shall not apply in the event that the Term of this Agreement
expires by reason of the Company’s election not to renew or extend this Agreement. The term “Competitor” means (i) insurance companies providing non-standard automobile insurance coverage of any type or class as a primary line of
business (in excess of fifteen percent (15%) of aggregate revenues), (ii) underwriting agencies (or managing general agencies) that produce and administer non-standard automobile insurance as a primary line of business, and
(iii) retail agencies that sell non-standard automobile insurance policies as a primary line of business. 
  

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 (ii) Executive agrees that he shall not at any time during his employment divert away or
attempt to divert away any business from the Company to another company, business, or individual. Additionally, Executive shall not, during the Non-Interference Period, solicit, divert away or attempt to divert away business from any Company
Customer, either directly or indirectly. “Company Customer” is defined as any person, company, or business that Executive contacted, solicited, serviced, or had access to Confidential Information about. “Solicit” is defined as
soliciting, inducing, attempting to induce, or assisting any other person, firm, entity, business or organization, whether direct or indirect, in any such solicitation, inducement or attempted inducement, in all cases regardless of whether the
initial contact was by Executive, the Company Customer, or any other person, firm, entity, business, or organization. 
 (iii)
Executive further agrees that during the Non-Interference Period, he will not directly or indirectly: (a) solicit, entice, persuade or induce any employee, agent or representative of the Company, who was an employee, agent or representative of
the Company upon the termination or expiration of this Agreement, to terminate such person’s relationship with the Company or to become employed by any business or person other than the Company; (b) approach any such person for any of the
foregoing purposes; (c) authorize, solicit or assist in the taking of such actions by any third party; or (d) hire or retain any such person 
 (iv) Executive further agrees that, during the Non-Interference Period, he shall not own, manage, operate, control, invest or acquire an interest in, or otherwise similarly engage or participate in (whether as a
proprietor, owner, member, partner, stockholder, director, officer, employee, consultant, joint venturer, investor, sales representative or other participant) any Competitor or business or entity that owns or operates, or controls another business
or entity that owns or operates a Competitor located in the Prohibited Market; provided, however, that the foregoing provisions shall not prohibit the Employee from: (a) being a passive investor in any publicly traded entity, as long as any
such investment does not exceed ten percent (10%) of the outstanding equity securities of such entity; (b) continuing as a non controlling investor in any entity which subsequent to the date of the Executive’s investment therein
becomes the owner or operator of, or acquires control of another business or entity that owns or operates, a Competitor in a Prohibited Market (provided that if any entity in which the Executive is a non controlling investor acquires a non-standard
automobile insurance provider in a Prohibited Market, the Executive shall limit his participation in such entity to a passive role); or (c) investing in or becoming employed by any entity whose ownership, operation or control of a Competitor is
not material relative to its principal business activities provided Executive’s participation in such a Competitor is not a material part of Executive’s duties. 
 (v) If Executive requests, the Company will notify Executive in writing within fourteen (14) business days of the request whether any
action proposed to be taken by Executive would be viewed by the Company in good faith to be inconsistent with Executive’s obligations in this Section 8(b). If the Company informs Executive that it would not consider such action to be a
violation of any of Executive’s obligations in this Section 8(b), then the Company shall have forever waived any claim that such action taken by Executive violates any of Executive’s obligations in this Section 8(b). 

(c) Non-Disparagement. During the term of Executive’s employment with the Company and following the termination or
expiration of this Agreement for any reason, Executive shall not disparage, discredit or otherwise criticize, directly or indirectly, verbally or in writing, the Company or any of its subsidiaries, or any of their respective businesses, products,
practices, trademarks, employees, officers, or directors. Further, during the term of Executive’s employment with the Company and following the termination or expiration of this Agreement, the Company shall not disparage, discredit or otherwise
criticize, directly or indirectly, verbally or in writing, Executive. 
 (d) Acknowledgement. Executive acknowledges
that the compensation and Confidential Information provided to Executive pursuant to this Agreement, give rise to the Company’s interest in restraining Executive from competing with the Company, that the noncompetition and nonsolicitation
covenants are designed to enforce such consideration and that any limitations as to time, geographic scope and scope of activity to be restrained as defined herein are reasonable and do not impose a greater restraint than is necessary to protect the
goodwill or other business interest of the Company. 
  

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 (e) Survival of Covenants. Sections 7 and 8 shall survive the expiration or
termination of this Agreement for any reason. Executive agrees not to challenge the enforceability or scope of Sections 7 and 8. Executive further agrees to notify all future persons, businesses, or other entities, with which he becomes affiliated
or employed by, of the restrictions set forth in Sections 7 and 8, prior to the commencement of any such affiliation or employment. 
 9.
Severability and Reformation. If any one or more of the terms, provisions, covenants or restrictions of this Agreement shall be determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions shall remain in full force and effect, and the invalid, void or unenforceable provisions shall be deemed severable. Moreover, if any one or more of the provisions contained in this Agreement shall for any
reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be reformed by limiting and reducing it to the minimum extent necessary, so as to be enforceable to the extent compatible with the applicable
law as it shall then appear. 
 10. Entire Agreement. This Agreement sets forth the entire agreement between the parties hereto and
fully supersedes any and all prior agreements or understandings, written or oral, between the parties hereto pertaining to the subject matter hereof. 
 11. Notices. All notices and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, mailed by certified mail
(return receipt requested) or sent by overnight delivery service, or electronic mail, or facsimile transmission (with electronic confirmation of successful transmission) to the parties at the following addresses or at such other addresses as shall
be specified by the parties by like notice, in order of preference of the recipient: 
  

			
	If to the Company:	  	General Counsel
		  	150 Harvester Drive, Suite 300
		  	 Burr Ridge, Illinois 60527
  

	If to Executive:	  	Robert Bondi
		  	[Address Redacted]

 Notice so given shall, in the case of mail, be deemed to be given and received on the fifth calendar day after
posting, in the case of overnight delivery service, on the date of actual delivery and, in the case of facsimile transmission or personal delivery, on the date of actual transmission or, as the case may be, personal delivery. 
 12. Governing Law and Venue. This Agreement will be governed by and construed in accordance with the laws of the State of Illinois, without regard
to any conflict of laws rule or principle which might refer the governance or construction of this Agreement to the laws of another jurisdiction. Any action or arbitration in regard to this Agreement or arising out of its terms and conditions,
pursuant to Sections 26 and 27, shall be instituted and litigated only in Chicago, Illinois. 
 13. Assignment. This Agreement is
personal to Executive and may not be assigned in any way by Executive without the prior written consent of the Company. The Company may assign its rights and obligations under this Agreement. 
 14. Counterparts. This Agreement may be executed in counterparts, each of which will take effect as an original, and all of which shall evidence
one and the same Agreement. 
 15. Amendment. This Agreement may be amended only in writing signed by Executive and by a duly
authorized representative of the Company (other than Executive). 
 16. Construction. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing or interpreting this Agreement. The language in all parts of this Agreement shall be in all cases construed in accordance to its fair meaning and not strictly for or
against the Company or Executive. 
  

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 17. Non-Waiver. The failure by either party to insist upon the performance of any one or more
terms, covenants or conditions of this Agreement shall not be construed as a waiver or relinquishment of any right granted hereunder or of any future performance of any such term, covenant or condition, and the obligation of either party with
respect hereto shall continue in full force and effect, unless such waiver shall be in writing signed by the Company (other than Executive) and Executive. 
 18. Announcement. Company shall have the right to make public announcements concerning the execution of this Agreement and the terms contained herein, at the Company’s discretion. 
 19. Use of Name, Likeness and Biography. Company shall have the right (but not the obligation) to use, publish and broadcast, and to authorize
others to do so, the name, approved likeness and approved biographical material of Executive to advertise, publicize and promote the business of Company and its affiliates, but not for the purposes of direct endorsement without Executive’s
consent. This right shall terminate upon the termination of this Agreement. An “approved likeness” and “approved biographical material” shall be, respectively, any photograph or other depiction of Executive, or any biographical
information or life story concerning the professional career of Executive. 
 20. Corporate Opportunities. Executive acknowledges that
during the course of Executive’s employment by Company, Executive may be offered or become aware of business or investment opportunities in which Company may or might have an interest (a “Corporate Opportunity”) and that Executive has
a duty to advise Company of any such Corporate Opportunities before acting upon them. Accordingly, Executive agrees: (a) that Executive will disclose to the Board any Corporate Opportunity offered to Executive or of which Executive becomes
aware, and (b) that Executive will not act upon any Corporate Opportunity for Executive’s own benefit or for the benefit of any Person other than Company without first obtaining consent or approval of the Board (whose consent or approval
may be granted or denied solely at the discretion of the Board; provided, that Executive, at Executive’s election, may act upon any such Corporate Opportunity for Executive’s benefit or the benefit of any other Person if the Board has not
caused Company to act upon any such Corporate Opportunity within sixty (60) days after disclosure of such Corporate Opportunity to Company by Executive. 
 21. Right to Insure. Company shall have the right to secure, in its own name or otherwise, and at its own expense, life, health, accident or other insurance covering Executive, and Executive shall have no
right, title or interest in and to such insurance. Executive shall assist Company in procuring such insurance by submitting to examinations and by signing such applications and other instruments as may be required by the insurance carriers to which
application is made for any such insurance. 
 22. Assistance in Litigation. Executive shall reasonably cooperate with the Company in
the defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company that relate to events or occurrences that transpired while Executive was employed by the Company.
Executive’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually
convenient times. Executive also shall cooperate fully with the Company in connection with any investigation or review by any federal, state, or local regulatory authority as any such investigation or review relates to events or occurrences that
transpired while Executive was employed by the Company. The Company will pay Executive one thousand five hundred dollars ($1,500) per eight-hour day for the Executive’s cooperation pursuant to this Section 22. 
 23. No Inconsistent Obligations. Executive represents and warrants that to his knowledge he has no obligations, legal, in contract, or otherwise,
inconsistent with the terms of this Agreement or with his undertaking employment with the Company to perform the duties described herein. Executive will not disclose to the Company, or use, or induce the Company to use, any confidential,
proprietary, or trade secret information of others. Executive represents and warrants that to his knowledge he has returned all property and confidential information belonging to all prior employers, if he is obligated to do so. 
 24. Notification of New Employer. Upon termination of this Agreement for any reason, or expiration of this Agreement, Executive hereby consents to
the notification by the Company to Executive’s new employer of Executive’s rights and obligations under this Agreement. In addition, in the event that Executive plans to render 

  

 9 of 13 

 
services to a company that works in a similar field as the Company, Executive agrees to provide the Company with as much notice as possible of
Executive’s intention to join that company or business but in no event will Executive provide less than two weeks notice of that intention; provided, however, the provision of such notice and the Company’s receipt thereof shall not
constitute a waiver of any breach of any provision of this Agreement. 
 25. Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon Executive, his heirs and personal representatives, and the Company, its successors and assigns. 
 26.
Remedies. The parties recognize and affirm that in the event of a breach of Sections 7 and 8 of this Agreement, money damages would be inadequate and the Company would not have an adequate remedy at law. Accordingly, the parties agree that in
the event of a breach or a threatened breach of Sections 7 and 8, the Company may, in addition and supplementary to other rights and remedies existing in its favor, apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security). In addition, Executive agrees that in the event a court of competent jurisdiction or an
arbitrator finds that Executive violated Sections 7 or 8, the time periods set forth in those Sections shall be tolled until such breach or violation has been cured. Executive further agrees that the Company shall have the right to offset the amount
of any damages resulting from a breach by Executive of Sections 7 or 8 against any payments due Executive under this Agreement. The parties agree that if one of the parties is found to have breached this Agreement by a court of competent
jurisdiction, the breaching party will be required to pay the non-breaching party’s attorneys’ fees. 
 27. Arbitration.
Other than as stated in Section 26, the parties agree that any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration administered by the American Arbitration Association
(“AAA”) under its Commercial Arbitration Rules. The arbitration will take place in Chicago, Illinois. All disputes shall be resolved by a one (1) arbitrator. The method for selecting the arbitrator is set forth in the AAA’s
Commercial Arbitration Rules. The arbitrator will have the authority to award the same remedies, damages, and costs that a court could award, and will have the additional authority to award those remedies set forth in Section 26. The arbitrator
shall issue a reasoned award explaining the decision, the reasons for the decision, and any damages awarded, including those set forth in Section 26 where the arbitrator finds Executive violated Sections 7 or 8. The arbitrator’s decision
will be final and binding. The judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration proceedings, any record of the same, and the award shall be considered Confidential Information
under this Agreement. This provision and any decision and award hereunder can be enforced under the Federal Arbitration Act. 
 28.
Indemnification. The Company agrees that if Executive is made a party to or involved in, or is threatened to be made a party to or otherwise to be involved in, any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact that heis or was an officer or employee of the Company or is or was serving at the request of the Company as an officer, member, employee or agent of another corporation, limited
liability corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether or not the basis of such Proceeding is Executive’s alleged action in an official capacity while
serving as an officer, member, employee or agent, Executive shall be indemnified and held harmless by the Company against any and all liabilities, losses, expenses, judgments, penalties, fines and amounts reasonably paid in settlement in connection
therewith, to the fullest extent legally permitted or authorized by the Company’s By-laws or, if greater, by the laws of the State of Delaware, as may be in effect from time to time, except that this Section 28 shall not apply to the
following Proceedings: (a) any Proceeding initiated or brought voluntarily by Executive against the Company or its directors, officers employees or other indemnitees, unless the Board of Directors has authorized or consented to the initiation
of the Proceeding (or any part of the Proceeding), and (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Executive of securities of the Company within the meaning of Section 16(b) of the Exchange
Act or any similar successor statute. The rights conferred on Executive by this Section 28 shall not be exclusive of any other rights which Executive may have or hereafter acquire under any statute, the By-laws, agreement, vote of stockholders
or disinterested directors, or otherwise. The indemnification provided for by this Section 28 shall continue until and terminate upon the latest of: (a) the statute of limitations applicable to any claim that could be asserted against
Executive with respect to which he may be entitled to indemnification under this Section 28, (b) ten years after the date that Executive has ceased to serve as a director or officer of the Company or as a director, officer, employee,
member, or agent of any other corporation, limited liability corporation, partnership, joint 

  

 10 of 13 

 
venture, trust or other enterprise at the request of the Company, or (c) if, at the later of the dates referred to in (a) and (b) above, there
is a pending Proceeding in respect of which Executive is granted rights of indemnification under this Section 28, one year after the final termination of such Proceeding, including any and all appeals. The indemnification provided for by this
Section 28 shall inure to the benefit of his heirs, executors and administrator 
 29. Tax Gross Up. 
 (a) If, as a result of payments provided for under or pursuant to this Agreement together with all other payments in the nature of
compensation provided to or for the benefit of Executive under any other agreement in connection with a Change in Control, Executive becomes subject to taxes of any state, local or federal taxing authority that would not have been imposed on such
payments but for the occurrence of a Change in Control, including any excise tax under Section 4999 of the Code an any successor or comparable provision, then, in addition to any other benefits provided under or pursuant to this Agreement or
otherwise, Company (including any successor to Company) shall pay to Executive at the time any such payments are made under or pursuant to this or the other agreements, an amount equal to the amount of any such taxes imposed or to be imposed on
Executive (the amount of any such payment, the “Parachute Tax Reimbursement”). 
 (b) In addition, Company
(including any successor to Company) shall “gross up” such Parachute Tax Reimbursement by paying to Executive at the same time an additional amount equal to the aggregate amount of any additional taxes (whether income taxes, excise taxes,
special taxes, employment taxes or otherwise) that are or will be payable by Executive as a result of the Parachute Tax Reimbursement being paid or payable to Executive and/or as a result of the additional amounts paid or payable to Executive
pursuant to this sentence, such that after payment of such additional taxes Executive shall have been paid on a net after-tax basis an amount equal to the Parachute Tax Reimbursement. 
 (c) The amount of any Parachute Tax Reimbursement and of any such gross-up amounts shall be determined by a nationally recognized
accounting firm selected by the Company (with all such cost borne by the Company), whose determination, absent manifest error, shall be treated as conclusive and binding absent a binding determination by a governmental taxing authority that a
greater amount of taxes is payable by Executive. 
 (d) The term “Change in Control” shall mean a transaction or
event (or series of transactions or events) as a result of which any “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act (other than any Excluded Person, the Company or any Company employee benefit plan,
including its trustees) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of all of the securities of the Company held by New Affirmative LLC held immediately prior to such
transaction or event (or series of transactions or events) and all director designees of New Affirmative LLC are no longer on the Company’s Board; provided, however, that in no event shall the distribution, sale, transfer, or acquisition of
securities of the Company held by New Affirmative LLC or any Excluded Persons (or any successor thereof) to any Excluded Person trigger a “Change in Control.” “Excluded Person” shall mean any of New Affirmative LLC, Affirmative
Investment LLC, The Enstar Group, Inc. and any of their respective stockholders, members, affiliates, subsidiaries, or any such persons under common control. 
 30. Fees and Expenses. To induce the Executive to execute this Agreement and to provide the Executive with reasonable assurance that the purposes of this Agreement will not be frustrated by the cost of its
enforcement should the Company fail to perform its obligations under this Agreement: 
 (a) In the event that the
Executive’s employment is terminated by the Company prior to a Change in Control either for Cause or without Cause, the Company shall reimburse the Executive for any reasonable attorneys’ fees, expenses and court costs incurred by the
Executive as a result of any litigation by the Executive regarding the validity, enforceability or interpretation of any provision of this Agreement (except as stated in Section 8(e), and including as a result of any litigation by the Executive
regarding the benefits payable to the Executive pursuant to this Agreement); provided, however, that such reimbursement shall only be payable by the Company (i) if the Executive prevails on any material issues involved in such litigation and
(ii) upon receipt of proof of such expenses. 
  

 11 of 13 

 (b) In the event that the Executive’s employment is terminated after a Change in
Control either by the Company either for Cause or without Cause or by the Executive for Good Reason, the Company shall reimburse the Executive for any reasonable attorneys’ fees, expenses and court costs incurred by the Executive as a result of
any litigation by the Executive regarding the validity, enforceability or interpretation of any provision of this Agreement (except as stated in Section 8(e)), and including as a result of any litigation by the Executive regarding the benefits
payable to the Executive pursuant to this Agreement) upon receipt of proof of such expenses regardless of which party, if any, prevails in the contest. 
 31. Voluntary Agreement. Each party to this Agreement has read and fully understands the terms and provisions hereof, has had an opportunity to review this Agreement with legal counsel, has executed this
Agreement based upon such party’s own judgment and advice of counsel (if any), and knowingly, voluntarily, and without duress, agrees to all of the terms set forth in this Agreement. The parties have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party
because of authorship of any provision of this Agreement. Except as expressly set forth in this Agreement, neither the parties nor their affiliates, advisors and/or their attorneys have made any representation or warranty, express or implied, at law
or in equity with respect of the subject matter contained herein. Without limiting the generality of the previous sentence, the Companies, their affiliates, advisors, and/or attorneys have made no representation or warranty to Executive concerning
the state or federal tax consequences to Executive regarding the transactions contemplated by this Agreement. 
 <remainder of page
intentionally left blank> 
  

 12 of 13 

 IN WITNESS WHEREOF, the Company and Executive have executed this Agreement, effective as of the day and
year first above written. 
  

									
		 		 	COMPANY
					
	Dated:	 	March 30, 2009	 		 	By:	 	/s/ Kevin R. Callahan
		 		 		 	Name:	 	Kevin Callahan
		 		 		 	Title:	 	Chief Executive Officer

  

									
		 		 	EXECUTIVE
					
	Dated:	 	March 30, 2009	 		 	By:	 	/s/ Robert Bondi
		 		 		 	Name:	 	Robert Bondi

  

 13 of 13Auction 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

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