FIRST AMENDED AND RESTATED 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 30 ^th day of March, 2009 (the “Effective Date”) by and between Affirmative Insurance Holdings, Inc. (the “Company”) and Robert A. Bondi (“Executive”).

PRELIMINARY STATEMENTS

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