EX-10.3






FOX PAINE & COMPANY, LLC

950 Tower Lane

Suite 1150

Foster City, California 94404




WIND RIVER HOLDINGS, L.P.

555 Croton Road, Suite 300

King of Prussia, Pennsylvania 19406




May 25, 2006



United America Indemnity, Ltd


c/o United America Indemnity Group, Inc.


Three Bala Plaza, East


Suite 605


Bala Cynwyd, Pennsylvania 19004



Re: Amendment No. 1 to Management Agreement



Ladies and Gentlemen:



We refer to the Management Agreement, dated as of September 5, 2003, by and among United
America Indemnity, Ltd., formerly Vigilant International, Ltd., an exempted company formed with
limited liability under the laws of the Cayman Island (the “Company”), Fox Paine & Company, LLC, a
Delaware limited liability company (“Fox Paine”) and Wind River Holdings, L.P., formerly The AMC
Group, L.P., a Pennsylvania limited partnership (“Wind River”), whereby the Company contracted for
certain services from each of Fox Paine and Wind River (the “Agreement”). Whereas the Company, Fox
Paine and Wind River have agreed to amend the Agreement as set forth herein. Capitalized terms
used herein, but not otherwise defined shall have the meanings ascribed to them in the Agreement.



The Company and Wind River hereby agree to terminate Wind River’s services as of the date
hereof. Wind River agrees to refund to the Company, within seven days of the date hereof, $35,134,
as a net repayment of the Annual Service Fee paid to it by the Company on November 2, 2005. Such
repayment represents the pro rata repayment of the current year’s Annual Service Fee, which has not
been earned as of this date by Wind River.



In connection with the ongoing operations of the Company, the Company agrees to pay Fox Paine,
an annual fee equal to $1,500,000 (the “Annual Service Fee”), as compensation for Fox Paine’s
ongoing provision of certain financial and strategic consulting, advisory and other services to the
Company and its affiliates (collectively, the “Services”).



The Annual Service Fee with respect to each twelve month period beginning on September 5 of
each year shall continue to be billed to the Company by Fox Paine and continue to be payable on or
before November 1 of such year (each, a “Payment Date”). Such Annual Service Fee shall continue
and be payable until the earlier of (i) such time as the Funds no longer hold an indirect equity
investment in the Company and (2) such time Fox Paine and the Company agree in writing to modify or
terminate the arrangements contemplated hereby. Notwithstanding the foregoing, no Annual Service
Fee payable in respect of any year shall be paid on an applicable Payment Date if United America
Indemnity Group, Inc. (“UAIG”) and the Company, as guarantor, fails to make payment in full on any
amounts due on the 6.22% Guaranteed Senior Notes due 2015 (the “Senior Notes”). Any Annual
Services Fees not paid as a result of the preceding sentence, together with interest thereon
accruing from the applicable Payment Date at the Prime Rate from time to time announced by
Citibank, N.A., shall be deferred and shall be payable from time to time in accordance with the
following sentence. Such deferred Annual Services Fee shall be paid at such times as UAIG and/or
the Company makes payment in full, inclusive of any late payment charges and/or fees on the Senior
Notes.



The parties hereto continue to agree that the indemnification letter, dated as September 5,
2003 (the “Indemnification Letter”), shall continue to survive this Amendment with respect to Wind
River, and otherwise shall continue to survive the termination, expiration or assignment of the
Agreement.



Except as expressly amended, modified and supplement herein, all other provisions of the
Agreement shall remain in full force and effect.



Please confirm that the foregoing is in accordance with your understanding and agreement with
Fox Paine and Wind River by signing a copy of this letter agreement in the space provided below.




Very truly yours,




FOX PAINE & COMPANY, LLC




By: /s/ Troy W. Thacker

Name: Troy W. Thacker

Title: Managing Director





WIND RIVER HOLDINGS, L.P.




By: The AMC Group, LLC, its general
partner




By: /s/ Barry S. Swirsky

Name: Barry S. Swirsky

Title: General Counsel




ACCEPTED AND AGREED AS OF


THE DATE FIRST ABOVE WRITTEN:



UNITED AMERICA INDEMNITY, LTD.



By: /s/ Joseph F. Morris


Name: Joseph F. Morris

Title: President