EX-10.1






United America Indemnity, Ltd.

Walker House

87 Mary Street

P.O. Box 908GT

George Town, Grand Cayman




March 4, 2005




Mr. David R. Bradley


50 Mohawk Drive


West Hartford, CT 06117



Dear David:



This letter sets forth the terms and conditions of our agreement regarding your separation of
employment from United America Indemnity, Ltd. (the “Company”) and its affiliates. Reference is
made to the letter dated November 7, 2003 to you from the Company’s predecessor, United National
Group, Ltd. (the “Letter Agreement”).



	 	 	 
	Separation:




	 	Your separation will be effective as of February

7, 2005 (the “Separation Date”).
	 
	 	 
	Compensation/

	 	

	 

	 	

	Benefits:




	 	You will continue to earn base salary until the

Separation Date. You will be eligible to receive

six (6) monthly installments of $37,500 beginning

on the first day of the month following the

expiration of the Revocation Period (as defined

below), without your revocation of this letter,

and any other amounts owed by the Company to you.

While you are receiving such payments you will

continue to receive coverage under the Company’s

group health plans as if you were employed by the

Company, to the extent permitted under such

plans. If your continued participation is not so

permitted, you may elect COBRA coverage and the

Company will reimburse you for up to six months

of COBRA coverage. When you no longer remain

eligible for coverage as an active employee, you

will be provided under separate cover forms by

which you may elect COBRA continuation coverage

with respect to group health coverage offered by

the Company and conversion coverage with respect

to any life insurance benefits offered by the

Company. You will also receive a bonus of

$175,000 with respect to 2004, to be paid to you

within seven (7) days following the end of the

Revocation Period (as defined below), without

your revocation of this letter. All payments

hereunder shall be subject to applicable taxes

and withholding.
	 
	 	 
	Equity:




	 	You own 33,333 shares of common stock in the

Company and are fully vested in 10,833 options to

purchase the Company’s common shares with a $17

strike price (subject to the terms of the

original grant). The Company and Fox Paine &

Company, LLC shall seek to have your shares of

common stock removed from the scope of the

Management Shareholders’ Agreement dated as of

September 5, 2003 by and among the Company and

the investors who are signatories thereto.
	 
	 	 
	Covenants:




	 	You will continue to be subject to the

non-compete, non-solicit, no-hire and

confidentiality restrictions contained in the

Letter Agreement for a period of six (6) months,

with such period beginning at the end of the

Revocation Period (as defined below).
	 
	 	 
	Non-Disparagement:




	 	You agree that you will not at any time disparage

or encourage or induce others to disparage the

Company or call into question the business

operations, status or reputation of the Company.

For the purposes of this paragraph, the term

“disparage” includes, without limitation,

comments or statements to the press and/or media

or any individual or entity with whom the Company

has a business relationship that may adversely

affect in any manner (i) the conduct of the

business of the Company (including, without

limitation, any business plans or prospects) or

(ii) the business reputation of the Company or

the quality, standing or character of any of the

Company’s services or products.
	 
	 	 
	
 
	 	For purposes of this section and the “Release,”

“Other Agreements,” and “Miscellaneous” sections

below, the definition of “Company” shall include

Fox Paine & Company, LLC and its affiliated

entities, including without limitation Fox Paine

Capital Fund, L.P., FPC Investors, L.P., Fox

Paine Capital, LLC, Fox Paine Capital Fund II GP,

LLC, Fox Paine Capital Fund II, L.P., Fox Paine

Capital Fund II International, L.P., Fox Paine

Capital Fund II Co-Investors International, L.P.,

FPC Investment GP, and all corporate entities

that are partners in any such related entities

and each of their past and present directors,

members, managers, officers, employees, servants,

divisions, owners, shareholders and successors

(including, without limitation, Saul Fox, Troy

Thacker and Michael McDonough), and all

affiliates of the foregoing.








The Company’s “Control Group” agrees not to disparage or encourage or induce
others to disparage you; provided that the foregoing shall
not limit any truthful responses that the Company or any member of the
Control Group may make as a result of any (i) statutory or contractual
reporting obligations, (ii) any judicial or administrative proceeding, or
(iii) as a defense to any claim, action or allegation raised by you. For
purposes of this paragraph, “Control Group” shall mean any member of the
Board and the Company’s CEO, CFO and executives of the senior vice president
level, and “disparage” shall mean to disparage your status, responsibilities
or performance while at the Company.




	 	 	 	Release: You agree to fully release the Company and its affiliates and each of their past
and present employees, officers, members, shareholders and directors thereof from any claims
that you have had or may ever have against the Company (including, without limitation, any
claims arising under “ADEA” as defined below, or any state or local law respecting employment
discrimination on the basis of age or other protected status). Should you later choose to
pursue a claim against the Company or violate the terms of this letter in any way, you agree
that such action would irreparably damage the Company that the Company would be entitled to an
injunction to cease such a proceeding and to indemnification by you of any costs (including
reasonable attorneys’ fees) incurred relating to such a proceeding. Notwithstanding the
foregoing, you understand and confirm that you are entering into this agreement (with its
covenant not to sue and waiver and release) voluntarily and knowingly, and the covenant not to
sue shall not affect your right to claim otherwise with respect to your rights under the Age
Discrimination in Employment Act (“ADEA”). In addition, the first two sentences of this
paragraph shall not apply to any action challenging the validity of a waiver or release in
this letter of a claim under ADEA.






The Company hereby agrees to fully release you from any claims known as of
the date hereof that it may have against you; provided that you shall not be
released from any claims arising from your fraudulent or gross misconduct or
engagement in any criminal activity; provided further that claims “known” to
the Company shall be limited only to matters actually known to Messrs. Saul
Fox, Troy Thacker and Kevin Tate as of the date hereof.



	 	 	 
	Other Agreements:




Miscellaneous:




Effectiveness:




	 	You agree that this letter constitutes the entire

agreement between you and the Company with respect

to the matters addressed herein and may not be

altered or modified other than in a writing signed

by you and the Company. Furthermore, except as

otherwise provided herein, the Company and you

agree that the Letter Agreement has been

terminated in all respects as of the Separation

Date; provided that the arbitration provisions of

the section captioned “Miscellaneous” of the

Letter Agreement, as well as any other

confidentiality, non-compete or non-solicit

agreements to which you have agreed shall continue

in effect and govern any dispute between the

parties arising under this letter. The Company

agrees that you will continue to be eligible for

D&O insurance coverage to the extent then

applicable and for indemnification under the

Company’s by-laws and charter with respect to

claims brought against you in connection with your

service and activities as an officer, director or

employee of the Company, to the fullest extent

permitted under the Company’s by-laws and charter

(or applicable insurance policy). This provision

shall survive and is not discharged or released by

the earlier provisions of this paragraph.

You agree to cooperate in executing any necessary

documents (including Annex A) to effectuate your

separation and to assist the Company with any

outstanding matters with which you were involved

during your employment with the Company and to

return any Company property in your possession to

the Company as soon as possible. You agree that

any work you did for the Company while employed is

“work for hire” and therefore the property of the

Company and you agree to keep this letter and any

confidential information regarding the Company

confidential. This letter shall be governed by

the laws of Pennsylvania without regard to

conflict of law principles of such state.

You have reviewed the terms of this letter and you

confirm that you have had the opportunity to

confer with an attorney of your own choosing with

respect to the terms of this letter. You

acknowledge that you were advised that you could

take up to twenty-one (21) days from the date this

letter was given to you to review this letter and

decide whether you would enter into this letter.

To the extent that you have elected to enter into

this letter prior to such time, you have done so

voluntarily, and have knowingly waived such

twenty-one (21) day review period. You may revoke

your assent to the terms of this letter for a

period of seven (7) calendar days after its

execution (the “Revocation Period”), by delivery

of a notarized written notice of revocation prior

to 5:00 p.m. on the last day comprising the

Revocation Period to the Company at its Bala

Cynwyd address, Attn: General Counsel. This

letter shall become irrevocable automatically upon

the expiration of the Revocation Period if you do

not revoke it in the aforesaid manner; provided

that the foregoing shall not apply to your

separation of employment from the Company, which

shall be effective as of the Separation Date.







Please acknowledge your acceptance to the matters described above and return this letter (and
the attached Annex A) to the Company at its Bala Cynwyd address, Attn: General Counsel.




	 	 	 	Very
truly yours,






UNITED AMERICA INDEMNITY, LTD.



	 	 	 
	By:

	 	/s/ Richard S. March
	
 
	 	 
	
 
	 	General Counsel







Agreed to and accepted:



/s/ David R. Bradley


David R. Bradley


Date: March 4, 2005



1




ANNEX A




March 4, 2005



Saul Fox, Chairman


United America Indemnity, Ltd.


Walker House


87 Mary Street


P.O. Box 908GT


George Town, Grand Cayman



Dear Saul:



Effective as of February 7, 2005, I hereby resign as Director and Chief Executive Officer of United
America Indemnity, Ltd. (the “Company”) and from all other positions I hold with the Company and
any of its affiliates and/or subsidiaries, including without limitation, the following:





	 	•	 	Director of Wind River Insurance Company (Barbados) Ltd.;






	 	•	 	Director of Wind River Insurance Company, Ltd.;






	 	•	 	Director of Wind River Services, Ltd.; and






	 	•	 	Alternate Director of U.A.I. (Gibraltar) Limited.





Sincerely,



David R. Bradley




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