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Exhibit 10(6)
AGREEMENT
This agreement ("Agreement") is entered into the 30th day of June, 1997, by
and among Xxxx X. Xxxx, Xx. ("Xxxx"), Capsure Financial Group, Inc., an
Oklahoma corporation ("Capsure Financial"), Capsure Holdings Corp., a Delaware
corporation ("Capsure Holdings"), and CNA Surety Corporation, a Delaware
corporation ("CNA Surety").
RECITALS:
x. Xxxx entered into a Stock Purchase Agreement as of July 26, 1994, with
Capsure Financial and Capsure Holdings (the "Stock Purchase
Agreement") whereby Xxxx and certain others sold the outstanding stock
of Universal Surety Holding Corp., a Texas corporation ("Universal
Surety"), to Capsure Financial. Capsure Financial is a wholly-owned
subsidiary of Capsure Holdings.
b. Universal Surety owned as of July 26, 1994, and continues to own at
this date, the outstanding capital stock of Universal Surety of
America, a Texas insurance company ("USA").
c. As part of the consideration under the Stock Purchase Agreement,
275,113 shares of the common stock of Capsure Holdings (the
"Restricted Shares") were issued to Xxxx and certain registration
rights were granted to Xxxx with respect to such shares. The Restricted
Shares are subject to, and the registration rights were granted under,
a Restricted Stock and Registration Rights Agreement entered into as
of September 22, 1994, among Capsure Financial, Capsure Holdings and
Xxxx (the "Restricted Stock Agreement").
d. As additional consideration under the Stock Purchase Agreement,
Capsure Financial agreed to make a contingent payment to Xxxx based
upon a calculation relating to the future performance and value of USA
(the "Contingent Payment") pursuant to Section 2.2 of the Stock
Purchase Agreement.
e. Capsure Holdings, CNA Surety and certain others have entered into a
Reorganization Agreement dated as of December 19, 1996, (the
"Reorganization Agreement") under which, among other things, Capsure
Holdings will be merged with a subsidiary of CNA Surety, and Capsure
Holdings will be the surviving corporation and a wholly-owned
subsidiary of CNA Surety.
x. Xxxx entered into an Employment Agreement with Universal Surety, USA,
Capsure Holdings and Capsure Financial on September 22, 1994 (the
"Employment Agreement") which included a five year non-compete period
commencing upon the termination of the Employment Agreement or Xxxx'x
earlier termination of employment.
g. The parties desire to waive calculation of the Contingent Payment
and, in consideration for Xxxx'x agreement to waive any claim to
payment of any amounts which may become due to Xxxx thereunder, if
any, to amend the terms of the Restricted Stock Agreement and
Employment Agreement.
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NOW, THEREFORE, in consideration of the premises:
1. Settlement of the Contingent Payment
Xxxx hereby waives any and all rights or claims of rights now or hereafter
arising under or relating to Section 2.2 of the Stock Purchase Agreement,
including without limitation, any rights or claims to a calculation for the
purpose of determining any Contingent Payment or the payment of the Contingent
Payment, and agrees to accept the benefits provided to him by the amendment to
the terms of the Restricted Stock Agreement and Employment Agreement, as set
forth herein, in full settlement of any and all amounts due to him, if any, or
which he may claim to be due to him, as a Contingent Payment, and forever
discharges Capsure Holdings, Capsure Financial and their successors and assigns
(including, without limitation, CNA Surety) from any and all obligations under
or relating to Section 2.2 of the Stock Purchase Agreement.
2. Amendment of the Restricted Stock Agreement
The parties agree that the period of restriction contained in the
Restricted Stock Agreement shall expire on the date six months following
the Effective Time (as defined in the Reorganization Agreement) of the Merger
and that the term "Restricted Period", as used in the Restricted Stock
Agreement, shall be for the period commencing September 22, 1994, and
terminating on the date six months following the Effective Time of the Merger.
The parties hereby acknowledge and agree (a) that, subject to applicable
federal and state securities laws, upon termination of the Restricted Period,
pursuant to the Restricted Stock Agreement (i) all restrictions imposed therein
upon the sale, transfer, exchange, conveyance, pledge or other encumbrance of
or upon the Restricted Shares set forth under Section 1 thereof shall terminate
and (ii) the registration rights granted under Sections 4 and 5 thereof shall
be of immediate force and effect, and (b) that Capsure Holdings, Capsure
Financial, Universal Surety and USA hereby waive the right, and any and all
claims with respect to such right, to purchase the Restricted Shares pursuant
to Section l(b) of the Restricted Stock Agreement in the event of the
termination of Xxxx'x employment. All other provisions of the Restricted Stock
Agreement shall remain in full force and effect.
3. Amendment to Non-Competition Provision of Employment Agreement
The parties agree that, notwithstanding any provision in the Employment
Agreement to the contrary, the Non-Compete Period, as defined and set forth in
Section 6 of the Employment Agreement, shall be reduced from five years to two
years from the expiration or earlier termination of Xxxx'x employment.
4. Joinder by CNA Surety
CNA Surety, joining herein as successor to the rights and obligations of
Capsure Holdings upon the Effective Time of the Merger under the Reorganization
Agreement, agrees to all recitals and provisions hereof.
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