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                                                                    EXHIBIT 10.6


                              SURETY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                     (HEREINAFTER REFERRED TO AS "CONTRACT")

                           EFFECTIVE: OCTOBER 1, 2002

                           entered into by and between

                             WESTERN SURETY COMPANY
                           UNIVERSAL SURETY OF AMERICA
                        SURETY BONDING COMPANY OF AMERICA
               (hereinafter collectively referred to as "Company)

                                       and

                          CONTINENTAL CASUALTY COMPANY
                     (hereinafter referred to as 'Reinsurer)


Witnesseth:

In consideration of the mutual covenants contained herein, and upon the terms
and conditions hereinafter set forth the Company and the Reinsurer hereby agree
as follows:

ARTICLE 1 - SCOPE OF THE CONTRACT

This Contract is solely between the Company and the Reinsurer. Performance of
respective obligations of each party under this Contract shall be rendered
solely to the other party, except as specifically and expressly provided for in
the Insolvency Article. The provisions of this Contract are intended solely for
the benefit of the parties to and executing this Contract, and nothing in this
Contract shall in any manner create, or be construed to create, any obligations
to or establish any rights against any party to this Contract in favor of any
third parties or other persons not parties to and executing this Contract.

ARTICLE 2 - BUSINESS COVERED

The Company shall reinsure with the Reinsurer and the Reinsurer shall accept as
reinsurance from the Company the Company's net excess liability under the surety
business written or renewed and surety reinsurance assumed (hereinafter referred
to as Bonds) by the Company during the term of this Contract, on behalf of Each
Principal, in excess of $100,000.000.

ARTICLE 3 - RETENTION OF COMPANY & LIABILITY OF THE REINSURER



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The retention of the Company and the liability of the Reinsurer and all other
benefits accruing to the Company, as provided in this Contract or any amendments
thereof, shall apply to the parties comprising the Company as a group and not
separately to each of the parties. Any payment by the Reinsurer to any of the
parties comprising the Company shall discharge the Reinsurer's liability under
this Contract to the extent of such payment with respect to that loss.

Reinsurance hereunder shall be on an excess of loss basis and shall apply to
that portion of coverage which the Company retains net for its own account in
accordance with the provisions set forth under this Contract.

The Reinsurer shall pay to the Company the amount of loss in excess of the
Company's Retention as set forth in the Schedule of Reinsurance below as
respects any one Principal, but the Reinsurer's liability shall not exceed the
Limit of Liability of the Reinsurer for Each Principal as stated in the Schedule
of Reinsurance.

                             SCHEDULE OF REINSURANCE

<Table>
<S>                                                         <C>
Company Retention                                           $100,000,000
Limit of Liability of the Reinsurer for Each                $50,000,000
Principal
</Table>

Under no circumstances, howsoever arising, shall the Reinsurer be liable under
this Contract for more than $50,000,000 of Net Loss, in the aggregate, inclusive
of all loss, allocated expense payments, extra contractual obligations or losses
in excess of original policy limits.


ARTICLE 4 - COMMENCEMENT AND TERMINATION

The Contract shall take effect at 12:01AM, Central Standard Time, on October 1,
2002 and shall remain in full force and effect until Midnight, Central Standard
Time, December 31, 2003 and provides cover for losses discovered on Bonds
written, renewed or assumed during the term of this Contract all as respects
business classified by the Company as Surety Business as described in Article 2
- Business Covered.

Upon termination of this Contract, the Reinsurer shall be liable for losses
discovered within three years after the effective date of termination of this
Contract, as respects business covered by this Contract and written, renewed or
assumed prior to the date of termination of this Contract. The Reinsurer shall
have no liability under this Contract for any losses discovered after Midnight,
Standard Time, December 31, 2006.

ARTICLE 5 - DEFINITIONS



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"Company Retention" shall mean that amount indicated as the Company Retention in
the Schedule of Reinsurance as set forth in the Retention of Company & Liability
of Reinsurer Article. It is understood and agreed that any underlying
reinsurance maintained by the Company on the business reinsured hereunder, shall
not be deducted in determining the Company's Retention, including amounts
retained by the Company or its affiliated companies under common management or
common ownership.

"Each Principal" shall mean one or more firms or corporations under the same
management or control, or one or more persons or entities for whom bonds were
executed in reliance upon the indemnity of the same person, firm or corporation,
or in reliance upon the indemnity of a related group of persons, firms or
corporations.

"Net Written Premium" shall mean the Company's written premium on the business
covered hereunder net of applicable returns and cancellations and net of
premiums on inuring reinsurance.

"Loss(es) Discovered" shall mean that the Company shall have discovered a loss
when:

a)   a claim or a collection of claims on the Bond business for Each Principal
     exceeds $50,000,000, whether or not the Company has an incurred loss on
     such principal through the establishment of a reserve or payment of loss or
     allocated expenses; or

b)   when the Company has incurred a loss of $50,000,000 or more for Each
     Principal through the establishment of a reserve, payment of loss or
     allocated expenses, assumption of a liability to prevent a default or a
     combination thereof.

"Net Loss" shall mean all loss and allocated expense payments made by the
Company (1) in the investigation, defense, settlement, or mitigation of claims
or potential claims (including the prevention of defaults) on the Bond business
of Each Principal of the Company, and (2) in the recovery or attempted recovery
of such loss and expense payments, less salvage and subrogation. The Company's
office expenses and salaries of its employees are not allocated expenses and are
not included in Net Loss. "Net Loss" shall include extra contractual obligations
and losses in excess of original policy limits to the extent that any underlying
excess of loss reinsurance purchased by the Company covers such obligations and
losses. It is understood and agreed that any underlying reinsurance maintained
by the Company on the business reinsured hereunder, shall not be deducted in
determining the Company's Net Loss.

ARTICLE 6 - PREMIUM

Upon execution of this Contract by the Company and the Reinsurer, the Company
shall pay the Reinsurer premium of $4,000,000.

ARTICLE 7 - ADDITIONAL PREMIUM



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If any Net Loss is ceded to this Contract, the Company shall immediately pay the
Reinsurer an additional premium of $9,000,000.

ARTICLE 8 - NOTICE OF LOSS & SETTLEMENTS

The Company shall investigate and settle or defend all claims and losses
including those involving the extension of credit or the advancement of money.
All payments of claims or losses by the Company within the sum or limits of its
Bonds and within the amount of reinsurance set forth in Article 3 - Retention of
Company and Liability of Reinsurer, shall be binding on the Reinsurer, subject
to the terms of this Contract.

The Reinsurer shall pay to the Company the Reinsurer's portion of Net Loss
within thirty days after receipt of the proof of loss from the Company. Any
subsequent changes in the amount of Net Loss shall be reported by the Company to
the Reinsurer, and the amount due either party shall be remitted within thirty
days after receipt of such report.

ARTICLE 9 - CO-SURETY

It is understood and agreed by the parties to this Contract that Continental
Casualty Company and any one of its affiliated insurers shall act as co-surety
as respects business covered by this Contract, when so requested by the Company.

ARTICLE 10 - EXCESS OF ORIGINAL POLICY LIMITS

This Contract shall protect the Company as provided in Article 2 - Business
Covered, in connection with loss in excess of the limit of the original policy,
such loss in excess of the limit having been incurred because of failure by the
Company to settle within the policy limit or by reason of alleged or actual
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the, trial of any action against its insured or
reinsured or in the preparation or prosecution of an appeal consequent upon such
action.

However, this Article shall not apply where the loss has been incurred due to
fraud by a member of the Board of Directors or a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.

For the purpose of this Article, the word "loss" shall mean any amounts for
which the Company would have been contractually liable to pay had it not been
for the limit of the original policy. The date on which any Excess of Original
Policy Limit loss is incurred by the Company shall be deemed, in all
circumstances, to be the date of the original loss.


ARTICLE 11 - EXTRA CONTRACTUAL OBLIGATIONS



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This Contract shall protect the Company as provided in Article 2 - Business
Covered, where the loss includes any extra contractual obligations.

The term "Extra Contractual Obligations" is defined as those liabilities not
covered under any other provision of this Contract and which arise from the
handling of any claim on business covered hereunder, such liabilities arising
because of, but not limited to, the following: failure by the Company to settle
within the policy limit, or by reason of alleged or actual negligence, fraud or
bad faith in rejecting an offer of settlement or in preparation of the defense
or in the trial of any action against its insured or reinsured or in the
preparation or prosecution of an appeal consequent upon such action.

The date on which any Extra Contractual Obligation loss is incurred by the
Company shall be deemed, in all circumstances, to be the date of the original
loss.

However, this Article shall not apply where the loss has been incurred due to
fraud by a member of the Board of Directors or a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any loss covered hereunder.


ARTICLE 12 - SALVAGE & SUBROGATION

The Reinsurer shall be subrogated to the rights of the Company to the extent of
its loss payments to the Company. The Company agrees to enforce its rights of
salvage and subrogation by taking whatever action is necessary to recover its
loss from an obligee, principal, indemnitor, or any other party who caused or
contributed to its loss or part thereof, or to assign those rights to the
Reinsurer, unless enforcement is waived by the mutual consent of the Company and
the Reinsurer. Recoveries shall be distributed to the parties in an order
inverse to that in their liabilities accrued.



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ARTICLE 13 - OFFSET

The Company or the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract or
under the Surety Quota Share Treaty between certain of the parties hereto. The
party asserting the right of offset may exercise such right at any time whether
the balances due are on account of premiums or losses. In the instance of
insolvency of one or more of the reinsured Companies, applicable state law will
apply.

ARTICLE 14 - CURRENCY

Whenever the word "Dollars" or the "$" sign appears in this Contract, they shall
be construed to mean United States Dollars and all transactions under this
Contract shall be in United States Dollars.

Amounts paid or received by the Company in any other currency shall be converted
to United States Dollars at the rate of exchange at the date such transaction is
entered on the books of the Company.

ARTICLE 15 - ACCESS TO RECORDS

The Company shall allow the Reinsurer to inspect, at reasonable times, the
records of the Company relevant to the business reinsured under this Contract,
including but not limited to Company files concerning premium, underwriting,
claims, losses or legal proceedings which involve or may involve the Reinsurer
and the Reinsurer may make copies of any records pertaining thereto. This right
of inspection, audit and information shall survive termination of this Contract
and shall run to the natural expiry of all liabilities under the Bonds
reinsured.

ARTICLE 16 - ERRORS AND OMISSIONS

Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission, or error had not been made, provided such omission or error is
rectified as soon as possible after discovery.

ARTICLE 17 - TAXES

The Reinsurer shall maintain the required reserves as to the Reinsurer's portion
of claims and losses. The Company shall be liable for all premium taxes on
business covered hereunder. If the Reinsurer is obligated to pay any premium
taxes on this business, the Company shall reimburse the Reinsurer, however, the
Company shall not be required to pay taxes twice of the same premium.

ARTICLE 18 - INSOLVENCY



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This reinsurance shall be payable by the Reinsurer on the basis of the liability
of the reinsured Company(ies) under Bonds reinsured hereunder without
diminution, because of the insolvency of one or more than one of the Companies,
to the Company(ies) or its liquidator, receiver, or statutory successor.

In the event of insolvency of one or more than one of the Companies, the
liquidator or receiver or statutory successor of the Company(ies) shall give
written notice to the Reinsurer of the pendency of a claim filed against the
Company(ies) on the Bond or Bonds reinsured within a reasonable time after such
claim is filed in the insolvency proceeding. During the pendency of such claim
the Reinsurer may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense or defenses
which it may doom available to the Company(ies) or its liquidator or receiver or
statutory successor. The expenses thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the Company(ies) as part of the
expense of liquidation to the extent of a proportionate share of the benefits
which may accrue to the Company(ies) solely as a result of the defense so
undertaken by the Reinsurer.

Should one or more than one of the Companies go into liquidation of should a
receiver be appointed, the Reinsurer shall be entitled to deduct from any sums
which may be or may become due to the Company(ies) any sums which are due to the
Reinsurer by the Company(ies) and which are payable at a fixed or stated date
under this Contract or under the Surety Quota Share Treaty or the Aggregate Stop
Loss Reinsurance Contract between certain of the parties hereto to the full
extent permitted by the laws of the insolvent party's state of domicile.

It is further understood and agreed that, in the event of the insolvency of one
or more than one of the Companies, the reinsurance under this Contract shall be
payable directly by the Reinsurer to the Company(ies) or to Its liquidator,
receiver or statutory successor, except a) where this Contract specifically
provides another payee of such reinsurance in the event of the insolvency of the
Company(ies) or b) where the Reinsurer with the consent of the direct insured or
insureds has assumed such Bond obligations of the Company(ies) as direct
obligations of the Reinsurer to the payees under such Bonds and in substitution
for the obligations of the Company(ies) to such payees.

In no event shall anyone other than the parties to this Contract or, in the
event of one or more than one of the Company's insolvency, its liquidator
receiver, or statutory successor, have any rights under this Contract.



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ARTICLE 19 - AMENDMENTS

This Contract may be altered or amended in any of its terms and conditions by
mutual written consent of the Company and the Reinsurer. Such written mutual
consent will then constitute a part of this Contract.

ARTICLE 20 -ARBITRATION

As a condition precedent to any right of action hereunder, any dispute arising
out of the interpretation, performance or breach of this Contract, including the
formation or validity thereof, shall be submitted for decision to a panel of
three arbitrators. Notice requesting arbitration will be in writing and sent
certified mail, return receipt requested.

One arbitrator shall be chosen by each party and the two arbitrators shall,
before instituting the hearing, choose an impartial third arbitrator who shall
preside at the hearing. If either party falls to appoint its arbitrator within
thirty (30) days after being requested to do so by the other party, the latter,
after ten (10) days notice by certified mail of its intention to do so, may
appoint the second arbitrator.

If the two arbitrators are unable to agree upon the third arbitrator within
thirty (30) days of their appointment, the third arbitrator shall be selected
from a list of six individuals (three named by each arbitrator) by a judge of
the federal district court having jurisdiction over the geographical area in
which the arbitration is to take place, or if the federal court declines to act,
the state court having general jurisdiction in such area.

All arbitrators shall be disinterested active or former executive officers of
insurance or reinsurance companies or Underwriters at Lloyd's London.

Within thirty (30) days after notice of appointment of all arbitrators, the
panel shall meet and determine timely periods for briefs, discovery procedures
and schedules for hearings.

The panel shall be relieved of all judicial formality and shall not be bound by
the strict rules of procedure and evidence. Arbitration shall take place in
Sioux Falls, South Dakota, or a location mutually agreed to by the panel.
Insofar as the arbitration panel looks to substantive law, it shall consider the
law of the State of South Dakota. The decision of any two arbitrators when
rendered in writing shall be final and binding. The panel is empowered to grant
interim relief as it may deem appropriate.

The panel shall make its decision considering the custom and practice of the
applicable insurance and reinsurance business as promptly as possible following
the termination of the hearings. Judgment upon the award may be entered in any
court having jurisdiction thereof.

Each party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the cost of the third arbitrator. The
remaining costs of the arbitration shall be



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allocated by the panel. The panel may, at its discretion, award such further
costs and expenses as it considers appropriate, Including but not limited to
attorneys fees, to the extent permitted by law, The panel is prohibited from
awarding punitive, exemplary or treble damages, of whatever nature, in
connection with any arbitration proceeding concerning this Contact.

ARTICLE 21 - CHOICE OF LAW

This Contract, including all matters relating to formation, validity and
performance thereof, shall be interpreted in accordance with the law of the
State of South Dakota.

ARTICLE 22 - AGENCY

For purposes of sending and receiving notices and payments required by this
Contract, the reinsured Company that is set forth first in the Title section to
this Contract will be deemed the agent for all other reinsured companies
referenced in the Title of this Contract. In no event however, will any
reinsured Company be deemed the agent of the other with respect to the terms of
the Insolvency Article.

ARTICLE 23 - ENTIRE CONTRACT

ThisContract, and that certain Services and Indemnity Agreement between the
parties dated October 1, 2002, represent the entire agreement and understanding
among the parties. No other oral or written agreements or contracts relating to
the risks reinsured hereunder currently exist and/or are contemplated between
the parties.

ARTICLE 24 - FUNDING OF RESERVES

(This Article is only applicable if the Reinsurer cannot qualify for credit by
each governmental authority having jurisdiction over the Company's reserves.)

As regards Policies issued by the Company coming within the scope of this
Contract, the Company agrees that, when it files with the Insurance Department
or sets up on its books reserves for losses (including Loss and Loss Expense
paid by the Company but not recovered from the Reinsurer, Loss and Loss Expense
reported and outstanding, and an allowance for Incurred But Not Reported Losses
and Loss Expenses as determined by the Company) covered hereunder and/or
unearned premium, which it is required by law to set up, it shall forward to the
Reinsurer a statement showing the proportion of such reserves applicable to it.
The Reinsurer hereby agrees that it shall apply for and secure delivery to the
Company of a clean, irrevocable, unconditional Letter of Credit, dated on or
before December 31 of the year in which the request is made, issued by a member
of the Federal Reserve System or any bank approved for use by the NAIC
Securities Valuation Office, and containing provisions acceptable to the
insurance regulatory authorities having jurisdiction over the Company's reserves
in an amount equal to the Reinsurer's proportion of reserves as shown in the
statement prepared by the Company.




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The Letter of Credit shall be issued for a period of not less than one year, and
shall be automatically extended for one year from its date of expiration or any
future expiration date unless 30 days prior to any expiration date the issuing
bank notifies the Company by registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period. An issuing
bank, not a member of the Federal Reserve System or not chartered in the state
of domicile of the Company, shall provide 60 days notice to the Company prior to
any expiration in the event of nonextension.

Notwithstanding any other provisions of this Contract, the Company or its
court-appointed successor in interest may draw upon such credit at any time
without diminution because of the insolvency of the Company or of any Reinsurer
for one or more of the following purposes only:

A.   To reimburse the Company for the Reinsurer's share of unearned premium on
     Policies reinsured hereunder on account of cancellations of such policies.

B.   To pay the Reinsurer's share or to reimburse the Company for the
     Reinsurer's share of any Loss reinsured by this Contract, which has not
     been otherwise paid.

C.   To make refund of any sum in excess of the actual amount required to pay
     the Reinsurer's share of any liability reinsured by this Contract.

D.   In the event of nonextension of Letters of Credit as provided for above, to
     establish deposits of the Reinsurer's share of reserves for losses and/or
     unearned premium under this Contract.

E.   To pay any other amounts the Company claims are due under this Contract.

The issuing bank shall have no responsibility whatsoever in connection with the
propriety of withdrawals made by the Company or the disposition of funds
withdrawn, except to ensure that withdrawals are made only upon the order of
properly authorized representatives of the Company.

At annual intervals, or more frequently as agreed but never more frequently than
semi-annually, the Company shall prepare, for the sole purpose of amending the
Letter of Credit, a specific statement of the Reinsurer's share of loss and/or
unearned premium reserves. If the statement shows that the Reinsurer's share of
such reserves exceeds the balance of credit as of the statement date, then the
Reinsurer shall, within 30 days after receipt of notice of such excess, secure
delivery to the Company of an amendment of such difference. If, however, the
statement shows that the Reinsurer's share of such reserves is less than the
balance of credit as of the statement date, the Company shall, within 30 days
after receipt of written request from the Reinsurer, release such excess credit
by agreeing to secure an amendment to the Letter of Credit, reducing the amount
of credit available by the amount of such excess credit.

The Reinsurer shall be responsible for any and all costs, fees and charges as
respects establishing and maintaining a Letter of Credit under the provisions of
this Article.



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ARTICLE 25 - SERVICE OF SUIT

(This Article applies only if the Reinsurer is domiciled outside the United
States of America and/or unauthorized in any state, territory, or district of
the United States of America that has jurisdiction over the Company and in which
a subject suit has been instituted. This Article is not intended to conflict
with or override the parties' obligation to arbitrate their disputes in
accordance with the Arbitration Article.)

In the event of the failure of any Reinsurer hereon to pay any amount claimed to
be due hereunder, such Reinsurer, at the request of the Company, shall submit to
the jurisdiction of a court of competent jurisdiction within the United States
and shall comply with all requirements necessary to give that court
jurisdiction. Nothing in this Article constitutes or should be understood to
constitute a waiver of the Reinsurer's rights to commence an action in any court
of competent jurisdiction in the United States, to remove an action to a United
States District Court, or to seek a transfer of a case to another court as
permitted by the laws of the United States or of any state in the United States.
Service of process in such suit may be made upon Mendes and Mount, 750 Seventh
Avenue, New York, New York 10019-6829. In any suit instituted against it upon
this Contract, the Reinsurer shall abide by the final decision of such court or
of any appellate court in the event of any appeal.

The above-named are authorized and directed to accept service of process on
behalf of the Reinsurer in any such suit and/or upon the request of Company to
give a written undertaking to the Company that they shall enter a general
appearance upon the Reinsurer's behalf in the event such a suit shall be
instituted.

Further, pursuant to any statute of any state, territory or district of the
United States which makes provision therefor, the Reinsurer hereon hereby
designates the Superintendent, Commissioner or Director of Insurance or other
officer specified for that purpose in the statute, or the successor or
successors in office, as its true and lawful attorney upon whom may be served
any lawful process in any action, suit or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder, arising out of this Contract, and
hereby designates the above-named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.

ARTICLE 26 - SEVERABILITY

If any law or regulation of any Federal, State, or Local Government of the
United States of America, or the ruling of officials having supervision over
insurance companies, should render illegal this Contract, or any portion
thereof, as to risks or properties located in the jurisdiction of such
authority, either the Company or the Reinsurer may upon written notice to the
other suspend, abrogate, or amend this Contract insofar as it relates to risks
or properties located within such jurisdiction to such extent as may be
necessary to comply with such law, regulations, or ruling.



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Such illegality, suspension, abrogation, or amendment of a portion of this
Contract shall in no way affect any other portion thereof.

ARTICLE 27 - HONORABLE UNDERTAKING

The purposes of this Contract are not to be defeated by narrow or technical
legal interpretations of its provisions. The Contract shall be construed as an
honorable undertaking and should be interpreted for the purpose of giving effect
to the real intentions of the parties hereto.

ARTICLE 28- NOTICES

Any notice relating to this Contract shall be in writing and shall be
sufficiently given if delivered by certified mail to the Reinsurer at the
following address:

         Continental Casualty Company
         CNA Plaza
         Attn.:   Chief Financial Officer
                  Chicago, IL 60685

and to the Company at the following address:

         Western Surety Company
         Attn.:   Chief Executive Officer
         Sioux Falls, South Dakota  57117-5077




IN WITNESS WHEREOF the parties acknowledge that no intermediary is involved in
or brought about this transaction, and the parties hereto, by their authorized
representatives, have executed this Contract:


on this                     day of                                   2002

WESTERN SURETY COMPANY


By:
   -------------------------------------------------------------

Title:
      ----------------------------------------------------------

Attested by:
            ----------------------------------------------------




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and on this                 day of                                   2002


UNIVERSAL SURETY OF AMERICA


By:
   -------------------------------------------------------------

Title:
      ----------------------------------------------------------

Attested by:
            ----------------------------------------------------


and on this                 day of                                   2002


SURETY BONDING COMPANY OF AMERICA


By:
   -------------------------------------------------------------

Title:
      ----------------------------------------------------------

Attested by:
            ----------------------------------------------------



and on this                 day of                                   2002


CONTINENTAL CASUALTY COMPANY


By:
   -------------------------------------------------------------

Title:
      ----------------------------------------------------------

Attested by:
            ----------------------------------------------------