exv10w1w25



 





EXHIBIT 10.1.25






September 30, 2004




Mr. Lee Wendleton

President

AEON Insurance Group, Inc.

18525 Sutter Boulevard, Suite 140

Morgan Hill, CA 95037




Dear Lee:




     This
letter agreement (the “Agreement”) dated as of
September 30, 2004, by
and between AEON Insurance Group, Inc., a C Corporation (“AEON”), and Specialty
Underwriters’ Alliance, Inc., a Delaware corporation (“SUA”), confirms the
parties’ understanding as to certain terms and conditions relating to the
issuance by SUA to AEON of shares of Class B Common Stock, par value $.01 per
share (the “Class B Stock”).



     SUA and AEON are parties to that certain Securities Purchase Agreement,
dated May 18th, 2004 (the “Purchase Agreement”), as amended and restated,
whereby AEON agreed to purchase such number of shares of Class B Stock (the
“Shares”) as determined herein for an aggregate purchase
price of $1,000,000.00. Such
purchase shall be contingent on the closing of an Initial Public Offering by
SUA. For purposes hereof, an “Initial Public Offering” shall mean a public
equity offering of the capital stock of SUA in which the proceeds to SUA are
not less than $100,000,000.00, before deduction of underwriting commissions,
placement agent fees or similar charges, and other offering expenses.
Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Purchase Agreement.





 









 










     After the closing of a Public Offering, the price of each share of Class B
Stock shall equal the fair market value of one share of SUA’s common stock, par
value $.01 per share (the “Common Stock”), on such date, to be calculated as
follows: (i) if the Common Stock is listed or admitted to trading on a
national securities exchange, the last reported sale price of the Common Stock,
regular way, on such day or in case no sale takes place on such day, the
average of the reported closing bid and asked prices of the Common Stock,
regular way, on such day, in either case as reported on such exchange; or (ii)
if the Common Stock is not listed or admitted to trading on any national
securities exchange, but is listed on the NASDAQ



 









 





National Market, the closing sale price of the Common Stock on such day, or in
case no sale is publicly reported for such day, the average of the
representative closing bid and asked quotations for the Common Stock, as
reported on NASDAQ; or (iii) if the Common Stock is not listed or admitted to
trading on the NASDAQ National Market, the average of the bid and asked prices
for the Common Stock as furnished for such day by NASDAQ, or, if not furnished
by NASDAQ, by any New York Stock Exchange, Inc. member firm regularly making a
market in the Common Stock and selected for such purpose by the SUA’s board of
directors.




     Notwithstanding the terms of the Purchase Agreement, the parties hereby
agree that AEON shall pay the Purchase Price in installments as set forth in
the Promissory Note (the “Note”), the terms of which are incorporated herein by
reference. Upon payment by AEON of each installment of the Purchase Price, as
set forth in the Note, SUA shall deliver to AEON such number of shares of Class
B Stock as can be purchased for the amount of such payment, as calculated
above. The date of each payment and delivery of shares of Class B Stock shall
be defined as a “Closing Date.”



     This Agreement may not be amended or changed without the written consent
of SUA and shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Sincerely,
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	By:
	 	/s/ Courtney C. Smith	 	 	 	 
	

	 	 	 	 	 	
 	 	 	 	 
	

	 	 	 	 	 	Name: Courtney C. Smith	 	 	 	 
	

	 	 	 	 	 	Title:   President & CEO	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ACCEPTED AND AGREED:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	AEON INSURANCE GROUP, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Lee Wendleton	 	 	 	 	 	 	 	 
	

	 	
 	 	 	 	 	 	 	 	 
	

	 	Name: Lee Wendleton	 	 	 	 	 	 	 	 
	

	 	Title:   President