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EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of _________________________, 1997
("Agreement"), between CNA Surety Corporation, a Delaware corporation (the
"Company") and Equity Capsure Limited Partnership, an Illinois limited
partnership (the "Major Stockholder").
RECITALS
(A) Pursuant to the Reorganization Agreement (the "Reorganization
Agreement") by and among Capsure Holdings Corp., a Delaware corporation
("Capsure"), Continental Casualty Company, an Illinois corporation ("Parent"),
the Company and Surety Acquisition Company, a Delaware corporation, dated as of
December 19, 1996, the Major Stockholder agreed to, among other things, vote
all of the 4,039,622 shares of common stock, $.05 par value per share of
Capsure, held by it in favor of the adoption of the Merger.
(B) As a condition to the consummation of the Merger contemplated by the
Reorganization Agreement, the Company and the Major Stockholder have entered
into this Agreement to provide certain securities registration rights with
respect to the shares of CNA Surety Common Stock issued to the Major
Stockholder.
Capitalized terms used in this Agreement without definition shall have the
respective meanings given to them in the Reorganization Agreement.
AGREEMENTS
In consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Effectiveness of Registration Rights. The registration rights
pursuant to Sections 2 and 3 hereof shall become effective as of the first day
of the sixth month following the Closing Date and terminate on the 3rd
anniversary of the Closing Date; provided, that the rights set forth herein
shall continue as necessary to effect a written notice submitted prior to the
termination of this Agreement.
Section 2. Registration on Request.
2.1 Notice. Upon written notice from the Major Stockholder or the Holders
(as defined in Section 8 hereof) of at least a majority of the Registrable
Securities (as defined in Section 9 hereof) requesting (i) that the Company
effect the registration under the Securities Act of all or part of the
Registrable Securities held by it or them or (ii) that the Company effect the
registration under the Securities Act of all but not less than all of the
Registrable Securities on a Form S-3 registration statement pursuant to Rule
415 under the Securities Act (or any similar rule) ("shelf registration"),
which notice shall specify the intended method or methods of disposition of
such Registrable Securities, the Company shall use its best efforts to effect
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earliest possible date) the registration, under the Securities Act, of such
Registrable Securities for disposition in accordance with the intended method
or methods of disposition stated in such request, provided that:
(a) except in the case of a shelf registration, if the Company shall have
previously effected a registration with respect to Registrable Securities
pursuant to this Section 2 or Section 3 hereof, the Company shall not be
required to effect a registration pursuant to this Section 2 until a period
of 120 days shall have elapsed from the effective date of the most recent
such previous registration;
(b) if, in the reasonable judgment of the Company, a registration at the
time and on the terms requested would adversely affect any public financing
by the Company that had been contemplated by the Company prior to the notice
by such Holder requesting registration, the Company shall not be required to
commence using its best efforts to effect a registration pursuant to this
Section 2 until the earlier of (i) 60 days after the completion or
abandonment of such financing and (ii) the termination of any "black out"
period required by the underwriters, if any, in connection with such
financing;
(c) the Company shall not be required to file a registration statement if,
as a result, the Company would be required to include in such registration
statement (i) audited financial statements as of any date other than a fiscal
year end or (ii) pro forma financial statements pursuant to Regulation S-X
under the Securities Act if such pro forma statements cannot be reasonably
prepared in a timely fashion, until such audited financial statements or such
pro forma financial statements have been prepared; provided that the Company
shall use its reasonable efforts to prepare on a timely basis any audited
financial statements or pro forma financial statements required to be
included;
(d) if the Company determines, based on the good faith judgment of the
Company's general counsel, that the filing of a registration statement would
require the disclosure of material information which the Company has a bona
fide business purpose for preserving as confidential or the Company is unable
to comply with Securities and Exchange Commission requirements, the Company
shall not be required to commence using its best efforts to effect a
registration pursuant to this Section 2 until the earlier of (i) the date
upon which such material information is disclosed to the public (it being
understood that nothing herein shall require such disclosure) or ceases to be
material or (ii) 90 days after the Company makes such good faith
determination; and
(e) if, at any time the Company informs the Holder or Holders that it
believes that any fact or circumstance concerning the Company exists which,
in the opinion of the Company, constitutes material information which has not
been publicly disclosed and which the Company believes, in its sole opinion,
it is inappropriate or inadvisable to so disclose, the Company may instruct
orally (such oral instructions to be confirmed promptly in writing) such
Holder or Holders not to sell any of its or their Registrable Securities
until the Company either (i) discloses such fact or circumstance and delivers
to the Holder or Holders (in the context of a public offering) copies of an
amended or
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supplemented prospectus in accordance with the provisions of Section 4.1
hereof, or (ii) delivers written notice to each Holder that it may proceed
with such sale; provided, that no such limitation on the Holders' ability to
sell its Registrable Securities shall continue for more than a period of 60
business days.
(f) the Holders, cumulatively, shall have the right to exercise
registration rights pursuant to this Section 2.1 only once.
If in any case the Company shall under any of foregoing clauses (a) through (d)
postpone the filing of a registration statement requested by a Holder or
Holders, the Holder or Holders shall have the right to withdraw, in whole but
not in part, the request for registration by giving written notice to the
Company 30 days after receipt of the notice of postponement, and in the event
of such withdrawal such request shall not be counted as the exercise of the
right permitted under the foregoing clause (f) to this Section 2.1. In
addition, in no event shall a registration request be counted if the
Registrable Securities with respect to which a request is made are not
registered pursuant to an effective registration statement due to default by
the Company of its obligations hereunder. If the Company shall have filed a
shelf registration with respect to the Registrable Securities, the Company may
withdraw such registration statement upon the third anniversary date of the
Closing Date.
2.2 Third Person Shares. The Company shall have the right to cause the
registration of securities for sale for the account of any person (excluding
the Company in a primary offering of its voting securities) in any registration
of Registrable Securities requested pursuant to this Section 2, provided that
the Company shall not have the right to cause the registration of such
securities if:
(a) in the reasonable judgment of the Holder or Holders requesting such
registration pursuant to this Section 2, registration of such securities
would adversely affect the offering and sale of Registrable Securities then
contemplated by the Holders; or
(b) such Holder or Holders do not receive assurances satisfactory to it or
them that the person for which such securities are being registered will pay
any transfer taxes applicable to their securities being registered, all
commissions, discounts and other compensation payable to the underwriters
(including fees and expenses of underwriters' counsel other than those
referred to in clause (iv) of the definition of Registration Expenses) in
respect of such securities and the fees and expenses of their own counsel
(provided that for purposes of this clause (b), the guarantee by the Company
to each Holder of payment of such amounts shall be satisfactory assurance to
the Holders).
2.3 Registration Expenses. The Company shall pay or cause to be paid all
Registration Expenses in connection with any registration pursuant to this
Section 2; provided that with respect to any such registration each Holder
requesting such registration shall bear any transfer taxes applicable to such
Holder's Registrable Securities registered thereunder, all commissions,
discounts or other compensation payable to the underwriters in respect of such
Registrable Securities and the fees and expenses of such Holder's own counsel;
and provided further that
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in no event shall any Holder be required to pay any internal costs of the
Company or the Company be required to pay any internal costs of any Holder.
Section 3. Incidental Registration.
3.1 Notice and Registration. If the Company proposes to register any of its
voting securities ("Other Securities") for public sale under the Securities
Act, on a form and in a manner which would permit registration of Registrable
Securities for sale to the public under the Securities Act, it will give prompt
written notice to each Holder of its intention to do so, and upon the written
request of a Holder delivered to the Company within fifteen Business Days after
the giving of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such Holder and the intended method of
disposition thereof) the Company will use its best efforts to effect, in
connection with the registration of the Other Securities, the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by such Holder, to the extent required to permit
the disposition (in accordance with the intended method or methods thereof as
aforesaid) of the Registrable Securities so to be registered, provided that:
(a) if, at any time after giving such written notice of its intention to
register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company receives the written opinion of the managing underwriters of such
offering or offerings that the aggregate amount of shares to be registered by
the Holders of the Registrable Securities could materially and adversely
affect such offering, then the Company may reduce the number of Registrable
Securities of such Holders to be included in such offering; provided, that
such Holders will be entitled to register the maximum number of Registrable
Securities which the underwriters deem advisable in such written opinion
(without regard to the limitations set forth in Section 7) and the Company
will allocate the number of Registrable Shares to be registered for each such
Holder on a pro rata basis in accordance with the number of shares each
Holder initially requested to be sold;
(b) the Company shall not be required to effect any registration of
Registrable Securities under this Section 3 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange
offers, dividend reinvestment plans or stock option or other employee benefit
plans; and
(c) Holders, cumulatively, shall have the right to exercise registration
rights pursuant to this Section 3 without limit during the term hereof.
No registration of Registrable Securities effected under this Section 3 shall
relieve the Company of its obligation to effect registrations of Registrable
Securities pursuant to Section 2.
3.2 Registration Expenses. The Company will pay all Registration Expenses
in connection with any registration pursuant to this Section 3; provided that
with respect to any such registration a Holder requesting such registration
shall bear all transfer taxes applicable to such Holder's Registrable
Securities registered thereunder, as such Holder's pro rata share of
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all commissions, discounts or other compensation payable to the underwriters in
respect of such Registrable Securities and the fees and expenses of a Holder's
own counsel; and provided, further, that in no event shall any Holder be
required to pay any internal costs of the Company or the Company be required to
pay any internal costs of any Holder.
Section 4. Registration Procedures.
4.1 Registration and Qualification.
(a) If and whenever the Company is required to use its best efforts to
effect the registration of any Registrable Securities under the Securities
Act as provided in Sections 2 and 3, the Company will as promptly as is
practicable:
(i) prepare, file and use its best efforts to cause to become effective
a registration statement under the Securities Act regarding the Registrable
Securities to be offered;
(ii) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities until the
earlier of such time as all of such Registrable Securities have been disposed
of in accordance with the intended methods of disposition by the Holder set
forth in such registration statement or the expiration of five months after
such registration statement becomes effective (except in the case of a shelf
registration statement on Form S-3 the parties shall mutually agree upon an
appropriate expiration period which in no event shall be later than the end
of the term of this Agreement);
(iii) furnish to each Holder and to any underwriter of such Registrable
Securities such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in the case of a Holder or
managing underwriter, including all exhibits), such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) or filed under the
Securities Act, in conformity with the requirements of the Securities Act,
such documents as may be incorporated by reference in such registration
statement or prospectus, and such other documents, as each Holder or such
underwriter may reasonably request;
(iv) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as a Holder or any underwriter of such
Registrable Securities shall reasonably request, and do any and all other
acts and things which may be necessary or advisable to enable each Holder or
any underwriter to consummate the disposition in such jurisdictions of its
Registrable Securities covered by such registration statement, except that
the Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction wherein it is not
so qualified, or to
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subject itself to taxation in any such jurisdiction, or to consent to general
service of process in any such jurisdiction;
(v) furnish to each such Holder and the underwriters, addressed to them,
(A) an opinion of counsel for the Company, dated the date of the closing
under the underwriting agreement relating to any underwritten offering, and
(B) a "comfort" letter signed by the independent public accountants who have
certified the Company's financial statements included in such registration
statement, covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case
of such accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters, respectively, delivered to underwriters
in underwritten public offerings of securities and such other matters as a
Holder may reasonably request;
(vi) immediately notify each such Holder at any time when a prospectus
relating to a registration pursuant to Section 2 or 3 is or was required to
be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes or included an untrue statement of a material fact
or omits or omitted to state any material fact required to be stated therein
or necessary, in the light of the circumstances then existing, to make the
statements therein not misleading, and at the request of each such Holder
prepare and furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary, in
the light of the circumstances then existing, to make the statements therein
not misleading; and
(vii) use reasonable efforts to do any and all other acts any Holder may
reasonably request and which are customary for a registration of equity
securities.
The Company may require each Holder to furnish the Company such information
regarding such Holder and the distribution of such securities as the Company
may from time to time reasonably request in writing and as shall be required by
law or by the SEC in connection with any registration.
(b) Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
4.1(a)(vi) thereof, such Holder shall use its best effort to discontinue
forthwith disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by Section
4.l(a)(vi) hereof.
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4.2 Underwriting.
(a) If requested by the managing underwriter for any underwritten
offering of Registrable Securities pursuant to a registration requested
hereunder, the Company will enter into an underwriting agreement with the
underwriters for such offering, such agreement to contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnities and contribution to the effect provided in Section 6 and the
provision of opinions of counsel and accountants' letters to the effect
provided in Section 4.1(a)(v). Each Holder involved shall be a party to any
such underwriting agreement and the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of
such underwriters, shall also be made to and for the benefit of each such
Holder.
(b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the Company may
require the Registrable Securities requested to be registered pursuant to
Section 3 by any Holder, to be included in such underwriting on the same
terms and conditions as shall be applicable to the Other Securities being
sold through underwriters under such registration. In any such case, the
requesting Holder shall be a party to any such underwriting agreement. Such
agreement shall contain such representations, warranties and covenants by
each such Holder and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnities and contribution to the effect
provided in Section 6. The representations and warranties in such
underwriting agreement by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters, shall also be made to
and for the benefit of such Holder.
Section 5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give each Holder involved
and the underwriters, if any, and their respective counsel and accountants
(collectively, the "Inspectors"), such reasonable and customary access to its
books and records (collectively, the "Records") and such opportunities to
discuss the business of the Company with its officers and the independent
public accountants who have certified its financial statements as shall be
necessary, in the opinion of such Holder and such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act. Records which the Company reasonably determines to be
confidential and which it notifies the Inspectors in writing are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary or appropriate to avoid or correct a misstatement or
omission in the registration statement, (ii) the portion of the Records to be
disclosed has otherwise become publicly known, (iii) the information in such
Records is to be used in connection with any litigation or governmental
investigation or hearing relating to any registration statement or (iv) the
release of such Records is ordered pursuant to a subpoena or other order. Each
Holder agrees that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company.
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Section 6. Indemnification and Contribution.
(a) In the event of any registration of any Registrable Securities
hereunder, the Company will enter into customary indemnification arrangements
to indemnify and hold harmless a Holder, its general and limited partners,
directors and officers, each other person who participates as an underwriter
in the offering or sale of such securities, each officer and director of each
underwriter, and each other person, if any, who controls such Holder or any
such underwriter within the meaning of the Securities Act against any losses,
claims, damages, liabilities and expenses, joint or several, to which such
person may be subject under the Securities Act or otherwise insofar as such
losses, claims, damages, liabilities or expenses (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus included
therein or filed under the Securities Act, or any amendment or supplement
thereto, or any document incorporated by reference therein, or (ii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and the Company will reimburse each such person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus or final prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by a Holder or an underwriter for use in
the preparation thereof; and provided, further, that the Company shall not be
liable to any person who participates as an underwriter in the offering or
sale of Registrable Securities or any other person who controls such
underwriter within the meaning of the Securities Act under the indemnity
agreement in this subsection (a) with respect to any preliminary prospectus
to the extent that any such loss, claim, damage or liability or expense (or
actions or proceedings in respect thereof) of such person results from the
fact that such underwriter sold Registrable Securities to a purchaser to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the prospectus (excluding documents incorporated by
reference) or of the prospectus as then amended or supplemented (excluding
documents incorporated by reference) in any case where such delivery is
required by the Securities Act if the Company has previously made available
copies thereof to such underwriter and the loss, claim, damage or liability
of such person results from an untrue statement or omission of a material
fact contained in the preliminary prospectus which was corrected in the
prospectus (or the prospectus as amended or supplemented). Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of a Holder or any such underwriter and shall survive the
transfer of such securities by a Holder. The Company also shall agree to
provide provision for contribution as shall be reasonably requested by a
Holder or any underwriters regarding circumstances where such indemnity may
be held unenforceable.
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(b) A Holder, by virtue of exercising its registration rights hereunder,
agrees and undertakes severally, and the Company may require, as a condition
to filing a registration statement, that the Company shall have received from
the underwriters an agreement to enter into customary indemnification
arrangements to indemnify and hold harmless (in the same manner and to the
same extent as set forth in clause (a) of this Section 6) the Company, each
director of the Company, each officer of the Company who shall sign such
registration statement, each other person who participates as an underwriter
in the offering or sale of such securities, each officer and director of each
underwriter, and each other person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act, with respect to
any statement in or omission from such registration statement, any
preliminary prospectus or final prospectus included therein, or any amendment
or supplement thereto, if such statement or omission was made in reliance
upon and in conformity with written information furnished by it to the
Company. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of the
Registrable Securities by such Holder of Registrable Securities. Each Holder
also shall agree to provide provision for contribution as shall reasonably be
requested by the Company or any underwriters regarding circumstances where
such indemnity may be held unenforceable.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any indemnified person in respect of which
indemnity may be sought pursuant to this Section, such indemnified person
shall promptly notify the indemnifying person in writing and the indemnifying
person, upon request of the indemnified person, promptly shall retain counsel
satisfactory to the indemnified person to represent the indemnified person
and any others the indemnifying person may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified person shall have the
right to retain its own counsel, but the fees and disbursements of such
counsel shall be at the expense of such indemnified person unless (i) the
indemnifying person shall have failed to retain counsel for the indemnified
person as aforesaid, (ii) the indemnifying person and such indemnified person
shall have mutually agreed to the retention of such counsel or (iii) in the
reasonable opinion of such indemnified person representation of such
indemnified person by the counsel retained by the indemnifying person would
be inappropriate due to actual or potential differing interests between such
indemnified person and any other person represented by such counsel in such
proceeding. The indemnifying person shall not be liable for any settlement
of any proceeding effected without its written consent (which shall not be
unreasonably withheld) but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying person agrees to indemnify
the indemnified person from and against any loss or liability by reason of
such settlement or judgment.
(d) Indemnification and contribution similar to that specified in the
preceding subdivisions of this Section 6 (with appropriate modifications)
shall be given by the Company and each Holder with respect to any required
registration or other qualification
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of such Registrable Securities under any federal or state law or regulation of
governmental authority other than the Securities Act.
Section 7. Limitation on Rights. Each Holder agrees that no requests for
registration shall be made hereunder for less than 500,000 shares, in
aggregate, of Registrable Securities.
Section 8. Definition of Holder. The term "Holder" means the Major
Stockholder and shall also mean any Permitted Assignee (as defined hereinafter)
that is a holder of Registrable Securities; provided that in the case of such
Permitted Assignee, the Major Stockholder shall have assigned rights hereunder
in writing and the Permitted Assignee shall have agreed in writing, addressed
to the Major Stockholder and the Company, to be bound hereby; and provided
further, that there shall be no more than 20 Permitted Assignees considered
Holders hereunder at any one time without the consent of the Company, which
consent will not be unreasonably withheld. For purposes of this Agreement, a
"Permitted Assignee" shall mean (i) an affiliate (as defined under the Exchange
Act, as defined in the Reorganization Agreement) of the Holder or its partners,
(ii) a lender or other pledgee of Registrable Securities as collateral or
(iii) a charitable foundation receiving Registrable Securities from the Holder
or an affiliate of the Holder. Rights hereunder assigned to any Permitted
Assignee covered by clauses (ii) or (iii) in the preceding sentence shall not,
without the consent of the Company, be further assignable by such Permitted
Assignee other than to a successor to all or substantially all of such
Permitted Assignee's business or assets which successor shall have agreed in
writing to be bound hereby. The Company shall not be obligated to effect any
registration pursuant to Section 3 hereof if, in the written opinion of counsel
to the Company who shall be reasonably satisfactory to any affected Holder, the
intended method or methods of disposition of any Registrable Securities by such
Holder may be effected without registration under the Securities Act.
Section 9. Definition of Registrable Securities. The term "Registrable
Securities" shall mean (a) the common stock of the Company held by the Major
Stockholder on the date hereof (and __________ shares of Common Stock held by
_________________________ (charitable foundation) on the date hereof), (b) any
common stock referred to in clause (a) held by a Permitted Assignee, (c) any
common stock issued or issuable with respect to the securities referred to in
clause (a) by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization, and (d) any common stock issued or issuable pursuant to the
exercise of stock options. For purposes of determining the aggregate amount of
Registrable Securities outstanding at any time, shares with respect to which
the Company shall not be obligated to effect registration pursuant to the last
sentence of Section 8 hereof shall not be deemed Registrable Securities.
Section 10. Entire Agreement. This Agreement and the agreements referenced
herein constitute the entire agreement between the parties hereto with respect
to the subject matter hereof.
Section 11. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by fax, by
nationally-recognized overnight delivery service
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or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
if to the Company:
CNA Surety Corporation
c/o CNA Insurance Companies
CNA Plaza; 00 Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Group Vice President
& Associate General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
If to any Holder, addressed to such Holder at such Holder's address as shown
on the books of the Company or its transfer agent or to such other address or
person as the person to whom notice is given may have previously furnished to
the other in writing in the manner set forth above.
Section 12. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW; HOWEVER, ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN AND DECIDED BY THE FEDERAL
OR STATE COURTS IN CHICAGO, ILLINOIS, SUCH COURTS BEING A PROPER FORUM IN WHICH
TO ADJUDICATE SUCH ACTION OR PROCEEDING, AND EACH PARTY HEREBY WAIVES ANY CLAIM
OF INCONVENIENT FORUM.
Section 13. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 14. Amendments; Severability. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the Company
and the Major Stockholder or the Holders of a majority of the Registrable
Securities hereunder. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity and enforceability of the other provisions hereof. If any
provision
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