CNA FINANCIAL CORPORATION SERIES H CUMULATIVE PREFERRED STOCK RETIREMENT AGREEMENT
CNA
FINANCIAL CORPORATION
SERIES
H CUMULATIVE PREFERRED STOCK
RETIREMENT
AGREEMENT
As
of
August 1, 2006
Loews
Corporation
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attn:
General Counsel
Gentlemen:
The
undersigned, CNA Financial Corporation, a Delaware corporation (the “Company”),
hereby confirms its agreement with you as follows:
RECITALS
WHEREAS,
you purchased 7,500 shares of the Company’s Series H Cumulative Preferred Stock
(“Series H Preferred”) for $750 million from the Company on December 19,
2002;
WHEREAS,
pursuant to Section 4 of the Certificate of Designation creating the Series
H
Preferred, the Series H Preferred accrues dividends at the rate provided for
therein, none of which dividends have been declared or paid;
WHEREAS,
Section 5 of the Certificate of Designation creating the Series H Preferred
provides that the Series H Preferred may be redeemed upon the mutual agreement
of the Company and the Holders (as defined in the Certificate of Designation)
of
a majority of the outstanding shares of Series H Preferred, at any time and
from
time to time, at a redemption price per share equal to $100,000 plus all accrued
and unpaid dividends accrued thereon through and including the date of
redemption (the “Redemption Price”);
WHEREAS,
you are the sole Holder of the Series H Preferred; and
WHEREAS,
the Company desires to acquire all of the outstanding shares of Series H
Preferred from you at the Redemption Price and you desire to dispose of the
Series H Preferred to the Company for the Redemption Price on the Closing Date
(as defined below).
NOW
THEREFORE:
I.
AGREEMENT
TO SELL SERIES H CUMULATIVE PREFERRED; CLOSINGS;
SALE
OF SHARES
1.1 Agreement
to Sell Series H Cumulative Preferred. Subject
to the terms and conditions of this Agreement and upon the Closing, you hereby
agree to sell to the Company the 7,500 shares of Series H Preferred owned by
you
and the Company hereby agrees to purchase such shares of Series H Preferred
for
a purchase price equal to the Redemption Price as of the Closing Date (as
defined below).
1.2 Agreement
to Purchase Common Stock. Subject
to the terms and conditions of this Agreement and upon the Closing, you hereby
agree to purchase 7,863,258 shares (the “Shares”) of the Company’s common stock,
$2.50 par value per share (the “Common Stock”), at a price of $33.64/share,
resulting in an aggregate purchase price for the Shares of $264,520,000 (the
“Common Stock Purchase Amount”).
1.3 Closings.
Subject
to the terms and conditions of this Agreement, including, without limitation,
upon the basis of the representations
and warranties herein contained, on August 8, 2006, or at such earlier or later
date as the parties shall agree (the “Closing Date”), (A) the Company will pay
you the Redemption Price, against delivery by you to the Company of the
certificate representing the 7,500 shares of Series H Preferred, together with
a
duly executed stock power evidencing the transfer of such shares of Series
H
Preferred, (B) you will pay the Company the Common Stock Purchase Amount,
against delivery by the Company to you of a certificate or certificates in
your
name or the name of your nominee representing the Shares, and (C) you and the
Company will enter into the Registration Rights Agreement in substantially
the
form attached hereto as Exhibit
1.3
(the
“Registration Rights Agreement”). At the Closing, the Company will deliver to
you currently available funds, by wire transfer to the account designated by
you
to the Company no later than 10:00 a.m., Central Time, the Business Day prior
to
the Closing, in an amount equal to the difference between the Redemption Price
and the Common Stock Purchase Amount. The consummation of the transactions
contemplated hereby is hereinafter called the “Closing”. The Closing shall take
place on the Closing Date at 10:00 a.m., Central Time, at the offices of Mayer,
Brown, Xxxx & Maw LLP, 00 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, or at such
other time and place as shall be agreed upon by the parties.
II.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company represents and warrants that as of the date hereof and as of the Closing
Date:
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2.1 Organization
and Qualification of the Company. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full corporate power and authority
to conduct its business as currently conducted and to own and use its Property
and is qualified to do business and in good standing as a foreign corporation
in
each jurisdiction where the character of its Property or the nature of its
activities makes such qualification necessary, except where the failure to
so
qualify would not have a material adverse effect on the business or Property
of
the Company and its Subsidiaries (as defined in Section 2.2
below),
taken as a whole (a “Material Adverse Effect”).
2.2 Organization
and Qualification of Subsidiaries. Each
subsidiary of the Company that is a “significant subsidiary”, as defined in Rule
405 of the regulations under the Securities Act, (each a “Subsidiary”) has been
duly incorporated and is validly existing as an insurance company (other than
The Continental Corporation, which is validly existing as a New York business
corporation) and is authorized to transact its business under the insurance
code
of its domiciliary state with full corporate power and authority to conduct
its
business as currently conducted and to own and use the properties owned by
it,
and is duly licensed to do businesses as a foreign insurer and is authorized
to
transact its business under the laws of each jurisdiction which requires such
licensure where the character of its Property or the nature of its activities
makes such qualification necessary, except where the failure to so qualify
would
not have a Material Adverse Effect.
2.3 No
Conflict. The
execution, delivery and performance by the Company of this Agreement and the
Registration Rights Agreement and the consummation by the Company of the
transactions contemplated hereby and thereby do not and will not (1) contravene,
conflict with or result in any violation or breach of any provision of the
certificate of incorporation or bylaws of the Company; (2) contravene, conflict
with or result in a violation or breach of any provision of any law, rule,
regulation, judgment, injunction, order or decree applicable to the Company
or
its subsidiaries, or require any consent, approval or other action by, filing
with or notice to any governmental authority (including without limitation
any
regulatory authority); (3) require any consent or other action by, filing with
or notice to, any person under, constitute a default under (or an event that,
with or without notice or lapse of time or both, would constitute a default),
or
cause or permit the termination, cancellation, acceleration, triggering or
other
change of any right or obligation or the loss of any benefit to which the
Company or any of its subsidiaries is entitled under (A) any provision of any
agreement or other instrument binding upon the Company or any of its
subsidiaries or (B) any license, franchise, permit, certificate, approval or
other similar authorization held by, or affecting, or relating to, the assets
or
business of the Company or any of its subsidiaries; or (4) result in the
creation or imposition of any lien or other encumbrance on any asset of the
Company or any of its subsidiaries, other than such exceptions in the case
of
clauses (2), (3) and (4) as would not, individually or in the aggregate, be
reasonably expected to materially impair or delay the ability of the Company
to
consummate the transactions contemplated by this Agreement or the Registration
Rights Agreement or have a Material Adverse Effect.
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2.4 Litigation,
etc. There
are no actions, proceedings or investigations pending or to the knowledge of
the
Company threatened against the Company and/or any Subsidiaries before any court
or before any administrative agency or administrative officer or executive,
which may reasonably be expected to have a Material Adverse Effect on the
ability of the Company to perform its obligations under this Agreement and
the
Registration Rights Agreement.
2.5 Company
Authorizations. This
Agreement and the Registration Rights Agreement will have been duly authorized
by the Company; this Agreement has been, and no later than the Closing Date
the
Registration Rights Agreement will have been, duly executed and delivered by
the
Company and constitutes, or in the case of the Registration Rights Agreement
will constitute, the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors rights generally
or by equitable principles in any action (legal or equitable) and public policy
that may limit the enforceability of rights to indemnification.
2.6 Extent
of Offering. Neither
the Company nor, to its knowledge, any agent acting on its behalf has sold
or
offered to sell any or all of the Shares or any similar securities so as to
bring the issuance or sale of the Shares within the provisions of Section 5
of
the Securities Act.
2.7 No
Default. To
the knowledge of the Company, neither the Company nor any of the Subsidiaries
is
either (i) in default under any (a) order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority, or (b) contract, agreement or
instrument to which it is a party or by which it or any of its Property is
bound, or (ii) in violation of any applicable law, ordinance, rule or regulation
of any Governmental Authority, in neither case, which could reasonably be
expected to have a Material Adverse Effect.
2.8 Capital
Stock. Following
the retirement of the Series H Preferred, the authorized capital stock of the
Company will consist of 500,000,000 shares of Common Stock and 12,500,000 shares
of Preferred Stock, with no par value. No Holder of any security of the Company
(a) will be entitled to any preemptive rights or (b) will have any right of
first refusal to purchase any of the Shares. The Shares shall be, upon issuance,
validly issued, fully paid and nonassessable and free and clear of any liens
or
other encumbrances (other than any liens or encumbrances that may be created
as
a result of your ownership of the Shares).
2.9 Periodic
Reports. The
Company’s Annual Report on Form 10-K for the year ended December 31, 2005 and
the Company’s Quarterly Reports on Form 10-Q, for the quarterly periods ending
March 31, 2006 and June 30, 2006, when they were filed with the Securities
and
Exchange Commission, conformed in all material respects to the requirements
of
the Securities Exchange Act and the rules and regulations of the Securities
and
Exchange Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to
be
stated therein or necessary to make the statements therein not
misleading.
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2.10 Absence
of Material Adverse Effect. Since
December 31, 2005, except as described in the Company’s Annual Report on Form
10-K for the year ended December 31, 2005 and the Company’s Quarterly Reports on
Form 10-Q, for the quarterly periods ending March 31, 2006 and June 30, 2006,
there have not been any events or developments that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
III.
REPRESENTATIONS
AND WARRANTIES OF INVESTOR
3.1 Investment
Intent, etc. You
represent and warrant that you are acquiring the Shares acquired hereunder
for
your own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution (within the meaning of the
Securities Act) thereof, nor with any present intention of selling or otherwise
disposing of the same subject, nevertheless, to any requirement of law that
the
disposition of your Property shall at all times be within your
control.
3.2 Sophistication,
Financial Strength, Access, etc. You
represent, warrant and acknowledge that you are an accredited investor (as
the
term is defined in Rule 501 promulgated by the Securities and Exchange
Commission under the Securities Act) and that your principal place of business
is the address set forth on page one hereof. You acknowledge that you are fully
informed that the Shares being sold to you hereunder are being sold pursuant
to
a private offering exemption of the Securities Act and are not being registered
under the Securities Act or under the securities or blue sky laws of any state
or foreign jurisdiction; that such Shares must be held indefinitely unless
they
are subsequently registered under the Securities Act and any applicable state
securities or blue sky laws, or unless an exemption from registration is
available thereunder; and that the Company has no obligation to register such
Shares, other than as contemplated in the Registration Rights Agreement. You
acknowledge that all documents, records and books pertaining to the investment
in the Company contemplated hereby have been made available or delivered to
you;
that you have had an opportunity to ask questions of and receive answers from
the Company and its officers.
3.3 Organization
of Investor. You
represent and warrant that you are a corporation duly organized, validly
existing and in good standing under the laws of your state of incorporation,
and
that you have all requisite power and authority to carry out the transactions
provided for in, or contemplated by, this Agreement.
3.4 Authorization. You
represent and warrant that the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein, have
been duly authorized by you. The fulfillment of and compliance with the terms
of
this Agreement by you will not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, or (iii)
result in a violation of, breach of or default under (a) your certificate of
incorporation or bylaws or (b) any law, statute, rule or regulation to which
you
are subject, or (c) any agreement, instrument, order, judgment or decree to
which you are a party, bound or subject.
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3.5 Binding
Effect. You
represent and warrant that this Agreement constitutes your valid and binding
obligation, enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors
rights generally or by equitable principles in any action (legal or
equitable).
3.6 Title
to Series H Preferred. At
the Closing, upon payment for the Series H Preferred as contemplated in this
Agreement, the Company shall obtain good and marketable title to the Series
H
Preferred acquired on such date, free and clear of any liens or other
encumbrances.
IV.
CONDITIONS
TO CLOSINGS
4.1 The
Company’s obligation to consummate the transactions contemplated herein, as
provided in Article I hereof, shall be subject to the satisfaction of the
following conditions at or prior to the Closing, any of which may be waived
by
the Company in writing.
(A) Completion
of Financing Transactions. The
Company shall have consummated (i) a public offering of its Common Stock (the
“Stock Offering”) and (ii) one or more issuances of its debt securities (the
“Debt Offering”), with total gross proceeds to the Company of not less than
$650,000,000.
(B) Representations
and Warranties True at Closing: Non-Occurrence of Default. The
representations and warranties contained in Article III hereof shall be true
as
of the Closing Date and a duly authorized officer of yours shall deliver to
the
Company at the Closing a certificate to such effect, executed by him, dated
the
Closing Date.
4.2 Your
obligation to consummate the transactions contemplated herein, as provided
in
Article I hereof, shall be subject to the satisfaction of the following
conditions at or prior to the Closing, any of which may be waived by you in
writing:
(A) Representations
and Warranties True at Closing: Non-occurrence of Default. The
representations and warranties contained in Article II hereof shall be true
as
of the Closing Date, there shall exist no condition, event or fact constituting,
or which, with notice or passage of time or both, would constitute a material
default in the observance of any of the Company’s undertakings or covenants
hereunder, or pursuant to the Registration Rights Agreement, no material adverse
change shall have occurred in the business, Property, prospects or condition
(financial or otherwise) of the Company between the date of this Agreement
and
the Closing Date, and all conditions precedent to the Closing to be performed
by
the Company shall have been complied with; and an Executive Vice President
or a Senior Vice President
of the Company shall deliver to you at the Closing a certificate to such effect,
executed by him, dated the Closing Date.
(B) Corporate
Proceedings. All
corporate and other proceedings required to be taken in connection with the
transactions contemplated hereby, shall be
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satisfactory
in form and substance to you and your counsel, and you and your counsel shall
have received all such counterpart originals or certified or other copies of
such documents as you or your counsel shall reasonably request.
(C) Legal
Opinion. You
shall have received an opinion of counsel from Xxxxxxxx X. Xxxxxx, Esq.,
Executive Vice President, Secretary and General Counsel of the Company,
substantially in the form attached hereto and made a part hereof as Exhibit
4.2(C).
(D) Registration
Rights
Agreement. You and the Company shall have entered into the
Registration Rights Agreement.
(E) Listing. The
Shares
shall have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
V.
COVENANTS
5.1 Covenants
of the Company. The
Company hereby covenants and agrees with you as follows:
(A) Retirement
of Series H Preferred. The
Company will as soon as practicable following the Closing, retire the Series
H
Preferred acquired hereunder.
(B) Listing. The
Company shall use its best efforts to have the Shares listed for trading on
the
New York Stock Exchange.
VI.
TRANSFER
OF SECURITIES
The
Shares shall not be transferable except upon the conditions specified in this
Article VI, which conditions are intended to insure compliance with the
provisions of the Securities Act and state securities laws in respect of the
transfer of any such shares.
6.1 Restrictive
Legends.
Unless
and until otherwise permitted by this Article, each certificate for the Shares
issued to you or your nominee, or to any subsequent transferee shall be stamped
or otherwise imprinted with a legend in substantially the following
form:
“The
shares represented hereby have not been registered under the Securities Act
of
1933, as amended, and thus may not be offered for sale, sold, transferred or
otherwise disposed of unless registered under the Securities Act of 1933, as
amended, or unless an exemption from such registration is available. Further,
such transfer is subject to the conditions specified in a Retirement Agreement
dated
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as
of
August 1, 2006, between Loews Corporation and CNA Financial Corporation (the
“Company”), a copy of which Agreement is on file and may be inspected at the
principal office of the Company. A copy of such Agreement will be furnished
by
the Company to the holder hereof upon request and without charge. Under certain
circumstances specified in such Agreement, the Company has agreed to deliver
to
the holder hereof a new certificate, not bearing this legend, for all or part
of
the number of shares evidenced hereby, as the case may be, registered in the
name of such holder or designated nominee.”
The
Company may stop, or may order its
transfer agent for the Shares to stop, the transfer of any Shares bearing the
legend set forth above until the conditions of this Article VI with respect
to
the transfer of such shares have been satisfied.
6.2 Notice
of Proposed
Transfer. If, prior to any transfer or sale of any Shares, the Holder
desiring to effect such transfer or sale shall deliver a written notice to
the
Company describing briefly the manner of such transfer or sale and a written
opinion of counsel for such Holder (provided that such counsel, and the form
and
substance of such opinion, are reasonably satisfactory to the Company) to the
effect that such transfer or sale may be effected without the registration
of
such shares under the Securities Act, the Company shall thereupon permit or
cause its transfer agent (if any) to permit such transfer or sale to be
effected.
6.3 Termination
of
Restrictions.
(A) Notwithstanding
the foregoing
provisions of this Article VI, the restrictions imposed by this Article VI
upon
the transferability of the Shares shall terminate as to any particular share
when (1) such share shall have been effectively registered under the Securities
Act and sold by the Holder thereof in accordance with such registration, or
(2)
a written opinion to the effect that such restrictions are no longer required
or
necessary under any federal or state securities law or regulation has been
received from counsel for the Holder thereof (provided that such counsel and
the
form and substance of such opinion, are reasonably satisfactory to the Company)
or counsel for the Company, or (3) such share shall have been sold without
registration under the Securities Act in compliance with Rule 144 promulgated
by
the Securities and Exchange Commission under the Securities Act (“Rule 144”), or
(4) the Company is reasonably satisfied that the Holder of such share shall,
in
accordance with the terms of Subsection (k) of Rule 144, be entitled to sell
such share pursuant to such Subsection, or (5) a letter or an order shall have
been issued to the Holder thereof by the staff of the Securities and Exchange
Commission or such Commission stating that no enforcement action shall be
recommended by such staff or taken by such Commission, as the case may be,
if
such share is transferred without registration under the Securities Act in
accordance with the conditions set forth in such letter or order and such letter
or order specifies that no subsequent restrictions on transfer are
required.
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(B) Whenever
the restrictions imposed by this Article VI shall terminate, as hereinabove
provided, the Holder of any particular Share then outstanding as to which such
restrictions shall have terminated, shall be entitled to receive from the
Company, without expense to such Holder, one or more new certificates for Shares
not bearing the restrictive legend set forth in Section
6.1
hereof.
6.4 Compliance
with Rule 144. At
the written request of any Holder of Shares who proposes to sell any Shares
in
compliance with Rule 144, the Company shall furnish to such Holder, within
ten
days after receipt of such request, a written statement as to whether or not
the
Company is in compliance with the filing requirements of the Securities and
Exchange Commission as set forth in such Rule.
6.5 Non-Applicability
of Restrictions on Transfer. Notwithstanding
the provisions of Section
6.2
hereof,
any record owner of Shares may from time to time transfer all or part of such
record owner’s Shares (i) to a nominee identified in writing to the Company as
being the nominee of or for such record owner, and any nominee of or for a
beneficial owner of Shares identified in writing to the Company as being the
nominee of or for such beneficial owner may from time to time transfer all
or
part of the Shares registered in the name of such nominee but held as nominee
on
behalf of such beneficial owner, to such beneficial owner, or (ii) if such
record owner is a partnership or the nominee of a partnership, to a partner,
retired partner, or estate of a partner or retired partner, of such partnership,
so long as such transfer is in accordance with the transferee’s interest in such
partnership and is without consideration; provided,
however,
that
each such transferee shall remain subject to all restrictions on the transfer
of
Shares herein contained.
VII.
DEFINITIONS
For
the
purposes of this Agreement, the following terms shall have the following
meanings:
“Agreement”
shall mean, and the words “herein,” “hereof,” “hereunder” and words of similar
import shall refer to this Agreement and any amendment or supplement
hereto.
“Closing”
shall have the meaning set forth in Section
1.3
hereof.
“Closing
Date” shall have the meaning set forth in Section
1.3
hereof.
“Company”
shall mean CNA Financial Corporation, a Delaware corporation, and all
successor corporations thereof.
“Common
Stock Purchase Amount” shall have the meaning set forth in Section
1.2
hereof.
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“Governmental
Authority” shall mean (a) the government of (i) the United States of America or
any state or other political subdivision thereof, or (ii) any jurisdiction
in
which the Company or any Subsidiary conducts all or any part of its business,
or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
“Holders”
shall mean the Persons who shall from time to time, own, of record or
beneficially, any Share. The term “Holder” shall mean any one of the
Holders.
“Material
Adverse Effect” shall have the meaning set forth in Section
2.1
hereof.
“Property”
shall mean an interest in any kind of property or assets, whether real, personal
or mixed, or tangible or intangible.
“Redemption
Price” shall have the meaning set forth in the Recitals.
“Registration
Rights Agreement” shall have the meaning set forth in Section
1.2(B).
“Rule
144” shall have the meaning set forth in Section
6.3(A)
hereof.
“Securities
Act” shall mean the Securities Act of 1933, as amended prior to or after the
date of this Agreement, or any federal statute or statutes which shall be
enacted to take the place of such Act, together with all rules and regulations
promulgated thereunder.
“Securities
and Exchange Commission” shall mean the United States Securities and Exchange
Commission or any successor to the functions of such agency.
“Securities
Exchange Act” shall mean the Securities Exchange Act of 1934, as amended prior
to or after the date of this Agreement, or any federal statute or statutes
which
shall be enacted to take the place of such Act, together with all rules and
regulations promulgated thereunder.
“Series
H
Preferred” shall mean the Company’s Series H Cumulative Preferred Stock, no par
value.
“Stock
Offering” shall have the meaning set forth in Section
4.1(A) hereof.
“Subsidiary”
shall have the meaning set forth in Section
2.2
hereof.
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VII.
MISCELLANEOUS
8.1 Amendment
and Waiver.
(A) Any
term,
covenant, agreement or condition contained in this Agreement may be amended,
or
compliance therewith may be waived (either generally or in particular instances
and either retroactively or prospectively), (i) if prior to the Closing, by
written instruments signed by you and the Company, and (ii) if subsequent to
the
Closing, by written instruments signed by the Company and the Holders of a
majority of the then outstanding Shares.
(B) This
Agreement shall not be altered, amended or supplemented except by written
instruments. Any waiver of any term, covenant, agreement or condition contained
in this Agreement shall not be deemed a waiver of any other term, covenant,
agreement or condition, and any waiver of any default in any such term,
covenant, agreement or condition shall not be deemed a waiver of any later
default thereof or of any other term, covenant, agreement or condition. No
delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
8.2 Lost,
Etc., Securities. Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of any certificate representing Shares and (in case
of
loss, theft or destruction) receipt of indemnity satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto,
and
upon surrender and cancellation of such certificate, if mutilated, the Company
will make, and deliver, in lieu of such certificate, a new certificate of like
tenor. Any certificate made and delivered in accordance with the provisions
of
this Section
8.2
shall be
dated as of the date of the certificate in lieu of which such new certificate
is
made and delivered. If you or your affiliate are the beneficial owner of such
lost, stolen or destroyed certificate, then the affidavit of your or your
affiliate’s president (or other chief executive officer) and any vice president
or treasurer (if you or your affiliate are a corporation) or your or your
affiliate’s general partner (if you or your affiliate are a partnership),
setting forth the fact of loss, theft or destruction and your or your
affiliate’s beneficial ownership of such certificate at the time of such loss,
theft or destruction shall be accepted as satisfactory evidence thereof, and,
except as required by law, no indemnity shall be required as a condition to
execution and delivery of a new certificate other than your or your affiliate’s
written agreement to indemnify the Company and its directors, officers and
agents. The term “outstanding” when used in this Agreement with reference to
Shares as of any particular time, shall not include Shares in lieu of which
a
new certificate has been made and delivered by the Company in accordance with
the provisions of this Section
8.2.
8.3 Survival
of Covenants; Termination of Representations and Warranties. All
covenants contained herein or made in writing by the Company or by you in
connection herewith shall survive the execution and delivery of this Agreement
and the
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issuance
and sale or other transfer of Shares hereunder; provided, however, that all
representations and warranties contained herein or made in writing by the
Company or by you in connection herewith shall terminate immediately following
the Closing.
8.4 Severability. In
the event that any court or any governmental authority or agency declares all
or
any part of any Section of this Agreement to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate any other Section
of
this Agreement, and in the event that only a portion of any Section is so
declared to be unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidate the balance of such Section.
8.5 Successors
and Assigns. All
representations, warranties, covenants and agreements of the parties contained
in this Agreement or made in writing in connection herewith, shall, except
as
otherwise provided herein, be binding upon and inure to the benefit of their
respective nominees, successors and assigns and, in the case of a natural
Person, of his heirs and personal representatives.
8.6 Notices. All
communications provided for hereunder shall be in writing and delivered by
hand,
by express delivery service with confirmed receipt or by first-class or
certified mail, postage prepaid, and, if to you or your nominee, addressed
to
you at the address set forth below your name on the first page hereof or at
such
other address as you may designate to the Company in writing and if to any
Holder of Shares other than you or your nominee, addressed to such Holders
at
their respective addresses as shown on the books of the Company or its transfer
agent, and if to the Company, addressed to the Company at its offices at CNA
Financial Corporation, CNA Center, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000; Attention: Treasurer or such other place as shall be designated by the
Company in writing.
8.7 Governing
Law. The
validity, meaning and effect of this Agreement shall be determined in accordance
with the domestic laws of the State of Illinois applicable to contracts made
and
to be performed in that state without giving effect to any choice or conflict
of
law provision or rule (whether in the State of Illinois or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Illinois.
8.8 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which shall together constitute one and the same
document.
8.9 Reproduction
of Documents. This
Agreement and all documents relating hereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by you at the Closing or thereafter (except certificates
evidencing Shares) and (c) financial statements, certificates and other
information previously or hereafter furnished to you, may be reproduced by
you
by any photographic, photostatic, microfilm, micro-card, miniature photographic
or other similar process and you may destroy any original document so
reproduced. The Company agrees and stipulates that any such reproduction, absent
evidence of alteration, shall be
-12-
admissible
in evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
8.10 Transfers. Any
transferee to whom Shares are transferred in accordance with Article VI hereof
shall be entitled to all rights and benefits to which the transferor would
be
entitled as an original Holder of the Shares so transferred.
8.11 Headings. The
headings used herein are solely for the convenience of the parties and shall
not
constitute a part hereof or serve to modify or interpret the text.
8.12 Entire
Agreement and Exhibits. This
Agreement and the Exhibits hereto constitute and encompass the entire agreement
and understanding of the parties hereto with regard to the transactions
contemplated or provided for herein.
* * * *
-13-
|
Very
truly yours,
|
|
|
CNA
FINANCIAL CORPORATION
|
|
|
By:
|
/s/
D. Xxxxx Xxxxx
|
|
|
Name:
D. Xxxxx Xxxxx
|
||
|
Title:
Executive Vice President
|
||
| and Chief Financial Officer | ||
|
The
terms of the foregoing Retirement Agreement are approved and accepted
by
the undersigned as of August 1,
2006.
|
|
LOEWS
CORPORATION
|
|
|
By:
|
/s/
Xxxxx X. Xxxxxx
|
|
|
Name:
Xxxxx X. Xxxxxx
|
||
|
Title:
Executive Vice President
|
||
| and Chief Financial Officer | ||
-14-
EXHIBIT
1.3
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement is entered into as of August __, 2006, between
CNA
Financial Corporation, a Delaware corporation (the “Company”),
and
Loews Corporation, a Delaware corporation (the “Purchaser”).
Reference
is made to the Series H Cumulative Preferred Stock Retirement Agreement, dated
as of August 1, 2006, among the Company and the Purchaser (as amended,
supplemented or modified from time to time, the “Retirement
Agreement”).
The
execution of this Agreement is a condition to the closing of the transactions
contemplated by the Retirement Agreement.
The
parties hereby agree as follows:
1.
Definitions
As
used
in this Agreement, the following terms shall have the following
meanings:
Advice: As
defined in the last paragraph of Section 4 hereof.
Affiliate: of
any specified person shall mean any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified person. For the purposes of this definition, “control,” when used
with respect to any person, means the power to direct the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise and the terms “affiliated,”
“controlling” and “controlled” have meanings correlative to the
foregoing.
Agreement: This
Registration Rights Agreement, as the same may be amended, supplemented or
modified from time to time in accordance with the terms hereof.
Business
Day: Each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York are authorized or obligated by law
or
executive order to close.
Common
Stock. The
common stock, $2.50 par value per share, of the Company.
Company: As
defined in the Recitals hereto.
Controlling
person: As
defined in Section 6(a) hereof.
Disclosure
Package: With
respect to any offering shall mean any preliminary prospectus relating to such
offering, any Issuer Free Writing Prospectus (as defined in Rule 433 promulgated
by the SEC pursuant to the Securities Act) used in connection with such offering
and any final term sheet used in connection with such offering.
-15-
Exchange
Act: The
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the SEC pursuant thereto.
Holder: The
Purchaser and each transferee (including subsequent transferees) of Shares
that
are Transfer Restricted Securities registered in the name of the Purchaser
or
such transferee.
Indemnified
Person: As
defined in Section 6(a) hereof.
Person: An
individual, partnership, corporation, limited liability company, professional
corporation, trust, unincorporated organization, or a government or agency
or
political subdivision thereof.
Prospectus: The
prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A or Rule 430B promulgated pursuant to the Securities Act), as amended
or supplemented by any prospectus supplement, with respect to the terms of
the
offering of any portion of the Transfer Restricted Securities covered by such
Registration Statement, and all other amendments and supplements to any such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such
prospectus.
Purchaser: As
defined in the Recitals hereto.
Registration
Request: As
defined in Section 2(a) hereto.
Registration
Statement: Any
registration statement of the Company that covers any of the Transfer Restricted
Securities pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement.
Retirement
Agreement: As
defined in the Recitals hereto.
Rule
144: Rule
144 promulgated by the SEC pursuant to the Securities Act, as such Rule may
be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC as a replacement thereto having substantially the same effect as
such
Rule.
SEC: The
Securities and Exchange Commission.
Securities
Act: The
Securities Act of 1933, as amended, and the rules and regulations promulgated
by
the SEC thereunder.
Shares: A
total of 7,863,258 shares of Common Stock owned by the Purchaser at the time
of
any Registration Request or any request by the Purchaser pursuant to
Section
-16-
2(b)
of
this Agreement; provided,
that
the maximum number of shares of Common Stock for which the Purchaser may make
Registration Requests and requests pursuant to Section 2(b) of this Agreement
is
7,863,258.
Transfer
Restricted Securities: The
Shares until the earliest of (i) the date on which such Shares have been
registered effectively pursuant to the Securities Act and disposed of in
accordance with the Registration Statement or (ii) the date on which such Shares
are sold pursuant to Rule 144 (or any similar provisions then in effect) or
are
salable pursuant to paragraph (k) of Rule 144.
2.
Demand
and Piggy-back Registrations
(a) Upon
the
written request (a “Registration
Request”)
to
register shares of Transfer Restricted Securities by Holders of not less than
a
majority of the then outstanding Transfer Restricted Securities, the Company
will use its reasonable best efforts to file with the SEC as promptly as
practicable thereafter (but in no event later than thirty (30) days following
the date of receipt of a Registration Request), a Registration Statement under
the Securities Act registering the resale of such Transfer Restricted Securities
and will use its reasonable best efforts to effect the registration of the
Transfer Restricted Securities under all applicable state securities and blue
sky laws on or prior to 150 days following the date of receipt of a Registration
Request. Such request shall state the intended method of disposition of the
Transfer Restricted Securities sought to be registered, which may include the
underwritten public offering of such Transfer Restricted Securities. Whenever
the Company shall be requested to effect the registration of any Transfer
Restricted Securities under the Securities Act pursuant to this Section 2(a),
the Company shall promptly give written notice of such proposed registration
to
all Holders stating that such Holders have the right to request that any or
all
of the Transfer Restricted Securities owned by them be included in such
registration. The Company shall include in such registration all Transfer
Restricted Securities with respect to which the Company receives written
requests from the Holders thereof for inclusion therein (stating the intended
method of disposition of such Transfer Restricted Securities) if such requests
are received within 20 calendar days of the Company’s delivery of written notice
pursuant to the preceding sentence. The Registration Statement shall be on
Form
S-1 or S-3 under the Securities Act or another appropriate registration
permitting registration of such Transfer Restricted Securities for resale by
the
Holders in the manner or manners reasonably designated by them. The holders
shall be entitled to request not more than three (3) such registrations pursuant
to this Section 2(a). The Company shall use its reasonable best efforts to
keep
the Registration Statement effective for a continuous period until such time
as
no Transfer Restriction Securities remain outstanding by supplementing and
amending the Registration Statement to the extent necessary to ensure that
it is
available for sales of Transfer Restricted Securities by the holder thereof
entitled to the benefits of this Section 2(a), and to ensure that it conforms
with the requirements of this Agreement, the Securities Act and the rules,
regulations or instructions applicable to the registration form used for such
Registration Statement.
(b) Piggy-back
Registration Rights. If
the Company at any time proposes or is required to register any of its
securities under the Securities Act or any applicable state
-17-
securities
or Blue Sky laws on a form which permits inclusion of Transfer Restricted
Securities, it will each such time give written notice to all Holders of then
existing Transfer Restricted Securities of its intentions to do so. Upon the
written request of any such Holder given within 20 days after receipt of any
such notice, the Company will use its best efforts to cause all such Transfer
Restricted Securities which such Holders shall have requested be registered
to
be registered under the Securities Act and any applicable state securities
or
blue sky laws all to the extent requisite to permit the sale or other
disposition by such Holders of the Transfer Restricted Securities so registered;
provided, however, if the offering proposed to be made is to be an underwritten
public offering, and the managing underwriters of such public offering furnish
a
written opinion that the total amount of securities to be included in such
offering would exceed the maximum amount of Securities (as specified in such
opinion) which can be marketed without materially and adversely affecting such
offering, then the relative rights to participate in such offering of the
Holders of Transfer Restricted Securities, Holders of other securities having
the right to include such securities in such registration, and the Company
shall
be in the following order of priority:
First: The
Person or Persons (including the Company in the case of an offering initiated
by
the Company) requesting such registration shall be entitled to participate
in
accordance with the relative priorities, if any, as shall exist among them;
and
then
Second: The
Holders of Transfer Restricted Securities and the holders of securities of
the
Company which have a right to include such securities in such registration
shall
be entitled to participate pro rata among themselves in accordance with the
number of outstanding shares of Transfer Restricted Securities which each such
Holder shall have requested be registered and the number of outstanding
securities of the Company which a holder thereof shall have requested be
registered; and then
Third: If
such registration shall have been requested by a Person or Persons other than
the Company, the Company shall be entitled to include securities in such
registration.
No
registrations of Transfer Restricted Securities under this Section 2(b) shall
relieve the Company of its obligation to effect registrations under Section
2(a)
hereof, or shall constitute a registration request by any Holder of Transfer
Restricted Securities under Section 2(a).
(c) Suspension
of Registration Statement.
Notwithstanding anything to the contrary in this Section 2, the Company may,
by
delivering written notice to the Holders, defer and suspend the filing of any
Registration Statement covering Transfer Restricted Securities at any time
if
(i) the Company is in possession of material non-public information, (ii) the
Company determines (based on advice of counsel) that such prohibition is
necessary in order to avoid a requirement to disclose such material non-public
information and (iii) the Company determines in good faith that disclosure
of
such material non-public information would have a material adverse effect on
the
-18-
Company
and its stockholders; provided,
however,
that
upon the public disclosure by the Company of the material non-public information
described in clause (i) of this paragraph, the suspension of the filing of
the
Registration Statement pursuant to this Section 2(c) shall cease and the Company
shall promptly comply with Section 3(b) hereof. In no event shall any suspension
of the filing of a Registration Statement pursuant to Section 2(c) exceed sixty
(60) days or occur more than three (3) times in any twelve (12) month
period.
3.
Registration
Procedures
In
connection with the Company’s registration obligations pursuant to Section 2
above, the Company shall in compliance with the time frames set forth
above:
(a) prepare
and file with the SEC a Registration Statement with respect to such Transfer
Restricted Securities and use reasonable best efforts to cause such Registration
Statement to be declared effective (unless it shall have become automatically
effective upon filing) and to keep such Registration Statement effective until
such time as none of such Transfer Restricted Securities remain outstanding
and
provide all requisite financial statements required for such Registration
Statement to become effective and remain effective as provided herein. Upon
the
occurrence of any event that would cause any such Registration Statement or
the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement; the Company shall
file
promptly an appropriate amendment to such Registration Statement, (1) in the
case of clause (A), correcting any such misstatement or omission, and (2) in
the
case of clauses (A) and (B), use its best efforts to cause such amendment to
be
declared effective (unless it shall have become automatically effective upon
filing) and such Registration Statement and the related Prospectus to become
usable for their intended purpose(s) as soon as practicable
thereafter;
(b) prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement as may be necessary to keep the Registration Statement
effective for the applicable period as specified in Section 2 hereof; cause
the
related Prospectus to be supplemented by any required Prospectus supplement,
and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) under the Securities Act; and comply with the provisions of
the
Securities Act with respect to the disposition of all securities covered by
such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth
in
such Registration Statement or supplement to the Prospectus;
(c) advise
the selling Holders and any underwriters promptly and, if requested by such
Persons, confirm such advice in writing, (i) when the Registration Statement,
post-effective amendment thereto, Prospectus or Prospectus supplement has been
filed and/or become effective, (ii) of any request by the SEC for amendments
to
the Registration Statement or amendments or supplements to the Prospectus or
for
additional information relating thereto, (iii) of the issuance by the SEC of
any
stop order suspending
-19-
the
effectiveness of the Registration Statement under the Securities Act or of
the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the
initiation of any proceeding for any of the preceding purposes, and (iv) of
the
existence of any fact or the happening of any event that makes any statement
of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any document incorporated or deemed to be
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement in order to make the
statements therein not misleading, or that requires the making of any additions
to or changes in the Prospectus in order to make the statements therein, in
the
light of the circumstances under which they were made, not misleading. If at
any
time the SEC shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or
Blue Sky laws, the Company shall use its reasonable best efforts to obtain
the
withdrawal or lifting of such order at the earliest possible time;
(d) furnish
to any underwriters and each selling Holder named in any Registration Statement
or Prospectus before filing with the SEC, copies of any Registration Statement
or any Prospectus included therein or any amendments or supplements to any
such
Registration Statement or Prospectus (including all documents incorporated
by
reference after the initial filing of such Registration Statement), which
documents will be subject to the review and comment of such Persons in
connection with such sale, if any, for a period of at least five Business Days,
and the Company will not file any such Registration Statement or any amendment
or supplement to any such Registration Statement (including all such documents
incorporated by reference) to which any such Person, shall reasonably object
within five Business Days after the receipt thereof. A selling Holder shall
be
deemed to have reasonably objected to such filing only if such Registration
Statement, amendment, or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission or fails to comply with the
applicable requirements of the Securities Act;
(e) promptly
following the filing of any document that is to be incorporated by reference
into a Registration Statement, provide copies of such document to any
underwriter and the selling Holders, make the Company’s representatives
available for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the filing
thereof as such Persons, reasonably may request.
(f) make
available at reasonable times for inspection by any underwriters and the selling
Holders, and any attorney or accountant retained by Persons, all relevant
financial and other records, pertinent corporate documents and properties of
the
Company and cause the Company’s officers, directors and employees to supply all
relevant information reasonably requested by any Persons, attorney or accountant
in connection with such Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its
effectiveness;
-20-
(g) if
requested by any underwriter or selling Holders, promptly include in any
Registration Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such underwriter or selling Holders,
may reasonably request to have included therein, including, without limitation,
information relating to the “Plan of Distribution” of the Transfer Restricted
Securities; and make all required filings of such supplement or post-effective
amendment as soon as practicable after the Company is notified of the matters
to
be included therein;
(h) furnish
to any underwriter and each selling Holder, without charge, at least one copy
of
the Registration Statement, as first filed with the SEC, and of each amendment
thereto, including all documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);
(i) deliver
to any underwriter and each selling Holder, without charge, as many copies
of
the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company hereby
consents to the use (in accordance with law) of the Prospectus and any amendment
or supplement thereto by any underwriter and each of the selling Holders in
connection with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(j) make
such
representations and warranties and take all such other actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any Registration Statement contemplated by
this Agreement as may be reasonably requested by any Holder of Transfer
Restricted Securities in connection with any sale pursuant to any Registration
Statement contemplated by this Agreement, and, at or prior to each closing
of
such sale, the Company shall:
(A) furnish
(or in the case of subparagraphs (2) and (3) below, use its best efforts to
furnish) to any underwriter and each selling Holder:
(1) a
customary certificate signed on behalf of the Company by (x) the President
or
any Vice President and (y) a principal financial or accounting officer of the
Company confirming, as of the date thereof, the matters similar to those covered
in an officers certificate to underwriters in connection with primary
underwritten offerings and such other similar matters as the Holders may
reasonably request;
(2) a
customary opinion of counsel for the Company covering matters similar to those
customarily covered in opinion letters of Counsel to underwriters in connection
with primary underwritten offerings and such other matters as the Holders may
reasonably request, and in any event including a statement to the effect that
such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company and have considered the matters required to be
stated therein and the
-21-
statements
contained therein, although such counsel has not independently verified the
accuracy,completeness or fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying as to materiality to a
large extent upon facts provided to such counsel by officers and other
representatives of the Company and without independent check or verification),
no facts came to such counsel’s attention that caused such counsel to believe
that the (i) applicable Registration Statement, as of its most recent effective
date immediately preceding the execution of the underwriting agreement,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Disclosure Package as of the date of the first contract
of sale following the execution of the underwriting agreement contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (iii) Prospectus
contained in such Registration Statement as of its date, contained an untrue
statement of a material fact or omitted to state a material fact necessary
in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the foregoing, such
counsel may state further that such counsel assumes no responsibility for,
and
has not independently verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial data included
in
any Registration Statement contemplated by this Agreement or the related
Prospectus; and
(3) customary
comfort letters from the independent accountants of the Company, in the
customary form and covering matters of the type customarily covered in comfort
letters to underwriters in connection with primary Underwritten
Offerings;
(B) enter
into an underwriting agreement in customary form with an underwriter or
underwriters selected by the Holders;
(C) to
the
extent requested by the selling Holders, (1) make available for inspection
by
any underwriter participating in any disposition pursuant to a Registration
Statement, and any attorney, accountant or other agent retained by any such
underwriter, all financial and other records, pertinent corporate documents
and
assets of the Company, and cause the Company’s officers, directors, employees
and independent accountants to supply all information reasonably requested
by
any underwriter, attorney, accountant or agent in connection with the
registration statement, (2) make available appropriate management personnel
for
participation in the preparation and drafting of the registration or comparable
statement, for due diligence and “road show” meetings, and (3) obtain a cold
comfort letter from the Company’s independent public accountants addressed to
the selling Holders in customary form and covering such
-22-
matters
of the type customarily covered by cold comfort letters as the Holders of a
majority of the Transfer Restricted Securities being sold reasonably request;
and
(D) deliver
such other documents and certificates as may be reasonably requested by any
underwriter or any of the selling Holders to evidence compliance with
clause
(A) above.
The
above
shall be done at each closing, and if at any time the representations and
warranties of the Company contemplated in (A)(1) above cease to be true and
correct, the Company shall so advise any underwriter and the selling Holders
promptly and if requested by such Persons, shall confirm such advice in
writing;
(k) prior
to
any public offering of Transfer Restricted Securities, to register or qualify,
or cooperate with any underwriter and the selling Holders, and their respective
counsel in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may reasonably request and as reasonably
required to permit the resale of such Transfer Restricted Securities in such
jurisdictions and do any and all other acts or things necessary or advisable
to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided,
however,
that the
Company shall not be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would subject it
to
the service of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any jurisdiction where
it is not now so subject;
(l) in
connection with any sale of Transfer Restricted Securities that will result
in
such securities no longer being Transfer Restricted Securities, facilitate
the
timely preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to register
such Transfer Restricted Securities in such denominations and such names as
the
Holders may request at least two Business Days prior to such sale of Transfer
Restricted Securities;
(m) use
its
reasonable best efforts to cause the disposition of the Transfer Restricted
Securities covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in clause
(k)
above;
(n) subject
to Section 3(c)(iv), if any fact or event contemplated by Section 3(c)(iv)
above
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
-23-
(o) provide
a
CUSIP number for all Transfer Restricted Securities not later than the effective
date of a Registration Statement covering such Transfer Restricted Securities
and provide a transfer agent and registrar for the Transfer Restricted
Securities not later than the effective date of the Registration Statement;
and
(p) agree
with the selling Holders and any underwriters that no party may use a Free
Writing Prospectus (as defined in Rule 405 promulgated by the SEC pursuant
to
the Securities Act) without the consent of the other parties.
4.
Agreement
of Holders
Each
Holder of Transfer Restricted Securities agrees that, upon receipt of any notice
from the Company pursuant to Section 3(a) hereof or of the happening of any
event of the kind described in Section 3(c)(iv) hereof, such Holder will
forthwith discontinue disposition of such Transfer Restricted Securities covered
by such Registration Statement or Prospectus until such Holder’s receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 3(d)
hereof, or until it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus and,
if so directed by the Company, such Holder will deliver to the Company (at
the
Company’s expense) all copies, other than permanent file copies, then in such
Holder’s possession of the Prospectus covering such Transfer Restricted
Securities at the time of receipt of such notice. In the event the Company
shall
give any such notice, the time period regarding the effectiveness of such
Registration Statement set forth in Section 2(a) hereof, if applicable, shall
be
extended by the number of days during the period from and including the date
of
the giving of such notice pursuant to Section 3(c)(iii) or Section 3(c)(iv)
hereof to and including the date when each selling Holder covered by such
Registration Statement shall have received the copies of the supplement or
amended Prospectus contemplated by Section 3(c) hereof or shall have received
the Advice.
5. Registration
Expenses
(a) Except
as
set forth in Section 5(b) below, all fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registration Statement is filed or becomes
effective and whether or not any securities are issued or sold pursuant to
any
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing
fees
(including, without limitation, fees and expenses in compliance with securities
or Blue Sky laws), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Transfer Restricted Securities and
Prospectus), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company , (v) fees and disbursements of all
independent certified special audit and “cold comfort” letters required by or
incident to such performance, (vi) Securities Act liability insurance, if the
Company so desires such insurance, and (vii) fees and expenses of all other
persons retained by the Company. In
-24-
addition,
the Company shall pay its internal expenses (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of the securities to be registered
on
any securities exchange.
(b) In
connection with any Registration Request hereunder, the following fees and
expenses shall be borne by the Holders: (i) underwriters’ discounts, commissions
and expenses, (ii) SEC registration fees and stock exchange listing fees with
respect to the shares of Transfer Restricted Securities to be registered, and
(iii) fees and disbursements of counsel for the Holders.
6.
Indemnification
(a) The
Company agrees to indemnify and hold harmless (i) each Holder and underwriter
and (ii) each person, if any, who controls (within the meaning of Section 15
of
the Act or Section 20 of the Exchange Act) any Holder or underwriter (any of
the
persons referred to in this clause (ii) being hereinafter referred to as a
“controlling
person”)
and
(iii) the respective officers, directors, partners, employees, representatives
and agents of any Holder, underwriter or any controlling person (any person
referred to in clause (i), (ii) or (iii) may hereinafter be referred to as
an
“Indemnified
Person”),
to
the fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation
and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any claim or action, or any investigation or proceeding
by
any governmental agency or body, commenced or threatened, including the
reasonable fees and expenses of counsel to any Indemnified Person) directly
or
indirectly caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, the Disclosure Package
or
the Prospectus (or any amendment or supplement thereto), or caused by 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,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by any such untrue statement or omission or alleged untrue statement
or
omission that is made in reliance, upon and in conformity with information
relating to any of the Holders furnished in writing to the Company by any of
the
Holders expressly for use therein.
In
case
any action or proceeding (including any governmental or regulatory investigation
or proceeding) shall be brought against any Indemnified Person with respect
to
which indemnity may be sought against the Company pursuant to the preceding
paragraph, such Indemnified Person (or the Indemnified Person controlled by
such
controlling person) shall promptly notify the Company in writing and the Company
upon the request of such Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person, and shall pay the fees and disbursements
of such counsel related to such proceedings (provided, that the failure to
promptly give such notice shall not relieve the Company of its obligations
pursuant to this Agreement except to the extent the Company was actually
prejudiced by such failure). Such Indemnified Person shall have the right to
employ its own counsel in any such action and the fees and expenses of such
counsel shall be at the expense of the such Indemnified Person, unless (i)
the
employment
-25-
of
such
counsel shall have been specifically authorized in writing by the Company,
(ii)
the Company shall have failed to assume the defense and employ counsel or (iii)
the named parties to any such action (including any impleaded parties) include
both the Indemnified Person and the Company, and such Indemnified Person shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the
Company (in which case the Company shall not have the right to assume the
defense) it being understood, however, that the Company shall not, in connection
with any one such action or proceeding or separate but substantially similar
or
related actions or proceedings in the same jurisdiction arising out of the
same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for such Indemnified Persons, which firm shall be designated by the
Indemnified Persons. The Company shall be liable for any settlement of any
such
action or proceeding effected with the Company’s prior written consent, and the
Company agrees to indemnify and hold harmless each Indemnified Person from
and
against any loss, claim, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the Company.
The
Company shall not, without the prior written consent of such Indemnified Person,
settle or compromise or consent to the entry of judgment in or otherwise seek
to
terminate any pending or threatened action, claim, litigation or proceeding
in
respect of which indemnification or contribution may be sought hereunder
(whether or not any Indemnified Person is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional release
of such Indemnified Person from all liability arising out of such action, claim,
litigation or proceeding.
(b) Each
Holder of Transfer Restricted Securities agrees, severally and not jointly,
to
indemnify and hold harmless the Company and its directors, officers, and any
person controlling (within the meaning of Section 15 of the Act or Section
20 of
the Exchange Act) the Company, and its officers, directors, partners, employees,
representatives and agents of each such person, to the same extent as the
foregoing indemnity from the Company to each of the Indemnified Holders, but
only with respect to claims and actions based on information relating to such
Holder furnished in writing by such Holder expressly for use in any Registration
Statement. In case any action or proceeding shall be brought against the Company
or its directors or officers or any such controlling person in respect of which
indemnity may be sought against a Holder, such Holder shall have the rights
and
duties given the Company (except that if the Company shall have assumed the
defense thereof, such Holder shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees
and
expenses of such counsel shall be at the expense of such Indemnified Holder,
its
directors or officers or such controlling persons) and the Company shall have
the rights and duties given to each Holder by the preceding paragraph. In no
event shall any Holder be liable or responsible for any amount in excess of
the
total proceeds (net of brokerage commissions) received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Registration
Statement.
(c) If
the
indemnification provided for in this Section 6 is unavailable to an indemnified
party under Section 6(a) or Section 6(b) hereof (other than by reason of
-26-
exceptions
provided in those Sections) in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to
the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate
to
reflect the relative fault of the Company, on the one hand, and of the
Indemnified Person, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of the Company, on the one hand, and of the Indemnified Person, on the
other hand, shall be determined by reference to, among other things, whether
the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Indemnified Person and the parties’ relative intent, knowledge and
opportunity to correct or prevent such statement or omission. The amount paid
or
payable by a party as a result of the losses, claims, damages, liabilities
and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 6(a), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The
Company and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 6(c) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose)
or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, no Holder shall be required
to
contribute, in the aggregate, any amount in excess of the amount by which the
total amount received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds the amount
paid by such Holder for such Transfer Restricted Securities. No person guilty
of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to
this Section 6(c) are several in proportion to the respective shares of Transfer
Restricted Securities held by each of the Holders hereunder and not
joint.
The
indemnity, contribution and expense reimbursement obligations of the Company
hereunder shall be in addition to any liability the Company may otherwise have
under the Retirement Agreement or hereunder. The provisions of this Section
6
shall survive so long as Transfer Restricted Securities remain outstanding,
notwithstanding any transfer or sale of the Transfer Restricted Securities
by
any Holder or any termination of this Agreement or the Retirement
Agreement.
-27-
7.
Information
Requirements.
The
Company shall file the reports required to be filed by it under the Securities
Act and the Exchange Act, and if at any time the Company is not required to
file
such reports, it will, upon the request of any Holders of Transfer Restricted
Securities, make publicly available other information so long as necessary
to
permit sales pursuant to Rule 144 under the Securities Act. The Company further
covenants that it will cooperate with any Holder of Transfer Restricted
Securities and take such further reasonable action as any Holder of Transfer
Restricted Securities may reasonably request (including, without limitation,
making such reasonable representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder
to
sell Transfer Restricted Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144 under the
Securities Act. Upon the request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as
to
whether it has complied with such filing requirements.
8.
Miscellaneous
(a) Remedies. Each
holder of Transfer Restricted Securities or the Company, in addition to being
entitled to exercise all rights provided herein, in the Retirement Agreement
or
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each holder
of
Transfer Restricted Securities agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by the Company
of the provisions of this Agreement and hereby agrees to waive the defense
in
any action for specific performance that a remedy at law would be
adequate.
(b) No
Inconsistent Agreements. The
Company shall not enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the holders of Transfer Restricted
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company represents and warrants that as of the date hereof, the rights
granted to the Holders of Transfer Restricted Securities hereunder do not in
any
way conflict with the rights granted to holders of the Company’s securities
under other agreements.
(c) Amendments
and Waivers. The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, without the written consent of the
Holders of a majority of the then outstanding Transfer Restricted Securities;
provided,
however;
that,
for the purposes of this Agreement, Transfer Restricted Securities that are
owned, directly or indirectly, by either the Company or an Affiliate of the
Company shall not be deemed outstanding.
Notices. All
notices and other communications provided for herein shall be made in writing
by
hand-delivery, next-day air courier, or certified first-class mail, return
receipt requested:
-28-
(i) if
to the
Company, as provided in the Retirement Agreement,
(ii)
if
to the
Purchaser, as provided in the Retirement Agreement, or
(iii)
if
to any
other person who is then the registered Holder of any Transfer Restricted
Securities, to the address of such Holder as it appears in the Transfer
Restricted Securities register of the Company.
Except
as
otherwise provided in this Agreement, all such communications shall be deemed
to
have been duly given: when delivered by hand, if personally delivered; one
Business Day after being timely delivered to a next-day air courier; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; and when receipt is acknowledged by the
recipient’s telecopier machine, if telecopied.
(e) Successors
and Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of each of the parties, including subsequent Holders of Transfer
Restricted Securities provided such subsequent Holders acquire such Transfer
Restricted Securities directly from such Holder but without the need for an
express assignment.
(f) Counterparts. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and, all of which taken together shall constitute one and
the
same Agreement.
(g) Governing
Law; Venue. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, as applied to contracts made and performed within the State
of New York without regard to principles of conflicts of law. All suits or
other
actions (whether at law or in equity) to enforce rights pursuant to this
Registration Rights Agreement may be brought only in (i) state courts of the
state of Illinois in Xxxx County, (ii) state courts of the state of New York
in
New York County, (iii) state courts in the state of Delaware in New Castle
County, or (iv) the United States District Court for (a) the Northern District
of Illinois, (b) the Southern District of New York or (c) the District of
Delaware. The Company and Holders of Transfer Restricted Securities, by their
acceptance thereof, consent to the jurisdiction of such courts and waive any
objections to venue or claim of forum non-conveniens with respect to all such
suits and actions brought in any such court.
(h) Severability. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve
the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby
-29-
stipulated
and declared to be the intention of the parties that they would have executed
the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(i) Headings. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof. All references made in this
Agreement to “Section” and “paragraph” refer to such Section or paragraph of
this Agreement, unless expressly stated otherwise.
(j) Owner
of Transfer Restricted Securities. The
Company will maintain, or will cause its registrar and transfer agent to
maintain, a register with respect to the Transfer Restricted Securities in
which
all transfers of Transfer Restricted Securities of which the Company has
received notice will be recorded. The Company may deem and treat the Person
in
whose name Transfer Restricted Securities are registered in such register of
the
Company as the owner thereof for all purposes, including, without limitation,
the giving of notices under this Agreement.
(k) Further
Assurances. Each
of the parties hereto shall use all reasonable efforts to take, or cause to
be
taken, all appropriate action, do or cause to be done all things reasonably
necessary, proper or advisable under applicable law, and execute and deliver
such documents and other papers, as may be required to carry out the provisions
of this Agreement and the other documents contemplated hereby and consummate
and
make effective the transactions contemplated hereby.
(l) Survival. The
provisions of Sections 5, 6 and 8(a) shall survive the termination of this
Agreement.
-30-
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to
be duly executed as of the date first written above.
|
CNA
FINANCIAL CORPORATION
|
|
|
By:
|
/s/
D. Xxxxx Xxxxx
|
|
|
Name:
D. Xxxxx Xxxxx
|
||
|
Title:
Executive Vice President
|
||
|
and
Chief Financial Officer
|
||
|
LOEWS
CORPORATION
|
|
|
By:
|
/s/
Xxxxx X. Xxxxxx
|
|
|
Name:
Xxxxx X. Xxxxxx
|
||
|
Title:
Senior Vice President
|
||
|
and
Chief Financial
Officer
|
||
-31-
EXHIBIT
4.2(C)
August
,
2006
Loews
Corporation
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000-0000
Attn: General
Counsel
Gentlemen:
I
am
providing this opinion as Executive Vice President, Secretary and General
Counsel of CNA Financial Corporation, a Delaware corporation (the “Company”), in
connection with the transactions contemplated by that certain Series H
Cumulative Preferred Stock Retirement Agreement (the “Retirement Agreement”),
dated as of August 1, 2006, by and between the Company and Loews Corporation
(“Loews”), pursuant to which the Company will purchase all of the Company’s
Series H Cumulative Preferred Stock, no par value per share, owned by Loews
and,
in consideration for which, the Company will issue and sell to Loews 7,863,258
shares (the “Shares”) of the Company’s common stock, $2.50 par value per share,
and pay $[________] in cash. Capitalized terms used herein, but not otherwise
defined, shall have the meanings provided for such terms in the Retirement
Agreement.
In
connection with the foregoing, I have examined the minute books and stock
records of the Company; the Certificate of Incorporation and By-Laws of the
Company; copies of the resolutions of the Board of Directors of the Company
relating to the sale of the Shares. In addition, I have reviewed such documents
and instruments, investigated such matters of law and have conferred with such
officers and directors of the Company and have ascertained or verified to my
satisfaction, such additional facts with respect to the Company which I have
deemed necessary or appropriate for the purposes of rendering this
opinion.
In
connection with this opinion, I have examined originals, or copies identified
to
my satisfaction as being true copies, of the following documents:
(a) The
Retirement Agreement; and
(b) The
Registration Rights Agreement (the “Registration Rights Agreement”), dated as of
the date hereof, by and between the Company and Loews.
The
Retirement Agreement and the Registration Rights Agreement are hereinafter
referred to collectively as the “Agreements”.
I
do not
express any opinion as to any matters governed by any laws other than the laws
of the State of Illinois, the General Corporation Law of the State of Delaware
and the Federal laws of the United States of America.
-32-
Based
upon and qualified by the foregoing, I am of the opinion that:
(i)
The Company is a corporation duly organized, validly existing as a corporation
in good standing under the laws of the State of Delaware; and
(ii)
The Shares have been duly authorized and will, when issued and sold by the
Company in accordance with the terms of the Agreement, be validly issued,
fully
paid and nonasessable; and
(iii)
The Agreements have been duly authorized, executed and delivered by the Company;
and
(iv)
The execution and delivery by the Company of, and the performance by the
Company
of its obligations under, the Agreements will not contravene the certificate
of
incorporation or by-laws of the Company or, to my knowledge, any provision
of
applicable law; and
(v)
The Agreements constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except,
in each case, as may be limited by (i) any applicable bankrupty, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance, equitable
subordination, readjustment of debt and other similar laws now or hereafter
in
effect affecting creditors' rights generally, (ii) general principles of
equity,
including, without limitation, concepts of materiality, reasonableness, public
policy, good faith, fair dealing and the possible unavailability of specific
performance, injunctive relief or other equitable relief (regardless of whether
applied in a proceeding at law or in equity) and (iii) public policy
considerations which, among other things, limit or restrict any agreement
of any
party to the Agreements relating to indemnification, contribution or exculpation
of costs, expenses or liabilities incurred by any indemnified person in
connection with the transactions contemplated by the Agreements.
This
opinion is being furnished pursuant to Section 4.3 of the Agreement and is
for
the sole benefit of the addressee hereto in connection with the above-described
matter. This opinion may not be relied upon by you for any other purpose,
or
relied upon by any other person, firm or corporation or quoted, filed with
any
government authority or other regulatory agency or otherwise circulated or
used
for any other purpose without my prior consent. This opinion is limited to
the
matters set forth herein; no opinion may be inferred or implied beyond the
matters expressly stated in this opinion. This opinion is rendered on the
date
hereof and I have no continuing obligation hereunder to inform you of changes
of
law or fact subsequent to the date hereof or facts of which I become aware
after
the date hereof.
Very
truly yours,
-33-
