exv10w2






Exhibit 10.2




2008 SENIOR PREFERRED STOCK

REDEMPTION AGREEMENT




     This 2008 Senior Preferred Stock Redemption Agreement (this “Agreement”), effective as of
November 10, 2009, is entered into by and between CNA Financial Corporation, a Delaware corporation
(the “Company”), and Loews Corporation, a Delaware corporation (“Loews”).



     WHEREAS, Loews purchased 12,500 shares of the Company’s 2008 Senior Preferred Stock (the “2008
Preferred”) for $1,250,000,000 from the Company on November 7, 2008;



     WHEREAS, pursuant to Section 4 of the Certificate of Designation creating the 2008 Preferred
(the “Certificate of Designation”), the 2008 Preferred accrues dividends at the rate provided for
therein;



     WHEREAS, Section 5 of the Certificate of Designation provides that the 2008 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 the 2008 Preferred, at any time and from
time to time, at the Redemption Price described below in Section 1(b);



     WHEREAS, Loews is the sole Holder of the 2008 Preferred;



     WHEREAS, the Company is in the process of a public offering of an aggregate principal amount
of $350 million of senior notes (the “Notes”); and



     WHEREAS, the Company desires to redeem 2,500 shares of the 2008 Preferred from Loews and Loews
desires to dispose of 2,500 shares of the 2008 Preferred to the Company upon completion of the
public offering of the Notes and the Company’s receipt of net proceeds of at least $250 million
(the “Offering”).



     NOW THEREFORE, in consideration of the mutual promises set forth herein, and other good and
valuable consideration, it is hereby agreed by and between the Company and Loews as follows:



     1. Redemption of the 2008 Preferred.



          a. Upon completion of the Offering and the Company’s receipt of the proceeds expected
therefrom, the Company hereby agrees to (i) call for redemption 2,500 shares of the 2008 Preferred
and (ii) pay to Loews the Redemption Price (as defined below) for such shares (the “Redemption”);
it being understood that if the Offering has not been completed by March 31, 2010, this Agreement
shall terminate along with each of the parties’ respective obligations hereunder, it being further
understood that the Offering shall not be deemed complete unless the Offering directly results in
the Company’s issuance of an aggregate principal amount of the Notes equal to at least $250
million.




 









 








          b. “Redemption Price” shall mean a per share redemption price equal to (i) $100,000
plus (ii) an amount equal to all unpaid dividends accrued on such shares up to but
excluding the date of Redemption (which amount shall be calculated pursuant to Section 4 of the
Certificate of Designation). If the Offering is consummated on November 13, 2009, the Redemption
shall occur on November 13, 2009 and the Redemption Price shall be two hundred fifty-two million
nine hundred sixteen thousand six hundred sixty-six and 67/100 dollars ($252,916,666.67). Although
Section 5 of the Certificate of Designation provides that the per share Redemption price shall
include all unpaid dividends accrued thereon through and including the date of Redemption, the
parties acknowledge and agree that the Redemption Price shall exclude dividends accruing on the
date of Redemption.




     2. Legal Opinion. Prior to the Redemption, the Company shall furnish to Loews an
opinion of counsel from Jonathan D. Kantor, Esq., Executive Vice President, Secretary and General
Counsel of the Company, substantially in the form attached hereto and made a part hereof as
Exhibit A.



     3. Amendment and Waiver. 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.



     4. Severability. In the event that any court or any governmental authority or agency
declares any provision of this Agreement to be unlawful or invalid, such unlawfulness or invalidity
shall not serve to invalidate any other provisions of this Agreement, and in the event that only a
portion of any provision is so declared to be unlawful or invalid, such unlawfulness or invalidity
shall not serve to invalidate the balance of such provision.



     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 or her heirs and
personal representatives.



     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 Loews or its nominee, addressed to Loews at 667 Madison
Avenue, New York, New York 10065-8087 or at such other address as Loews may designate to the
Company in writing, and if to the Company, addressed to the Company at 333 South Wabash Avenue,
Chicago, Illinois 60604; Attention: Treasurer, with a copy to or such other address as the Company
may designate to Loews in writing.



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     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. Counterparts. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original but all of which shall together constitute one and the same
document.



     9. 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.



     10. Entire Agreement and Exhibit. This Agreement and the Exhibit hereto constitute
and encompass the entire agreement and understanding of the parties hereto with regard to the
transactions contemplated or provided for herein.



[Signature Page Follows]




3









 





     IN WITNESS WHEREOF, this Agreement has been executed and deemed effective as of the date first
above written.



	 	 	 	 	 	 	 
	 	 	CNA FINANCIAL CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ D. Craig Mense
 

D. Craig Mense
	 	 
	 

	 	Title:
	 	Executive Vice President and Chief 

Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	LOEWS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Gary W. Garson
 

Gary W. Garson
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 






[Signature Page to 2008 Senior Preferred Redemption Agreement]





 









 








EXHIBIT A




[CNA Financial Corporation Letterhead]




November 13, 2009




Loews Corporation

667 Madison Avenue

New York, New York 10065-8087




Attn: General Counsel




Ladies and Gentlemen:




          I am providing this opinion as Executive Vice President, General Counsel and Secretary of CNA
Financial Corporation, a Delaware corporation (the “Company”), in connection with the transactions
contemplated by that certain 2008 Senior Preferred Stock Redemption Agreement (the “Redemption
Agreement”), dated as of November 10, 2009, by and between the Company and Loews Corporation
(“Loews”), pursuant to which the Company will redeem 2,500 shares of the Company’s 2008 Senior
Preferred Stock, no par value (the “Shares”), owned by Loews and, in consideration for which, the
Company will pay the Redemption Price. Capitalized terms used herein, but not otherwise defined,
shall have the meanings provided for such terms in the Redemption 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 redemption of the Shares. In addition, I
have reviewed such other 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 Redemption Agreement. I do not express any opinion as to
any matters governed by any laws other than the laws of the state of Illinois and the General
Corporation Law of the state of Delaware.




          Based upon and qualified by the foregoing, I am of the opinion that:





	 	1.    	The Company is a corporation duly organized, validly existing as a corporation in
good standing under the laws of the state of Delaware; and
	 
	 	2.    	The Redemption Agreement has been duly authorized, executed and delivered by the
Company; and




 









 






	 	3.    	The execution and delivery by the Company of, and the performance by the Company of
its obligations under, the Redemption Agreement will not contravene the Certificate of
Incorporation or By-Laws of the Company or, to my knowledge, any provision of applicable
law; and
	 
	 	4.    	The Redemption Agreement constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with their terms, except, in each
case, as may be limited by (i) any applicable bankruptcy, 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; and
	 
	 	5.    	The redemption of the Shares in accordance with the terms and conditions of the
Redemption Agreement has been duly authorized by the Board of Directors of the Company or
a Committee thereof.





          This opinion is being furnished pursuant to Section 2 of the Redemption 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 governmental 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,




Jonathan D. Kantor

Executive Vice President,

General Counsel and Secretary