Document:

EXHIBIT
10.29

 

August 19, 2004

 

Amendment No. 1

 

To

 

The Uranium Supply Contract dated January 13, 2004 between [REDACTED] and URI, Inc.

 

Pursuant to [REDACTED] (Buyer)’s revised proposal dated
August 6, 2004 and URI, Inc. (Seller)’s acceptance dated August 18, 2004,
(copies attached) the parties hereby agree to amend the above referenced
Contract as follows:

 

Buyer and Seller agree to
advance a portion of the 2005 Annual Quantity as set forth under Article 2.1
(herein designated by Buyer to be a total of 345,000 pounds U3O8) to 2004
accordingly:

 

1.              2004 Delivery
Schedule and Quantity:

 

	
  October, 2004:

  	
   

  	
  66,000 pounds U3O8, +/-
  15

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  November, 2004

  	
   

  	
  66,000 pounds U3O8, +/-
  15

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  December, 2004

  	
   

  	
  99,000 pounds U3O8, +/-
  15

  	
  %

  
	
  Total:

  	
   

  	
  231,000 pounds U3O8, +/-
  15

  	
  %

  

 

2.              Remaining Annual
Quantity:

 

That portion of the 2005
Annual Quantity not advanced pursuant to 1 above (345,000 pounds U3O8 less
231,000 pounds U3O8 [+/- 15%]) shall be delivered to Buyer no later than March
31, 2005.

 

3.              Timing of Deliveries
and Quantity Flexibility

 

The timing of the
deliveries and the quantity flexibility (+/- 15%) within the periods specified
in items 2 and 3 above will be at the Sellers discretion.  The Seller agrees to notify the Buyer of the
timing and quantity of each such delivery no later than seven (7) days prior to
the date of each delivery.

 

4.              Delivery Location:

 

Seller shall deliver the
U3O8 quantities set forth under items 1 and 2 above to Buyer’s account at
ConverDyn.

 

5.              Price:

 

A.            For all U3O8
delivered to Buyer under item 1 above, the price paid to       Seller shall be US$13.95 per pound U3O8,
fixed, and

 

B.            For all U3O8
delivered to Buyer under item 2 above, the price paid to Seller shall be
US$14.01 per pound U3O8, fixed.

 

 

6.              Payment:

 

Payment to Seller shall
be made by Buyer within 3 business days of each Delivery, subject to Buyer’s
receipt of ConverDyn’s Delivery confirmation notice and Seller’s invoice.

 

 

All other terms and
conditions of the above referenced Contract remain unchanged. Upon execution,
this Amendment shall be effective as of the date first written above.

 

	
  Agreed to by Buyer

  	
   

  	
  Agreed to by Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  TitleExhibit 10.18

 

AGREEMENT AND PLAN OF REORGANIZATION AND MERGER

 

This Agreement and Plan of Reorganization and
Merger (the “Agreement”) is entered into as of August 20, 2004, by and among
Nevada Security Bank (“NSB”), a Nevada banking corporation and wholly-owned
subsidiary of The Bank Holdings (“Holdings”), CNA Trust Corporation (“CNA”), a
California banking corporation and CNA Financial Corporation (“CNA Financial”),
a Delaware corporation and parent company of CNA.

 

RECITALS:

 

WHEREAS, the respective Boards of Directors
of CNA and NSB have determined that it is in the best interests of CNA and NSB
and their respective shareholders for CNA to merge with NSB upon the terms and
subject to the conditions set forth in this Agreement and in accordance with
the Nevada Revised Statutes, the California Corporations Code, the California
Financial Code, the Bank Merger Act (each as hereinafter defined) and other
applicable laws;

 

WHEREAS, each of the Boards of Directors of
CNA Financial, CNA and NSB and the shareholders of CNA and NSB have approved or
will approve this Agreement and the transactions contemplated hereby; and

 

WHEREAS, upon the consummation of the Merger
(as hereinafter defined) of CNA with and into NSB, NSB shall remain a
wholly-owned subsidiary of Holdings.

 

NOW, THEREFORE, in consideration of these
premises and the representations, warranties and agreements herein contained,
CNA Financial, CNA and NSB hereby agree as follows:

 

ARTICLE
1.  DEFINITIONS

 

As used in this Agreement, the following
terms shall have the meanings set forth below:

 

“Acquisition Event” shall mean any of the
following:

 

CNA’s Board of Directors shall have approved
or CNA shall have authorized, recommended, publicly proposed or publicly
announced an intention to authorize, recommend or propose, or shall have
entered or announced an intention to enter into a letter of intent, an
agreement-in-principle or a definitive agreement with any Person (other than
NSB) to effect, an Acquisition Transaction. 
As used herein, the term “Acquisition Transaction” shall mean (i) a
merger, consolidation or similar transaction involving CNA or (ii) the sale of
the capital stock of CNA.

 

“Acquisition Proposal” shall have the meaning
given such term in Section 6.2.4.

 

 

“Affiliate” or “affiliate” shall mean, with
respect to any Person, any other Person that, directly or indirectly, controls
or is controlled by or is under common control with such Person provided,
however, that with respect to CNA and CNA Financial, “Affiliate” (i) shall
include only CNA Financial and Persons controlled by CNA Financial, and (ii)
shall exclude CNA Surety Corporation, a Delaware corporation, and its
Subsidiaries, First Insurance Company of Hawaii, a Hawaii stock insurance
company, and its Subsidiaries, Accord Underwriting Agency, Ltd., a Bermuda
company, and RVI Guaranty Co., Ltd., a Bermuda insurance company, and its
Subsidiaries.

 

“Affiliated Group” shall mean any affiliated
group within the meaning of Section 1504(a) of the IRC or any similar group
defined under a similar provision of state, local or foreign law.

 

“Agreement” shall have the meaning given to
such term in the preamble.

 

“Articles of Merger” shall have the meaning
given to such term in Section 2.1.

 

“Bank Merger Act” shall mean 12 U.S.C.
Section 1828(c), as amended.

 

“BHCA” shall mean the Bank Holding Company
Act of 1956, as amended.

 

“Business Day” shall mean any day, other than
a Saturday, Sunday or any other day, such as a legal holiday, on which
commercial banks in Chicago, Illinois, California or Nevada are authorized or
required by law to be closed.

 

“CDFI” shall mean the California Department
of Financial Institutions or its successor in interest.

 

“California Corporations Code” shall mean the
General Corporation Law of the State of California, as amended.

 

“California Financial Code” shall mean the
Financial Code of the State of California, as amended.

 

“Closing” shall have the meaning given to
such term in Section 2.1.

 

“Closing Date” shall have the meaning given
to such term in Section 2.1.

 

“CNA” shall have the meaning given to such
term in the preamble.

 

“CNA Common Stock” shall mean the common
stock, $100 par value, of CNA.

 

“CNA Financial” shall have the meaning given
to such term in the preamble.

 

“CNA Schedules” shall have the meaning given
to such term in Section 5.5.

 

“Confidential Information” shall mean all
information exchanged heretofore or hereafter between CNA and its Affiliates
and agents, on the one hand, and NSB and its Affiliates and

 

2

 

agents, on the other hand, which is
information related to the business, financial position or operations of the
Person responsible for furnishing the information or an Affiliate of such
Person (such information to include, by way of example only and not of
limitation, client lists, company manuals, internal memoranda, strategic plans,
budgets, forecasts/ projections, computer models, marketing plans, files
relating to loans originated by such Person, loans and loan participations
purchased by such Person from others, investments, deposits, leases, contracts,
employment records, minutes of board of directors meetings (and committees
thereof) and stockholder meetings, legal proceedings, reports of examination by
any Governmental Entity, and such other records or documents such Person may
supply to the other Party pursuant to the terms of this Agreement or as
contemplated hereby).  Notwithstanding
the foregoing, “Confidential Information” shall not include any information
that (i) at the time of disclosure or thereafter is generally available to and
known by the public (other than as a result of a disclosure directly or
indirectly by the recipients or any of their officers, directors, employees or
other representatives or agents), (ii) was available to the recipients on a
nonconfidential basis from a source other than Persons responsible for
furnishing the information, provided that such source is not and was not bound
by a confidentiality agreement with respect to the information, or (iii) has
been independently acquired or developed by the recipients without violating
any obligations under this Agreement.

 

“Confidentiality Agreement” shall mean that
certain Confidentiality Agreement, dated as of May 25, 2004, between Holdings
and CNA.

 

“Dispute Officer” shall have the meaning
given to such term in Section 5.7.3(a).

 

“Effective Time” shall have the meaning given
such term in Section 2.1.

 

“FDIC” shall mean the Federal Deposit
Insurance Corporation or its successor in interest.

 

“FDI Act” shall mean the Federal Deposit
Insurance Act, as amended.

 

“Federal Reserve” shall mean the Board of
Governors of the Federal Reserve System or its successor in interest.

 

“GAAP” shall mean accounting principles
generally accepted in the United States of America.

 

“Governmental Entity” shall mean any court,
federal, state, local or foreign government or any administrative agency or
commission or other governmental authority or instrumentality whatsoever.

 

“Holdings” shall have the meaning given to
such term in the preamble.

 

“Indemnified Party” shall have the meaning
given to such term in Section 5.7.3.

 

“Indemnifying Party” shall have the meaning
given to such term in Section 5.7.3.

 

3

 

“IRC” shall mean the Internal Revenue Code of
1986, as amended and regulations promulgated thereunder.

 

“Knowledge” shall mean, with respect to any
representation or warranty contained in this Agreement, the actual knowledge of
those individuals listed on Schedule 1.1.

 

“Legal Requirement” shall mean any law,
statute, ordinance, regulation, writ, injunction, rule, established principle
of common law, directive, decree, administrative ruling or enforceable
supervisory policy of any Governmental Entity or applicable court decision.

 

“Licenses” shall have the meaning given to
such term in Section 3.2.

 

“License Agreement” shall have the meaning
given to such term in Section 5.10.

 

“Losses” shall mean losses, liabilities,
Taxes, damages, expenses, costs and reasonable legal fees and disbursements,
collectively, and specifically includes any other matters for which CNA is
obligated to indemnify UBOC pursuant to the UBOC Agreement.

 

“Material Adverse Effect” shall mean a
material adverse effect: (i) on the ownership or operation of CNA (or its
successor) by NSB after the Effective Time; or (ii) on the ability of a Person
that is a party to this Agreement to perform its obligations under this
Agreement or to consummate the transactions contemplated by this
Agreement.  Material Adverse Effect
specifically does not include (a) the transactions contemplated by the UBOC
Agreement; (b) any adverse change or effect that is caused by a change in laws
or regulations applicable to any party hereto; (c) any adverse change or effect
that is caused by or that arises out of the closing of any securities or
financial markets, or conditions affecting the economy or financial, banking,
currency or capital markets in general; (d) any adverse change or effect that
is caused by or that arises out of conditions affecting the banking or
financial services industries generally; and (e) any adverse change or effect
that is caused by or arises out of any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any attack or act of
terrorism.

 

“Merger” shall have the meaning set forth in
Section 2.1.

 

“NCFID” shall mean the Nevada Commissioner of
the Financial Institutions Division or its successor in interest.

 

“Nevada Revised Statutes” shall mean Chapters
92A and 666 of the Nevada Revised Statutes, as amended.

 

“NSB” shall have the meaning given to such
term in the preamble.

 

“NSB Schedules” shall have the meaning given
to such term in Section 5.5.

 

“Persons” or “persons” shall mean an
individual, corporation, partnership, limited liability company, joint venture,
trust or unincorporated organization, Governmental Entity or any other legal
entity whatsoever.

 

4

 

“Pre-Closing Tax Period” means any taxable
period (or portion thereof) ending at or before the Effective Time.

 

“Purchase Price” shall mean an amount equal
to (i) the sum of $500,000 plus CNA’s cash and cash equivalents plus any
accrued interest thereon at the Effective Time.

 

“Regulatory Authority” shall mean any
Governmental Entity, the approval of which is legally required for consummation
of the Merger.

 

“Related Agreements” shall mean this
Agreement, the Articles of Merger and the License Agreement.

 

“Requisite Regulatory Approvals” shall have
the meaning set forth in Section 7.1.1.

 

“Returns” shall mean all returns,
declarations, reports, statements, and other documents required to be filed
with respect to federal, state, local and foreign Taxes, and the term “Return”
means any one of the foregoing Returns.

 

“Subsidiary” shall mean, with respect to any
corporation (the “parent”), any other corporation, association or other
business entity of which more than 50% of the shares of the voting stock are
owned or controlled, directly or indirectly, by the parent or by one or more
Subsidiaries of the parent, or by the parent and one or more of its
Subsidiaries.

 

“Surviving Corporation” shall have the
meaning given to such term in Section 2.1.

 

“Taxes” shall mean all federal, state, local
and foreign net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service use,
withholding, backup withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties, or other
taxes, together with any interest and any penalties, including penalties with
respect to information reporting, additions to tax, or additional amounts with
respect thereto, and the term “Tax” means any one of the foregoing Taxes.

 

“UBOC” shall mean Union Bank of California,
N.A., a national banking association.

 

“UBOC Agreement” shall mean that certain
Purchase and Assumption Agreement between CNA and UBOC, dated as of May 14,
2004, as such agreement may be amended from time to time, including but not
limited to the CNA Financial Assignment and Assumption Agreement dated August
2, 2004 by and among CNA, CNA Financial and UBOC.

 

“Updated Schedules” shall mean the schedules
provided by CNA to NSB, and the schedules provided by NSB to CNA, immediately
prior to the Closing as set forth in Section 5.5.

 

5

 

ARTICLE
2.  THE MERGER

 

Section 2.1 
The Merger.  Subject to the
terms and conditions of this Agreement, the closing of the Merger (as defined
below) under this Agreement (the “Closing”) shall take place at a location and
time to be designated by NSB and reasonably concurred to by CNA on the Closing
Date.  The “Closing Date” shall be the
first Business Day as is reasonably practicable after all of the conditions set
forth in Article 7 have been satisfied. 
At the Effective Time, CNA shall be merged with NSB, with NSB being the
surviving corporation of the merger, all pursuant to the Articles of Merger
attached to this Agreement as Exhibit 2.1 (the “Articles of Merger”) and in
accordance with the applicable provisions of the Nevada Revised Statutes, the
California Financial Code, the California Corporations Code and the Bank Merger
Act (the “Merger”).  The Merger shall be
effective at the Effective Time.  The
Articles of Merger shall have been filed with the Secretary of State of the
State of Nevada at or before the Closing. 
When used in this Agreement, the term “Effective Time” shall mean 12:02
a.m., Pacific Coast time, on the first calendar day of the month after the
Closing Date occurs, and “Surviving Corporation” shall mean NSB.

 

Section 2.2 
Effect of Merger.  The
Merger shall have the effects set forth in the California Corporation Code, the
California Financial Code, the Nevada Revised Statutes and the Bank Merger
Act.  By virtue of the Merger and at the
Effective Time, all of the rights, privileges, powers and franchises and all
property and assets of every kind and description of CNA and NSB shall be
vested in and be held and enjoyed by the Surviving Corporation, without further
act or deed, and all the estates and interests of every kind of CNA and NSB,
including all debts due to either of them, shall be as effectively the property
of the Surviving Corporation as they were of CNA and NSB immediately prior to
the Effective Time, and the title to any real estate vested by deed or
otherwise in either CNA or NSB shall not revert or be in any way impaired by
reason of the Merger; and all rights of creditors and liens upon any property
of CNA and NSB shall be preserved unimpaired and all debts, liabilities and
duties of CNA and NSB shall be debts, liabilities and duties of the Surviving
Corporation and may be enforced against it to the same extent as if such debts,
liabilities and duties had been incurred or contracted by it, and none of such debts,
liabilities or duties shall be expanded, increased, broadened or enlarged by
reason of the Merger.

 

Section 2.3 
Articles of Incorporation and Bylaws.  The Articles of Incorporation and Bylaws of
NSB in effect immediately prior to the Effective Time shall be the Articles of
Incorporation and Bylaws of the Surviving Corporation until amended and the
name of the Surviving Corporation shall be “Nevada Security Bank.”

 

Section 2.4 
NSB Stock.  The authorized
and issued capital stock of NSB immediately prior to the Effective Time, on and
after the Effective Time, pursuant to the Articles of Merger and without any
further action on the part of NSB shall remain unchanged and shall be held by
Holdings.

 

Section 2.5 
Cancellation of CNA Common Stock. 
At the Effective Time, all of the outstanding shares of CNA Common Stock
shall be canceled and CNA Financial shall receive from NSB an amount equal to
the Purchase Price by wire transfer in immediately available funds to the
account designated by CNA Financial.

 

Section 2.6 
Board of Directors of NSB following the Effective Time.  At the Effective Time, the then existing
Board of Directors of NSB shall remain the Board of Directors of the Surviving
Corporation, each to serve until the next annual meeting of shareholder of NSB
and until such successors are elected and qualified.

 

6

 

Section 2.7 
Executive Officers of NSB following the Effective Time.  At the Effective Time, the then existing
executive officers of NSB shall remain the executive officers of NSB.

 

ARTICLE 3. 
REPRESENTATIONS AND WARRANTIES

OF CNA FINANCIAL AND CNA

 

CNA Financial and CNA represent and warrant to NSB as follows:

 

Section 3.1 
Organization; Corporate Power; Etc.  CNA Financial is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of Delaware,
and its common stock is listed on the New York Stock Exchange.  CNA is a California state-chartered banking
corporation, duly organized, validly existing and in good standing under the
laws of California. CNA is a wholly-owned subsidiary of CNA Financial.  CNA Financial and CNA each have all requisite
corporate power and authority to enter into this Agreement and, subject to obtaining
all Requisite Regulatory Approvals, CNA Financial and CNA each will have the
requisite corporate power and authority to perform their respective obligations
hereunder with respect to the consummation of the transactions contemplated
hereby.

 

Section 3.2 
Licenses and Permits.  Set
forth on Schedule 3.2 is a list of all material licenses and permits that are
currently held by CNA (the “Licenses”). 
The Licenses are in full force and effect, except for any failure to be
in full force and effect that would not, individually or in the aggregate, have
a Material Adverse Effect on CNA or on the ability of CNA to consummate the
transactions contemplated by this Agreement. 
Furthermore CNA has all material licenses, certificates, franchises,
rights and permits that are necessary for the conduct of the business of
banking in California.

 

Section 3.3 
Subsidiaries.  Other than
as set forth on Schedule 3.3, there is no corporation, partnership, joint
venture or other entity in which CNA owns, directly or indirectly (except as
pledgee pursuant to loans or stock or other interest held as the result of or
in lieu of foreclosure pursuant to pledge or other security arrangement) any
equity or other voting interest or position.

 

Section 3.4 
Authorization of Agreement; No Conflicts.

 

3.4.1 
The execution and delivery of this Agreement and each Related Agreement
to which it is a party by each of CNA Financial and CNA have been duly
authorized by all necessary corporate action on the part of CNA Financial and
CNA respectively.  The consummation of
the transactions contemplated hereby and by each of the Related Agreements to
which it is a party have been duly authorized by all necessary corporate action
on the part of each of CNA Financial and CNA. 
This Agreement has been duly executed and delivered by each of CNA
Financial and CNA and, subject to the receipt of all Requisite Regulatory
Approvals, will constitute a legal, valid and binding obligation of CNA
Financial and CNA, respectively, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, liquidation,
receivership, conservatorship, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general equitable principles
and by Section 8(b)(6)(D) of the Federal Deposit Insurance Act, 12 U.S.C.
Section 1818(b)(6)(D).  The Articles of
Merger, upon the receipt of all

 

7

 

Requisite Regulatory Approvals and the due execution and filing of such
Articles of Merger in accordance with the applicable provisions of the Nevada
Revised Statutes, will constitute a legal, valid and binding obligation of CNA,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, liquidation, receivership, conservatorship,
insolvency, moratorium or other similar laws affecting the rights of creditors
generally or by general equitable principles. 
At or before the Closing, the License Agreement will be duly executed and
delivered by CNA Financial or one of its Affiliates and will constitute a
legal, valid and binding obligation of CNA Financial or one of its Affiliates,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, liquidation, receivership, conservatorship,
insolvency, moratorium or other similar laws affecting the rights of creditors
generally and by general equitable principles.

 

3.4.2 
Except as disclosed on Schedule 3.4, the execution and delivery of this
Agreement and the Related Agreements, and the consummation of the transactions
contemplated hereby and thereby, do not and will not conflict with, or result
in any violation of or default under, any provision of the Certificate or
Articles of Incorporation or Bylaws of CNA Financial or CNA, any material
mortgage, indenture, lease, agreement or other material instrument or any
License, judgment, order, decree, statute, law, ordinance or regulation
applicable to CNA Financial or CNA, other than any such conflict, violation or
default which (i) will not have a Material Adverse Effect on CNA; or (ii) will
be cured or waived prior to the Effective Time.

 

Section 3.5 
Capital Structure.  The
authorized capital stock of CNA consists of 10,000 shares of CNA Common Stock,
$100 par value per share.  On the date of
this Agreement, 10,000 shares of CNA Common Stock were outstanding.  All outstanding shares of CNA Common Stock
are validly issued, fully paid and nonassessable and do not possess any
preemptive rights and were not issued in violation of any preemptive rights or
any similar rights of any Person.  CNA
does not have outstanding any options, warrants, calls, rights, commitments,
securities or agreements of any character to which CNA is a party or by which
it is bound obligating CNA to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of CNA or obligating CNA
to grant, extend or enter into any such option, warrant, call, right,
commitment or agreement.

 

Section 3.6 
Compliance with Applicable Laws. 
Except as disclosed on Schedule 3.6, to the Knowledge of CNA, the
respective businesses of CNA are not being conducted in violation of any law,
ordinance or regulation, except for violations which individually or in the
aggregate would not have a Material Adverse Effect on CNA.  Except as set forth in Schedule 3.6, to the
Knowledge of CNA no investigation or review by any Governmental Entity with
respect to CNA, other than regular bank examinations, is pending or threatened,
nor has any Governmental Entity indicated to CNA an intention to conduct the
same.

 

Section 3.7 
Litigation.  Except as set
forth in Schedule 3.7, to the Knowledge of CNA Financial and CNA there is no
suit, action or proceeding or investigation pending or threatened against or
affecting CNA which, if adversely determined, would have a Material Adverse
Effect on CNA; nor is there any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against CNA that has, or
which, insofar as reasonably can be foreseen, in the future would have, any
such Material Adverse Effect.

 

8

 

Section 3.8 
Agreements with Banking Authorities.  Except as set forth on Schedule 3.8, CNA is
not a party to any written agreement or memorandum of understanding with, or
order or directive (that is not of general applicability) from, any
Governmental Entity.

 

Section 3.9 
Taxes.

 

3.9.1  Filing
of Returns.  Except as set forth on
Schedule 3.9.1, CNA Financial or CNA has duly prepared and filed or caused to
be duly prepared and filed all federal, state, and local Returns (for Tax or
informational purposes) which were required to be filed by or in respect of CNA
or any of their properties, income and/or operations on or prior to the Closing
Date.  As of the time they were filed,
the foregoing Returns accurately reflected the material facts regarding the
income, business, asset, operations, activities, status, and any other
information required to be shown thereon. 
Except as set forth on Schedule 3.9.1, no extension of time within which
CNA may file any Return is currently in force.

 

3.9.2  Payment
of Taxes.  Except as disclosed on
Schedule 3.9.2 with respect to all amounts in respect of Taxes imposed on CNA
or for which CNA is or could be liable, whether to taxing authorities (as, for
example, under law) or to other Persons (as, for example, under Tax allocation
agreements), with respect to all taxable periods or portions of periods ending
on or before the Closing Date, all applicable tax laws and agreements have been
or will be fully complied with in all material respects, and all such amounts
required to be paid by or on behalf of CNA to taxing authorities or others on
or before the date hereof have been paid.

 

Section 3.10 
Brokers and Finders. 
Except as set forth on Schedule 3.10, CNA is not a party to or obligated
under any agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement, or any other
Related Agreement, nor the consummation of the transactions provided for herein
or therein, will result in any liability to any broker or finder.

 

Section 3.11 
Powers of Attorney.  Except
as set forth on Schedule 3.11, no power of attorney or similar authorization
given by CNA thereof is presently in effect or outstanding other than powers of
attorney given in the ordinary course of business with respect to routine
matters.

 

Section 3.12 
Corporate Records.  The
minute books of CNA accurately reflect all material actions taken by the
respective shareholders, board of directors and committees of CNA.

 

Section 3.13 
Approvals of CNA and CNA Financial.  CNA and CNA Financial require no approvals of
or notice filings with any Governmental Entity or other third party except for
those to be obtained prior to the Closing Date and listed on Schedule 3.13 (the
“CNA Approvals”) in order to consummate the transactions described in this
Agreement and the Related Agreements.

 

ARTICLE
4.  REPRESENTATIONS AND WARRANTIES OF NSB

 

NSB represents and warrants to CNA and CNA
Financial that:

 

Section 4.1 
Organization; Corporate Power; Etc.  NSB is a Nevada corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada.  NSB is a

 

9

 

wholly-owned subsidiary of Holdings. 
NSB has all requisite corporate power and authority to enter into this
Agreement and, subject to obtaining all Requisite Regulatory Approvals, NSB
will have the requisite corporate power and authority to perform its
obligations hereunder with respect to the consummation of the transactions
contemplated hereby.  NSB is a state
chartered banking corporation licensed to conduct banking business in Nevada.  NSB is not a member of the Federal Reserve
System.  NSB’s deposits are insured by
the FDIC in the manner and to the full extent provided by law.

 

Section 4.2 
Licenses and Permits. 
Except as disclosed on Schedule 4.2, NSB has all material licenses and
permits that are necessary for the conduct of its business, and such licenses
and permits are in full force and effect, except for any failure to be in full
force and effect that would not, individually or in the aggregate, have a
Material Adverse Effect on NSB, or on the ability of NSB to consummate the transactions
contemplated by this Agreement.

 

Section 4.3 
Authorization of Agreement; No Conflicts.

 

4.3.1 
The execution and delivery of this Agreement and each Related Agreement
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of NSB.  NSB has received the approval of its sole
shareholder, Holdings, of this Agreement and each Related Agreement, and the
transactions contemplated in those agreements. 
This Agreement has been duly executed and delivered by NSB, and subject
to receipt of all Requisite Regulatory Approvals, will constitute a legal,
valid and binding obligation of NSB, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, liquidation,
receivership, conservatorship, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and by general equitable
principles.  The Articles of Merger, upon
the receipt of all Requisite Regulatory Approvals and the due execution and
filing of such Articles of Merger in accordance with the applicable provisions
of the Nevada Revised Statutes and the California Corporations Code, will
constitute a legal, valid and binding obligation of NSB, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, liquidation, receivership, conservatorship, insolvency,
moratorium or other similar laws affecting the rights of creditors generally or
by general equitable principles.  At the
Closing, the License Agreement will be duly executed and delivered by NSB and
will constitute a legal, valid and binding obligation of NSB, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, liquidation, receivership, conservatorship, insolvency,
moratorium or other similar laws affecting the rights of creditors generally
and by general equitable principles.

 

4.3.2 
Except as set forth on Schedule 4.3, the execution and delivery of this
Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby and thereby do not and will not conflict with, or result in
any violation of or default under, any provision of the Articles of Incorporation
or Bylaws of NSB, or any material mortgage, indenture, lease, agreement or
other material instrument, or any permit, License, judgment, order, decree,
statute, law, ordinance or regulation applicable to NSB, other than any such
conflict, violation or default which (i) will not have a Material Adverse
Effect on NSB; or (ii) will be cured or waived prior to the Effective Time.

 

10

 

Section 4.4 
Agreements with Banking Authorities.  Except as set forth on Schedule 4.4, NSB is
not a party to any written agreement or memorandum of understanding with, or
order or directive (that is not of general applicability) from, any
Governmental Entity.

 

Section 4.5 
Brokers and Finders. 
Except as set forth on Schedule 4.5, NSB is not a party to or obligated
under any agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of this Agreement or any Related
Agreement, nor the consummation of the transactions provided for herein or
therein, will result in any liability to any broker or finder.

 

Section 4.6 
Bank Regulatory Matters. 
To NSB’s knowledge, there are no facts or circumstances, and it has
engaged in no acts, practices or courses of conduct, that reasonably would cause
a Governmental Entity, including but not limited to the FDIC, the CDFI, the
NCFID and any other applicable federal or state bank regulatory authorities, to
deny, object to or limit in any material respect any application or notice
required to be filed or submitted by NSB with respect to the transactions
contemplated by this Agreement, the Related Agreements and any other agreements
contemplated hereby or thereby.

 

Section 4.7 
NSB’s Approvals.  NSB
requires no approvals of or notice filings with any Governmental Entity or
other third party except for those listed in Schedule 4.7 (the “NSB Approvals”)
in order to consummate the transactions described in this Agreement and the
Related Agreements.

 

Section 4.8 
Financing.  NSB has
available, and at the Closing will have available, sufficient cash to
consummate the transactions contemplated by this Agreement and the Related
Agreements and to pay all related fees and expenses required to be paid by NSB
hereunder and thereunder.

 

Section 4.9 
Litigation.  Except as set
forth in Schedule 4.9, to the knowledge of NSB there is no suit, action or
proceeding or investigation pending or threatened against or affecting NSB
which, if adversely determined, would have a Material Adverse Effect on NSB;
nor is there any judgment, decree, injunction or order of any Governmental
Entity or arbitrator outstanding against NSB that has, or which, insofar as
reasonably can be foreseen, in the future would have, any such Material Adverse
Effect.

 

ARTICLE
5.  ADDITIONAL AGREEMENTS

 

Section 5.1 
Access to Information

 

5.1.1 
NSB, on the one hand, and CNA and CNA Financial, on the other hand, each
agrees to keep confidential and not divulge to any other party or Person (other
than to the employees, attorneys, accountants and consultants of each who have
a need to receive such information and other than as may be required by law)
any Confidential Information received from the other, unless and until such
documents and other information otherwise becomes publicly available through no
fault of the receiving party or unless the disclosure of such information is
authorized by the other party.  In the
event of termination of this Agreement for any reason, the parties shall
promptly return, or at the election of the other party destroy, all nonpublic
documents obtained from the other and any

 

11

 

copies or notes of such documents (except as otherwise required by law)
and, upon the request of the other party, confirm such destruction to the other
in writing.

 

Section 5.2 
Taking of Necessary Action.

 

5.2.1 
Subject to the terms and conditions of this Agreement, each of the
parties hereto agrees, subject to applicable laws and the fiduciary duties of
CNA’s or NSB’s Boards of Directors, as advised in writing by their respective
counsel, to use all reasonable best efforts promptly to take or cause to be
taken all action and promptly to do or cause to be done all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement and the Related
Agreements, including, without limitation, the delivery of any certificate or
other document reasonably requested by counsel to a party to this Agreement.  Without limiting the foregoing, NSB and CNA
will use their reasonable best efforts to obtain all consents of third parties
and Governmental Entities necessary or, in the reasonable opinion of NSB or CNA
advisable for the consummation of the transactions contemplated by this Agreement.  In case at any time after the Effective Time
any further action is necessary or desirable to carry out the purposes of this
Agreement or any of the Related Agreements, the proper officers or directors of
NSB or CNA, as the case may be, shall take all such necessary action.

 

5.2.2 
CNA and NSB shall cooperate and use all commercially reasonable efforts
to obtain all consents, approvals and agreements of, and to give and make all
notices and filings with, any Governmental Entity necessary to authorize,
approve or permit the consummation of the transactions contemplated by this
Agreement and the Related Agreements and any other agreements contemplated
hereby or thereby, including, without limitation, as set forth on Schedule 3.13
and Schedule 4.7.  Without limiting the
generality of the foregoing, NSB and its Affiliates shall, within ten (10)
Business Days after the date hereof, file with the CDFI, the NCFID and the FDIC
for approval of the Merger.  NSB will
provide CNA and its counsel the opportunity to review in advance and to provide
comments no later than three (3) Business Day following receipt of all such
filings with any Governmental Entity. 
Each party shall provide to the other at the request of the other party:
(i) immediately prior to the filing thereof, copies of all material statements,
applications, correspondence or forms to be filed with the appropriate
regulatory authorities to obtain the Requisite Regulatory Approvals; (ii)
promptly after delivery to, or receipt from, such regulatory authorities all
written communications, letters, reports or other documents relating to the
transactions contemplated by this Agreement; and (iii) reports of all material
oral communications between the other party and any appropriate bank regulatory
authorities regarding the Requisite Regulatory Approvals.

 

Section 5.3 
Expenses.  Whether or not
the Merger is consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring the same.

 

Section 5.4 
Notification of Certain Events.

 

5.4.1 
CNA shall provide to NSB, as soon as practicable, written notice (sent
via facsimile and overnight mail or courier) of the occurrence or failure to
occur of any of the events,

 

12

 

circumstances or conditions that are the subject of Sections 6.1 and
6.2, which notice shall provide reasonable detail as to the subject matter
thereof.

 

5.4.2 
NSB shall provide to CNA, as soon as practicable, written notice (sent
via facsimile and overnight mail or courier) of the occurrence or failure to
occur of any of the events, circumstances or conditions that are the subject of
Section 6.3 and 6.4, which notice shall provide reasonable detail as to the subject
matter thereof.

 

5.4.3 
Each party shall promptly advise the others in writing of any change or
event which could reasonably be expected to have a Material Adverse Effect on
such party or on its ability to consummate the transactions contemplated by this
Agreement or any Related Agreement.

 

Section 5.5 
Updated Schedules.  CNA has
delivered to NSB on or before the date of this Agreement all of the Schedules
to this Agreement which CNA is required to deliver to NSB hereunder (the “CNA
Schedules”).  NSB has delivered to CNA on
or before the date of this Agreement all of the Schedules to this Agreement
which NSB is required to deliver to CNA hereunder ( the “NSB Schedules”).  Immediately prior to the Closing Date, CNA
shall have prepared updates of the CNA Schedules provided for in this Agreement
and shall deliver to NSB revised schedules containing the updated information
(or a certificate signed by CNA’s Chief Executive Officer stating that there
have been no changes on the applicable schedules); and NSB shall have prepared
updates of the NSB Schedules provided for in this Agreement and shall deliver
to CNA revised Schedules containing updated information (or a certificate
signed by NSB’s Chief Executive Officer stating that there has been no change
on the applicable schedules).

 

Section 5.6 
Tax Matters.

 

5.6.1  Post-Closing
Access to Records; Cooperation. 
After the Closing, CNA Financial and NSB will each afford to the other
or to such other’s representatives or agents and auditors reasonable access
during normal business hours (on terms not unreasonably disruptive to the
business, operations or employees of the party or parties of which access is
sought) to the records and all other data and information relating to Taxes
pertaining to taxable years or periods ending at or prior to the Effective Time
(and the Straddle Period) for the purpose of obtaining information relating to
Taxes, to the extent such access is reasonably necessary: (i) to prepare and
complete any Returns required to be made hereunder; (ii) to prosecute or defend
any Tax dispute relating to CNA; and (iii) to comply with requests made by any
Tax authority conducting an audit, investigation or inquiry relating to CNA’s
activities; provided that in no case will NSB (or its Affiliates) have access
to the consolidated Tax Returns of the Loews Corporation Affiliated Group.  After the Closing, CNA Financial and NSB
agree (i) to retain all books and records with respect to Tax matters pertinent
to CNA relating to any Tax period beginning before the Effective Time until the
expiration of the statute of limitations (and, to the extent notified by NSB or
CNA Financial, any extensions thereof) of the respective Tax periods, and to
abide by all record retention agreements entered into with any governmental
authority; and (ii) to give the other party hereto reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other party so requests, CNA Financial or NSB, as the case may be, shall
allow the other party hereto to take possession of such books and records.

 

13

 

5.6.2  Taxes
for Short Taxable Year.  For purposes
of allocating liability for Taxes for purposes of Section 5.7.4(c)(iii) , in
the case of any taxable period that includes (but does not end at) the
Effective Time (a “Straddle Period”), Taxes of CNA allocable to the Pre-Closing
Tax Period shall be determined on the basis of an interim closing of the books
as of the close of business at the Effective Time, except that exemptions,
allowances, deductions or minimum amounts that are calculated on an annual
basis, such as the deduction for depreciation, shall be ratably apportioned on
a time basis.

 

5.6.3  Adjustment
to Purchase Price.  Any payment by CNA
Financial or NSB under Section 5.7 will be an adjustment to the Purchase Price
and will also be a purchase price adjustment for federal income tax purposes
unless a determination (as defined in Section 1313 of the IRC) causes any such
payment not to constitute an adjustment to the purchase price for federal
income tax purposes.

 

5.6.4  Preparation
and Filing of Tax Returns.

 

(a) 
CNA Financial shall cause to be prepared and timely filed, taking into
account all valid extensions of time to file, all Returns of CNA (or Returns in
which CNA is required to be included) that are due to be filed for any taxable
years or periods ending at or before the Effective Time.  All such Returns shall be prepared consistent
with past practices.  CNA shall pay or
cause to be paid all Taxes shown to be due on Returns that it is responsible
for preparing and filing under this Agreement.

 

(b) 
NSB shall cause to be prepared and timely filed, taking into account all
valid extensions of time to file, all Returns of CNA or relating to the
operations or assets of CNA that are due to be filed for any Straddle
Period.  Taxes for a Straddle Period
shall be the joint responsibility of CNA Financial and NSB and shall be
apportioned between CNA Financial and NSB based on an interim closing of the
books.  NSB shall pay to the appropriate
taxing authority the full amount of Taxes shown on any Straddle Period
Return.  NSB shall promptly provide to
CNA Financial a copy of all such Straddle Period Returns as filed and
thereafter CNA Financial shall promptly reimburse NSB for CNA Financial’s share
of such Taxes as determined under this Section 5.6.4.

 

(c) 
NSB shall be responsible for preparing and filing all Returns and paying
all Taxes not covered by Sections 5.6.4(a) and (b).

 

5.6.5  Contest
Provisions.

 

(a) 
NSB shall promptly notify CNA Financial in writing upon receipt by NSB
or any of NSB’s Affiliates of notice of any pending or threatened federal,
state, local or foreign Tax audits or assessments which may affect CNA
Financial’s liability to NSB pursuant to Section 5.7.4(c)(ii) and (iii).

 

(b) 
CNA Financial shall have the sole right to represent CNA’s interests in
any Tax audit or administrative or court proceeding relating to taxable years
or periods ending at or before the Effective Time, and to employ counsel of its
choice and expense.  To the extent any
such audit or proceeding could reasonably be expected to increase the tax
liability of NSB after the

 

14

 

Effective Time, (i) CNA Financial shall provide notice to NSB of any
such audit or proceeding, (ii) NSB shall have the right to participate in (but
not control) any such audit or proceeding at its own expense and (iii) CNA
Financial shall not settle any such audit or proceeding without prior written
authorization from NSB.

 

(c) 
With respect to Straddle Periods, the Parties shall jointly control any
audits or proceedings, and neither Party shall settle or compromise any matter
without the prior written consent of the other Party.

 

5.6.6  Tax
Sharing Agreements.  All tax sharing
agreements or similar agreements (other than this Agreement) with respect to or
involving CNA shall be terminated at or before the Effective Time.

 

5.6.7  Certain
Taxes.  All transfer, documentary,
sales, use, stamp, registration and other such Taxes and fees (including any
penalties and interest) incurred in connection with this Agreement shall be
paid by NSB when due, and NSB will, at its own expense, file all necessary
Returns and other documentation with respect to all such transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by
applicable Legal Requirements, CNA Financial will join in the execution of any
such Returns and other documentation.

 

Section 5.7 
Indemnification.

 

5.7.1  CNA
Financial’s Indemnification.  CNA
Financial shall indemnify and hold harmless NSB and Holdings and their
respective directors, officers and employees (all of the foregoing
collectively, the “NSB Affiliates”), from and against any and all Losses which
any of the NSB Affiliates may suffer, incur or sustain arising out of or
attributable to (i) any material breach of any agreement to be performed
by CNA Financial or CNA pursuant to this Agreement (excluding breaches after
the Effective Time of CNA or its successor), (ii) any claim, penalty
asserted, legal action or administrative proceeding based upon any action taken
or omitted to be taken by CNA Financial or CNA or resulting from any
transaction or event occurring prior to the Effective Time, relating in any
such case to the operation of CNA, (iii) any liability, obligation or duty
of CNA, relating to the operation of the business of CNA prior to the Effective
Time,  (iv) any material breach of any representation
or warranty contained in this Agreement on the part of CNA Financial or CNA
(excluding breaches of CNA or the Surviving Corporation after the Effective
Time) or (v) any acts or omissions by Continental Casualty Company carried out
pursuant to the power of attorney referred to in Section 5.8.

 

5.7.2  NSB’s
Indemnification.  In addition to any
other provisions of this Agreement or the Related Agreements under which NSB
has agreed to indemnify CNA Financial or any of its Affiliates, and except as
expressly provided in this Agreement, NSB shall indemnify and hold CNA
Financial and its Affiliates harmless from and against any Loss arising or
resulting from any material breach of any representation or warranty contained
in this Agreement or any Related Agreement or nonfulfillment of any agreement
on the part of NSB or the Surviving Corporation under this Agreement (excluding
breaches prior to the Effective Time of CNA) or any Related Agreement or from
any misrepresentation in any certificate furnished or to be furnished by CNA
Financial hereunder.

 

15

 

5.7.3 Additional Indemnification
Provisions.  The respective
obligations and liabilities of CNA Financial and NSB (herein sometimes called
the “Indemnifying Party”) to the other and to the other Persons entitled to
indemnification (herein sometimes called the “Indemnified Party”) for Losses
for which indemnification is provided under Sections 5.7.1 and 5.7.2 hereof
shall include the following:

 

(a) 
CNA Financial and NSB each agree to designate a single point of contact
within each of their respective corporate organizations to give and receive
notices of disputes under this Agreement and the Related Agreements (the “Dispute
Officer”), who shall be acceptable to the other party and shall be a senior manager
who either reports directly to the Chief Executive Officer or a person who
reports to a person who reports directly to the Chief Executive Officer.  In the event of any claim against NSB or CNA
Financial covered by this Section 5.7 that does not involve a claim, audit or
inquiry by a third party to which a response must be served in order to avoid
default or waiver of any defense, the Parties agree that for a period of not
less than 15 days following receipt of the claim by the Party against which the
claim has been asserted, they each will respond to reasonable inquiries by the
other Party and will hold at least one meeting in person or by telephone
conference of the Dispute Officers to attempt to resolve the claim and to
provide prompt reimbursement to the Indemnified Party of the amount agreed to
be owed to such Indemnified Party.  To
the extent that any amount of any claim remains in dispute at the end of the
agreed period for consideration by the Dispute Officers, which shall not be
less than 15 days following receipt of the claim by the Party against whom the
claim has been made, the Indemnified Party seeking recovery may proceed with
its claim under Section 5.7.3(b).  Any
undisputed portion of any invoice or other claim that has been submitted pursuant
to this Section 5.7.3 shall be paid to the Indemnified Party to which such
amount is owed within 15 days of the date the invoice or claim is received by
the Indemnifying Party.

 

(b)  On
or before the earliest of (i) the 20th day after receipt of notice (referred to
herein as “notice”) by the Indemnified Party of commencement of any action or
the assertion in writing, formal or informal, of any claim, audit or inquiry
implicating a Loss (referred to herein as a “claim”), (ii) the tenth day
preceding the day on which a responsive pleading must be served in order to
prevent judgment by default in favor of the person asserting the claim, or
(iii), in the case of a claim described in (a) above, the 30th day after
expiration of the agreed period of consideration by the Dispute Officers, the
Indemnified Party shall give the Indemnifying Party written notice thereof
together with a copy of the document asserting such claim.  Failure to give such notice timely shall not
relieve the Indemnifying Party from any obligation under this Agreement except
to the extent that the Indemnifying Party is prejudiced, except that the
Indemnifying Party shall not be responsible for expenses incurred during the
period within which the Indemnified Party failed to give notice.  The Indemnifying Party shall acknowledge
receipt thereof to the Indemnified Party and, if the claim is brought by a
third party, the Indemnifying Party shall undertake and pay for the defense
thereof by a representative of its own choosing (which shall be reasonably
satisfactory to the Indemnified Party).

 

(c)  If
the Indemnifying Party determines during the course of its defense that the
Indemnifying Party is not responsible for indemnifying the Indemnified Party
for all or part of the claim, the Indemnifying Party shall give written notice
thereof to the Indemnified Party, but shall continue to defend such claim and
pay for such defense.  Within 30 days of
receipt of such a notice, the Indemnified Party shall notify the Indemnifying
Party in writing either (i) that the Indemnified

 

16

 

Party agrees that such claim or any portion thereof is not
indemnifiable under Section 5.7.1 or 5.7.2, respectively, or (ii) that the
Indemnified Party disagrees with the determination of the Indemnifying
Party.  In the event the Indemnified
Party notifies the Indemnifying Party under (ii) above, the matter shall be
referred to the Dispute Officers for a period of 120 days during which the Indemnifying
Party shall continue to defend and pay for the defense of the Indemnified
Party.  If the matter is not resolved by
the Dispute Officers within such 120-day period, the Indemnifying Party shall
continue to defend and pay for the defense of the claim or part thereof and may
pursue its remedies to collect its expenses from the Indemnified Party.  The Indemnifying Party may not resign from
defending and paying for the defense of any such claim or part thereof as to
which the Indemnified Party in good faith disputes responsibility until such
time as a court of competent jurisdiction finally determines that the
Indemnifying Party is not responsible for indemnification.  Upon the judicial determination that the
Indemnifying Party is not responsible for indemnification, the Indemnifying
Party may resign from defending and paying for the defense of the claim by
giving written notice to the Indemnified Party of the Indemnifying Party’s
resignation, including an effective date that will permit a reasonable time for
substitution of counsel and any other necessary transition, and the Indemnified
Party shall assume the defense of the claim and pay for such defense from and
after the effective date of such notice or such later time as may be necessary
to effect transition and substitution of counsel.  The party finally determined to be
responsible for indemnification shall reimburse the other party for any
expenses incurred by the other party in connection therewith, including but not
limited to the payment of any Loss by such party, and for any expenses incurred
in the successful contest of responsibility for indemnification, plus interest
on each payment from the time when payment was first due to be reimbursed by
the responsible party to the time of actual reimbursement at an annual
percentage rate of two hundred basis points above the floating prime rate (as
of the first business day of each calendar quarter as published in the Wall
Street Journal) for each calendar quarter between the date the payment was
first due to be reimbursed and the time of actual reimbursement.

 

(d) 
Subject to subsection (c) above, the Indemnifying Party shall defend any
claim and/or enter into a settlement or compromise thereof or consent to a
judgment with respect thereto; provided, however, the Indemnifying Party shall
not, without the prior written consent of the Indemnified Party, settle or
compromise any claim by any third party or consent to the entry of judgment (i)
that does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party a release from all liability
in respect of such claim, or (ii) that contemplates any payment or performance
by the Indemnified Party.  The
Indemnified Party may retain separate counsel at its sole cost and expense to
represent it in any proceedings involving any claim.

 

(e)  If
the Indemnifying Party, at any time after the 10th day after receipt of notice
of a claim by a third party (or, if earlier, at any time after the fifth day
preceding the day on which a responsive pleading must be served in order to
prevent judgment by default in favor of the person asserting such claim) does
not provide reasonable assurances to the Indemnified Party of (i) the
Indemnifying Party’s (or its insurer’s) ability to pay defense costs and
indemnity costs likely to be incurred with respect to the claim, or (ii) the
Indemnifying Party’s active and diligent defense of the claim, the Indemnified
Party will, upon notice to the Indemnifying Party and the failure of the
Indemnifying Party to discharge its obligations under this sentence within
three days of receiving such notice, have the right to respond to such claim
and to undertake to defend, compromise or settle such claim on behalf of and
for the account and risk of loss of the Indemnifying Party, provided that

 

17

 

the Indemnifying Party shall be given at least 15 days’ prior written
notice of the effectiveness of any such proposed settlement or compromise, and
subject to the right of the Indemnifying Party to assume the defense of such
claim upon satisfying conditions (i) and (ii) above at any time prior to a date
not less than 90 days before the start of any trial or other hearing for the
presentation of facts with respect to such claim.

 

(d)  In
connection with any such indemnification, the Indemnifying Party shall
cooperate in all reasonable requests of the Indemnified Party.

 

(e)  No
violation of or failure to observe any of the notice or other obligations of
the Indemnified Party under this Section 5.7.3 shall operate to waive or excuse
Indemnifying Party’s obligations under this Section 5.7 except and only to the
extent that the Indemnifying Party is demonstrably and materially prejudiced
thereby, provided, however, that the Indemnifying Party shall not be responsible
for expenses of the Indemnified Party with respect to any period prior to
receipt by the Indemnifying Party of written notice of the applicable claim
under Section 5.7.3(b).

 

5.7.4  Indemnification
Limits.

 

(a)  Exclusions
from Indemnification.  Required
payments by an Indemnifying Party pursuant to this Section 5.7 shall be limited
to the amount of any Loss remaining after deducting therefrom (i) any insurance
proceeds actually recovered by the Indemnified Party on account of the Loss,
(ii) any actual Tax benefit to the Indemnified Party, which shall be the
marginal, discounted present value of Tax benefit to the Indemnified Party,
taking into account the Indemnified Party’s existing Tax strategy at the time
the Loss is payable, and (iii) any indemnity, contribution, or other similar
payment actually recovered by any Indemnified Party from any third party, in
each case with respect to such Loss.  The
Indemnified Party shall use commercially reasonable efforts to collect all such
indemnity, contribution or other similar payments.

 

(b)  Time
Limits.  Each party agrees that it
will not waive the statute of limitations with respect to any third party claim
for which indemnification may be sought under this Section 5.7 and in no event
shall any Indemnified Party be permitted to recover any Losses from the
Indemnifying Party pursuant to this Section 5.7 as a result of any such waiver.

 

(c)  Limitations
on Amount of Certain Claims.  In no
event shall the aggregate of all indemnifiable claims paid by CNA Financial to
NSB and the other Indemnified Parties for breaches of Sections 3.1, 3.4.1 and
3.5 exceed $500,000.  The limitations on
amount set forth in this Section shall not apply to limit recovery by NSB and
the other Indemnified Parties for any Losses arising or resulting from (i) the
operations and business of CNA, including, but not limited to those matters
listed on Schedule 3.6, CNA’s employment practices, employee benefit plans,
customer relationships and regulatory matters, as well as the ownership of any
assets by CNA, any other acts or omissions by CNA, and any liabilities and
obligations of CNA, in each case to the extent arising or occurring at or prior
to the Effective Time; (ii) Unpaid Taxes of any member of the Loews Corporation
Affiliated Group (other than CNA or its successor) under Internal Revenue
Service Reg. §1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract or otherwise; and (iii) any
Taxes of CNA with respect to any Tax year or portion thereof ending at or
before the Effective Time.

 

18

 

(d)  Exclusive
Remedy.  The Parties expressly
acknowledge that (i) the provisions of this Section 5.7 shall be the sole and
exclusive remedy for Losses caused as a result of breaches of the
representations, warranties and agreements contained in this Agreement (except
to the extent additionally provided in Section 5.6) and the Related Agreements
and any certificate furnished or to be furnished hereunder, except that the
remedies of injunction and specific performance shall remain available to the
Parties hereto, and (ii) no Indemnifying Party shall be liable or responsible
to any other party hereto and the other Indemnified Parties for punitive, incidental
and consequential or multiplied damages or for lost profits, in accordance with
Section 9.8.

 

Section 5.8 
Assets and Liabilities of CNA at the Effective Time.  Immediately prior to the Effective Time, CNA
shall have assets consisting only of its charter, cash and cash equivalents,
and no liabilities other than the License Agreement and the Licenses.  To the extent that CNA has any liabilities or
contingent liabilities that are not known at the Effective Time, CNA Financial
agrees to assume all of such liabilities. 
At any time prior to the Effective Time, CNA shall be permitted to (i)
make distributions to CNA Financial, (ii) transfer any of its assets (other
than the Licenses) to CNA Financial or one or more of its Affiliates and (iii)
undertake any actions necessary, advisable or appropriate to consummate the
transactions contemplated by the UBOC Agreement, provided that CNA shall retain
an amount of cash and cash equivalents in an amount not less than the sum of
$100,000.  NSB hereby consents to the execution
and delivery of all documents and the taking of all other actions by CNA as are
necessary, advisable or appropriate to effect the foregoing.  Not later than 30 days after the Closing
Date, CNA Financial shall deliver to NSB an income statement of CNA for the
period beginning January 1, 2004, and ended as of the Closing Date, and a
balance sheet of CNA as of the Closing Date, in the same form used by CNA prior
to the Closing Date for reporting month end results internally (the “Closing
Financial Statements”).  After the
Effective Time, in the event any additional assets and/or liabilities are
discovered to have been held by CNA prior to the Effective Time, the Parties
shall take such action as is necessary to transfer such additional assets
and/or liabilities to CNA Financial.  At
the Closing, NSB shall deliver to CNA Financial a limited power of attorney in
favor of Continental Casualty Company in substantially the form attached hereto
as Exhibit 5.8.

 

Section 5.9 
Post-Acquisition Cooperation. 
To the extent any CNA corporate document is requested by legal process
or by any Governmental Entity, that is in the actual possession of CNA
Financial, CNA Financial agrees to produce such documents to NSB within a
reasonable period of time.  To the extent
any CNA corporate document is requested by legal process or by any Governmental
Entity, that is in the actual possession of NSB, NSB agrees to produce such
documents to CNA Financial within a reasonable period of time.

 

Section 5.10 
Short-term License of Premises. 
CNA Financial or one of its Affiliates agrees to sublease to CNA at or
prior to the Closing, certain office space at 3080 South Bristol Street, Fourth
Floor, Costa Mesa, California pursuant to a License Agreement in substantially
the form attached hereto as Exhibit 5.10.

 

Section 5.11 
Names Owned by CNA. 
Notwithstanding any implication contained herein or prior course of
conduct to the contrary, in no event shall NSB or any of its Affiliates have
any right to use, nor shall NSB or any of its Affiliates use, any trademark,
service mark, trade name, corporate name or acronym of CNA Financial or any of
its Affiliates in any jurisdiction or any domain name or

 

19

 

URL or any application or registration therefor, owned by, licensed to
or used by CNA Financial or any of its Affiliates (including, without
limitation, the names “CNA” and “CNA Trust”), or any other mark, name, term or
identification that suggests, simulates or is otherwise confusing due to its
similarity to the foregoing.

 

Section 5.12 
Rights Retained by CNA. 
NSB acknowledges that it is not acquiring any interest in any
confidential or proprietary information concerning the enterprise of CNA
Financial and its Affiliates, including, but not limited to, (i) the customers
and employees of CNA Financial and its Affiliates, or (ii) information (x) in
which CNA Financial has an ownership interest (either through creation,
license, other contractual relation or through acquisition from CNA Financial
and its Affiliates), (y) that is confidential, and (z) relates to the data
bases, marketing strategies, marketing relationships, products, product
development, product pricing, and customers of the enterprise of CNA Financial
and its Affiliates.

 

Section 5.13 
Communications.  Except
pursuant to any Legal Requirements (including, without limitation, the filing
of periodic and other reports with the Securities and Exchange Commission or
other Governmental Entities concerning the transactions contemplated by this
Agreement and the Related Agreements) or the rules of any applicable stock
exchange, no release or announcement concerning this Agreement or the
transactions contemplated hereby, shall be made without advance written
approval thereof by CNA Financial and NSB, which approval shall not be
unreasonably conditioned, delayed or withheld. 
CNA Financial approves the proposed press release attached as Schedule
5.13 to this Agreement for use by NSB at the date this Agreement is
entered.  All parties shall cooperate
with each other in making any such release or announcement.  Each party shall request confidential
treatment of information concerning the transactions contemplated by this
Agreement and the Related Agreements when filing such information with, or communicating
such information to, banking agencies and other Governmental Entities which
allow confidential treatment of such type of information.  CNA Financial and NSB have prepared a
mutually acceptable communications plan for announcing the status of the
transactions contemplated hereby and any related events that will occur prior
to the Closing.

 

ARTICLE 6.  CONDUCT OF BUSINESS

 

Section 6.1 
Affirmative Conduct of CNA. 
During the period from the date of execution of this Agreement until the
Effective Time, CNA shall use commercially reasonable efforts to preserve its
banking charter and, to these ends, shall fulfill each of the following:

 

6.1.1 
Use its commercially reasonable efforts, or cooperate with others, to
expeditiously bring about the satisfaction of the conditions specified in
Article 7 hereof;

 

6.1.2 
Keep in full force and effect all of the Licenses; and

 

6.1.3 
Duly observe and conform to all legal requirements applicable to its
business, except for any failure to so observe and conform that would not,
individually or in the aggregate, and, in the future will not, have a Material
Adverse Effect on CNA.

 

20

 

Section 6.2 
Negative Covenants of CNA. 
Between the date hereof and the Effective Time, except as contemplated
by this Agreement, and subject to requirements of law and regulation generally
applicable to banks, CNA shall not, without prior written consent of NSB:

 

6.2.1 
Take any action that would result in any of the representations and warranties
of CNA set forth in the Agreement becoming untrue in any material respect or
any of the conditions to the Merger set forth in Article 7 not being satisfied,
except to the extent such actions are contemplated by this Agreement or
required to be undertaken by applicable law, regulation or at the direction of
any Regulatory Authority;

 

6.2.2 
Issue, deliver, sell, or grant, or authorize the issuance, delivery,
sale or grant of, or purchase, any shares of the capital stock of CNA or any
securities convertible or exercisable into or exchangeable for such capital
stock, or any rights, warrants or options, including options under any stock
option plans or enter into any agreements to do any of the foregoing;

 

6.2.3 
Amend its Articles of Incorporation or Bylaws, except as required by
applicable law or by the terms of this Agreement;

 

6.2.4 
Authorize or knowingly permit any of its representatives, directly or
indirectly, to solicit any Acquisition Proposal (as hereinafter defined) or
participate in any discussions or negotiations with, or provide any nonpublic
information to, any Person or group of persons (other than NSB, and its
representatives) concerning any such solicited Acquisition Proposal.  For purposes of this Section 6.2.4, “Acquisition
Proposal” shall mean (a) any proposal pursuant to which any Person other than
NSB would acquire or participate in a merger or other business combination or
reorganization involving CNA; or (b) any proposal by which any Person or
group, other than NSB, would acquire CNA’s banking charter; or

 

6.2.5 
Acquire or agree to acquire by merging, consolidating with, or by
purchasing all or a substantial portion of the assets of, or in any other
manner, any business or any Person or otherwise acquire or agree to acquire any
assets which are material to CNA, other than in the ordinary course of business
consistent with prior practice.

 

Section 6.3 
Affirmative Conduct of NSB. 
During the period from the date of execution of this Agreement through
the Effective Time, NSB shall carry on its business in a reasonable manner
consistent with applicable laws and use all commercially reasonable efforts to
preserve intact its business organization and preserve its relationships with
customers; and, to these ends, shall fulfill each of the following:

 

6.3.1 
Use its commercially reasonable efforts, or cooperate with others, to
expeditiously bring about the satisfaction of the conditions specified in
Article 7 hereof;

 

6.3.2 
Duly observe and conform to all legal requirements applicable to its
business, except for any failure to so observe and conform that would not,
individually or in the aggregate, and, in the future will not, have a Material
Adverse Effect on NSB; and

 

6.3.3 
File all necessary applications to obtain all Requisite Regulatory
Approvals or waivers thereof with the NCFID, the FDIC and the CDFI for the
transaction as soon as possible.

 

21

 

Section 6.4 
Negative Covenants of NSB. 
During the period from the date of execution of this Agreement through
the Effective Time, NSB agrees that without CNA’s prior written consent, it
shall not and its Subsidiaries shall not:

 

6.4.1 
Take any action that would result in any of the representations and
warranties of NSB set forth in the Agreement becoming untrue in any material
respect or any of the conditions to the Merger set forth in Article 7 not being
satisfied or otherwise materially delay or impair completion of the Merger,
except to the extent such actions are contemplated by this Agreement or
required to be undertaken by applicable law, regulation or at the direction of
any Regulatory Authority; or

 

6.4.2 
Take any action which would or is reasonably likely to (i) adversely
affect the ability of NSB to obtain any necessary approval of any Governmental
Entity required for the transactions contemplated hereby; (ii) adversely affect
NSB’s ability to perform its covenants and agreements under this Agreement; or
(iii) result in any of the conditions to the performance of NSB’s obligations
hereunder, as set forth in Article 7 herein, not being satisfied.

 

ARTICLE 7.  CONDITIONS PRECEDENT
TO CLOSING

 

Section 7.1 
Conditions to the Parties’ Obligations.  The obligations of all the parties to this
Agreement to effect the Merger shall be subject to the fulfillment of the
following conditions:

 

7.1.1 
All approvals and consents of any Governmental Entity listed in Schedule
3.13 and Schedule 4.7 (all such approvals and consents being referred to as the
“Requisite Regulatory Approvals”) shall have been received or deemed received,
in each case, without the imposition of any condition which in the reasonable
good faith judgment of any party to be affected by such condition is materially
burdensome upon such party or its respective Affiliates or the Surviving
Corporation (the parties agree that any condition that materially impairs the
ability of the Surviving Corporation post-Merger to conduct business as a full
service bank in California is materially burdensome);

 

7.1.2 
There shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the Merger, by any
Government Entity which: (i) makes the consummation of the Merger illegal; (ii)
requires the divestiture by NSB of any material asset or of a material portion
of the business of NSB; or (iii) imposes any condition upon NSB or its
Subsidiaries (other than provisions of law generally applicable to banks and
bank holding companies) which in the reasonable judgment of NSB and CNA would
be materially burdensome;

 

7.1.3 
No action, suit or proceeding shall have been instituted by any
Governmental Entity before any court or governmental body seeking to challenge
or restrain the transactions contemplated by this Agreement or the Related
Agreements which presents a substantial risk that such transactions will be
restrained or that either party hereto may suffer material damages or other
relief as a result of consummating such transactions; and

 

22

 

Section 7.2 
Conditions to NSB’ Obligations.  The obligations of NSB to effect the Merger
shall be subject to the fulfillment (or waiver, in writing, by NSB) of each of
the following conditions:

 

7.2.1 
Except as otherwise provided in this Section 7.2, (a) the representations
and warranties of CNA contained in Article 3 shall be true in all material
respects as of the Closing as though made at the Closing, except to the extent
they expressly refer to an earlier time and except where the failure to be
true, individually or in the aggregate, would not have or would not be
reasonably likely to have, a Material Adverse Effect on the Surviving
Corporation or upon the consummation of the transactions contemplated hereby;
(b) CNA shall have duly performed and complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by it prior to or at the Closing, except where the failure to so
perform and comply, individually or in the aggregate, would not have or would
not be reasonably likely to have a Material Adverse Effect on CNA, or upon the
consummation of the transactions contemplated hereby; and (c) CNA shall have
delivered to NSB a certificate dated the date of the Closing Date and signed by
the President and Chief Executive Officer and Chief Financial Officer to the
effect set forth in Subsections 7.2.1(a) and (b);

 

7.2.2 
CNA shall have delivered its Updated Schedules to NSB on the day
immediately preceding the Closing Date and none of such Updated Schedules shall
reflect any item that was not on the CNA Schedules delivered on the date of
execution of this Agreement that has had, would have, or could be reasonably
likely to have, a Material Adverse Effect on CNA, or on the consummation of the
transactions contemplated hereby; and

 

7.2.3 
Between the date of this Agreement and the Effective Time, no event or
circumstance shall have occurred which event or circumstance is continuing and
which has had or would reasonably be expected to have a Material Adverse Effect
on CNA, and NSB shall have received a certificate signed on behalf of CNA by
the President and Chief Executive Officer of CNA to such effect.

 

7.2.4 
CNA shall have delivered to NSB no later than the day immediately
preceding the Closing Date a copy of the closing letter from the U.S.
Department of Labor in connection with the formal fiduciary investigation of
CNA in 2004.

 

Section 7.3 
Conditions to CNA’s Obligations. 
The obligations of CNA Financial and CNA to effect the Merger shall be
subject to the fulfillment (or waiver, in writing, by CNA Financial) of each of
the following conditions:

 

7.3.1 
Except as otherwise provided in this Section 7.3, (a) the
representations and warranties of NSB contained in Article 4 shall be true in
all material respects as of the Closing as though made at the Closing, except
to the extent they expressly refer to an earlier time and except where the
failure to be true, individually or in the aggregate, would not have or would
not be reasonably likely to have, a Material Adverse Effect on NSB or upon
consummation of the transactions contemplated hereby; (b) NSB shall have duly
performed and complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with it prior
to or at the Closing, except where the failure to so perform and comply,
individually or in the aggregate, would not have or would not be reasonably
likely to have a Material Adverse Effect on NSB, or upon the consummation of
the transactions contemplated hereby; and (c) NSB shall have

 

23

 

delivered to CNA certificates dated the date of the Closing Date and
signed by the Chief Executive Officer and Chief Financial Officer of NSB to the
effect set forth in Subsections 7.3.1(a) and (b); and

 

7.3.2 
NSB shall have delivered its Updated Schedules to CNA on the day
immediately preceding the Closing Date and none of such Updated Schedules shall
reflect any item that was not on the NSB Schedules delivered on the date of
execution of this Agreement that has had, or would have, or could be reasonably
likely to have, a Material Adverse Effect on NSB at or after the Effective
Time, or on the consummation of the transactions contemplated hereby.

 

Section 7.4 
Stock Sale.  In the event
that any condition set forth in Section 7.1, 7.2 or 7.3 has not been satisfied
and would be reasonably expected to be satisfied if the transactions
contemplated by this Agreement were structured as a sale of the capital stock
of CNA, instead of a merger of CNA into NSB, the parties agree to use all
commercially reasonable efforts to restructure such transactions as such a sale
on terms as similar as possible to the terms of this Agreement.

 

ARTICLE 8.  TERMINATION,
AMENDMENTS AND WAIVERS

 

Section 8.1 
Termination of Agreement. 
Anything herein to the contrary notwithstanding, this Agreement and the
transactions contemplated hereby including the Merger may be terminated at any
time before the Effective Time, as follows, and in no other manner:

 

8.1.1 
By mutual consent of NSB, on the one hand, and CNA and CNA Financial, on
the other;

 

8.1.2 
By NSB or CNA Financial, if any conditions set forth in Section 7.1
shall not have been met by November 30, 2004, which date may be extended to
February 28, 2005 by any party by giving written notice to the other parties at
any time during the month of November 2004 if such first party reasonably
believes that the conditions to closing in Article 7 of this Agreement will be
satisfied on or before February 28, 2005;

 

8.1.3 
By NSB, if any conditions set forth in Section 7.2 shall not have been
met, or by CNA Financial, if any conditions set forth in Section 7.3 shall not
have been met, in each case by November 30, 2004, which date may be extended to
February 28, 2005 by any party by giving written notice to the other parties at
any time during the month of November 2004 if such first party reasonably
believes that the conditions to closing in Article 7 of this Agreement will be
satisfied on or before February 28, 2005;

 

8.1.4 
By NSB if there shall have been (i) a breach of any of the
representations or warranties of CNA set forth in this Agreement, or (ii) a
default in the observance or in the due and timely performance of any of CNA’s
covenants and agreements herein contained, which breach or default, in the
reasonable opinion of NSB, by its nature cannot be cured or is not cured prior
to the Closing and which breach or default would, in the reasonable opinion of
NSB, individually or in the aggregate, have, or be reasonably likely to have, a
Material Adverse Effect on CNA or upon the consummation of the transactions
contemplated hereby;

 

24

 

8.1.5 
By CNA Financial if there shall have been (i) a breach of any of the
representations or warranties of NSB set forth in this Agreement, or (ii) a
default in the observance or in the due and timely performance of any of NSB’s
covenants and agreements herein contained, which breach or default, in the
reasonable opinion of CNA Financial, by its nature cannot be cured or is not
cured prior to the Closing and which breach or default would, in the reasonable
opinion of CNA Financial, individually or in the aggregate, have, or be
reasonably likely to have, a Material Adverse Effect on NSB or upon the
consummation of the transactions contemplated hereby; or

 

8.1.6 
By NSB or CNA Financial, if an Acquisition Event involving CNA shall
have occurred.

 

Section 8.2 
Effect of Termination.  In
the event that this Agreement shall be terminated pursuant to Section 8.1
hereof, all further obligations of the Parties hereto under this Agreement
shall terminate without further liability of any Party to another; provided,
however, that no termination of this Agreement under Section 8.1 for any reason
or in any manner shall release, or be construed as so releasing, any Party from
its obligations under Sections 5.1 or 5.3, hereof and notwithstanding the
foregoing if such termination shall result from the willful failure of a Party
to fulfill a condition to the performance of the obligations of any other Party
or to perform a covenant of such Party in this Agreement, such Party shall,
subject to the provision of Section 8.5, be fully liable for any and all
damages, costs and expenses incurred by the other party in connection with such
willful failure to fulfill a condition or perform a covenant.

 

Section 8.3 
Waiver of Conditions.  If
any of the conditions specified in Section 7.2 have not been satisfied, NSB may
nevertheless, at its election, proceed with the transactions contemplated in
this Agreement.  If any of the conditions
specified in Section 7.3 have not been satisfied, CNA Financial may
nevertheless, at its election, proceed with the transactions contemplated in
this Agreement.  If any Party elects to
proceed pursuant to the provisions hereof, the conditions that are unsatisfied
immediately prior to the Effective Time shall be deemed to be satisfied, as
evidenced by a written waiver delivered by the electing party or parties.

 

Section 8.4 
Force Majeure.  NSB and CNA
agree that, notwithstanding anything to the contrary in this Agreement, in the
event this Agreement is terminated as a result of a failure of a condition,
which failure is due to a natural disaster or other act of God, or an act of war
or of terror, and provided neither Party has materially failed to observe the
obligations of such Party under this Agreement, neither Party shall be
obligated to the other Party to this Agreement for any expenses or otherwise be
liable hereunder.

 

Section 8.5 
Effect of Termination.  No
termination under Section 8.1 for any reason or in any manner shall release, or
be construed as so releasing, any party hereto from its obligations pursuant to
Sections 5.1 or 5.3 hereof or from any liability or damage to any other party
hereto arising out of, in connection with, or otherwise relating to, directly
or indirectly, said party’s willful breach of any of its covenants, agreements,
duties or obligations arising hereunder, or any willful breaches of any
representation or warranty contained herein arising prior to the date of
termination of this Agreement.

 

25

 

ARTICLE 9.  GENERAL PROVISIONS

 

Section 9.1 
Notices.  All notices and
other communications hereunder shall be in writing and shall be delivered
personally, mailed by registered or certified mail (return receipt requested),
sent by confirmed overnight courier or telecopied (with written confirmation of
error-free transmission).  Any such
notice shall be deemed given when so delivered personally or sent by facsimile
transmission (and immediately after transmission confirmed by telephone), if
mailed, on the date shown on the receipt therefor, or if sent by overnight
courier, on the date shown on the written confirmation of delivery.  Such notices shall be given to the following
addresses (or any such other address for a party as shall be specified by like
notice):

 

	
  If to CNA at:

  	
  CNA Trust Corporation

  
	
   

  	
  3080 South Bristol Street, Suite 430

  
	
   

  	
  Costa Mesa, California 92626

  
	
   

  	
  Fax No. (714) 430-5200

  
	
   

  	
  Attention: Roy A. Henderson,

  
	
   

  	
  Chairman and President

  
	
   

  	
   

  
	
  With copies to:

  	
  CNA Trust Corporation

  
	
   

  	
  c/o CNA Financial Corporation

  
	
   

  	
  CNA Plaza

  
	
   

  	
  Chicago, Illinois 60685

  
	
   

  	
  Fax No. (312) 822-1297

  
	
   

  	
  Attention: Secretary

  
	
   

  	
   

  
	
  and

  	
  Matthew A. Posthuma

  
	
   

  	
  Mayer, Brown, Rowe & Maw LLP

  
	
   

  	
  190 South LaSalle Street

  
	
   

  	
  Chicago, Illinois 60603-3441

  
	
   

  	
  Fax No. (312) 701-7711

  
	
   

  	
   

  
	
  If to CNA Financial at:

  	
  CNA Financial Corporation

  
	
   

  	
  CNA Plaza

  
	
   

  	
  Chicago, Illinois 60685

  
	
   

  	
  Fax No. (312) 822-1297

  
	
   

  	
  Attention: Secretary

  
	
   

  	
   

  
	
  with a copy to:

  	
  Matthew A. Posthuma

  
	
   

  	
  Mayer, Brown, Rowe & Maw LLP

  
	
   

  	
  190 South LaSalle Street

  
	
   

  	
  Chicago, Illinois 60603-3441

  
	
   

  	
  Fax No. (312) 701-7711

  
	
   

  	
   

  
	
  If to NSB at:

  	
  Nevada Security Bank

  
	
   

  	
  9990 Double R Boulevard

  
	
   

  	
  P.O. Box 19579

  
	
   

  	
  Reno, Nevada 89511-2119

  
	
   

  	
  Fax No. (775) 853-2056

  
	
   

  	
  Attention: Hal Giomi, CEO

  

 

26

 

	
  with a copy to:

  	
  Gary Steven Findley & Associates

  
	
   

  	
  1470 North Hundley Street

  
	
   

  	
  Anaheim, California 92806

  
	
   

  	
  Fax No. (714) 630-7910

  
	
   

  	
  Attention: Gary Steven Findley, Esq.

  

 

Section 9.2 
Counterparts.  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.

 

Section 9.3 
Entire Agreement/No Third Party Rights/Assignment.  This Agreement (including the documents and
instruments referred to herein): (a) together with the Confidentiality
Agreement and the Related Agreements, constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder; (c) shall not be
assigned by a party, by operation of law or otherwise, without the consent of
the other parties; and (d) subject to the foregoing, shall be binding upon and
shall inure to the benefit of the parties hereto and their permitted successors
and assigns.  EXCEPT TO THE EXTENT OF THE
EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE 3, EACH OF CNA
FINANCIAL AND CNA DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS AND
GUARANTEES, WHETHER EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, ALL
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.

 

Section 9.4 
Governing Law.  This
Agreement shall be governed and construed in accordance with the laws of the
State of California applicable to contracts entered into therein, without
reference to principles of choice of law or conflicts of laws.  NSB, CNA and CNA Financial each hereby
irrevocably and unconditionally submits to the exclusive jurisdiction of any
State or Federal Court sitting in the State of California, over any suit,
action or proceeding arising out of or relating to this Agreement.  NSB, CNA and CNA Financial each hereby agrees
that service of any process, summons, notice or document by U.S. registered
mail addressed to such Party shall be effective service of process for any
action, suit or proceeding brought against such Party in such court.  NSB, CNA and CNA Financial each hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any such suit, action or proceeding brought in any such court and any claim that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.  NSB, CNA and
CNA Financial each agrees that final judgment in any such action, suit or
proceeding brought in any such court shall be conclusive and binding upon such
Party and may be enforced in any other courts to whose jurisdiction such Party
may be subject, by suit upon such judgment.

 

27

 

Section 9.5 
Headings/Table of Contents. 
The table of contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

Section 9.6 
Enforcement of Agreement. 
The parties hereto agree that irreparable damage will occur in the event
that any of the provisions of this Agreement or the Related Agreements is not
performed in accordance with its specific terms or is otherwise breached.  It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the State of California or any state having jurisdiction.

 

Section 9.7 
Severability.  Any term or
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.  If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

 

Section 9.8 
Waiver of Jury Trial; Damages.

 

(a)                                  EACH
PARTY HERETO HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION, IN ANY ACTION OR PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT
BY A PARTY AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE, BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.  EACH PARTY HERETO
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT
A JURY.  WITHOUT LIMITING THE FOREGOING,
EACH PARTY HERETO FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY A JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR ANY PROVISION HEREOF OR
THEREOF.  THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OF THE RELATED AGREEMENTS.

 

(b)                                 Each
of the Parties hereto irrevocably waives, with respect to any first party
action filed by the other party (but not as to any action by one party against
the other seeking indemnification for a third party claim against the party
initiating the action, to the extent that such damages may be recoverable as
part of the indemnification by the indemnified party) any right to punitive,
incidental and consequential or multiplied damages or lost profits, either
pursuant to common law or statute, in any legal proceedings arising out of or
related to this Agreement or the transactions contemplated hereby.

 

Section 9.9 
Attorneys’ Fees.  If any
legal action or any arbitration upon mutual agreement is brought for the
enforcement of this Agreement or because of an alleged dispute, breach or
default in

 

28

 

connection with this Agreement, the prevailing party shall be entitled
to recover reasonable attorneys’ fees and other costs and expenses incurred in
that action or proceeding, in addition to any other relief to which it may be
entitled.

 

Section 9.10 
Amendment.  This Agreement
may not be amended or modified in any respect whatsoever except by an
instrument in writing signed by the Parties hereto.

 

Section 9.11 Nonsurvival of
Representations and Warranties.  None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement shall survive the
Effective Time, except for those covenants and agreements contained herein and
therein which by their terms apply in whole or in part after the Effective Time
or to a termination of this Agreement.

 

29

 

IN WITNESS WHEREOF, NSB, CNA and CNA Financial have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first above written.

 

	
  NEVADA SECURITY BANK

  	
  CNA TRUST CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name: Hal Giomi

  	
  Name: Roy A. Henderson

  
						

 

30

 

	
   

  	
  CNA
  FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name: 

  	
   

  	
   

  

 

31

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