Document:

exv10w41

EXHIBIT NO. 10 (41)

TERMINATION ADDENDUM

attaching to and forming a part of

SURETY EXCESS OF LOSS REINSURANCE CONTRACT AS RESPECTS ONLY

SURETY BUSINESS FOR THE DICK CORPORATION

(originally effective: January 1, 2005)

(hereinafter referred to as “Contract”)

	 	 	 
	ISSUED TO:

	 	WESTERN SURETY COMPANY

UNIVERSAL SURETY OF AMERICA

SURETY BONDING COMPANY OF AMERICA

(hereinafter collectively referred to as “Company”)
	 
	 	 
	ISSUED BY:

	 	CONTINENTAL CASUALTY COMPANY

(hereinafter referred to as “Reinsurer”)

     It is hereby mutually understood and agreed that, effective June 30, 2009, the captioned
Contract, as previously amended by Addenda Nos. 1, 2, 3 and 4, shall be terminated. In light of
such termination and pursuant to Article 4 — Commencement and Expiration, the Reinsurer exercises
its option to cease acceptance of any additional Bonds under this Contract. The Company and the
Reinsurer agree that there are no outstanding Bonds which shall result from bids already released
by the Company as of this date of termination.

     All other terms and conditions of the captioned Contract shall remain unchanged.

IN WITNESS WHEREOF the parties acknowledge that no intermediary is involved in or brought about
this transaction, and the parties hereto, by their authorized representatives, have executed this
Termination Addendum to the Contract:

on this                                          day of                                          2009.

WESTERN SURETY COMPANY

			
	By:	 	 

			
	Printed Name:	 	 

			
	Title:	 	 

Termination Addendum — Surety Excess of Loss (Dick Corporation)

Effective: June 30, 2009

Page 1

 

 

and on this                                          day of                                          2009.

UNIVERSAL SURETY OF AMERICA

			
	By:	 	 

			
	Printed Name:	 	 

			
	Title:	 	 

	 

and on this                                          day of                                          2009.

SURETY BONDING COMPANY OF AMERICA

			
	By:	 	 

			
	Printed Name:	 	 

			
	Title:	 	 

	 

and on this                                          day of                                          2009.

CONTINENTAL CASUALTY COMPANY

			
	By:	 	 

			
	Printed Name:	 	 

			
	Title:	 	 

Termination Addendum — Surety Excess of Loss (Dick Corporation)

Effective: June 30, 2009

Page 2exv10w42

EXHIBIT NO. 10 (42)

ADDENDUM No. 1

attaching to and forming a part of

SERVICES AND INDEMNITY AGREEMENT

(effective: January 1, 2009)

(hereinafter referred to as “Agreement”)

between

WESTERN SURETY COMPANY

(hereinafter referred to as “Reinsurer”)

and

CONTINENTAL CASUALTY COMPANY

(hereinafter referred to as “Company”)

WHEREAS:

	 	A.	 	Pursuant to that certain Commutation and Release Agreement, effective as of June 30,
2009, by and between the Company and the Reinsurer (“Commutation Agreement”), the parties
have agreed to commute the Reinsurance Agreements as respects Surety Business for the
Dick Corporation (as defined in Recital A of the Commutation Agreement);
	 
	 	B.	 	Pursuant to that certain Termination Addendum, effective June 30, 2009, between and
among the Company, the Reinsurer, Universal Surety of America and Surety Bonding Company
of America, the parties terminated that certain Surety Excess of Loss Reinsurance Contract
as respects only Surety Business for the Dick Corporation, effective January 1, 2005, as
amended from time to time; and
	 
	 	C.	 	Notwithstanding the provisions of Section XIV — Termination of the Agreement, the
Company and the Reinsurer agree that, despite the release and commutation of all
obligations related to the Reinsurance Agreements as respects Surety Business for the Dick
Corporation, certain obligations of the Reinsurer under the Agreement shall continue as
respects such business of the principal Dick Corporation;

NOW THEREFORE, it is hereby mutually understood and agreed that, effective June 30, 2009, for good
and valuable consideration, as well as the mutual promises set forth herein, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Reinsurer hereby agree as
follows:

Addendum No. 1 — Services and Indemnity Agreement

Effective: June 30, 2009

Page 1

 

 

	1.	 	Section IV, Claims Authority and Related Duties of the Agreement shall be amended by adding
the following new Section 4.9:

Section 4.9: Effective June 30, 2009, the COMPANY and the REINSURER have entered
into a Commutation and Release Agreement (“Commutation Agreement”) as respects
only the bonds issued for the principal Dick Corporation. Notwithstanding the
Commutation Agreement or anything in this Agreement to the contrary, the COMPANY
and the REINSURER agree that the REINSURER’S obligations to settle and handle all
claims and losses related to the Reinsurance Agreements as respects Surety
Business for the principal Dick Corporation (as defined in Recital A of the
Commutation Agreement) shall continue until such time as all bonds issued for the
principal Dick Corporation have expired and all known claims have been paid or
settled and all incurred but not reported loss reserves relative to such business
have been reduced to zero.

	2.	 	All other terms and conditions of the Agreement shall remain unchanged and in full force and
effect.

IN WITNESS WHEREOF the parties acknowledge that no intermediary is involved in or brought about
this transaction, and the parties hereto, by their authorized representatives, have executed this
Addendum No. 1 to the Agreement:

	 	 	 	 	 	 	 
	on this

	 	day of
	 	2009.	 	 

WESTERN SURETY COMPANY

By: 

Printed Name: 

Title: 

Attested by: 

Addendum No. 1 — Services and Indemnity Agreement

Effective: June 30, 2009

Page 2

 

 

	 	 	 	 	 	 	 
	and on this

	 	day of
	 	2009.	 	 

CONTINENTAL CASUALTY COMPANY

By:  

Printed Name:  

Title:  

Attested by:  

Addendum No. 1 — Services and Indemnity Agreement

Effective: June 30, 2009

Page 3exv10w43

EXHIBIT NO. 10 (43)

RESTATED

ADMINISTRATIVE SERVICES AGREEMENT

Originally effective January 1, 2001

This Restated Administrative Services Agreement (hereinafter the “Agreement”) is entered into by
and between Continental Casualty Company (“CNA”), and CNA Surety Corporation (“Surety”) effective
as of July 1, 2004.

RECITALS

	 	(A)	 	WHEREAS, Surety and its subsidiaries operate and maintain personnel for the
general purposes of engagement in the business of marketing, underwriting and
administering certain types of insurance products and programs; and,
	 
	 	(B)	 	WHEREAS, Surety and its subsidiaries have certain specialized knowledge,
capacity and regulatory compliance expertise in connection with the administration of
insurance statutes and regulations that require processing of large volumes of
information; and,
	 
	 	(C)	 	WHEREAS, CNA is a large enterprise which maintains the capacity to provide
extensive administrative, financial and legal support services to Surety; and,
	 
	 	(D)	 	WHEREAS, CNA is the majority shareholder of Surety, owning approximately
sixty — four percent (64%) of the stock of Surety; and,
	 
	 	(E)	 	WHEREAS, CNA and Surety each wish to purchase or have access to certain
services to be provided by the other and the parties are willing to sell the services
or provide access to those services to each other and the parties agree that each
should compensate the other for its proportionate share of the other’s overhead which
is required to support those services.

NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein
contained, the parties agree as follows:

AGREEMENTS

	 	1.	 	The parties shall purchase and/or have access to certain services provided by each
other and shall compensate each other therefor in accordance with the provisions of this
Agreement. Further, each party shall reimburse the other for the proportionate cost of the
other’s administrative and overhead costs incurred in supporting the services provided
pursuant to this Agreement. The assessment charged to reimburse such costs (hereinafter
the “Management Fee”) represents each party’s share of the general and administrative
corporate overhead pool of costs of the other party. The activities included in the pool
of costs are broad in nature and apply to all Surety, Surety affiliates, CNA Financial
Corporation (“CNAF”), CNA and CNA affiliate — majority owned operations.

 

	 	2.	 	The CNA pool of costs includes expenses related to establishing senior staff
direction and developing and promoting the corporate identity. Such expenses include, but
are not limited to, the costs incurred by CNA which are related to all or parts of the
following functions: Chairman’s Office, Human Resources, Information Technology, Corporate
Finance, Loews Corporation Management Fee, Internal Audit, Capital Management, and other
financial management activities. The CNA Management Fee will be based upon an agreed pool
of costs. The CNA Management Fee is determined according to the same cost structure and
according to the same allocation methods as CNA applies to other CNA insurance company
affiliates and subsidiaries. Expenses incurred and payments received shall be allocated
to Surety in accordance with customary insurance accounting practices consistently
applied. The CNA Management Fee shall change each year based on the total CNA pool of
costs.
	 
	 	3.	 	The Surety pool of costs includes, but is not limited to, costs incurred to process
all CNA producer licenses and appointments and such other services as Surety may perform
for CNA. The Surety Management Fee will be based upon an agreed pool of costs. The
Surety Management Fee is determined according to the same cost structure and according to
the same allocation methods as CNA applies to other CNA insurance company affiliates and
subsidiaries. Expenses incurred and payments received shall be allocated to CNA in
accordance with customary insurance accounting practices consistently applied. The Surety
Management Fee shall change each year based on the total Surety pool of costs.
	 
	 	4.	 	Surety and any of its subsidiaries shall have the option of purchasing additional
services from CNA at rates and with documentation to be negotiated by the parties. Surety
will be charged by CNA and agrees to pay charges for intercompany services received by
Surety at the same rates and according to the same allocation methods as CNA applies to
other CNA insurance company affiliates and subsidiaries. Such rates shall be determined
by and shall be substantially equivalent to the actual cost of providing said services.
	 
	 	5.	 	Surety and any of its subsidiaries shall also have the option to request support from
an individual CNA “Strategic Business Unit” (“SBU”) for shared systems, such as database
usage, facilities, or other services, and the terms would be negotiated at the time the
support is requested.
	 
	 	6.	 	CNA and any of its affiliates shall have the option of purchasing additional services
from Surety at rates and with documentation to be negotiated by the parties. CNA will be
charged by Surety and agrees to pay charges for intercompany services received by CNA at
the same rates and according to the same allocation methods as CNA applies to other CNA
insurance company affiliates and subsidiaries. Such rates are determined by and
substantially equivalent to the actual cost of providing said services.
	 
	 	7.	 	The charges to each party for services purchased under this Agreement will flow
through its cost centers in each party’s ledger, and cash settlement will occur each month
via wire transfer as part of the normal intercompany settlement process.
	 
	 	8.	 	This Agreement is not designed and should not be construed to cover any cost
applicable to any insurance coverage that Surety may purchase from CNA for

2

 

	 	 	 	Surety’s business or employees, which arrangement shall be documented by separate
agreement.
	 
	 	9.	 	To the extent that CNA or any CNA affiliate or SBU and Surety have negotiated and
entered into separate agreements for the provision of specific services to Surety and
payment to CNA, the terms of those agreements shall remain unmodified by this Agreement
and shall control.
	 
	 	10.	 	This Agreement shall be effective so long as CNA, CNAF or any combination thereof or
their affiliates or shareholders shall continue to own a majority interest in Surety. This
Agreement may be terminated by either party upon the provision of 30 days prior notice of
such termination to the other party.
	 
	 	11.	 	All notices, deliveries of documents and other communications required or permitted
to be given from one party to the other shall be in writing and, except as otherwise
expressly herein provided, shall be effective upon mailing to the other by messenger
delivery service (receipt signature required), by express delivery service (receipt
signature required) or by United States mail, postage pre-paid, certified or registered
mail with return receipt requested, addressed to the others as follows:

	 	To Surety: 	 	 CNA Surety Corporation

CNA Plaza — 13 South

333 S. Wabash

Chicago, Illinois 60685

Attention: Chief Financial Officer

	 
	 	To CNA: 	 	 Continental Casualty Company

CNA Center

Chicago, Illinois 60685

Attention: Chief Financial Officer

	 
	 	with a copy to: 	 	 Continental Casualty Company

CNA Center

Chicago, Illinois 60685

Attention: General Counsel

	 	12.	 	Notice shall be effective upon receipt in the case of messenger or express delivery
service. Notice shall be effective three (3) business days after deposit in the United
States mail in the case of certified or registered mail.
	 
	 	13.	 	This Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter hereof. It is especially understood and agreed that this
Agreement runs in perpetuity until terminated.
	 
	 	14.	 	This Agreement may be amended only by the written agreement of the parties.
	 
	 	15.	 	This Agreement is executed under and is to be construed by the laws of the State of
Illinois applicable to contracts entered into in Illinois without regard to conflicts of
laws or choice of law principles.

3

 

	 	16.	 	Any portion of this Agreement in contravention of any applicable statute, regulation,
directive, or any governmental ruling shall, without further action by the parties, be
modified or deleted to the extent necessary to conform to such statute, regulation,
directive or ruling.
	 
	 	17.	 	If any clause or any portion of this Agreement shall be unenforceable or declared
invalid for any reason whatsoever, such unenforceability or invalidity shall not affect
the enforceability or validity of the remaining portion of the Agreement and such
unenforceable or invalid portion shall be severable from the remainder of this Agreement.
	 
	 	18.	 	The rights, duties and obligations hereunder are not assignable, delegable or
assumable.
	 
	 	19.	 	This Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same
instrument.
	 
	 	20.	 	In accordance with the requirements of the Illinois Department of Insurance the
parties agree to make available to the Director or his designees the books, records, and
documents of both companies in relation to this agreement.

4

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their fully
authorized respective officers this                      day of
                                        
, 2004.

	 	 	 	 	 	 	 	 	 	 	 
	Continental Casualty Company	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 

	 	 
	 	Attest:
	 	 

	 	 
	 	Title:

	 
	 	 	 	 	 	Its Assistant Secretary	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CNA
Surety Corporation
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

	 

	 	 	 	Attest:
	 	 
	 	 
	 	Title:

	 

	 	 	 	 	 	Its Assistant Secretary	 	 

5

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