<PAGE>
As filed with the Securities and Exchange Commission on November 15, 1996
Registration No. 333-01831
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
---------------
TO
--
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMMERCIAL FEDERAL CORPORATION
------------------------------------------------
(Exact name of registrant as specified in its charter)
Nebraska 47-0658852
- -------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2120 South 72nd Street
Omaha, Nebraska 68124
(402) 554-9200
- --------------------------------------------------------------------------------
(Address, including zip code and telephone number, including area code of
registrant's principal executive offices)
James A. Laphen, President
Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
(402) 390-5361
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies To:
----------
Gary R. Bronstein, Esq.
Cynthia R. Cross, Esq. Elizabeth C. Hinck, Esq.
Housley Kantarian & Bronstein, P.C. Dorsey & Whitney LLP
1220 19th Street, N.W., Suite 700 220 South Sixth Street
Washington, DC 20036 Minneapolis, MN 55402
(202) 822-9611 (612) 340-2600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
____________________________________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
[ ] __________________________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered Per Note (1) Offering price (1) Registration Fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Subordinated Extendible
Notes due 2006 $50,000,000 100% $50,000,000 $17,242 (2)
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely to calculate the registration fee pursuant to Rule 457(a).
(2) Previously paid.
- --------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 18, 1996
Prospectus
dated , 1996
$50,000,000
COMMERCIAL FEDERAL CORPORATION
[LOGO OF COMMERCIAL FEDERAL CORPORATION APPEARS HERE]
Subordinated Extendible Notes Due 2006
Interest on the Subordinated Extendible Notes due 2006 (the "Notes") issued by
Commercial Federal Corporation (the "Company") is payable monthly on the 15th
day of each month, commencing January 15, 1997, at an interest rate of % per
annum until December 1, 2001. The interest rate will reset at the Company's
option on December 1, 2001 to a rate and for a term of one, two, three or five
years determined by the Company and will reset thereafter at the Company's
option, upon the date of expiration of each such new interest period prior to
maturity (each such date, including December 1, 2001, an "Interest Reset
Date"). Any new interest rate determined by the Company with respect to an
Interest Reset Date shall not be less than 105% of the Effective Interest Rate
on Comparable Maturity U.S. Treasury Obligations (as defined herein). In the
event that the Company decides not to reset the interest rate on an Interest
Reset Date, the interest rate on the Notes shall continue to be the interest
rate in effect for the next year and each year thereafter unless and until the
Company shall reset the interest rate on a subsequent Interest Reset Date.
Until the interest rate is reset for a subsequent period, each December 1 shall
be deemed to be an Interest Reset Date. The Notes are not redeemable prior to
December 1, 2001. The Notes are redeemable, in whole or in part, at the option
of the holder at par plus accrued interest to the date fixed for redemption, on
December 1, 2001 and on any subsequent Interest Reset Date. The Notes are
redeemable at the option of the Company in whole on December 1, 2001 and on any
subsequent Interest Reset Date at par plus accrued interest to the date fixed
for redemption. See "Description of Notes."
The Notes have no sinking fund. The Notes will be issued only in fully
registered form and in denominations of $1,000 and integral multiples thereof.
The Notes will be unsecured general obligations of the Company and will be
subordinated to all existing and future Senior Indebtedness (as defined herein)
of the Company. As creditors of the Company, holders of the Notes will be
denied access to the assets of the Company's subsidiaries upon such
subsidiaries' liquidation or reorganization until all the prior claims of
creditors (including depositors) of such subsidiaries have been satisfied. At
September 30, 1996, the Company (excluding subsidiaries) had $34.9 million in
Senior Indebtedness consisting of $6.9 million of 10% Senior Notes due 1999,
which are expected to be redeemed as soon as possible (under applicable
redemption provisions) following issuance of the Notes offered hereby with the
proceeds therefrom, and a $28.0 million variable rate secured promissory note
due January 31, 1997. See "Use of Proceeds." The Company has applied for
listing of the Notes on the New York Stock Exchange under the proposed symbol
"CFB 06."
Payment of principal on the Notes may be accelerated only in the case of
certain events relating to the bankruptcy, insolvency or reorganization of the
Company. There is no right to acceleration in the case of a default in the
payment of principal or interest on the Notes or in the performance of any
other covenant of the Company. See "Description of the Notes."
SEE "RISK FACTORS" BEGINNING ON PAGE 10 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THE SECURITIES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, ANY OTHER GOVERNMENTAL AGENCY OR OTHERWISE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discount (1) Company (2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note .................................. 100.0% % %
- --------------------------------------------------------------------------------
Total ..................................... $50,000,000 $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated offering expenses of $385,000 payable by the
Company.
The Notes are being offered by the Underwriters named herein, subject to prior
sale and when, as and if delivered to and accepted by the Underwriters. It is
expected that delivery of the Notes will be made at the offices of Piper
Jaffray Inc. in Minneapolis, Minnesota on or about , 1996.
Piper Jaffray inc.
Alex. Brown & Sons
INCORPORATED
Montgomery Securities
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and
Exchange Commission (the "Commission"). Copies of reports, proxy statements
and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: Citicorp
Center, 500 West Madison, Suite 1400, Chicago, Illinois 60661; and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material
also can be obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Reports,
proxy statements and other information that have been filed electronically
with the Commission may also be obtained from the Commission's Website, the
address of which is http://www.sec.gov. In addition, the Company's common
stock is listed and traded on the New York Stock Exchange. Reports, proxy
statements and other information may be inspected at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all exhibits and amendments thereto, called the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the securities covered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to
the Registration Statement. Copies of the Registration Statement, including
any amendments and exhibits thereto, can be inspected and copied at the
offices of the Commission as set forth above. Statements contained in this
Prospectus as to the contents of any contract or any other document are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been previously filed with
the Commission are hereby incorporated by reference in this Prospectus:
(a) the Company's Annual Report on Form 10-K for the Fiscal Year Ended June
30, 1996;
(b) the Company's Quarterly Report on Form 10-Q for the Quarter Ended
September 30, 1996; and
(c) the Company's Current Report on Form 8-K dated August 21, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Notes shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from
the respective dates of filing such documents. Any statement contained herein
or in a document all or part of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated by reference (other
than exhibits to such documents which are not specifically incorporated by
reference in such documents). Requests for such copies should be directed to
Commercial Federal Corporation, Corporate Secretary, 2120 South 72nd Street,
Omaha, Nebraska 68124, telephone number (402) 554-9200.
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY THE USE
OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE,"
"ESTIMATE," OR "CONTINUE" OR THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON
OR COMPARABLE TERMINOLOGY. THE "RISK FACTORS" ON PAGE 10 OF THIS PROSPECTUS
CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS, INCLUDING
CERTAIN RISKS AND UNCERTAINTIES, WITH RESPECT TO SUCH FORWARD-LOOKING
STATEMENTS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN
SUCH FORWARD-LOOKING STATEMENTS.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, THE OVER-THE-
COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
2
<PAGE>
(MAP)
3
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the Consolidated Financial
Statements of the Company, including the Notes thereto, appearing elsewhere in
this Prospectus or incorporated herein by reference.
THE COMPANY
The Company is a holding company for Commercial Federal Bank, a Federal
Savings Bank (the "Bank"), which is the largest depository institution
headquartered in Nebraska. At September 30, 1996, the Company had assets of
$6.7 billion and stockholders' equity of $359.7 million. Based upon total
assets at that date, the Company was the 19th largest publicly held thrift
holding company in the United States. The Bank is a consumer-oriented financial
institution that emphasizes single-family residential real estate lending,
consumer lending, retail deposit activities, including demand deposit accounts,
and mortgage banking. At October 1, 1996, following the acquisition of Heritage
Financial, Ltd. ("Heritage"), the Bank operated 34 branch offices in Nebraska,
20 branch offices in greater metropolitan Denver, Colorado, 19 branch offices
in Oklahoma, 24 branch offices in Kansas and seven branch offices in Iowa.
Throughout its 109 year history, the Bank has emphasized customer service. To
serve its customers, the Bank conducts loan origination activities through its
104 branch office network, loan offices of its wholly-owned mortgage banking
subsidiary and a nationwide correspondent network consisting of approximately
375 mortgage loan originators. The Bank also provides insurance and securities
brokerage and other retail financial services.
On October 1, 1996, the Company completed the acquisition of Heritage,
headquartered in Boone, Iowa, the holding company for Hawkeye Federal Savings
Bank. Heritage operated six branches in Iowa and at October 1, 1996, had $182.9
million in total assets, $157.9 million in deposits and $10.3 million in
stockholders' equity. See "Recent Developments."
The Company's strategy for growth emphasizes both internal and external
growth. Operations focus on increasing deposits, including demand accounts,
making loans (primarily single-family mortgage and consumer loans) and
providing customers with a full array of financial products and a high level of
customer service. As part of its long-term strategic plan, the Company intends
to expand its operations within its market areas either through direct
marketing efforts aimed at increasing market share, branch expansions, or
opening additional branches. The Company's retail strategy will continue to be
centered on attracting new customers and selling both new and existing
customers multiple products and services. Additionally, the Company will
continue to build and leverage an infrastructure designed to increase fee and
other income.
Complementing its strategy of internal growth, the Company will continue to
grow its five-state franchise through an ongoing program of selective
acquisitions of other financial institutions. Acquisition candidates will be
selected based on the extent to which the candidates can enhance the Company's
retail presence in new or underserved markets and complement the Company's
existing retail network.
The Company's principal executive offices are located at 2120 South 72nd
Street, Omaha, Nebraska 68124, and its telephone number is (402) 554-9200.
4
<PAGE>
THE OFFERING
Notes offered................. $50,000,000 principal amount of Subordinated
Extendible Notes due 2006. See "Description of
Notes--General."
Denominations................. $1,000 and integral multiples thereof.
Maturity...................... December 1, 2006.
Interest rate............ % per annum until December 1, 2001. The
Company will reset the interest rate for the
Notes, at its option, effective December 1,
2001 to a rate and for a term of one, two,
three or five years determined by the Company
and will reset the interest rate thereafter, at
its option, upon the date of expiration of each
such new interest period prior to maturity
(each such date, including December 1, 2001, an
"Interest Reset Date"). Any such new interest
rate shall not be less than 105% of the
Effective Interest Rate on Comparable Maturity
U.S. Treasury Obligations (as defined herein).
In the event that the Company decides not to
reset the interest rate on an Interest Reset
Date, the interest rate on the Notes shall
continue to be the interest rate in effect, for
the next year and each year thereafter, unless
and until the Company shall reset the interest
rate on a subsequent Interest Reset Date. Until
the interest rate is reset for a subsequent
period, each December 1 shall be deemed to be
an Interest Reset Date. See "Description of
Notes--Adjustable Interest Rate."
Interest payment dates........ Monthly, commencing January 15, 1997, and the
15th day of each month thereafter. The first
interest payment will represent interest from
the date of issuance of the Notes through
January 14, 1997.
Sinking fund.................. None.
Redemption at option of
Company...................... The Notes may not be redeemed prior to December
1, 2001. Thereafter, the Company may elect to
redeem the Notes, in whole on December 1, 2001
and on any subsequent Interest Reset Date at
par plus accrued interest to the date fixed for
redemption. See "Description of Notes--
Redemption at Option of the Company."
Redemption at option of
Holder.................. Notes tendered on or before the fifth business
day prior to December 1, 2001 or any subsequent
Interest Reset Date will be redeemable, in
whole or in part, at par plus accrued interest
to the date fixed for redemption. See
"Description of Notes--Redemption at Option of
Holder."
Subordination................. The Notes will be unsecured general obligations
of the Company and will be subordinated to all
existing and future Senior Indebtedness (as
defined herein) of the Company. There are no
restrictions in the Indenture on the creation
of additional Senior
5
<PAGE>
Indebtedness. The Notes will be structurally
subordinated to all liabilities (including
deposits) of the Company's subsidiaries. At
September 30, 1996, the Company (excluding
subsidiaries) had $34.9 million in Senior
Indebtedness consisting of $6.9 million of 10%
Senior Notes due 1999 which the Company assumed
in its acquisition of Railroad Financial
Corporation ("Railroad") on October 2, 1995 and
a $28.0 million variable rate secured
promissory note due January 31, 1997. The $6.9
million of 10% Senior Notes due 1999 are
expected to be redeemed as soon as possible
under applicable redemption provisions
following issuance of the Notes offered hereby.
The Company is in the process of negotiating to
refinance the $28.0 million variable rate
promissory note on a long-term basis. Any such
refinancing would be Senior Indebtedness under
the Indenture. See "Risk Factors--Subordination
of Notes," "Use of Proceeds" and "Description
of Notes--Subordination."
Covenants..................... The Indenture pursuant to which the Notes will
be issued, among other things, limits the
ability of the Company to pay cash dividends or
to make other capital distributions under
certain circumstances. The Indenture also
limits in certain respects consolidations,
mergers and transfers of all or substantially
all of the Company's assets. See "Description
of Notes--Restrictions on Dividends and Other
Distributions" and "--Consolidation, Merger or
Transfer."
Limited rights of
acceleration................. Payment of principal of the Notes may be
accelerated only in case of certain events
involving the bankruptcy, insolvency or
reorganization of the Company which constitute
an Acceleration Event (as defined herein).
There is no right of acceleration in the case
of a default in the payment of principal or
interest on the Notes or the performance of any
other covenant of the Company in the Indenture.
See "Description of Notes--Acceleration
Events."
Use of proceeds...............
The net proceeds of this offering will be used
to refinance the Company's $40.25 million
10.25% Subordinated Notes due 1999 and $6.9
million 10% Senior Notes due 1999 and for
general corporate purposes. Pending such uses,
the proceeds will be invested in short-term
investment securities. See "Use of Proceeds."
Listing.......................
The Company has applied for listing of the
Notes on the New York Stock Exchange under the
proposed symbol "CFB 06."
Trustee....................... Harris Trust and Savings Bank.
6
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The following summary consolidated financial data of the Company and its
subsidiaries as of and for the years ended June 30, 1996, 1995, 1994, 1993 and
1992 has been derived from the Company's audited Consolidated Financial
Statements. The following summary consolidated interim financial data for the
three months ended September 30, 1996 and 1995 has been derived from unaudited
consolidated interim financial statements which, in the opinion of management,
include all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation. The summary consolidated financial data
should be read in conjunction with the Company's audited Consolidated Financial
Statements and related Notes incorporated herein by reference. The consolidated
financial data for the three months ended September 30, 1996 is not necessarily
indicative of the operating results to be expected for the entire fiscal year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED JUNE 30,
---------------------- ----------------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Interest income......... $ 122,786 $ 122,702 $ 491,092 $ 454,368 $ 393,854 $ 404,628 $ 447,883
Interest expense........ 82,494 84,603 328,317 304,526 256,102 276,584 352,527
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income..... 40,292 38,099 162,775 149,842 137,752 128,044 95,356
Provision for loan loss-
es..................... (1,658) (1,583) (6,107) (6,408) (6,248) (6,185) (7,981)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income af-
ter provision for loan
losses................. 38,634 36,516 156,668 143,434 131,504 121,859 87,375
Non-interest income..... 13,603 11,389 49,646 45,066 44,693 34,442 77,817
General and administra-
tive expenses.......... 29,322 27,968 114,517 102,554 94,115 89,560 80,314
Federal deposit insur-
ance special assess-
ment................... 27,062 -- -- -- -- -- --
Amortization of goodwill
and core value of de-
posits................. 2,385 2,200 9,529 10,262 14,131 10,544 11,389
Valuation adjustment and
accelerated amortiza-
tion of
goodwill............... -- -- -- 21,357 52,703 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes,
extraordinary items and
cumulative effects of
changes in accounting
principles............. (6,532) 17,737 82,268 54,327 15,248 56,197 73,489
Income tax provision
(benefit).............. (2,482) 6,493 26,962 23,146 16,875 22,081 27,652
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
extraordinary items and
cumulative effects of
changes in accounting
principles............. (4,050) 11,244 55,306 31,181 (1,627) 34,116 45,837
Extraordinary items(1).. -- -- -- -- -- -- (5,046)
Cumulative effects of
changes in accounting
principles(2).......... -- -- -- -- 6,597 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)....... $ (4,050) $ 11,244 $ 55,306 $ 31,181 $ 4,970 $ 34,116 $ 40,791
========== ========== ========== ========== ========== ========== ==========
Earnings per share
(fully diluted):
Income (loss) before
extraordinary items
and cumulative effects
of changes in
accounting
principles............ $ (.27) $ .77 $ 3.72 $ 2.16 $ (.11) $ 2.42 $ 4.68
Extraordinary
items(1).............. -- -- -- -- -- -- (.52)
Cumulative effects of
changes in accounting
principles(2)......... -- -- -- -- .46 -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss)...... $ (.27) $ .77 $ 3.72 $ 2.16 $ .35 $ 2.42 $ 4.16
========== ========== ========== ========== ========== ========== ==========
Dividends declared per
common share(3)........ $ .10 $ -- $ .40 $ -- $ -- $ -- $ --
========== ========== ========== ========== ========== ========== ==========
Book value per common
share.................. $ 25.96 $ 27.06 $ 27.39 $ 23.65 $ 21.51 $ 21.28 $ 20.95
========== ========== ========== ========== ========== ========== ==========
Tangible book value per
common share(4)........ $ 23.19 $ 24.34 $ 24.69 $ 21.04 $ 16.73 $ 15.00 $ 12.81
========== ========== ========== ========== ========== ========== ==========
STATEMENT OF FINANCIAL
CONDITION DATA:
Total assets............ $6,667,758 $6,582,215 $6,607,670 $6,569,579 $5,982,307 $5,262,336 $5,035,913
Investment securi-
ties(5)................ 292,292 295,509 253,043 300,481 290,807 254,889 316,366
Mortgage-backed securi-
ties(6)................ 1,153,826 1,345,285 1,180,046 1,364,907 1,350,402 952,539 779,969
Loans receivable,
net(7)................. 4,853,305 4,576,344 4,813,164 4,540,692 3,970,626 3,655,740 3,460,294
Goodwill and core value
of deposits............ 38,349 35,062 40,734 37,263 67,661 87,946 98,490
Deposits................ 4,274,844 4,050,507 4,304,576 4,011,323 3,675,825 2,731,127 2,660,489
Advances from Federal
Home Loan Bank......... 1,194,014 1,752,163 1,350,290 1,787,352 1,625,456 1,868,779 1,465,062
Other borrowings........ 711,299 259,720 439,301 273,676 224,072 231,828 499,790
Stockholders' equity.... 359,656 349,335 413,277 337,614 304,568 297,848 253,528
</TABLE>
(Table continued on following page)
7
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION, CONT.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED JUNE 30,
-------------- ---------------------------------
1996 1995 1996 1995 1994 1993 1992
------ ------ ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING RA-
TIOS(8):
Return on average assets
(9)....................... N/M% .69% .84% .49% .09% .67% .79%
Return on average equity
(9)....................... N/M% 13.18% 14.74% 9.98% 1.54% 12.39% 20.12%
Net yield on interest-earn-
ing assets................ 2.59% 2.45% 2.58% 2.46% 2.59% 2.65% 2.01%
Earnings to fixed charges
(10):
Excluding interest on de-
posits.................... .77x 1.56x 1.71x 1.43x 1.13x 1.41x 1.26x
Including interest on de-
posits.................... .92x 1.21x 1.25x 1.18x 1.06x 1.20x 1.13x
Dividend payout ratio (3).. N/M% N/A 10.75% N/A N/A N/A N/A
General and administrative
expenses divided by
average assets (11)....... 2.09% 1.70% 1.75% 1.62% 1.67% 1.75% 1.55%
SELECTED CAPITAL AND ASSET
QUALITY RATIOS:
Regulatory capital ratios
of the Bank:
Tangible capital........... 5.81% 5.35% 6.18% 5.16% 4.69% 4.62% 2.95%
Core capital............... 6.02% 5.63% 6.41% 5.47% 5.53% 5.93% 4.63%
Risk-based capital:
Tier 1 capital............ 11.81% 12.31% 12.56% 12.02% 12.18% 11.93% 8.25%
Total capital............. 12.89% 13.42% 13.62% 13.12% 13.16% 12.81% 8.87%
Nonperforming assets to to-
tal assets................ 1.07% .96% 1.01% .95% 1.27% 1.97% 3.00%
Nonperforming assets to
total loans and
nonperforming assets...... 1.43% 1.35% 1.35% 1.32% 1.84% 2.71% 4.08%
Allowance for loan losses
to total loans............ 1.01% 1.06% 1.01% 1.04% 1.11% 1.26% 1.43%
Allowance for loan losses
to total nonperforming
assets.................... 69.71% 77.60% 74.05% 77.42% 59.04% 45.13% 33.58%
Net loans charged-off to
average loans outstand-
ing....................... .07% .10% .10% .06% .11% .13% .31%
</TABLE>
- --------
(footnotes for preceding tables)
(1) For fiscal year 1992, represents the loss on early extinguishment of debt,
net of income tax benefits, less the effect of the utilization of net
operating losses carried forward.
(2) For fiscal year 1994, represents the cumulative effect of the change in
the method of accounting for income taxes less the cumulative effect of
the change in accounting for postretirement benefits, net of income tax
benefit.
(3) Represents dividends declared per share divided by net income per share.
The Company established a quarterly common stock cash dividend policy on
October 4, 1995, and declared dividends totaling $1.4 million ($.10 per
common share) during the three months ended September 30, 1996, and $5.9
million ($.40 per common share) during fiscal year 1996. Such ratio is not
meaningful based on the loss per share for the three months ended
September 30, 1996 such ratio is not meaningful ("N/M").
(4) Calculated by dividing stockholders' equity, reduced by the amount of
goodwill and core value of deposits, by the number of shares of common
stock outstanding at the respective dates.
(5) Includes investment securities available for sale totaling $9.9 million,
$3.0 million, $9.9 million, $3.0 million, $5.4 million and $1.3 million at
September 30, 1996 and 1995, June 30, 1996, 1995, 1994 and 1993,
respectively. No investment securities were available for sale at June 30,
1992.
(6) Includes mortgage-backed securities available for sale totaling $255.3
million, $27.0 million, $263.2 million, $37.0 million, $45.0 million,
$41.3 million and $20.8 million at September 30, 1996 and 1995, June 30,
1996, 1995, 1994, 1993 and 1992, respectively.
(7) Includes loans held for sale totaling $87.3 million, $107.2 million, $89.4
million, $113.4 million, $187.7 million, $171.8 million and $158.4 million
at September 30, 1996 and 1995, June 30, 1996, 1995, 1994, 1993 and 1992,
respectively.
(8) Ratios for the three months ended September 30, 1996 and 1995 are
annualized. Such annualized data includes nonrecurring items and is not
necessarily indicative of results for the entire fiscal years.
8
<PAGE>
(9) Based on daily average balances during the three month periods ended
September 30, 1996 and 1995 and fiscal years 1996, 1995 and 1994, and on
average monthly balances for fiscal years 1993 and 1992. Return on average
assets ("ROA") and return on average equity ("ROE") for the three months
ended September 30, 1996, are .90% and 15.23%, respectively, excluding the
after-tax effect of the nonrecurring expenses totaling $17.3 million, $1.5
million and $103,000 associated with the Savings Association Insurance
Fund ("SAIF") special assessment, the repurchase of 1,250,100 shares of
the Company's common stock and the change in income taxes for tax bad debt
reserves, respectively. ROA and ROE for the three months ended September
30, 1995 are .76% and 14.63%, respectively, excluding the after-tax effect
of the nonrecurring expenses totaling $1.2 million associated with the
Railroad merger. ROA and ROE for fiscal year 1996 are .90% and 15.68%,
respectively, excluding the after-tax effect of the nonrecurring expenses
totaling $2.9 million and $585,000 associated with the Railroad merger and
the Company's 1995 proxy contest, respectively. ROA and ROE for fiscal
year 1995 are .83% and 16.82%, respectively, excluding the accelerated
amortization of goodwill totaling $21.4 million. ROA and ROE for fiscal
year 1994 are .75% and 13.11%, respectively, excluding the after-tax
effect of the intangible assets valuation adjustment and the cumulative
effects of changes in accounting principles totaling $43.9 million and
$6.6 million, respectively.
(10) The ratio of earnings to fixed charges has been computed by dividing
income (loss) before income taxes, extraordinary items and cumulative
effects of changes in accounting principles plus fixed charges by fixed
charges. Fixed charges represent all interest expense plus the portion of
rental payments under operating leases deemed to be interest. Earnings
were inadequate to cover fixed charges in the amount of $6.8 million for
the three months ended September 30, 1996.
(11) General and administrative expenses ("G&A") divided by average assets for
the three months ended September 30, 1996, is 1.64% excluding the
nonrecurring expenses totaling $27.1 million and $2.3 million associated
with the SAIF special assessment and the repurchase of 1,250,100 shares
of the Company's common stock, respectively. G&A divided by average
assets for the three months ended September 30, 1995 is 1.62% excluding
the nonrecurring expenses totaling $1.4 million primarily associated with
the Railroad merger, and for fiscal year 1996 is 1.68% excluding the
nonrecurring expenses totaling $3.6 million and $901,000 associated with
the Railroad merger and the Company's 1995 proxy contest, respectively.
9
<PAGE>
RISK FACTORS
Prospective investors should consider, among other things, the following
factors in connection with a decision to purchase the Notes offered hereby.
SOURCES OF PAYMENT FOR INTEREST AND PRINCIPAL OF THE NOTES
The Company's principal asset is its investment in the capital stock of the
Bank. Because it does not generate any significant revenues independent of the
Bank, the Company's ability to make interest and principal payments on the
Notes is dependent on the extent to which it receives dividends from the Bank.
The Bank's ability to pay dividends to the Company is dependent on its ability
to generate earnings and is subject to a number of regulatory restrictions and
tax considerations. Under current regulations of the Office of Thrift
Supervision (the "OTS"), in order to pay dividends without prior approval of
the OTS, a savings institution must satisfy all of its applicable regulatory
capital requirements. The Bank currently complies with its regulatory capital
requirements and is considered "well-capitalized" under applicable banking
regulations. At September 30, 1996, the Bank's regulatory capital ratios were
5.81%, 6.02%, and 12.89%, respectively, for tangible, core and risk-based
capital, compared to OTS minimum regulatory capital requirements of 1.50%,
3.00% and 8.00%, respectively. To be considered "well capitalized", the Bank
must maintain minimum Tier 1 leverage, Tier 1 risk-based and total risk-based
capital ratios of 5.00%, 6.00% and 10.00%, respectively. At September 30,
1996, the Bank's Tier 1 leverage, Tier 1 risk-based and total capital ratios
were 6.02%, 11.81% and 12.89%, respectively. Should the Bank in the future
fail to meet regulatory capital requirements, it might be unable to pay
dividends to the Company to fund interest and principal payments on the Notes.
Further, even assuming it continues to satisfy such requirements, the Bank
will be restricted by applicable OTS regulations from paying dividends beyond
a specified percentage of its earnings and excess capital, and will be
required to furnish the OTS with 30 days' prior written notice of any proposed
dividend. The OTS will have the opportunity to object to any proposed dividend
during such period. At September 30, 1996, the Bank had $70.9 million
available for the payment of dividends to the Company under current OTS
regulations. If the Company were denied access to the earnings of the Bank,
whether by regulatory restriction, inadequate earnings or deterioration in the
Bank's financial condition, the Company's ability to make debt service
payments on the Notes would be significantly impaired.
SUBORDINATION OF NOTES
The Notes are subordinated to all Senior Indebtedness of the Company. By
reason of such subordination, in the event of liquidation of the Company,
holders of the Notes will not receive payment until the holders of Senior
Indebtedness have been satisfied. While Senior Indebtedness excludes
indebtedness of the Company's subsidiaries, holders of the Notes, as creditors
of the Company, will be denied access to the assets of the Company's
subsidiaries upon such subsidiaries' liquidation or reorganization until all
the prior claims of creditors of such subsidiaries have been satisfied.
Obligors of the Bank, including depositors, have first claim on the assets of
the Bank in the event of liquidation of the Bank. There is no limitation in
the Indenture on the Company's creation of Senior Indebtedness or indebtedness
ranking in parity with the Notes. See "Description of Notes--General" and "---
Subordination."
POTENTIALLY ADVERSE IMPACT OF INTEREST RATES AND ECONOMIC AND INDUSTRY
CONDITIONS
The savings institution industry is affected by fluctuations in market
interest rates. Like most savings institution holding companies, the Company's
net interest income is affected by general economic and other factors that
influence market interest rates and the Company's ability to respond to
changes in such rates. General economic conditions may also affect the credit
quality of the Company's assets. Adverse economic conditions may affect the
ability of the Bank's borrowers to repay loans, particularly in the areas of
commercial real estate and consumer lending. To the extent that changes in
interest rates and economic conditions adversely affect the Company's
financial condition and results of operations, the Company's ability to make
debt service payments on the Notes may be impaired.
10
<PAGE>
Significant and rapid changes have occurred in the savings institution
industry in recent years, and the future of the industry is subject to various
uncertainties. The traditional role of savings institutions as the nation's
primary housing lenders is diminishing and savings institutions are subject to
increasing competition from commercial banks and mortgage bankers. The savings
institution industry also faces a volatile and uncertain regulatory
environment in which applicable laws, regulations and enforcement policies are
subject to significant change. There can be no assurance that changes in the
savings institution industry, regulatory and otherwise, will not adversely
affect the financial condition and results of operations of the Company and,
as a result, impair its ability to make debt service payments on the Notes.
LIMITED COVENANTS
The covenants in the Indenture are limited and are not designed to protect
holders of the Notes in the event of a material adverse change in the
Company's financial condition or results of operations. The provisions of the
Indenture should not be a significant factor in evaluating whether the Company
will be able to comply with its obligations under the Notes. See "Description
of the Notes."
LIMITED RIGHTS OF ACCELERATION OF NOTES
Payment of principal of or interest on the Notes may be accelerated only in
the case of the bankruptcy, insolvency or reorganization of the Company. There
is no right of acceleration in the case of a default in the payment of
principal or interest on the Notes or in the performance of any other covenant
of the Company. See "Description of Notes--Acceleration Events."
RECENT DEVELOPMENTS
Recent Acquisition. On October 1, 1996, the Company completed the
acquisition of Heritage, the holding company for Hawkeye Federal Savings Bank.
Based on the closing stock price of the Company's common stock on October 1,
1996 of $43.00 per share, the total consideration paid for this acquisition
was approximately $22.8 million consisting of 451,633 shares of the Company's
common stock and $3.4 million in cash. At that date, Heritage operated six
branches in Iowa and had $182.9 million in total assets, $157.9 million in
deposits and $10.3 million in stockholders' equity. The acquisition of
Heritage was accounted for as a purchase transaction.
SAIF Special Assessment. During the quarter ended September 30, 1996, the
Company incurred an after-tax charge of $17.3 million ($27.1 million pre-tax)
as a result of the imposition of a special assessment by the Federal Deposit
Insurance Corporation ("FDIC") to recapitalize the Savings Association
Insurance Fund ("SAIF"). The FDIC operates two deposit insurance funds: the
Bank Insurance Fund (the "BIF") which generally insures the deposits of
commercial banks and the SAIF which generally insures the deposits of savings
associations such as the Bank. Because the reserves of the SAIF have been
below statutorily required minimums, institutions with SAIF-assessable
deposits, like the Bank, have been required to pay substantially higher
deposit insurance premiums than institutions with deposits insured by the BIF
since September 30, 1995. In order to recapitalize the SAIF and address this
premium disparity, the Deposit Insurance Funds Act of 1996, effective
September 30, 1996, authorized the FDIC to impose a one-time special
assessment on institutions with SAIF-assessable deposits based on the amount
determined by the FDIC to be necessary to increase the reserve levels of the
SAIF to the designated reserve ratio of 1.25% of insured deposits as of
October 1, 1996. Institutions were assessed at the rate of .657% based on the
amount of their SAIF-assessable deposits as of March 31, 1995. This
nonrecurring special assessment totaling $27.1 million before taxes is
recorded in the general and administrative expense section of the Consolidated
Statement of Operations under a separate line item captioned "Federal deposit
insurance special assessment." Such special assessment reduced the Bank's
tangible, core and risk-based capital at September 30, 1996, by $17.3 million
and reduced the capital ratios as follows: tangible capital by .26% to 5.81%,
core capital by .26% to 6.02% and risk-based capital by .51% to 12.89%. The
Bank continues to exceed its minimum regulatory requirements and continues to
meet the requirements to be classified as a "well-capitalized" institution
under applicable regulations.
11
<PAGE>
The FDIC has proposed a new assessment schedule for SAIF deposit insurance
pursuant to which the assessment rate for well-capitalized institutions with
the highest supervisory ratings would be reduced to zero and institutions in
the lowest risk assessment classification would be assessed at the rate of
0.27% of insured deposits. Until December 31, 1999, however, SAIF-insured
institutions will be required to pay assessments to the FDIC at the rate of
.064% to help fund interest payments on certain bonds issued by the Financing
Corporation ("FICO"), an agency of the federal government established to
finance takeovers of insolvent thrifts. During this period, BIF members will be
assessed for FICO obligations at the rate of .013%. After December 31, 1999,
both BIF and SAIF members will be assessed at the same rate for FICO payments.
Based on the Company's level of deposits as of September 30, 1996, such a
reduction in rates from the current level of .23% of insured deposits to .064%
of insured deposits effective January 1, 1997 for SAIF insurance premiums will
result in an annual pre-tax increase in operating earnings of approximately
$7.0 million.
The Deposit Insurance Funds Act of 1996 provides that the BIF and the SAIF
will be merged into a single deposit insurance fund effective January 1, 1999
but only if there are no insured savings associations on that date. The
legislation directs the Department of Treasury to make recommendations to
Congress by March 31, 1997, for the establishment of a single charter for
banks and thrifts. Management of the Company cannot predict at this time what
effect this legislation will have on the Company.
Repurchase of Common Stock. On August 21, 1996, the Company consummated the
repurchase of 1,250,100 shares (8.3% of the outstanding shares of the
Company's common stock prior to the repurchase) of the Company's common stock
from CAI Corporation. ("CAI"), a Dallas-based investment company, for an
aggregate purchase price of approximately $48.9 million, excluding $329,000 in
transaction costs incurred as of September 30, 1996. Such purchase price
consisted of cash of approximately $28.2 million and the surrender of a
warrant (valued at $20.7 million) which would have enabled the Company to
purchase 99 shares of non-voting common stock of CAI. The Company also
reimbursed CAI for certain expenses totaling $2.2 million and paid CAI cash
totaling $62,500 in lieu of the pro rata portion of any dividend CAI otherwise
would have been entitled to receive for the quarter ended September 30, 1996.
The cash portion of the repurchase was financed by a $28.0 million variable
rate secured promissory note due January 31, 1997 from a financial
institution. The Company is in the process of negotiating to refinance this
loan on a long term basis. Such loan is secured by a portion of the
outstanding shares of the common stock of the Bank. Concurrent with the close
of the repurchase, two directors of the Company, who also serve as executive
officers of CAI, resigned from the Board of Directors.
12
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
(after deducting the underwriting discount and estimated expenses of the
offering) will be approximately $ million. A total of $47.15 million of the
net proceeds will be used to refinance the Company's $40.25 million of 10.25%
Subordinated Notes due 1999 and $6.9 million of 10% Senior Notes due 1999,
both of which are expected to be redeemed as soon as possible (under
applicable redemption provisions) following issuance of the Notes offered
hereby. The remainder of the net proceeds will be used for general corporate
purposes. Pending such uses, the proceeds will be invested in short-term
investment securities.
CAPITALIZATION
The following table presents the consolidated capitalization of the Company
at September 30, 1996, and as adjusted to give effect to the issuance of the
Notes offered hereby and the application of the net proceeds as described
herein. In addition, at September 30, 1996, the Company had other borrowings
consisting of deposits ($4.3 billion), Federal Home Loan Bank ("FHLB")
advances ($1.2 billion) and other funding liabilities ($711.3 million)
incurred in the ordinary course of business.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
--------------------------
ACTUAL AS ADJUSTED
----------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Parent Company Long-Term Debt:
Variable Rate Secured Promissory Note due January
31, 1997(1)...................................... $ 28,000 $ 28,000
10% Senior Notes due 1999......................... 6,900 --
10.25% Subordinated Notes due 1999................ 40,250 --
Subordinated Extendible Notes due 2006, offered
hereby........................................... -- 50,000
----------- -----------
Total parent company long-term debt.............. $ 75,150 $ 78,000
=========== ===========
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized, none issued.......................... $ -- $ --
Common stock, $.01 par value; 25,000,000 shares
authorized,
13,856,566 issued and outstanding(2)............. 139 139
Additional paid-in capital........................ 126,967 126,967
Retained earnings(3).............................. 234,846 234,316
Unrealized holding loss on securities available
for sale, net.................................... (2,296) (2,296)
----------- -----------
Total stockholders' equity....................... $ 359,656 $ 359,126
=========== ===========
</TABLE>
- --------
(1) The Company is in the process of negotiating to refinance this loan on a
long term basis.
(2) Does not include 389,335 shares of common stock which are issuable upon
the exercise of outstanding options granted under the Company's 1984 Stock
Option and Incentive Plan, as amended.
(3) The retained earnings of the Company are subject to certain restrictions.
See Notes 16 and 18 to Notes to the Company's Consolidated Financial
Statements, which are incorporated herein by reference. The reduction of
retained earnings results from the write-off of deferred offering expenses
($530,000 net of income taxes) relating to the 10.25% Subordinated Notes
due 1999 and the 10% Senior Notes due 1999.
13
<PAGE>
MANAGEMENT
The following table sets forth certain information about the directors
(including nominees) and executive officers of the Company.
<TABLE>
<CAPTION>
AGE AT
OCTOBER 7, DIRECTOR
NAME 1996 SINCE POSITION/BACKGROUND
---- ---------- -------- -------------------
<S> <C> <C> <C>
William A. Fitzgerald... 58 1984 Chairman and Chief Executive Officer of the
Company and the Bank.
Robert F. Krohn......... 63 1984 Vice Chairman and Chief Executive Officer
of PSI Group, Inc., a national document
processing company. Mr. Krohn serves as
President of Krohn Corporation, a
strategic planning firm. Mr. Krohn served
as Chairman of the Board of the Company
and the Bank from 1990 through 1994.
Robert S. Milligan...... 51 1987 Chairman of the Board and Chief Executive
Officer of MI Industries, a protein
processing company headquartered in
Lincoln, Nebraska, which produces products
for pharmaceutical, biological and
research markets throughout the world.
Charles M. Lillis....... 54 1988 President and Chief Executive Officer of U
S WEST Media Group, the international,
cellular, directory publishing and cable
television units of U S WEST, Inc.
Talton K. Anderson...... 59 1991 Owner and President of three automobile
dealerships in Omaha, Nebraska, as well as
one in Lincoln, Nebraska. Mr. Anderson is
also the President of a Nebraska-based
automobile leasing company and a
reinsurance company.
Carl G. Mammel.......... 63 1991 Chairman of the Board of Mammel &
Associates, a consulting firm providing
services in executive benefits, employee
benefits planning and wealth transfer
planning. He is also a managing partner
and Executive Vice President of M
Financial Corporation, a network of
financial service firms throughout the
United States.
James P. O'Donnell...... 48 1991 Senior Vice President and Chief Financial
Officer of ConAgra, Inc., an Omaha,
Nebraska-based international diversified
food company.
Robert D. Taylor........ 49 N/A(1) Director and Consultant with Taylor
Financial, based in Wichita, Kansas, a
provider of financial consulting services
to small- and medium-sized multi-unit
operations. From December 31, 1990 to
October 2, 1995, Mr. Taylor served as
Chairman of the Board of Directors and
Chief Executive Officer of Railroad and
its wholly owned subsidiary, Railroad
Savings Bank, F.S.B. Railroad was acquired
by the Company effective October 2, 1995.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
AGE AT
OCTOBER 7, DIRECTOR
NAME 1996 SINCE POSITION/BACKGROUND
---- ---------- -------- -------------------
<S> <C> <C> <C>
Aldo J. Tesi............ 45 N/A(1) President of First Data Resources, an
Omaha, Nebraska-based subsidiary of First
Data Corporation, which provides
cardholder services and relational
database marketing services to bank card
issuers throughout the world.
James A. Laphen......... 48 N/A President, Chief Operating Officer and
Chief Financial Officer of the Company and
the Bank.
</TABLE>
- --------
(1) Messrs. Taylor and Tesi have been nominated to stand for election at the
Company's Annual Meeting of Stockholders to be held on November 19, 1996.
15
<PAGE>
DESCRIPTION OF NOTES
The Notes are to be issued under an indenture (the "Indenture"), dated as of
November , 1996, between the Company and Harris Trust and Savings Bank, as
trustee (the "Trustee"). The Notes are not savings accounts or deposits of the
Bank and are not insured by the FDIC, any governmental agency or otherwise.
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, the provisions of the Indenture (including the definition of
certain terms in the Indenture), the form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is part.
Wherever particular provisions and definitions of the Indenture are referred
to, such provision and definitions are incorporated by reference as part of
the statements made, and the statements are qualified in their entirety by
such reference. Article and Section references are to Articles and Sections of
the Indenture. For purposes of the "Description of Notes" section of this
Prospectus, "Company" refers to Commercial Federal Corporation, excluding its
subsidiaries, unless the subsidiaries are specifically included.
GENERAL
The Notes offered by this Prospectus will be general unsecured obligations
of the Company and will be limited to $50,000,000 aggregate principal amount.
The Notes will be issued in registered form only, without coupons, in
denominations of $1,000 and any integral multiple thereof. Interest on the
Notes will accrue from the date of original issuance and will be payable on
the fifteenth day of each month, commencing January 15, 1997 (each, an
"Interest Payment Date"), at the rate per annum stated on the cover page of
this Prospectus. Interest will be payable to the person in whose name the Note
is registered at the close of business on the seventh day of the month in
which such Interest Payment Date occurs. (Sections 201, 202, 203, 301, 302,
307, 308 and 311). The Notes will mature on December 1, 2006 unless redeemed
earlier at the option of the Company or the Holders as set forth below. See
"--Redemption at Option of the Company" and "--Redemption at Option of
Holder."
Principal and interest will be payable at an office or agency to be
maintained by the Trustee in New York, New York, except that, at the option of
the Company, principal and interest may be paid by check mailed to the person
entitled thereto. (Sections 301, 307 and 1002) The Notes may be presented for
registration of transfer or exchange at an office or agency to be maintained
by the Trustee in New York, New York. (Section 305) The Notes will be
exchangeable without service charge, but the Company may require payment to
cover taxes or other government charges. (Section 305) The Notes will not be
secured by the assets of the Company or any of its subsidiaries or affiliates
or otherwise and will not have the benefit of a sinking fund for the
retirement of principal. In addition, the rights of the Company to participate
in any distribution of assets of any subsidiary, including the Bank, upon its
liquidation or reorganization or otherwise (and thus the ability of the
Holders of the Notes to benefit indirectly from such distribution) are subject
to the prior claims of creditors of that subsidiary. Claims on the Company's
subsidiaries by creditors other than the Company may include substantial
obligations with respect to loans, deposit liabilities, FHLB advances, federal
funds purchased and securities sold under repurchase agreements.
So long as the Company is a reporting company under the Exchange Act, the
Company will furnish to holders of the Notes annual reports of the Company
containing audited financial statements and interim reports with unaudited
financial data on a quarterly basis. If the Company ceases to be a reporting
company under the Exchange Act, the Company will furnish to holders of the
Notes information which is substantially comparable to the information
provided as a reporting company. (Section 704)
The Indenture does not contain provisions that would provide protection to
Holders against a decline in credit quality resulting from recapitalizations
or similar restructurings.
ADJUSTABLE INTEREST RATE
The Notes will bear interest from the date of original issuance until
December 1, 2001 at the rate of % per annum. Thereafter, the Notes will bear
interest in accordance with the following procedures: On or before
16
<PAGE>
30 days prior to December 1, 2001, or the expiration date of any subsequent
Interest Rate Period (as defined herein, such date, including December 1,
2001, an "Interest Reset Date") the Company will establish, at its option, the
interest rate per annum (rounded to the nearest five hundredths of a
percentage point; each such rate a "Subsequent Interest Rate") for a period
(an "Interest Rate Period") of one, two, three or five years (but never
extending beyond December 1, 2006), commencing with such Interest Reset Date
and ending on, but not including the December 1 of such first, second, third
or fifth year, as the case may be. Any such Subsequent Interest Rate will not
be less than 105% of the Effective Interest Rate on Comparable Maturity U.S.
Treasury Obligations (as defined herein) established prior to the commencement
of each such subsequent Interest Rate Period. In the event that the Company
determines on the November 1 preceding such Interest Reset Date that, during
the ten calendar days preceding such November 1, no Weekly Comparable Maturity
Treasury Rate (as defined herein) has been published and the Alternate
Comparable Maturity Treasury Rate (as defined herein) could not be determined,
the Company will establish the Subsequent Interest Rate in its discretion
without limitation. (Section 202)
In the event that the Company establishes a Subsequent Interest Rate for a
subsequent Interest Rate Period, the Company will notify the Trustee of each
Subsequent Interest Rate and Interest Rate Period on or before 30 days prior
to an Interest Reset Date. Not later than the second business day after
notification to the Trustee by the Company of each Subsequent Interest Rate
and Interest Rate Period, the Trustee will mail such notice to each Holder.
(Section 202)
If the Company decides not to establish a Subsequent Interest Rate as
provided above, the interest rate for the prior Interest Rate Period will
continue to be the interest rate in effect for the next year and each year
thereafter, unless and until the Company shall establish a Subsequent Interest
Rate on or before November 1 of a subsequent year in which an Interest Reset
Date occurs for a subsequent Interest Rate Period as provided above,
commencing with December 1 of such year. Until establishment of such a
Subsequent Interest Rate for a subsequent Interest Rate Period, each December
1 shall be deemed to be an Interest Reset Date. (Section 202)
In the event that the Company decides not to establish a Subsequent Interest
Rate for a subsequent Interest Rate Period, the Company will so notify the
Trustee on or before 30 days prior to the Interest Reset Date. Not later than
the second business day after such notification to the Trustee by the Company,
the Trustee will mail such notice to each Holder.
As used herein, the following capitalized terms shall have the following
definitions (Section 101):
"Alternate Comparable Maturity Treasury Rate" means the average yields to
maturity of the daily closing bids (or less frequently if daily quotations
shall not be available), quoted by at least three recognized U.S.
Government securities dealers selected by the Company, for all marketable
U.S. Treasury securities with a maturity of not less than three months
shorter nor more than three months longer than the applicable Comparable
Maturity from the November 1 preceding an Interest Reset Date (other than
securities which can, at the option of the holder, be surrendered at face
value in payment of any Federal estate tax) for the most recent five
consecutive business days during which there had been at least three days
on which daily closing bids were quoted within the 25 calendar day period
preceding such November 1.
"Comparable Maturity" means, with respect to an Interest Rate Period of
one, two, three or five years, one, two, three or five years, respectively.
"Consolidated Net Income" means the amount of net income (loss) of the
Company and its subsidiaries determined in accordance with generally
accepted accounting principles; provided, however, that there shall not be
included in Consolidated Net Income (a) any net income (loss) of a
subsidiary for any period during which it was not a consolidated subsidiary
or (b) any net income (loss) of businesses, properties or assets acquired
or disposed of (by way of merger, consolidation, purchase, sale or
otherwise) by the Company or any subsidiary for any period prior to the
acquisition thereof or subsequent to the disposition thereof; and,
provided, further, any assessment, or the effect thereof, imposed by the
FDIC on the Bank as a result of the Bank's membership in the SAIF for the
purpose of recapitalizing such fund shall be excluded from the
determination of Consolidated Net Income.
17
<PAGE>
"Effective Interest Rate on Comparable Maturity U.S. Treasury
Obligations" means as of the November 1 preceding an Interest Reset Date
(i) if available, the most recent Weekly Comparable Maturity Treasury Rate
published during the 25 calendar day period preceding such November 1 or
(ii) if such Weekly Comparable Maturity Treasury Rate is not available, the
Alternate Comparable Maturity Treasury Rate as of such November 1.
"Weekly Comparable Maturity Treasury Rate" means the weekly average yield to
maturity values adjusted to a constant maturity of the Comparable Maturity as
read from the yield curves of the most actively traded marketable U.S.
Treasury fixed interest rate securities constructed daily by the U.S. Treasury
Department as published by the Federal Reserve Board or any Federal Reserve
Bank or by a United States Government department or agency.
REDEMPTION AT OPTION OF THE COMPANY
The Notes may not be redeemed prior to December 1, 2001. On December 1,
2001, or at any subsequent Interest Reset Date, the Company may, at its
option, redeem the Notes in whole upon not less than 30 nor more than 60 days
notice mailed to the registered Holders at a redemption price equal to par,
without premium, together with interest accrued to the date fixed for
redemption (subject to the right of the registered Holder on the record date
for an interest payment to receive such interest). (Article Eleven)
REDEMPTION AT OPTION OF HOLDER
The Notes may be redeemable, in whole or in part, on December 1, 2001 or at
any subsequent Interest Reset Date at the option of the Holder thereof, at a
redemption price equal to par plus accrued interest to the date fixed for
redemption. To be redeemed, a Note must be presented to the Trustee at its
principal corporate trust office in Chicago, Illinois. The Trustee shall
notify Holders of any Interest Reset Date not later than two business days
after receipt of notice from the Company. Such notice from the Trustee, among
other things, shall set forth the Subsequent Interest Rate and the Interest
Rate Period (or that the Company has decided not to reset the interest rate,
as the case may be) and that the Holder must exercise his option to have his
Notes redeemed not later than the fifth business day before the Interest Reset
Date and that if a Holder elects to revoke his exercise of such option prior
to the redemption of the Notes, he must do so not later than the fifth
business day before the Interest Reset Date. (Article Twelve)
No particular form of request for redemption or authority to request payment
is necessary. However, in order for Notes to be validly tendered for
redemption, the Trustee must have received: (1) a written request for
redemption and (2) the Notes to be redeemed free of any liens or encumbrances.
Any Notes tendered or any request for redemption may be withdrawn by written
request received by the Trustee on or prior to the fifth business day before
an Interest Reset Date. A Holder who has tendered a Note for redemption shall
continue to receive all monthly interest payments prior to the date of
redemption. (Article Twelve)
SUBORDINATION
The Notes are subordinated, in the manner and to the extent hereinafter
described, to the prior payment of all Senior Indebtedness of the Company.
Senior Indebtedness is defined as the principal of, premium, if any, and
interest on (1) all indebtedness of the Company for money borrowed (including
indebtedness of others guaranteed by the Company) other than the Notes,
whether outstanding on the date of the Indenture or thereafter created,
assumed or incurred, (2) any amendments, renewals, extensions, modifications
and refundings of any such indebtedness, unless in either case in the
instrument creating or evidencing any such indebtedness or pursuant to which
it is outstanding it is provided that such indebtedness is not superior in
right of payments to the Notes, and (3) Derivative Obligations (as defined
herein). (Sections 101 and 1301) The Notes will be subordinated to the $6.9
million in aggregate principal amount of the Company's 10% Senior Notes due
1999 and the $28.0 million variable rate secured promissory note due January
31, 1997 and will rank pari passu with the $40.25 million in aggregate
principal amount of the Company's 10.25% Subordinated Notes due 1999 to the
18
<PAGE>
extent such 10% Senior Notes due 1999, variable rate secured promissory note
and 10.25% Subordinated Notes due 1999 remain outstanding after issuance of
the Notes. The Company intends to repay in full the entire principal amount of
its 10% Senior Notes due 1999 and 10.25% Subordinated Notes due 1999 with the
proceeds of this offering. The Company is in the process of negotiating to
refinance the $28.0 million variable rate secured promissory note due January
31, 1997 on a long term basis. Any such refinancing would be Senior
Indebtedness under the Indenture. See "Use of Proceeds."
For the purposes of the definition of Senior Indebtedness, "indebtedness for
money borrowed" is defined as (a) any obligation of the Company for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instruments, (b) any deferred payment obligation of the
Company for the payment of the purchase price of property or assets evidenced
by a note or similar instrument, (c) any obligation of the Company for the
payment of rent or other amounts under a lease of property or assets which
obligation is required to be classified and accounted for as a capitalized
lease on the balance sheet of the Company under general accepted accounting
principals. Notwithstanding the foregoing, Senior Indebtedness shall not
include any obligation of the Company that constitutes a trade payable or
accrued liability arising in the ordinary course of business. (Section 101)
"Derivative Obligations" are defined as any obligations of the Company to
make payment pursuant to the terms of any securities contracts and foreign
currency exchange contracts, derivative instruments, such as swap agreements
(including interest rate and currency and foreign exchange swap agreements),
cap agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and
commodity options contracts (other than obligations on account of indebtedness
for money borrowed ranking pari passu with or subordinate to the Notes).
(Section 101)
Upon a distribution of assets, dissolution, winding up, total liquidation or
reorganization of the Company, if a default has occurred and is continuing
with respect to payment of principal or interest on any Senior Indebtedness or
if an Acceleration Event (as defined herein) shall have occurred and the
principal of the Notes has been declared due and payable and such declaration
has not been rescinded or annulled, then in any such instance all Senior
Indebtedness must be paid in full before any payment of principal or interest
on the Notes can be made. (Section 1301) Any subordination will not prevent
the occurrence of an Acceleration Event or an Event of Default (as defined
herein) under the Indenture.
By reason of the subordination of the Notes, in the event of liquidation of
the Company, the Holders of the Notes will not receive payment until the
holders of Senior Indebtedness have been satisfied, and in such event holders
of Senior Indebtedness may recover more than Holders of Notes. As of September
30, 1996, the Company had Senior Indebtedness in the amount of $34.9 million
in aggregate principal amount outstanding, consisting of the Company's $6.9
million of 10% Senior Notes due 1999, which are expected to be redeemed as
soon as possible following issuance of the Notes offered hereby with the
proceeds therefrom and a $28.0 million variable rate secured promissory note
due January 31, 1997. The Company is in the process of negotiating to
refinance this loan on a long term basis. Any such refinancing would be Senior
Indebtedness under the Indenture. While Senior Indebtedness excludes
indebtedness of the Company's subsidiaries, Holders of the Notes, as creditors
of the Company, will be denied access to the assets of the Company's
subsidiaries, upon such subsidiaries' liquidation or reorganization, until all
the prior claims of creditors of such subsidiaries have been satisfied.
Obligors of the Bank, for example, including depositors, have first claim on
the assets of the Bank in the event of liquidation of the Bank. There is no
limitation in the Indenture on the Company's creation of Senior Indebtedness
or indebtedness ranking in parity with the Notes.
RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS
The Indenture provides that the Company cannot declare or pay dividends on,
or purchase, redeem or acquire its capital stock, return any capital to
holders of capital stock as such, or make any distribution of assets to
capital stockholders as such, except that the Company may (a) declare and pay
a dividend in capital stock of the Company and (b) declare and pay a dividend,
purchase, redeem or acquire capital stock or make another distribution in cash
or property other than capital stock of the Company if the amount of such
dividend, redemption or distribution, together with the amount of all previous
such dividends and distributions after
19
<PAGE>
September 30, 1996, would not exceed in the aggregate the sum of (i) $5.0
million, plus (ii) 75% of the Company's Consolidated Net Income (as defined
herein) for each fiscal year commencing after the year ended June 30, 1996
(reduced by 100% of any consolidated net loss in any fiscal year), plus (iii)
100% of the net proceeds received by the Company for any capital stock issued
after June 30, 1996. (Section 1007)
CONSOLIDATION, MERGER OR TRANSFER
The Company may not consolidate with, merge into, or transfer all or
substantially all of its assets to another entity unless such other entity
assumes the Company's obligations under the Indenture and unless, after giving
effect thereto, no event shall have occurred and be continuing which, after
notice or lapse of time, would become an Event of Default (as defined herein),
each insured institution controlled by the surviving corporation shall be in
compliance with applicable minimum capital requirements or shall have filed a
capital plan acceptable to its primary regulator and certain other conditions
are met. (Section 801)
EVENTS OF DEFAULT
An Event of Default includes: (a) failure to pay the principal on the Notes
when due at Maturity, upon redemption or upon repayment, as provided in the
Indenture, whether or not prohibited by the subordination provisions of the
Indenture; (b) failure to pay any interest on the Notes for 10 days after such
interest becomes due and payable, whether or not prohibited by the
subordination provisions of the Indenture; (c) failure to perform any other
covenant set forth in the Indenture for 30 days after receipt of written
notice from the Trustee or Holders of at least 25% in aggregate principal
amount of the outstanding Notes specifying the default and requiring the
Company to remedy such default; (d) default in the payment at stated maturity
of indebtedness of the Company or certain subsidiaries for money borrowed
having an outstanding principal amount due at stated maturity greater than
$7.0 million and such default having continued for a period of 30 days beyond
any applicable grace period; (e) an event of default as defined in any
mortgage, indenture or instrument of the Company or certain subsidiaries shall
have happened and resulted in the acceleration of indebtedness which, together
with the principal amount of any other such indebtedness so accelerated,
aggregates $7.0 million or more, and such default shall not have been cured or
waived and such acceleration shall not have been rescinded or annulled; (f)
certain events of insolvency, receivership, or reorganization of the Company
or certain subsidiaries; and (g) entry of a final judgment, decree or order
against the Company or certain subsidiaries for the payment of money in excess
of $7.0 million in certain circumstances. Except as described under
"Acceleration Events" below, there is no right to acceleration in the case of
an Event of Default. (Section 501)
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a "default" (meaning, for this purpose, the events specified
above without grace periods), mail to the Holders of the Notes notice of all
defaults known to it which have occurred and remain uncured; provided, that,
except in the case of a default in the payment of principal or interest on any
of the Notes, the Trustee shall be protected in withholding such notice if and
so long as it in good faith determines that the withholding of such notice is
in the interest of the Holders. (Section 602)
Upon the occurrence of any Event of Default the Company shall, upon demand
of the Trustee, pay to the Trustee, for the benefit of the Holders of the
Notes, all amounts then due and payable with respect to such Notes, with
interest upon the overdue principal and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of
interest at the rate of interest borne by the Notes. If an Event of Default
with respect to the Notes occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of the Notes by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in the Indenture or such
Notes or in the aid of the exercise of any power granted in the Indenture or
the Notes, or to enforce any other proper remedy. (Section 503)
The Company must furnish annually to the Trustee an Officer's Certificate
stating whether to the best of the knowledge of the signers the Company is in
default under any of the provisions of the Indenture, and specifying all such
defaults and the nature thereof of which they have knowledge. (Section 1011)
20
<PAGE>
A Holder will not have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless (a) such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default, (b) the Holders of at least 25% in aggregate principal amount of the
outstanding Notes shall have made a written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee, (c) the
Trustee shall have failed to institute such proceeding within 60 days and (d)
the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the outstanding Notes a direction inconsistent
with such request. (Section 507) However, the Holder of any Note will have an
absolute right to receive payment of the principal of and interest on such
Notes on or after the respective due dates and to institute suit for the
enforcement of any such payment. (Section 508)
ACCELERATION EVENTS
The Indenture defines an "Acceleration Event" as an Event of Default
relating to bankruptcy, insolvency or reorganization of the Company. If an
Acceleration Event shall occur and be continuing, either the Trustee or the
Holders of at least 25% in aggregate principal amount of outstanding Notes may
accelerate the maturity of all such outstanding Notes. If an Acceleration
Event has occurred and a declaration of acceleration made before a judgment or
decree for payment of money due is obtained, Holders of a majority of the
outstanding Notes may rescind the acceleration of the Notes if all
Acceleration Events have been remedied and all payments due, other than those
due as a result of acceleration, have been made. (Section 502)
MODIFICATION AND WAIVER
With certain limited exceptions which permit modification of the Indenture
by the Company and the Trustee only, the Indenture may be modified by the
Company with the consent of Holders of not less than a majority in aggregate
principal amount of outstanding Notes; provided, however, that no such changes
shall without the consent of the Holder of each Note affected thereby (a)
change the maturity date of the principal of, or the due date of any
installment of interest on, any Note, (b) reduce the principal of, or the rate
of interest on, any Note, (c) change the currency in which any portion of the
principal of, or interest on, any Note is payable, (d) impair the right to
institute suit for the enforcement of any such payment, (e) reduce the above-
stated percentage of Holders of the outstanding Notes necessary to modify the
Indenture, (f) modify the foregoing requirements or reduce the percentage of
outstanding Notes necessary to waive any past default or (g) impair the
optional right to repayment provided the Holders. (Sections 513 and 902)
The Holders of a majority in aggregate principal amount of outstanding Notes
may waive compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1012)
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
The Indenture provides that the Company may terminate its obligations under
the Indenture with respect to all Notes, by delivering to the Trustee, in
trust for such purpose, money, Government Obligations or both which, through
the payment of interest and principal in respect thereof in accordance with
their terms, will provide on the due dates of any payment of principal and
interest, or a combination thereof, money in an amount sufficient to discharge
the entire indebtedness of such Notes. (Section 401 and 402)
THE TRUSTEE
Harris Trust and Savings Bank will serve as Trustee under the Indenture and
is also the Note Registrar.
21
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in the Purchase
Agreement (a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part), the Underwriters named below
have severally agreed to purchase, and the Company has agreed to sell to the
Underwriters, $50,000,000 in aggregate principal amount of Notes, at the
public offering price less the underwriting discount set forth on the cover
page of the Prospectus, in the dollar amount of Notes set forth opposite their
names in the table below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- -----------
<S> <C>
Piper Jaffray Inc. .......................................... $
Alex. Brown & Sons Incorporated..............................
Montgomery Securities........................................
-----------
Total...................................................... $50,000,000
===========
</TABLE>
The nature of the Underwriters' obligation is such that if any of the Notes
are purchased, all of the Notes must be purchased. The Underwriters propose to
offer the Notes to the public at the Price to Public set forth on the cover
page of this Prospectus and to dealers at such price less a concession not in
excess of % of the principal amount of the Notes. The Underwriters may allow
and such dealers may reallow a concession not in excess of % of the
principal amount of the Notes to certain other brokers and dealers. After the
offering, the Price to Public, concession and reallowance may be changed by
the Underwriters.
The Company has applied for listing of the Notes on the New York Stock
Exchange under the symbol "CFB 06." There can be no assurance, however, that
an active trading market in the Notes will develop or that the Notes will not
trade at a discount to their principal amount.
The Purchase Agreement provides that the Company will indemnify the
Underwriters against certain liabilities in connection with this offering,
including liabilities under the Securities Act of 1933, as amended.
LEGAL MATTERS
The legality of the Notes offered hereby will be passed upon for the Company
by Housley Kantarian & Bronstein, P.C., Washington, D.C. Certain legal matters
will be passed upon for the Underwriters by Dorsey & Whitney LLP, Minneapolis,
Minnesota. Both firms may rely as to matters of Nebraska law on the opinion of
Fitzgerald, Schorr, Barmettler & Brennan, Omaha, Nebraska.
EXPERTS
The consolidated financial statements of the Company as of June 30, 1996 and
1995 and for each of the three years in the period ended June 30, 1996
incorporated in this Prospectus by reference have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference (which report expresses an unqualified
opinion and includes an explanatory paragraph referring to a change in the
method of accounting for mortgage servicing rights in fiscal year 1996 and a
change in the method of accounting for income taxes, a change in the method of
accounting for postretirement benefits, and a change in the method of
accounting for intangible assets in fiscal year 1994), and have been so
included in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
22
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PRO-
SPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ITS
SUBSIDIARIES OR THAT INFORMATION CONTAINED HEREIN IS CURRENT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
TO ANY PERSON OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION IN SUCH JURISDICTION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 4
Summary Consolidated Financial Information................................. 7
Risk Factors............................................................... 10
Recent Developments........................................................ 11
Use of Proceeds............................................................ 13
Capitalization............................................................. 13
Management................................................................. 14
Description of Notes....................................................... 16
Underwriting............................................................... 22
Legal Matters.............................................................. 22
Experts.................................................................... 22
</TABLE>
$50,000,000
[LOGO OF COMMERCIAL FEDERAL CORPORATION APPEARS HERE]
Subordinated Extendible Notes due 2006
-----------------
PROSPECTUS
-----------------
Piper Jaffray Inc.
Alex. Brown & Sons
Incorporated
Montgomery Securities
November , 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses in connection with this offering are as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee.. $ 17,242
NASD fee............................................. 5,500
* Legal fees and expenses.............................. 110,000
* Printing, postage and mailing........................ 30,000
* Accounting fees and expenses......................... 175,000
* Trustee fees......................................... 15,000
* Blue Sky fees (including counsel fees)............... 9,000
* Miscellaneous expenses............................... 28,258
--------
$385,000
========
- ---------------
</TABLE>
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE BANK
Federal Regulations clearly define areas for indemnity coverage, as follows:
(a) Any person against whom any action is brought by reason of the fact
that such person is or was a director or officer of the Bank shall be
indemnified by the Bank for:
(i) Reasonable costs and expenses, including reasonable attorney's
fees, actually paid or incurred by such person in connection with
proceedings related to the defense or settlement of such action;
(ii) Any amount for which such person becomes liable by reason of any
judgment in such action;
(iii) Reasonable costs and expenses, including reasonable attorney's
fees, actually paid or incurred in any action to enforce his rights
under this section, if the person attains a final judgment in favor of
such person in such enforcement action.
(b) Indemnification provided for in subparagraph (a) shall be made to such
officer or director only if the requirements of this subparagraph are met:
(i) The Bank shall make the indemnification provided by subparagraph
(a) in connection with any such action which results in a final
judgment on the merits in favor of such officer or director.
(ii) The Bank shall make the indemnification provided by subparagraph
(a) in case of settlement of such action, final judgment against such
director or officer or final judgment in favor of such director or
officer other than on the merits except in relation to matters as to
which he shall be adjudged to be liable for negligence or misconduct
in the performance of his duty, only if a majority of the directors of
the Bank determines that such a director or officer was acting in good
faith within what he was reasonably entitled to believe under the
circumstances was the scope of his employment or authority and for a
purpose which he was reasonably entitled to believe under the
circumstances was in the best interest of the Bank or its
shareholders.
II-1
<PAGE>
However, no indemnification shall be made unless the Bank gives the OTS at least
60 days' notice of its intention to make such indemnification. No such
indemnification shall be made if the OTS advises the Bank in writing, within
such notice period, of its objection thereto.
(c) As used in this paragraph:
(i) "Action" means any action, suit or other judicial or
administrative proceeding, or threatened proceeding, whether civil,
criminal, or otherwise, including any appeal or other proceeding for
review;
(ii) "Court" includes, without limitation, any court to which or in
which any appeal or any proceeding for review is brought;
(iii) "Final Judgment" means a judgment, decree, or order which is
appealable and as to which the period for appeal has expired and no
appeal has been taken;
(iv) "Settlement" includes the entry of a judgment by consent or by
confession or upon a plea of guilty or of nolo contendere.
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY
Indemnification of directors and officers of the Company is provided under
Article VI of the Articles of Incorporation of the Company for judgments, fines,
settlements, and expenses, including attorney fees incurred in connection with
any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative if such director or officer
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
Article VI of the Articles of Incorporation provides that an outside
director shall not be personally liable to the Company or its stockholders for
monetary damages for breach of his fiduciary duty as a director and authorizes
the Company to indemnify such outside director against monetary damages for such
breach to the full extent permitted by law. This provision applies to acts or
omissions occurring after the effective date of the amendment, and does not
---
limit liability for (i) any act or omission not in good faith which involves
intentional misconduct or a knowing violation of law, (ii) any transaction from
which the outside director derived an improper direct or indirect financial
benefit, (iii) paying a dividend or approving a stock repurchase in violation of
the Nebraska Business Corporation Act or (iv) any act or omission which violates
a declaratory or injunctive order obtained by the Company or its stockholders.
For purposes of Article VI, "outside director" is defined as any member of the
Board of Directors who is not an officer or a person who may control the conduct
of the Company through management agreements, voting trusts, directorships in
related corporations or any other device or relationship.
The Company has purchased director and officer liability insurance that
insures directors and officers against certain liabilities in connection with
the performance of their duties as directors and officers, including liabilities
under the Securities Act of 1933, as amended, and provides for payment to the
Company of costs incurred by it in indemnifying its directors and officers.
Under Nebraska law, indemnification of directors and officers may be
provided for judgments, fines, settlements, and expenses, including attorney's
fees, incurred in connection with any threatened, pending, or completed action,
suit, or proceeding other than an action by or in the right of the Company.
This applies to any civil, criminal, investigative or administrative action
provided that the director or officer involved acted in good faith, in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
II-2
<PAGE>
Indemnification of directors and officers may be also provided for
judgments, fines, settlements, and expenses, including attorney's fees, incurred
in connection with any threatened, pending, or completed action, or suit by or
in the right of the corporation if such director or officer acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation. However, no indemnification shall be made in
respect of any claim, issue or matter in which such person is adjudged to be
liable for negligence or misconduct in the performance of his duties to the
corporation unless the court in which the action is brought deems indemnity
proper.
The grant of indemnification to a director or officer shall be determined
by a majority of a quorum of disinterested directors, by a written opinion from
independent legal counsel, or by the shareholders.
Indemnification shall be provided to any directors and officers for
expenses, including attorney's fees, actually and reasonably incurred in the
defense of any action, suit or proceeding to the extent that he or she has been
successful on the merits.
ITEM 16. EXHIBITS.
The exhibits filed as part of this Registration Statement are as follows:
1 Form of Purchase Agreement
4 Form of Indenture
* 5 Opinion of Housley Kantarian & Bronstein, P.C. regarding the
legality of securities being issued
12 Statement re: computation of ratio of earnings to fixed charges
* 23(a) Consent of Housley Kantarian & Bronstein, P.C. (included in
Exhibit 5)
23(b) Consent of Deloitte & Touche LLP
* 24 Power of Attorney (reference is made to the signature page of the
Registration Statement)
25 Statement re: eligibility of trustee (bound separately)
- --------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Omaha, State of Nebraska, on the 15th day of
November, 1996.
COMMERCIAL FEDERAL CORPORATION
By: /s/ William A. Fitzgerald
-----------------------------------------------
William A. Fitzgerald,
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
as of the dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ William A. Fitzgerald
- ------------------------- Principal Executive Officer November 15, 1996
William A. Fitzgerald and Director
Chairman of the Board and
Chief Executive Officer
*
- --------------------- Principal Financial Officer November 15, 1996
James A. Laphen
President, Chief Operating
Officer and Chief Financial
Officer
* Principal Accounting Officer November 15, 1996
- --------------------
Gary L. Matter
Senior Vice President,
Controller and Secretary
* Director November 15, 1996
- -----------------------
Talton K. Anderson
II-5
<PAGE>
* Director November 15, 1996
- -------------------
Robert F. Krohn
Director November __,1996
- -------------------
Charles M. Lillis
* Director November 15, 1996
- ------------------
Carl G. Mammel
* Director November 15, 1996
- ------------------
Robert S. Milligan
* Director November 15, 1996
- ------------------
James P. O'Donnell
* By: /s/ William A. Fitzgerald
---------------------------
William A. Fitzgerald
Attorney-in-Fact
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibits No. Description
- ------------ -----------
<S> <C>
1 Form of Purchase Agreement
4 Form of Indenture
* 5 Opinion of Housley Kantarian & Bronstein, P.C. regarding the
legality of securities being issued
12 Statement re: computation of ratio of earnings to fixed
charges
* 23(a) Consent of Housley Kantarian & Bronstein, P.C. (included in
Exhibit 5)
23(b) Consent of Deloitte & Touche LLP
* 24 Power of Attorney (reference is made to the signature page of
the Registration Statement)
25 Statement re: eligibility of trustee (bound separately)
- --------------------
* Previously filed.
- --------------------
</TABLE>
II-7
<PAGE>
EXHIBIT 1
$50,000,000 Aggregate Principal Amount
COMMERCIAL FEDERAL CORPORATION
% Subordinated Extendible Notes due 2006
PURCHASE AGREEMENT
__________________
, 1996
PIPER JAFFRAY INC.
ALEX. BROWN & SONS INCORPORATED
MONTGOMERY SECURITIES
c/o Piper Jaffray Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Commercial Federal Corporation, a Nebraska corporation (the "Company"),
proposes to issue and sell to you as underwriters (individually, as
"Underwriter" and, collectively, the "Underwriters") $50,000,000 aggregate
principal amount of its authorized but unissued % Subordinated Extendible Notes
due 2006 (the "Notes"), to be issued pursuant to an indenture (the "Indenture"),
to be dated as of November 15, 1996, between the Company and Harris Trust and
Savings Bank, as trustee (the "Trustee").
The Company hereby confirms its agreement with you with respect to the sale
of the Notes.
1. Registration Statement. A registration statement on Form S-3 (File No.
333-01831) with respect to the Notes, including a preliminary form of
prospectus, has been prepared by the Company in conformity with the Securities
Act of 1933, as amended (the "Act"), the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission; one or more amendments
thereto may have been or be so prepared and filed by the Company. Copies of
such registration statement and amendments and each related preliminary
prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus. If the Company has elected to
rely upon Rule 430A of the Rules and Regulations, it will prepare and file a
prospectus (or a term sheet meeting the requirements of Rule 434) pursuant to
Rule 424(b) (and Rule 434, if applicable) that discloses the information
previously omitted from the prospectus in reliance upon Rule 430A. Such
registration statement as amended at the time it is or was declared effective by
the Commission, and in the event of any amendment thereto after the effective
date and prior to the Closing Date (as hereinafter defined), such registration
statement as so amended (but only from and after the effectiveness of such
amendment), including financial statements and all exhibits thereto, documents
incorporated by reference therein pursuant to Item 12 of Form S-3 filed under
the Securities
<PAGE>
Exchange Act of 1934, as amended (the "Exchange Act"), on or before the date of
this Agreement and the information deemed to be part of the registration
statement at the time of effectiveness pursuant to Rules 430A(b) and 434(d) of
the Rules and Regulations, if applicable, is hereinafter called the
"Registration Statement." The prospectus included in the Registration Statement
at the time it is or was declared effective by the Commission is hereinafter
called the "Prospectus," except that if any prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations provided by
the Company for use with a prospectus subject to completion within the meaning
of Rule 434 in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Company with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other
prospectus provided to the Underwriters by the Company for use in connection
with the offering of the Notes (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or otherwise) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to the Underwriters by the Company for such
use. The term "Preliminary Prospectus" as used herein means any preliminary
prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or Rule 434 of the Rules and Regulations. Reference made
herein to any Preliminary Prospectus or Prospectus shall include all documents
incorporated by reference therein and shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or Prospectus,
as the case may be, and so incorporated by reference under the Exchange Act.
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriters as follows:
(a) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission nor have any proceedings been
instituted or, to the best of the Company's knowledge, threatened for that
purpose. Each Preliminary Prospectus, at the time of filing thereof, did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus made in reliance upon, and in conformity with, written
information furnished to the Company by you specifically for use in the
preparation thereof.
(b) As of the time the Registration Statement (or any post-effective
amendment thereto) is or was declared effective by the Commission, upon the
filing or first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus (including any term sheet meeting the requirements
of Rule 434)) and at the Closing Date, (i) the Registration Statement and the
Prospectus (in each case, as so amended and/or supplemented) will conform or
conformed in all material respects to the requirements of the Act, the Rules and
Regulations and the Trust Indenture Act and under the rules and regulations
thereunder, (ii) the Registration Statement (as so amended) will not or did not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) the Prospectus (as so supplemented) will not or did not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are or were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
such document made in reliance upon, and in conformity with, written information
furnished to the Company by you specifically for use in the preparation thereof.
(c) The documents of the Company incorporated by reference in the
Registration Statement and the Prospectus, when they were filed with the
Commission, conformed in all material respects to the
<PAGE>
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement and the Prospectus or
any further amendment or supplement thereto, when such documents are filed with
the Commission, will conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Nebraska, is duly registered as a
savings and loan holding company under Section 10 of the Home Owners' Loan Act,
as amended, and is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the ownership or leasing of properties
or the conduct of its business requires such qualification, except where failure
to be so qualified would not have a material adverse effect upon the Company's
business, condition (financial or otherwise) or properties. Each Significant
Subsidiary of the Company, as defined below, has been duly incorporated or
organized and is in good standing under the laws of its jurisdiction of
incorporation or organization and is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the ownership or
leasing of properties or the conduct of its business requires such
qualification, except where failure to be so qualified would not have a material
adverse effect upon such Significant Subsidiary's business, condition (financial
or otherwise) or properties. The "Significant Subsidiaries" of the Company are:
Commercial Federal Bank, a Federal Savings Bank (the "Bank"), duly organized and
validly existing as a federal savings bank chartered under the Home Owners Loan
Act, 12 U.S.C. (S) 1464; Commercial Federal Mortgage Corporation, a Nebraska
corporation; Commercial Federal Investment Services, Inc., a Nebraska
corporation; Commercial Federal Investment Corporation, a Nebraska corporation;
Commercial Federal Insurance Corporation, a Nebraska corporation; Commercial
Federal Service Corporation, a Nebraska corporation; and Commercial Marketing,
Inc., a Nebraska corporation. The subsidiaries of the Company which are not
Significant Subsidiaries are not individually or in the aggregate, material to
the financial condition, results of operations, business or business prospects
of the Company and its subsidiaries, taken as a whole. The Company and each of
its subsidiaries has all requisite power and authority (corporate and other) to
own its properties and conduct its business as it is currently being carried on
and as described in the Prospectus. The Bank is a member in good standing of
the Federal Home Loan Bank of Topeka, the Bank's savings accounts are insured
by the Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation ("FDIC") up to the maximum applicable amount in accordance with the
rules and regulations of the FDIC, and no proceedings for the termination or
revocation of such membership or insurance are pending, or to the knowledge of
the Company, contemplated. The Company owns all of the outstanding capital
stock of the Bank, free of any liens, claims charges or encumbrances. The
Company or one of its subsidiaries owns all of the outstanding capital stock of
the Company's subsidiaries, free of any liens, claims charges or encumbrances.
(e) Deloitte & Touche LLP, who certified the financial statements and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectus, are independent public accountants as required by
the Act and the Rules and Regulations.
(f) The consolidated financial statements of the Company and its
subsidiaries, together with the notes thereto, set forth or incorporated by
reference in the Registration Statement and the Prospectus comply in all
material respects with the requirements of the Act, the Rules and Regulations
and the Exchange Act and the rules and regulations of the Commission thereunder
and present fairly the financial position of the Company and its subsidiaries as
at the dates indicated and the results of its operations and
3
<PAGE>
changes in financial position for the periods therein indicated; said
consolidated financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and the
supporting schedules incorporated by reference in the Registration Statement
present fairly the information required to be stated therein. No other financial
statements or schedules are required to be included or incorporated by reference
in the Registration Statement or the Prospectus. The financial information
appearing in the Prospectus under the caption "Summary Consolidated Financial
Information" presents fairly the information purported to be shown therein at
the dates and for the periods indicated. The pro forma financial statements
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information set forth therein on a basis consistent with that
of the audited financial statements incorporated by reference therein, the
assumptions on which such pro forma financial statements have been prepared are
reasonable and are set forth in the notes thereto, and such pro forma financial
statements have been prepared, and the pro forma adjustments set forth therein
have been applied, in accordance with the applicable accounting requirements of
the Act and the Rules and Regulations, including, without limitation, Regulation
S-X promulgated by the Commission.
(g) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as otherwise disclosed
therein or in the documents incorporated therein by reference, (i) there has
been no material adverse change in the condition (financial or otherwise) of the
Company or its subsidiaries, or in the financial results, business affairs or
business prospects of the Company or its subsidiaries, whether or not arising in
the ordinary course of business, (ii) there have been no transactions entered
into by the Company or its Significant Subsidiaries which would materially
effect the Company or the Significant Subsidiaries, (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock or on any class of capital stock of a subsidiary,
except regular quarterly cash dividends declared by the Board of Directors of
the Company and paid by the Company in the ordinary course of business in
accordance with the dividend policy established by the Board of Directors, (iv)
neither the Company nor any subsidiary has incurred, other than in the ordinary
course of business, any material liabilities or obligations, direct or
contingent, and (v) there has not been (A) any change in the capital stock of
the Company or any subsidiary (except for options granted pursuant to or shares
of common stock issued pursuant to the employee benefit plans of, or as
compensation to the directors of, the Company and the Bank described in the
documents incorporated by reference in the Registration Statement, or any
issuance of options, warrants, convertible securities or other rights to
purchase capital stock of the Company or any subsidiary), or (B) any material
increase in the short-term or long-term debt (including capitalized lease
obligations) of the Company or any subsidiary except indebtedness and deposit
liabilities incurred by the Bank in the ordinary course of its banking business.
Neither the Company nor any subsidiary has any material contingent liabilities
which are not disclosed in the Prospectus or in the Registration Statement.
(h) Neither the Company nor any subsidiary of the Company is in violation
of its respective articles of incorporation, charter or bylaws or other
governing documents or in violation or default of any term of any contract,
license, indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any such subsidiary is a party or by which it
is bound, or to which any of the property or assets of the Company or any such
subsidiary is subject, where any such default, breach or violation would have,
individually or in the aggregate, a material adverse effect on the Company or
its subsidiaries, on the performance of this Agreement, on the performance of
the obligations under the Indenture, or on the Notes.
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture, the Notes and
this Agreement and to issue, sell and deliver the Notes in accordance with and
upon the terms and conditions set forth in this Agreement. All necessary
corporate proceedings of the Company have been duly taken to authorize the
execution, delivery and performance by the Company of the Indenture and this
Agreement and the issuance, sale and delivery
4
<PAGE>
by the Company of the Notes. The Indenture has been duly authorized, and when
executed and delivered by the Company, will be a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the rights of creditors
generally and by equitable principles. The Notes have been duly authorized and,
when executed by the Company and authenticated by the Trustee in accordance with
the Indenture and delivered pursuant to this Agreement, will be duly issued,
will constitute the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the rights of creditors generally and by equitable
principles, and will be entitled to the benefits of the Indenture. The Indenture
and the Notes conform in all material respects to the descriptions thereof
contained in the Prospectus.
(j) This Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or similar laws relating to or affecting the rights of creditors generally and
by equitable principles and except as obligations of the Company under the
indemnification provisions hereof may be limited under federal or state
securities laws.
(k) The execution, delivery and performance by the Company of the
Indenture and this Agreement and the consummation of the transactions
contemplated hereby and thereby, including the issuance, sale and delivery of
the Notes pursuant to this Agreement, will not (i) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default)
or require, except for such consents as have been obtained and are currently in
effect, consent under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to the terms of, any agreement, instrument, franchise,
license, permit or other instrument to which the Company or any of its
subsidiaries is a party or by which any of such companies or their respective
properties or assets may be bound or violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets,
which conflicts, breaches, defaults, violations or liens would, in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole, or (ii) violate or conflict with any provision of the
certificate of incorporation, charter, by-laws or other governing documents of
the Company or any of its subsidiaries. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of the Indenture or this Agreement by the Company and the
consummation of the transactions contemplated hereby and thereby, including the
issuance, sale and delivery of the Notes pursuant to this Agreement, except as
required by the registration under the Act of the Notes, the qualification of
the Indenture under the Trust Indenture Act, and the consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses and
permits as may be required under state securities or Blue Sky laws in connection
with the sale of the Notes.
(l) The authorized capital stock of the Company is as set forth under the
caption "Capitalization" in the Prospectus. All of the outstanding shares of
capital stock have been duly authorized, validly issued and are fully paid and
nonassessable. Neither the filing of the Registration Statement nor the
offering or sale of the Notes, as contemplated by this Agreement, gives rise to
any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of capital stock or other securities
of the Company. All of the issued and outstanding shares of
5
<PAGE>
capital stock of each subsidiary of the Company have been duly authorized,
validly issued and are fully paid and nonassessable.
(m) Neither the Company nor any subsidiary is in violation of any law,
ordinance, governmental rule or regulation or court decree to which it is
subject nor has it failed to obtain any license, certificate, permit, franchise
or other governmental authorization, registration, acceptance or approval
necessary to the ownership, leasing or operation of its property or to the
conduct of its business as it is currently being carried on and as described in
the Prospectus, which violation or failure to obtain would have a material
adverse effect on the condition (financial or otherwise) of the Company, or on
the financial results, business affairs or business prospects of the Company.
(n) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, or any arbitrator, now pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any subsidiary which is required to be disclosed in the Registration
Statement (other than as disclosed therein), the disposition of which would
result in any material adverse change in the condition (financial or otherwise)
of the Company or any subsidiary, or in the financial results, business affairs
or business prospects of the Company or any subsidiary, or the disposition of
which would materially and adversely affect the consummation of this Agreement.
(o) The Company maintains insurance of the type and in the amounts
generally deemed adequate for its business and consistent with insurance
maintained by similar companies in similar businesses.
(p) There are no contracts or other documents which are required to be
filed as exhibits to the Registration Statement by the Act or by the Rules and
Regulations which have not been so filed.
(q) The Company and its subsidiaries have good title to all properties
owned by them that are material to the Company and its subsidiaries taken as a
whole, in each case free and clear of all liens, encumbrances and defects,
except (i) as do not materially interfere with the use made of such properties,
(ii) referred to in the Registration Statement (including the notes to the
financial statements included or incorporated by reference therein), or (iii) as
could not reasonably be expected, singly or in the aggregate, to have a material
adverse effect on the business, results of operations, conditions (financial or
otherwise) or business prospects of the Company and the subsidiaries taken as a
whole.
(r) The Company has filed all federal, state, local and foreign income
and franchise tax returns required to be filed and has paid all taxes shown to
be due pursuant to such returns or any assessments with respect thereto.
(s) The Company and its Significant Subsidiaries have all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public, regulatory or governmental agencies
and bodies, material to the ownership of their respective properties and conduct
of their respective businesses as now being conducted and as described in the
Registration Statement and the Prospectus, and no such consent, approval,
authorization, order, registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus. The conduct of the business of the Company and
each of its Significant Subsidiaries is in compliance in all material respects
with all applicable federal, state, local and foreign laws and regulations,
except where failure to be so in compliance would not materially adversely
affect the condition, business or results of operation of the Company and its
subsidiaries taken as a whole.
(t) Neither the Company nor any of its officers, directors (as defined in
the Rules and Regulations) has taken or will take, directly or indirectly, prior
to the termination of the offering contemplated by this Agreement, any action
designed to stabilize or manipulate the price of any security of
6
<PAGE>
the Company, or which has caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any security of the Company, to facilitate the sale or resale of
any of the Notes.
(u) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offer and sale of
the Notes other than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act and the Rules and Regulations to be distributed
by the Company.
(v) The Company has complied with all the provisions of Florida Statutes
Section 517.075 (Chapter 92-198, Laws of Florida). Neither the Company, nor any
of its affiliates, does business with the government of Cuba or with any person
or affiliate located in Cuba.
3. Purchase, Sale and Delivery of Notes.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell the Notes, and each Underwriter agrees, severally and
not jointly, to purchase from the Company the aggregate principal amount of
Notes set forth opposite the name of each Underwriter in Schedule I hereto. The
purchase price for the Notes shall be _____% of the principal amount thereof.
The Notes will be delivered by the Company to you for the accounts of the
Underwriters against payment of the purchase price therefor by certified or
official bank check or checks for next day funds, payable to the order of the
Company at the offices of Piper Jaffray Inc., Piper Jaffray Tower, 222 South
Ninth Street, Minneapolis, Minnesota 55402, or such other location as may be
mutually acceptable, at 9:00 a.m., Minneapolis time, on the third (or if the
Notes are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act,
after 4:30 p.m. Eastern time on the date of this Agreement, the fourth) full
business day following the date hereof, or at such other time as you and the
Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, the time
and date of delivery being herein referred to as the "Closing" and the "Closing
Date," respectively. The Notes, in definitive form (unless otherwise requested
by you) and in the denominations and registered in the names as you may request
upon at least two business days' prior notice to the Company, will be made
available for checking and packaging at the offices of Piper Jaffray Inc., Piper
Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402, or such
other location as may be mutually acceptable, at least one business day prior to
the Closing Date.
(b) It is understood that the Underwriters are to make a public offering
of the Notes as soon as the Underwriters deem it advisable to do so. The Notes
are to be initially offered to the public at the initial public offering price
set forth in the Prospectus. The Underwriters may from time to time thereafter
change the public offering price and other selling terms.
4. Covenants. The Company covenants with the Underwriters as follows:
(a) If the Registration Statement has not already been declared effective
by the Commission, the Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to become
effective as promptly as possible. The Company will notify you immediately, and
with respect to (ii) through (v) below shall confirm the notice in writing, (i)
of the effectiveness of the Registration Statement and any post-effective
amendment thereto, (ii) of the filing of any supplement to the Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), (iii) of the receipt of any comments from the Commission, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information and
(v) of the issuance by the Commission of any stop order
7
<PAGE>
suspending the effectiveness of the Registration Statement, of the suspension of
the qualification of the Notes for offering or sale in any jurisdiction, and of
the initiation of any proceedings for any of the foregoing purposes. The Company
will make every reasonable effort to prevent the issuance of any stop order or
suspension of qualification and, if any such stop order or suspension of
qualification is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) The Company will give you notice of its intention to file any
amendment to the Registration Statement (including any post-effective amendment)
or supplement to the Prospectus (including any revised prospectus which the
Company proposes for use by the Underwriters in connection with the offering of
the Notes which differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) or Rule 434 of the
Rules and Regulations), will furnish the Underwriters with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which you or counsel for the
Underwriters shall reasonably object.
(c) The Company will deliver to you at least two signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith) as you may reasonably request and will also
deliver to you a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits).
(d) The Company will furnish to you, from time to time during the period
when the Prospectus is required to be delivered under the Act, such number of
copies of the Prospectus (as amended or supplemented) as you may reasonably
request for the purposes contemplated by the Act or the Rules and Regulations.
(e) If any event shall occur as a result of which it is necessary, in the
written opinion of counsel for the Underwriters, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, the Company
will forthwith amend or supplement the Prospectus (in form and substance
reasonably satisfactory to counsel for the Underwriters) so that as a result, as
so amended or supplemented, the Prospectus will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a purchaser, not misleading, and the Company will furnish to
the Underwriters such number of copies of such amendment or supplement as they
may reasonably request.
(f) The Company will use its best efforts to qualify the Notes for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as you may reasonably designate; provided
that no such qualification shall be required in any jurisdiction where, as a
result thereof, the Company would become subject to service of general process
or to qualification to do business as a foreign corporation. In each
jurisdiction in which the Notes have been so qualified, the Company will file
such statements and reports as may be required to be filed by it by the laws of
such jurisdiction to continue such qualification in effect for a period of not
less than one year from the effective date of the Registration Statement.
(g) As soon as practicable, but not later than eighteen months after the
"effective date of the Registration Statement" (as defined in Rule 158(c) of the
Rules and Regulations), the Company will make generally available to its
security holders an earnings statement (which need not be audited) complying
with Section 11(a) of the Act and the Rules and Regulations (including at the
option of the Company Rule 158).
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(h) The Company will use the net proceeds received by it from the sale of
the Notes in the manner specified in the Prospectus under the caption "Use of
Proceeds."
(i) The Company will not claim the benefit of any usury laws against any
holder of the Notes.
(j) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule 430A or
of the Rules and Regulations, then the Company will prepare, and file or
transmit for filing with the Commission within the time period required by and
in accordance with such Rule 430A, Rule 424(b) and Rule 434, if applicable, of
the Rules and Regulations, copies of an amended Prospectus (or a term sheet
within the meaning of Rule 434 of the Rules and Regulations), or, if required by
such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(k) For so long as any of the Notes remain outstanding, the Company will
furnish to the Underwriters, copies of all annual reports, quarterly reports and
current reports filed by the Company with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar forms as may be designated by the Commission, and of
such other documents, proxy statements, reports and information as are furnished
by the Company to its stockholders generally.
(l) The Company has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Notes.
(m) Except pursuant to this Agreement, the Company has not incurred any
liability for any finder's or broker's fee or agent's commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(n) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is prevented from becoming effective under the
provisions of Section 8(a) hereof or is terminated, will pay all costs and
expenses incident to the performance of its obligations hereunder, including,
without limitation, (a) all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the issuance, transfer and
delivery to the Underwriters of the Notes, (b) all expenses and fees (including,
without limitation, fees and expenses of the Company's accountants and counsel)
in connection with the preparation, printing, filing, delivery and shipping of
the Registration Statement (including the financial statements therein and all
schedules, amendments and exhibits thereto), each Preliminary Prospectus, the
Prospectus and any amendment or supplement thereto, and the printing, delivery
and shipping of this Agreement and other underwriting documents including Blue
Sky memoranda and any legal investment survey requested by the Underwriters, and
the Indenture, (c) all filing fees and fees and disbursements of counsel to the
Underwriters incurred in connection with the qualification of the Notes for
offering and sale under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section 4(f) hereof,
(d) the filing fee of the National Association of Securities Dealers, Inc. for
review of underwriting arrangements, (e) the fees and expenses of the Trustee
under the Indenture, (f) rating agency fees, if any, (g) all other costs and
expenses of the Company incident to the offer and sale of the Notes hereunder
that are not otherwise specifically provided for herein. If the sale of the
Notes provided for herein is not consummated by reason of action by the Company
pursuant to Section 8(a) hereof which prevents this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder, or
because any other condition of your obligations hereunder required to be
fulfilled by the Company is not fulfilled, the Company shall reimburse the
Underwriters for all out-of-pocket disbursements, including, without limitation,
the fees and disbursements of counsel for the Underwriters, expenses of airfare,
lodging and food and other reasonable expenses incurred by the
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Underwriters in connection with its investigation, preparation to market and
marketing of the Notes and in contemplation of performing their obligations
hereunder. The Company shall not in any event be liable to the Underwriters for
loss of anticipated profits from the transactions covered by this Agreement.
5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
the Closing Date (as if made at such Closing Date), of and compliance with, the
representations, warranties and agreements of the Company contained herein, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m., Minneapolis time, on the date hereof, or such later time and date as
the Underwriters shall approve and all filings required by Rule 424, 430A and
434 of the Rules and Regulations shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereof shall have been issued under the Act; no proceedings for the issuance of
such an order shall be pending or threatened; and any request of the Commission
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your reasonable
satisfaction.
(b) No Underwriter shall have advised the Company that the Registration
Statement or the Prospectus, or any amendment thereof or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), contains an untrue statement of a fact which, in your reasonable
opinion, is material or omits to state a fact which, in your opinion, is
material and is required to be stated therein or necessary to make the
statements therein not misleading, and such misstatement or omission has not
been corrected.
(c) Except as contemplated or disclosed in the Prospectus or the
Registration Statement, subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, the Company
and its subsidiaries shall not have incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with respect
to its capital stock, except regular quarterly cash dividends declared by the
Board of Directors of the Company and paid by the Company in the ordinary course
of business in accordance with the dividend policy established by the Board of
Directors; and there shall not have been any change in the capital stock of the
Company or its subsidiaries (except for the issuance of shares pursuant to the
employee benefit plans of, or as compensation to the directors of, the Company
and the Bank) or any material increase in the short-term or long-term debt,
including capitalized lease obligations, of the Company or its subsidiaries
(except such increases as are incurred in the ordinary course of business and
are not material to the condition, financial or otherwise, of the Company and
its subsidiaries considered as a whole), or any issuance of options, warrants,
convertible securities or other rights to purchase capital stock of the Company
or the subsidiaries (except for securities granted pursuant to the Company's
employee benefit plans), or any material adverse change in the condition
(financial or otherwise) of the Company or the subsidiaries, or in the financial
results, business affairs or business prospects of the Company or the
subsidiaries that, in your judgment, makes it impractical or inadvisable to
offer or deliver the Notes on the terms and in the manner contemplated in the
Prospectus.
(d) On Closing Date there shall have been furnished to the Underwriters,
the opinion of Housley Kantarian and Bronstein, P.C., special counsel for the
Company, dated the Closing Date to the effect set forth in Appendix A.
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(e) On the Closing Date there shall have been furnished to the
Underwriters, the opinion of Fitzgerald, Schorr, Barmettler & Brennan, counsel
for the Company, dated the Closing Date and in form and to the effect that:
(i) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of
Nebraska. The Company is duly registered as a savings and loan
holding company under Section 10 of the Home Owner's Loan Act,
as amended ("HOLA"). The Bank has been duly organized and is
validly existing as a federal savings bank chartered under
HOLA. Each of the Significant Subsidiaries has each been duly
organized and is validly existing as a corporation in good
standing under the laws of the state of its jurisdiction. The
Company and each of the Significant Subsidiaries has full
corporate power and authority to own its properties and
conduct its business as it is currently being carried on and
as described in the Prospectus. The Company and each of the
Significant Subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or lease of property requires such qualification,
other than jurisdictions in which the failure to so qualify,
considering all such cases in the aggregate, would not have a
material adverse effect on the Company.
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization." All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. All of
the outstanding capital stock of the Bank is owned by the
Company, and such capital stock is not subject to any security
interest, other encumbrance or adverse claim.
(iii) All of the issued and outstanding shares of the Significant
Subsidiaries have been duly and validly authorized and issued,
are fully paid and nonassessable. All such shares of the
Significant Subsidiaries other than the Bank are owned by the
Bank free and clear of all perfected and, to the best of such
counsel's knowledge, other liens, encumbrances, equities,
claims, security interests, voting trusts or other defects of
title whatsoever.
(iv) The Indenture has been duly and validly authorized, executed
and delivered by the Company and constitutes a valid and
binding instrument of the Company, enforceable against the
Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws relating to or
affecting the rights of creditors generally and by equitable
principles. The Notes being delivered on the Closing Date have
been duly and validly authorized, and when authenticated by
the Trustee in accordance with the Indenture and delivered
pursuant to the Agreement will be duly issued, will constitute
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as
the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
relating to or affecting the rights of creditors generally and
by equitable principles, and except as to those provisions
relating to waivers of stay or extension laws as to which such
counsel expresses no opinion, and will be entitled to the
benefits of the Indenture.
(v) The Agreement has been duly authorized, executed and delivered
by the Company.
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<PAGE>
(vi) To the best of such counsel's knowledge, there are no legal or
governmental actions, suits or proceedings pending or
threatened against the Company or any of its subsidiaries
which are required to be described in the Prospectus which are
not described as required.
(vii) To the best of such counsel's knowledge, no holders of
securities of the Company have rights which have not been
waived to the registration of shares of common stock of the
Company or other securities, because of the filing of the
Registration Statement by the Company or the offering
contemplated hereby.
(viii) To the best of such counsel's knowledge, neither the Company
nor any of the Significant Subsidiaries is in violation of its
articles of incorporation, charter or bylaws or in default
under any material contract, license, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument
to which the Company or any such Significant Subsidiary is a
party or by which it is bound, or to which any of the property
or assets of the Company or any Significant Subsidiary is
subject, which violation or default would have a material
adverse effect on the Company.
(ix) The execution and delivery by the Company of, and performance
by the Company of its agreements in, the Agreement, the
Indenture and the consummation of the transactions
contemplated thereby, including the issuance, sale and
delivery of the Notes pursuant to the Agreement, will not
result in any violation of the provisions of the articles of
incorporation or bylaws of the Company
(f) On the Closing Date, there shall have been furnished to the
Underwriters, such opinion or opinions from Dorsey & Whitney LLP, counsel for
the Underwriters, dated such Closing Date and addressed to you, with respect to
the incorporation of the Company, the validity of the Notes, the Registration
Statement, the Prospectus and other related matters as you may reasonably
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(g) On the Closing Date the Underwriters, shall have received from
Deloitte & Touche LLP, independent certified public accountants, a letter dated
the Closing Date, in form and substance satisfactory to you, to the effect that
(i) they are independent public accountants with respect to the Company within
the meaning of the Act and the Rules and Regulations and are in compliance with
the applicable requirements relating to the qualifications of accountants under
Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date
of such letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date of
such letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the letter
to be so delivered on the Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter.
(h) On the Closing Date there shall have been furnished to the
Underwriters, a certificate, dated the Closing Date and addressed to you and
signed on behalf of the Company by its President or its Chief Executive Officer
and its Vice President, Secretary and Treasurer, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the
Closing Date, and the Company has complied
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<PAGE>
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement or any amendment thereof or supplement thereto has
been issued, and no proceeding for that purpose has been
instituted or, to the best of their knowledge, is threatened,
by the Commission or any state regulatory body; and
(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments
thereof or supplements thereto, and (A) neither the
Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, contains any untrue statement
of a material fact or omits to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, (B) since the effective
date of the Registration Statement there has occurred no event
required to be set forth in an amended or supplemented
prospectus which has not been so set forth, (C) subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as
disclosed or incorporated by reference therein, neither the
Company nor any of its subsidiaries has incurred any material
liability or obligation, direct or contingent, or entered into
any material transaction, whether or not in the ordinary
course of business, or declared or paid any dividend or made
any distribution of any kind with respect to its capital
stock, except regular quarterly cash dividends declared by the
Board of Directors of the Company and paid by the Company in
the ordinary course of business in accordance with the
dividend policy established by the Board of Directors, and
there has not been any change in the capital stock of the
Company (except for the issuance of shares upon exercise of
outstanding stock options), or any material increase in the
short-term debt or long-term debt (including capitalized lease
obligations) of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase
capital stock of the Company (except for securities granted
pursuant to or shares of common stock issued pursuant to the
employee benefit plans of, or as compensation to the directors
of, the Company and the Bank), or any material adverse change
in the condition (financial or otherwise) of the Company, or
in the financial results, business affairs or business
prospects of the Company, and the Company has not sustained
any material loss or damage to its property or material
interference with its business, whether or not any of the
foregoing is insured, and (D) except as disclosed in the
Prospectus, there is not pending or threatened or, to their
knowledge, contemplated, any action, suit, proceeding or
investigation before or by any court or governmental agency or
body, or any arbitrator, the disposition of which would be
reasonably likely to result in any material adverse change in
the condition (financial or otherwise) of the Company, or in
the financial results, business affairs or business prospects
of the Company.
(i) The Notes shall be tendered for delivery in accordance with the terms
and provisions of this Agreement.
(j) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and certificates as they may reasonably require
for the purpose of enabling them to pass upon the issuance and sale of the Notes
as herein contemplated and related proceedings, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained.
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All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and counsel for the Underwriters in all material
respects. All statements contained in any certificate, letter or other document
delivered pursuant hereto by or on behalf of the Company shall be deemed to
constitute representations and warranties of the Company and not the person
signing any such document. The Company will furnish you with such conformed
copies of such opinions, certificates, letters and other documents as you shall
reasonably request. The Underwriters may waive in writing the performance of any
one or more of the conditions specified in this Section 5 or extend the time for
their performance.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
against any losses, claims, damages, liabilities or expenses, joint or several,
to which such Underwriter may become subject, under the Act or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including the information deemed to be
a part of the Registration Statement at the time of effectiveness pursuant to
Rule 430A and Rule 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability, expense or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any preliminary prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity with, written
information furnished to the Company by the Underwriters, specifically for use
in the preparation thereof; and provided further that the Company shall not be
liable to any Underwriter under the indemnity agreement in this subsection (a)
with respect to any Preliminary Prospectus to the extent that any such loss,
claim, damage or liability of such Underwriter results from the fact that such
Underwriter sold Notes to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus or a
copy of the Prospectus as then amended or supplemented in any case where such
delivery is required by the Act if the Company has previously furnished copies
thereof to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus or the Prospectus, as the case may be,
which was corrected in the Prospectus (or the Prospectus as amended or
supplemented).
(b) Each Underwriter agrees to indemnify and hold harmless the Company
against any losses, claims, damages, liabilities or expenses, to which the
Company may become subject, under the Act or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent of
such Underwriter), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that the untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity with, written
information
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<PAGE>
furnished to the Company by such Underwriter, specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under paragraph (a) or
(b) above of notice of the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such paragraph, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve such indemnifying party from any liability which it may have
otherwise than on account of this indemnity agreement. In case any such action
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it shall wish jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such paragraph above for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that if, in the sole judgment of the indemnified party, it is advisable
for the indemnified party to be represented by separate counsel other than
counsel for the indemnifying party, the indemnified party shall have the right
to employ a single counsel to represent the indemnified party, in which event
the fees and expenses of such separate counsel shall be borne by the
indemnifying party. An indemnifying party shall not be obligated under any
settlement agreement relating to any action under this Section 6 to which it has
not agreed in writing.
(d) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under paragraph (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) above, (i) in the proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Notes or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in the proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in the losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bears to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent the
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this paragraph (d)
were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
first sentence of this paragraph (d). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this paragraph (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this paragraph (d). Notwithstanding the provisions of this paragraph (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
the Underwriter has otherwise been
15
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required to pay by reason of the untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
this consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Underwriters
and the Company contained in Section 6 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof, or the Company or any of its
officers, directors or any controlling persons, and shall survive delivery of,
and payment for, the Notes to and by the Underwriters hereunder.
8. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m., Minneapolis
time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective date of the
Registration Statement as you in your discretion shall first release the Notes
for sale to the public. For the purpose of this Section 8, the Notes shall be
deemed to have been released for sale to the public upon release by you of the
publication of a newspaper advertisement relating thereto or upon release by you
of telexes offering the Notes for sale to securities dealers, whichever shall
first occur. By giving notice as hereinafter specified before the time this
Agreement becomes effective, the Underwriters or the Company may prevent this
Agreement from becoming effective without liability of any party to any other
party, except that the provisions of this Section 8 and Section 4(n) and Section
6 hereof shall at all times be effective.
(b) The Underwriters, shall have the right to terminate this Agreement,
by notice to the Company, at any time at or prior to the Closing Date (i) if
there has been, since the date of this Agreement or since the respective dates
as of which information is given in the Registration Statement, any material
adverse change in the condition (financial or otherwise) of the Company, or in
the financial results, business affairs or business prospects of the Company,
whether or not arising in the ordinary course of business, or (ii) if the
Company shall have failed, refused or been unable, at or prior to such Closing
Date, to perform any agreement on its part to be performed hereunder, or (iii)
if any other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company is not fulfilled, or (iv) if there has occurred any
material adverse change in the financial markets in the United States or any
outbreak or the escalation of major hostilities involving the United States or
the declaration by the United States of a national emergency, war, or other
calamity or crisis, the effect of which is such as to make it, in your
reasonable judgment, impracticable or inadvisable to market the Notes or to
enforce contracts for the sale of the Notes, or (v) if trading in the Notes has
been suspended by the Commission, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or by order of
the Commission or any other
16
<PAGE>
governmental authority, or if a banking moratorium has been declared by either
Federal, New York or Nebraska authorities. If this Agreement is terminated
pursuant to this Section 8(b), such termination shall be without liability of
any party to any other party except that the provisions of Section 4(n) and
Section 6 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in the Section, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company elects to prevent this Agreement from becoming effective, you shall be
notified by the Company by telephone or telegram, confirmed by letter.
10. Notices. Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing or by telegraph an, if to the
Underwriters shall be mailed, telegraphed or delivered to the Underwriters c/o
Piper Jaffray Inc., Piper Jaffray Tower, 222 South Ninth Street, Minneapolis,
Minnesota 55402; if to the Company, shall be mailed, telegraphed or delivered to
it at 2120 South 72nd Street, Omaha, Nebraska 68124, Attention: Chief Executive
Officer, with a copy to Housley Kantarian & Bronstein, P.C., 1220 19th Street,
N.W., Suite 700, Washington, D.C. 20036, Attention: Gary R. Bronstein. All
notices given by telegram shall be promptly confirmed by letter. Any party to
this Agreement may change the address for notices by sending to the parties to
this Agreement written notice of a new address for that purpose.
11. Information Furnished by Underwriters. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in any
Preliminary Prospectus or the Prospectus, and, to the extent the same relate to
the Underwriters, in any Blue Sky Application, constitute the written
information furnished by or on behalf of the Underwriters referred to in Section
2 and Section 6 hereof.
12. Parties. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in
this Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. The term "successors and
assigns" as used herein shall not include any purchaser, as the purchaser, of
any of the Notes from any of the Underwriters.
13. Governing Law. This Agreement shall be governed by the laws of the
State of Minnesota.
17
<PAGE>
Please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
COMMERCIAL FEDERAL CORPORATION
By:
- ---------------- ---------------------------
President
CONFIRMED
as of the date first above mentioned:
By: PIPER JAFFRAY INC.
By:
----------------------------------------------
Managing Director
By: ALEX. BROWN & SONS INCORPORATED
By:
---------------------------------
By: MONTGOMERY SECURITIES
By:
----------------------------------------------
Vice President
18
<PAGE>
SCHEDULE I
Aggregate Principal Amount
Underwriter of Notes
-----------
Piper Jaffray Inc. .................................................... $
Alex. Brown & Sons Incorporated...................
Montgomery Securities..................................................
Total.............................................$[50,000,000]
- ----------------------
19
<PAGE>
Appendix A
----------
The opinion of Housley Kantarian and Bronstein, P.C., special counsel for
the Company, to be delivered pursuant to Section 5(d) of the Purchase Agreement,
shall be to the following effect (all terms used herein which are defined in the
Agreement have the meanings set forth therein):
(i) The Notes and the Indenture conform to the description thereof
contained in the Prospectus.
(ii) The Registration Statement has become effective under the Act
and the Indenture has been qualified under the Trust Indenture Act, and, to
our actual knowledge, no stop order suspending the effectiveness of the
Registration Statement or the qualification of the Indenture has been
issued and no proceeding for that purpose has been instituted or threatened
by the Commission. The Prospectus has been filed in the manner and within
the time period required by Rule 424(b) of the Act.
(iii) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (except as to financial statements,
notes to financial statements, financial tables and other financial and
statistical data included or incorporated by reference therein, as to which
we express no opinion), comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations, as of their
respective effect or issue dates.
(iv) The documents incorporated by reference in the Registration
Statement and the Prospectus (except as to financial statements, notes to
financial statements, financial tables and statistical data included
therein, as to which we express no opinion) comply as to form in all
material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder, as of the respective effect
or issue dates.
(v) The Bank is a member in good standing of the Federal Home Loan
Bank of Topeka and is an institution with deposit accounts insured by the
FDIC to the full extent allowed by law and, to our actual knowledge, no
proceedings for the termination or revocation of such insurance are pending
or threatened.
(vi) To our actual knowledge, there are no (a) statutes or legal or
governmental proceedings required to be described in the Prospectus that
are not described as required, or (b) contracts or other documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described and filed as required.
(vii) To our actual knowledge, the execution, delivery and
performance of the Agreement, the Notes and the Indenture and the issuance
and sale of the Notes, including the issuance, sale and delivery of the
Notes pursuant to the Agreement, will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material property or assets of the
Company or any Significant Subsidiary pursuant to, any statute, contract,
license, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument known to us to which the Company or any such
Significant Subsidiary is a party or by which it is bound or to which any
of the material property or assets of the Company or any such Significant
Subsidiary is subject, or result in any violation of the provisions of the
articles of incorporation, charter or bylaws of the Company or any such
Significant Subsidiary or of any applicable law, administrative regulation
or administrative or court decree known to us the violation of which would
have a material adverse affect on the Company or any Significant
Subsidiary; provided, however, that with respect to this paragraph (vii),
we express no opinion with respect to federal or state securities laws.
20
<PAGE>
(viii) To our actual knowledge, there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic
or foreign, or any arbitrator, now pending or threatened against or
affecting the Company or any of its Significant Subsidiaries which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), and other than those which individually or in the
aggregate would not have a material adverse effect on the Company or which
would not materially and adversely affect the consummation of the
Agreement. For purposes of this paragraph (viii), we have not reviewed the
plaintiff or defendant indices of state or federal courts.
(ix) No authorization, approval, consent or order of, or filing
with, any court or governmental authority or agency is necessary in
connection with the execution, delivery and performance of the Agreement,
the Indenture or the Notes or for the issuance or sale of the Notes under
the Agreement, except such as may be required under the Act or the Rules
and Regulations and the Trust Indenture Act, such as may be required under
the securities laws of any state or other jurisdiction and such as may be
described in the Prospectus.
In a separate letter, Housley Kantarian and Bronstein, P.C. shall
state as follows: Although we cannot guarantee, and do not assume
responsibility for, the accuracy, completeness and fairness of the
statements contained in the Registration Statement and the Prospectus, and
although we have not undertaken to verify independently such statements for
purposes of the opinion expressed in this paragraph (x), during the course
of our participation in the preparation of the Registration Statement and
Prospectus, conferences with certain officers, employees and other
representatives of, and certain representatives of the independent public
accountants for, the Company and the Significant Subsidiaries as well as
our review of various documents and other information deemed relevant
thereto, nothing has come to our attention that would lead us to believe
(A) that the Registration Statement, (except as to financial statements,
notes to financial statements, financial tables and other financial and
statistical data included or incorporated by reference therein and the
Trustee's Statement and Qualification under the Trust Indenture Act
(Form T-1) filed as an exhibit to the Registration Statement, as to which
we express no opinion), at the time it became effective, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or (B) that the Prospectus (except as to financial
statements, notes to financial statements, financial tables and other
financial and statistical data included or incorporated by reference
therein and the Trustee's Statement and Qualification under the Trust
Indenture Act (Form T-1) filed as an exhibit to the Registration Statement,
as to which we express no opinion), as of its date or on the date hereof,
included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
21
<PAGE>
EXHIBIT 4
Commercial Federal Corporation
as Issuer
to
Harris Trust and Savings Bank
as Trustee
------------------------------
INDENTURE
------------------------------
Dated as of November__, 1996
Subordinated Extendible Notes due 2006
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE ONE
<S> <C>
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............... 1
Section 101. Definitions............................................. 1
Section 102. Compliance Certificates and Opinions.................... 11
Section 103. Form of Documents Delivered to Trustee.................. 11
Section 104. Acts of Holders......................................... 12
Section 105. Notices, Etc. to Trustee and Company.................... 13
Section 106. Notice to Holders of Notes; Waiver...................... 14
Section 107. Language of Notices..................................... 14
Section 108. Conflict with Trust Indenture Act....................... 14
Section 109. Effect of Headings and Table of Contents................ 15
Section 110. Successors and Assigns.................................. 15
Section 111. Separability Clause..................................... 15
Section 112. Benefits of Indenture................................... 15
Section 113. Governing Law........................................... 15
Section 114. Legal Holidays.......................................... 15
<CAPTION>
ARTICLE TWO
<S> <C>
FORM OF NOTES......................................................... 16
Section 201. Forms Generally......................................... 16
Section 203. Form of Reverse of Note................................. 19
Section 204. Form of Trustee's Certificate of Authentication......... 23
<CAPTION>
ARTICLE THREE
<S> <C>
THE NOTES............................................................. 24
Section 301. Title and Terms......................................... 24
Section 302. Currency; Denominations................................. 24
Section 303. Execution, Authentication, Delivery and Dating.......... 25
Section 304. Temporary Notes......................................... 25
Section 305. Registration, Transfer and Exchange..................... 26
Section 306. Mutilated, Destroyed, Lost and Stolen Notes............. 27
Section 307. Payment of Interest; Rights to Interest Preserved....... 28
Section 308. Persons Deemed Owners................................... 29
Section 309. Cancellation............................................ 30
Section 310. Authentication and Delivery of Original Issue........... 30
Section 311. Computation of Interest................................. 30
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
ARTICLE FOUR
<S> <C>
SATISFACTION AND DISCHARGE............................................ 30
Section 401. Satisfaction and Discharge of Indenture................. 30
Section 402. Application of Trust Money.............................. 32
<CAPTION>
ARTICLE FIVE
<S> <C>
REMEDIES.............................................................. 32
Section 501. Events of Default....................................... 32
Section 502. Acceleration of Maturity; Rescission and Annulment...... 34
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................ 35
Section 504. Trustee May File Proofs of Claim........................ 36
Section 505. Trustee May Enforce Claims without Possession of Notes.. 37
Section 506. Application of Money Collected.......................... 37
Section 507. Limitations on Suits.................................... 38
Section 508. Unconditional Right of Holders to Receive Principal
and Interest........................................... 38
Section 509. Restoration of Rights and Remedies...................... 39
Section 510. Rights and Remedies Cumulative.......................... 39
Section 511. Delay or Omission Not Waiver............................ 39
Section 512. Control by Holders of Notes............................. 39
Section 513. Waiver of Past Defaults................................. 40
Section 514. Waiver of Stay or Extension Laws........................ 40
<CAPTION>
ARTICLE SIX
<S> <C>
THE TRUSTEE........................................................... 41
Section 601. Certain Duties and Responsibilities..................... 41
Section 602. Notice of Defaults...................................... 42
Section 603. Certain Rights of Trustee............................... 42
Section 604. Not Responsible for Recitals or Issuance of Notes....... 44
Section 605. May Hold Notes.......................................... 44
Section 606. Money Held in Trust..................................... 45
Section 607. Compensation and Reimbursement.......................... 45
Section 608. Corporate Trustee Required; Eligibility................. 46
Section 609. Resignation and Removal; Appointment of Successor....... 46
Section 610. Acceptance of Appointment by Successor.................. 47
Section 611. Merger, Conversion, Consolidation or Succession to
Business............................................... 48
Section 612. Appointment of Authenticating Agent..................... 48
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
ARTICLE SEVEN
<S> <C>
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................... 50
Section 701. Company to Furnish Trustee Names and Addresses of
Holders................................................ 50
Section 702. Preservation of Information; Communications to
Holders................................................ 50
Section 703. Reports by Trustee...................................... 51
Section 704. Reports by Company...................................... 51
<CAPTION>
ARTICLE EIGHT
<S> <C>
CONSOLIDATION, MERGER AND SALES.................................. 52
Section 801. Company May Consolidate, Etc., Only on Certain Terms.... 52
Section 802. Successor Person Substituted for Company................ 53
<CAPTION>
ARTICLE NINE
<S> <C>
SUPPLEMENTAL INDENTURES............................................... 53
Section 901. Supplemental Indentures without Consent of Holders...... 53
Section 902. Supplemental Indentures with Consent of Holders......... 54
Section 903. Execution of Supplemental Indentures.................... 55
Section 904. Effect of Supplemental Indentures....................... 55
Section 905. Reference in Notes to Supplemental Indentures........... 55
Section 906. Effect on Senior Indebtedness........................... 56
<CAPTION>
ARTICLE TEN
<S> <C>
COVENANTS............................................................. 56
Section 1001. Payment of Principal and Interest...................... 56
Section 1002. Maintenance of Office or Agency........................ 56
Section 1003. Money for Note Payments to Be Held in Trust............ 56
Section 1004. Corporate Existence.................................... 58
Section 1005. Bank Existence; Maintenance of Status as an Insured
Institution........................................... 58
Section 1006. Maintenance of Properties.............................. 58
Section 1007. Restrictions on Dividends, Redemptions and Other
Payments.............................................. 59
Section 1008. Insurance.............................................. 59
Section 1009. Payment of Taxes and Other Claims...................... 60
Section 1010. Books and Records...................................... 60
Section 1011. Statement by Officers as to Default.................... 60
Section 1012. Waiver of Certain Covenants............................ 61
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
ARTICLE ELEVEN
<S> <C>
REDEMPTION OF NOTES AT COMPANY'S OPTION............................... 61
Section 1101. Right of Redemption.................................... 61
Section 1102. Election to Redeem; Notice to Trustee.................. 61
Section 1103. Notice of Redemption................................... 61
Section 1104. Deposit of Redemption Price............................ 62
Section 1105. Notes Payable on Redemption Date....................... 62
<CAPTION>
ARTICLE TWELVE
<S> <C>
REDEMPTION AT THE OPTION OF HOLDERS................................... 63
Section 1201. Redemption Option upon an Interest Rate Reset Notice... 63
Section 1202. Redemption Procedure at Holder's Option Upon an
Interest Reset Date................................... 63
Section 1203. Withdrawal............................................. 64
Section 1204. Deposit of Redemption Price............................ 64
Section 1205. Notes Payable on Redemption Date....................... 64
Section 1206. Notes Redeemed in Part................................. 64
<CAPTION>
ARTICLE THIRTEEN
<S> <C>
SUBORDINATION OF NOTES................................................ 65
Section 1301. Notes Subordinated to Senior Indebtedness.............. 65
Section 1302. Subrogation............................................ 67
Section 1303. Obligation of Company Unconditional.................... 67
Section 1304. Payments on Notes Permitted............................ 68
Section 1305. Effectuation of Subordination by Trustee............... 68
Section 1306. Knowledge of Trustee................................... 68
Section 1307. Trustee May Hold Senior Indebtedness................... 69
Section 1308. Rights of Holders of Senior Indebtedness Not Impaired.. 69
Section 1309. Notice to Trustee...................................... 69
</TABLE>
-iv-
<PAGE>
INDENTURE, dated as of November__, 1996 (the "Indenture"), between
Commercial Federal Corporation, a corporation duly organized and existing under
the laws of the State of Nebraska (hereinafter called the "Company"), having
executive offices located at 2120 South 72nd Street, Omaha, Nebraska 68101 and
Harris Trust and Savings Bank, an Illinois banking corporation (hereinafter
called the "Trustee"), having its Corporate Trust Office located at 111 West
Monroe Street, Chicago, Illinois 60603.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Subordinated Extendible Notes due
2006 (hereinafter called the "Notes"), to be issued in such amount and to have
such provisions as are hereinafter set forth. All things necessary to make this
Indenture a valid agreement of the Company, in accordance with its terms, have
been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders (as hereinafter defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders from time to time
of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in this Indenture or unless the
context otherwise requires, for all purposes of this Indenture:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
-1-
<PAGE>
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted in the United States at the date of such computation;
(d) the words "herein", "hereof", "hereto" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(e) the word "or" is always used inclusively (for example, the phrase "A or
B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"Acceleration Event" has the meaning specified in Section 502.
"Act", when used with respect to any Holders, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Alternative Comparable Maturity Treasury Rate" means the average yields to
maturity of the daily closing bids (or less frequently if daily quotations shall
not be available), quoted by at least three recognized U.S. Government
securities dealers selected by the Company, for all marketable U.S. Treasury
securities with a maturity of not less than three (3) months shorter nor more
than three (3) months longer than the applicable Comparable Maturity from any
November 1 preceding an Interest Reset Date (other than securities which can, at
the option of the holder, be surrendered at face value in payment of any Federal
estate tax) for the most recent five (5) consecutive business days during which
there had been at least three (3) days on which daily closing bids were quoted
within the 25-calendar day period preceding such November 1.
-2-
<PAGE>
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 612 to act on behalf of the Trustee to authenticate Notes.
"Authorized Newspaper" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
"Bank" means Commercial Federal Bank, a Federal Savings Bank, and any
successor thereto.
"Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions, certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, delivered to the Trustee.
"Business Day", with respect to any Place of Payment or other location,
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a Legal
Holiday in such Place of Payment or other location.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934 or, if at
any time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person, and any other obligor upon the Notes.
"Company Request" and "Company Order" mean, respectively, a written request
or order, as the case may be, signed in the name of the Company by the Chairman
of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President, a Vice President, the Treasurer, an Assistant Treasurer, the
Secretary
-3-
<PAGE>
or an Assistant Secretary, of the Company, or by another officer of the Company
duly authorized to sign by a Board Resolution, and delivered to the Trustee.
"Comparable Maturity" means, with respect to an Interest Rate Period of one
(1), two (2), three (3) or five (5) years, one (1), two (2), three (3) or five
(5) years, respectively.
"Consolidated Net Income" means the amount of net income (loss) of the
Company and its Subsidiaries determined in accordance with generally accepted
accounting principles; provided, however, that there shall not be included in
Consolidated Net Income (a) any net income (loss) of a Subsidiary for any period
during which it was not a Consolidated Subsidiary or (b) any net income (loss)
of businesses, properties or assets acquired or disposed of (by way of merger,
consolidation, purchase, sale or otherwise) by the Company or any Subsidiary for
any period prior to the acquisition thereof or subsequent to the disposition
thereof; and, provided, further, any assessment, or the effect thereof, imposed
by the FDIC on the Bank as a result of the Bank's membership in the Savings
Association Insurance Fund for the purpose of recapitalizing such fund shall be
excluded from the determination of Consolidated Net Income.
"Consolidated Subsidiary" means a Subsidiary of the Company the financial
statements of which are required to be included in the financial statements of
the Company and its Subsidiaries.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office at the date of original execution of this Indenture is located at 111
West Monroe Street, Chicago, Illinois 60603, Attention: Corporate Trust
Department.
"Corporation" includes corporations and, except for purposes of Article
Eight, associations, companies and business trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Derivative Obligations" means any obligations of the Company to make
payment pursuant to the terms of any securities contracts and foreign currency
exchange contracts, derivative instruments, such as swap agreements (including
interest rate and currency and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts other than obligations on account of indebtedness for money
borrowed ranking pari passu with or subordinate to the Notes.
-4-
<PAGE>
"Effective Interest Rate on Comparable Maturity U.S. Treasury Obligations"
means as of the November 1 preceding an Interest Reset Date (i) if available,
the most recent Weekly Comparable Maturity Treasury Rate published during the
twenty-five (25) calendar day period preceding such November 1 or (ii) if such
Weekly Comparable Maturity Treasury Rate is not available, the Alternate
Comparable Maturity Treasury Rate as of such November 1.
"Event of Default" has the meaning specified in Section 501.
"FDIC" means the Federal Deposit Insurance Corporation or successor
thereto.
"Government Obligations" means direct obligations of the United States of
America, or any Person controlled or supervised by and acting as an agency or
instrumentality of such government, in each case where the payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by such government and which are not callable or redeemable at the option of the
issuer or issuers thereof, and shall also include a depository receipt issued by
a bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of or other amount
with respect to any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of or other amount with respect to the Government
Obligation evidenced by such depository receipt.
"Holder", when used with respect to the Notes, means the Person in whose
name such Note is registered in the Note Register.
"Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument
and any such supplemental indenture, respectively.
"Independent Public Accountants" means a nationally recognized firm of
accountants that, with respect to the Company, are independent public
accountants within the meaning of the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder, who may be
the independent public accountants regularly retained by the Company or who may
be other independent public accountants. Such accountants or firm shall be
entitled to
-5-
<PAGE>
rely upon any Opinion of Counsel as to the interpretation of any legal matters
relating to the Indenture or certificates required to be provided hereunder.
"Insured Institution" means any "insured bank" as defined in 12 U.S.C.
Section 1813(h), or a similar definition under any succeeding federal law
hereinafter enacted.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Interest Rate Period" means a period of one (1), two (2), three (3) or
five (5) years (but never extending beyond December 1, 2006), commencing with an
Interest Reset Date and ending on, but not including, the December 1 of such
first, second, third or fifth year, as the case may be.
"Interest Reset Date" means December 1, 2001 or the expiration date of any
subsequent Interest Rate Period.
"Interest Rate Reset Notice" means the notice described in the form of Note
set forth in Sections 202 and 203 pursuant to which, prior to an Interest Reset
Date, the Company provides notice to the Trustee of the related Subsequent
Interest Rate and Interest Rate Period, copies of which shall be mailed by the
Trustee to Noteholders within two Business Days thereafter as provided in the
form of Note set forth in Sections 202 and 203.
"Junior Indebtedness" means the principal amount of, and interest on, any
indebtedness for money borrowed of the Company, whether now outstanding or
hereafter created, incurred, assumed or guaranteed, provided that in the
instrument creating or evidencing such indebtedness or pursuant to which such
indebtedness is outstanding it is provided that (a) such indebtedness is junior
in right of payment to the Notes; (b) no payments with respect to such
indebtedness may be made at any time that an Event of Default shall have
occurred and be continuing or at any time that payments made to holders of the
Notes are to be withheld or paid over to holders of Senior Indebtedness in
accordance with Article Thirteen hereof and (c) no payments other than the
payment of interest may be made with respect to such indebtedness at any time
the Notes are Outstanding.
"Legal Holiday", with respect to any Place of Payment, means a Saturday, a
Sunday or a day on which banking institutions or trust companies in such Place
of Payment are not authorized or obligated to be open.
"Maturity" means the date on which the principal of the Notes or an
installment of principal becomes due and payable as provided in this Indenture,
whether at the Stated Maturity or by declaration of acceleration, notice of
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redemption, notice of option to elect redemption or otherwise, and includes any
Redemption Date.
"Money", with respect to any payment, deposit or other transfer pursuant to
or contemplated by the terms hereof, means United States dollars or other
equivalent unit of legal tender for payment of public or private debts in the
United States of America.
"Note" or "Notes" means any note or notes, as the case may be,
authenticated and delivered under this Indenture.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 305.
"Office or Agency" means an office or agency of the Company maintained or
designated in a Place of Payment for the Notes pursuant to Section 1002 or any
other office or agency of the Company maintained or designated for the Notes
pursuant to Section 1002 or, to the extent designated or required by Section
1002 in lieu of such office or agency, the Corporate Trust Office of the
Trustee.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary of the Company, that complies with the requirements of
Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that complies with the requirements of Section 314(e)
of the Trust Indenture Act and is delivered to the Trustee.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture, except:
(a) any Note theretofore canceled by the Trustee or the Note Registrar or
delivered to the Trustee or the Note Registrar for cancellation;
(b) any Note or portion thereof for whose payment at the Maturity thereof
Money in the necessary amount has been theretofore deposited pursuant hereto
with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of the Notes, provided that, if the Notes are
to be redeemed, notice of
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such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(c) any Note with respect to which the Company has effected defeasance
pursuant to clauses (1)(b) and (3) of Section 401 hereof; and
(d) any Note which has been paid pursuant to Section 306 or in exchange for
or in lieu of which other Notes have been authenticated and delivered pursuant
to this Indenture, unless there shall have been presented to the Trustee proof
satisfactory to it that such Note is held by a bona fide purchaser in whose
hands such Note is a valid obligation of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making any
such determination or relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee knows to be
so owned shall be so disregarded. Notes so owned which shall have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee (1) the pledgee's right so to act with respect to
such Notes and (2) that the pledgee is not the Company or any other obligor upon
the Notes or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Note on behalf of the Company.
"Person" means any individual, Corporation, partnership, joint venture,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" has the meaning set forth in Section 301.
"Predecessor Note" of a Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the
purposes of this definition, any Note authenticated and delivered under Section
306 in exchange for or in lieu of a lost, destroyed, mutilated or stolen Note
shall be deemed to evidence the same debt as the lost, destroyed, mutilated or
stolen Note.
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"Redemption Date", with respect to any Note to be redeemed, means the date
fixed for such redemption pursuant to Article Eleven or Article Twelve, as the
case may be, of this Indenture.
"Redemption Price", with respect to any Note to be redeemed, means the
price at which it is to be redeemed pursuant to Article Eleven or Article
Twelve, as the case may be, of this Indenture.
"Regular Record Date" for the interest payable on any Note on any Interest
Payment Date therefor means the date specified in Section 202 as the "Regular
Record Date".
"Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"RTC" means the Resolution Trust Corporation or a successor thereto.
"Senior Indebtedness" means the principal amount of, and interest on (a)
all indebtedness of the Company for money borrowed (including indebtedness of
others guaranteed by the Company) other than the Notes, whether outstanding on
the date hereof or thereafter created, assumed or incurred, (b) any amendments,
renewals, extensions, modifications and refundings of any such indebtedness,
unless in either case in the instrument creating or evidencing any such
indebtedness or pursuant to which it is outstanding it is provided that such
indebtedness is not superior in right of payment to the Notes, and (c)
Derivative Obligations. For the purposes of this definition, "indebtedness for
money borrowed" is defined as (1) any obligation of the Company for the
repayment of borrowed money, whether or not evidenced by bonds, debentures,
notes or other written instrument, (2) any deferred payment obligation of the
Company for the payment of the purchase price of property or assets evidenced by
a note or similar instruments, and (3) any obligation of the Company for the
payment of rent or other amounts under a lease of property or assets which
obligation is required to be classified and accounted for as a capitalized lease
on the balance sheet of the Company under generally accepted accounting
principles; provided, however, that the foregoing shall not include any
obligation that constitutes a trade payable or accrued liability arising in the
ordinary course of business. Notwithstanding anything herein to the contrary,
Senior Indebtedness shall not include the Company's 10.25% Subordinated Notes
due March 15, 1999.
"Significant Subsidiary" means the Bank, Commercial Federal Mortgage
Corporation, a Nebraska corporation ("CFMC"), and any other Subsidiary within
the
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meaning of Rule 12b-2 under the Securities Exchange Act of 1934, as in effect at
the date as of which this Indenture was executed.
"Special Record Date" for the payment of any Defaulted Interest on any Note
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", with respect to any Note or any installment of principal
thereof or interest thereon means the date established by this Indenture as the
fixed date on which the principal of such Note or such installment of principal
or interest is due and payable.
"Subsidiary" means any Corporation of which at the time of determination
the Company or one or more Subsidiaries owns or controls directly or indirectly
more than 50% of the shares of Voting Stock.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
each Person who is then a Trustee hereunder.
"United States", except as otherwise provided herein, means the United
States of America (including the states thereof and the District of Columbia),
its territories and possessions and other areas subject to its jurisdiction.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
"Voting Stock" means stock of a Corporation of the class or classes having
general voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers or trustees of such Corporation provided
that, for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered Voting Stock
whether or not such event shall have happened.
"Weekly Comparable Maturity Treasury Rate" means the weekly average yield
to maturity values adjusted to a constant maturity of the Comparable Maturity
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as read from the yield curves of the most actively traded marketable U.S.
Treasury fixed interest rate securities constructed daily by the U.S. Treasury
Department as published by the Federal Reserve Board or any Federal Reserve Bank
or by a United States Government department or agency.
Section 102. Compliance Certificates and Opinions.
(a) Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents or any of them is specifically required by any provision of
this Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
(a) In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such
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Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
(b) Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of counsel or Opinion of Counsel or
representation of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Note, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are received by the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Note, shall be
sufficient for any purpose of this Indenture and (subject to Section 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
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(c) The ownership, principal amount and serial numbers of Notes held by any
Person, and the date of the commencement and the date of the termination of
holding the same, shall be proved by the Note Register.
(d) If the Company shall solicit from the Holders of any Notes any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may at its option (but is not obligated to), by Board Resolution, fix in
advance a record date for the determination of Holders of Notes entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
Act. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of Notes of record at the close of
business on such record date shall be deemed to be Holders for the purpose of
determining whether Holders of the requisite proportion of Outstanding Notes
have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Notes shall be computed as of such record date; provided that no
such authorization, agreement or consent by the Holders of Notes on such record
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or suffered to be done by the Trustee, any Note Registrar, any Paying Agent or
the Company in reliance thereon, whether or not notation of such action is made
upon such Note.
Section 105. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with the
Trustee at its Corporate Trust Office, or
(b) the Company by the Trustee or any Holder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to the attention
of its Treasurer at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
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Section 106. Notice to Holders of Notes; Waiver.
(a) Except as otherwise expressly provided in this Indenture, where this
Indenture provides for notice to Holders of Notes of any event, such notice
shall be sufficiently given to Holders of Notes if in writing and mailed, first-
class postage prepaid, to each Holder of a Note affected by such event, at such
Holder's address as it appears in the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice.
(b) In any case where notice to Holders of Notes is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Note shall affect the sufficiency of such notice with
respect to other Holders of Notes. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given or
provided. In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
(c) Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Notes shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 107. Language of Notices.
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control. If any provision
of this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
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Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, either wholly or partially, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and such provisions shall be given effect to the fullest
extent permitted by law.
Section 112. Benefits of Indenture.
Except as otherwise provided in Article Thirteen, nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto, any Note Registrar, any Paying Agent, any Authenticating Agent
and their respective successors hereunder and the Holders of Notes, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
This Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of Nebraska applicable to agreements made
or instruments entered into and, in each case, performed in said state.
Section 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Note shall be a Legal Holiday at any Place of Payment, then
(notwithstanding any other provision of this Indenture) payment need not be made
at such Place of Payment on such date, but may be made on the next succeeding
day that is a Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date, Redemption Date or at the Stated
Maturity, and no interest shall accrue on the amount payable on such date or at
such time for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
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ARTICLE TWO
FORM OF NOTES
Section 201. Forms Generally.
(a) Each Note issued pursuant to this Indenture shall be in substantially
the forms set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture or any indenture supplemental hereto and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with any law or with any rule or regulation
of any stock exchange or as may, consistently herewith, be determined by the
officers executing such Note as evidenced by their execution of such Note. The
Notes shall be issuable in registered form only without coupons.
(b) Definitive Notes shall be printed, lithographed or engraved or produced
by any combination of these methods on a steel engraved border or steel engraved
borders or may be produced in any other manner, all as determined by the
officers of the Company executing such Notes, as evidenced by their execution of
such Notes.
Section 202. Form of Face of Note.
COMMERCIAL FEDERAL CORPORATION
SUBORDINATED EXTENDIBLE NOTE DUE 2006
$____________________ $NO.________________________
THIS SECURITY IS NOT A SAVINGS ACCOUNT OR A DEPOSIT AND IS NOT INSURED BY
THE UNITED STATES OR ANY AGENCY OF THE UNITED STATES.
Commercial Federal Corporation, a Nebraska corporation (herein called the
"Company"), for value received, hereby promises to pay to
----------------------
, or registered assigns, the principal sum of
- ------------------ ----------------
Dollars on December 1, 2006 (or on such earlier date at which the Company may
redeem this Note as set forth hereinbelow), and to pay interest thereon at the
rate per annum specified hereinbelow from [insert date], 1996 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, on the first day of each calendar month, commencing January 15, 1997 (each
an "Interest Payment Date"), until the principal hereof is paid or made
available for payment.
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Until December 1, 2001, this Note shall bear interest at the rate of __%
per annum. Thereafter, on or before thirty (30) days prior to December 1, 2001
or any subsequent Interest Reset Date (as defined herein), the Company shall
establish the interest rate per annum (rounded to the nearest five hundredths of
a percentage point) (a "Subsequent Interest Rate"). Any such Subsequent Interest
Rate shall not be less than 105% of the Effective Interest Rate on Comparable
Maturity U.S. Treasury Obligations (as defined herein) established prior to the
commencement of each such subsequent Interest Rate Period. In the event that the
Company determines on the November 1 preceding such Interest Reset Date that
during the ten (10) calendar days preceding such November 1 no Weekly Comparable
Maturity Treasury Rate (as defined herein) has been published and the Alternate
Comparable Maturity Treasury Rate (as defined herein) could not be determined,
the Company shall establish such Subsequent Interest Rate in its discretion
without limitation. If the Company shall decide not to establish a Subsequent
Interest Rate for a subsequent Interest Rate Period (as defined herein), the
interest rate for the prior Interest Rate Period shall continue in effect,
unless and until the Company shall establish a Subsequent Interest Rate on or
before November 1 of any subsequent year for a subsequent Interest Rate Period,
commencing with December 1 of such subsequent year. Until establishment of such
a Subsequent Interest Rate for a subsequent Interest Rate Period, each December
1 shall be deemed for all purposes to be an Interest Reset Date.
The Company shall notify the Trustee of each Subsequent Interest Rate and
Interest Rate Period or its decision not to establish a Subsequent Interest Rate
on or before thirty (30) days prior to an Interest Reset Date. Upon receipt
from the Company of the Interest Rate Reset Notice regarding any Subsequent
Interest Rate and the related Interest Rate Period, the Trustee shall promptly
mail to each Noteholder (and to beneficial owners as required by applicable
laws), but in no event later than two (2) Business Days after receipt of notice
from the Company, a notice that shall state, among other things, (a) that the
Company has exercised its option to reset the interest rate or decided not to
establish a Subsequent Interest Rate, (b) the Subsequent Interest Rate and the
related Interest Rate Period, (c) that the Noteholder must exercise his option
to have his Notes redeemed not later than the fifth Business Day before the
Interest Reset Date and procedures to be followed by the Noteholder to exercise
such option, (d) that if a Noteholder elects to revoke his exercise of such
option prior to the redemption of his Notes, he must do so not later than the
fifth business day before the Interest Reset Date and the procedures to be
followed to revoke the exercise of such option and (e) such other information as
the Company may provide.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, except as provided in the Indenture hereinafter
referred to, be paid to the Person in whose name this Note (or one or more
Predecessor
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Notes) is registered at the close of business on the Regular Record Date for
such interest, which shall be the seventh day, whether or not a Business Day, of
the month in which the Interest Payment Date occurs. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and either may be paid to the Person in whose
name this Note (or one or more Predecessor Notes) is registered at the close of
business on a Special Record Date for the payment of such defaulted interest to
be fixed by the Trustee, notice whereof shall be given to the Holders not less
than ten days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in the Indenture. Payment of
the principal of and interest on this Note will be made at the office or agency
of the Company maintained for that purpose, or in such other office or agency as
may be established by the Company pursuant to the Indenture (initially the
principal corporate trust office of the Trustee in Chicago, Illinois (the
"Corporate Trust Office")), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest on any Interest
Payment Date may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear in the Note
Register. Payments of principal will be made against presentation of this Note
at the Corporate Trust Office (or such other office as may be established
pursuant to the Indenture), by check.
Reference is hereby made to the further provisions of this Note set forth
on the reverse side hereof, which further provisions shall for all purposes have
the same effect as though fully set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee or an Authenticating Agent under the Indenture referred to on the
reverse hereof by the manual signature of one of its authorized officers, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be signed in its
name by the manual or facsimile signature of its Chief Executive Officer, its
President or one of its Vice Presidents and its corporate seal, or a facsimile
thereof, to be impressed or imprinted hereon, attested by the manual or
facsimile signature of its Secretary or one of its Assistant Secretaries.
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Date:
COMMERCIAL FEDERAL
CORPORATION
[Corporate Seal]
By:
___________________________
President
ATTEST:
- ---------------------------
Secretary
Section 203. Form of Reverse of Note.
COMMERCIAL FEDERAL CORPORATION
SUBORDINATED EXTENDIBLE NOTE DUE 2006
This Note is one of a duly authorized issue of Notes of the Company
designated as its Subordinated Extendible Notes due 2006 ("herein called the
"Notes") limited in aggregate principal amount to $50,000,000 issued and to be
issued under an Indenture dated as of November__, 1996 (herein called the
"Indenture"), between the Company and Harris Trust and Savings Bank, as Trustee
(herein called the "Trustee," which term includes any successor Trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder of
the Company, the Trustee and the Holders of the Notes, and the terms upon which
the Notes are, and are to be, authenticated and delivered.
As used herein, the following capitalized terms shall have the following
meanings:
"Alternate Comparable Maturity Treasury Rate" means the average yields to
maturity of the daily closing bids (or less frequently if daily quotations shall
not be available), quoted by at least three recognized U.S. Government
securities dealers selected by the Company, for all marketable U.S. Treasury
securities with a maturity of not less than three (3) months shorter nor more
than three (3) months longer than the applicable Comparable Maturity from the
November 1 preceding an Interest Reset Date (other than securities which can, at
the option of the holder, be surrendered at face value in payment of any Federal
estate tax) for the most recent five (5) consecutive business days during which
there had been at least three (3) days
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on which daily closing bids were quoted within the twenty-five (25) calendar day
period preceding such November 1.
"Comparable Maturity" means, with respect to an Interest Rate Period of one
(1), two (2), three (3) or five (5) years, one (1), two (2), three (3) or five
(5) years, respectively.
"Effective Interest Rate on Comparable Maturity U.S. Treasury Obligations"
means as of the November 1 preceding an Interest Reset Date (i) if available,
the most recent Weekly Comparable Maturity Treasury Rate published during the
twenty-five (25) calendar day period preceding such November 1 or (ii) if such
Weekly Comparable Maturity Treasury Rate is not available, the Alternate
Comparable Maturity Treasury Rate as of such November 1.
"Interest Rate Period" means a period of one (1), two (2), three (3) or
five (5) years (but never extending beyond December 1 2006), commencing with an
Interest Reset Date and ending on, but not including, the December 1 of such
first, second, third or fifth year, as the case may be.
"Interest Reset Date" means December 1, 2001 or the expiration date of any
subsequent Interest Rate Period.
"Weekly Comparable Maturity Treasury Rate" means the weekly average yield
to maturity values adjusted to a constant maturity of the Comparable Maturity as
read from the yield curves of the most actively traded marketable U.S. Treasury
fixed interest rate securities constructed daily by the U.S. Treasury Department
as published by the Federal Reserve Board or any Federal Reserve Bank or by a
United States Government department or agency.
The indebtedness of the Company evidenced by the Notes, including the
principal thereof and interest thereon (including post-default interest), (a) is
expressly subordinated, to the extent and to the manner set forth in the
Indenture, in right of payment to the prior payment in full of all of the
Company's obligations to holders of Senior Indebtedness and (b) is unsecured by
any collateral, including the assets of the Company or any of its Subsidiaries
or Affiliates. Each Holder of Notes, by acceptance thereof, (1) agrees to and
shall be bound by such provisions of the Indenture and all other provisions of
the Indenture; (2) authorizes and directs the Trustee to take such action on
such Holder's behalf as may be necessary or appropriate to effectuate the
subordination of the Notes as provided in the Indenture; and (3) appoints the
Trustee as such Holder's attorney-in-fact for any and all such purposes.
The Notes are not subject to any sinking fund. The Notes may be redeemed,
at the option of the Company, as a whole prior to maturity on each Interest
Reset
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Date at 100% of the principal amount thereof, without premium, together with
interest thereon accrued to such Redemption Date.
Notice of redemption shall be given to the Holders of Notes by mailing a
notice of such redemption not less than 30 or more than 60 days prior to the
Redemption Date at their addresses as they shall appear on the Note Register,
all as provided in the Indenture.
If this Note is duly called for redemption and funds for payment duly
provided, this Note shall cease to bear interest from and after such Redemption
Date.
Unless the Notes have been declared due and payable prior to maturity by
reason of an Event of Default, the holder of this Note has the right to present
it, together with all other Notes held by such holder, for payment not later
than five (5) business days before any Interest Reset Date, and the Company will
redeem the same on the Interest Reset Date.
Notes may be presented for redemption by delivering to the Trustee: (i) a
written request for redemption, in form satisfactory to the Trustee, signed by
the registered holder(s) or his duly authorized representative and (ii) the Note
to be redeemed. No particular forms of request for redemption or authority to
request redemption are necessary. The price to be paid by the Company for all
Notes or portions thereof presented to it for redemption is 100% of the
principal amount or respective portions thereof plus accrued but unpaid interest
to the Redemption Date.
In the case of any Notes which are presented for redemption in part only,
upon redemption, the Company shall execute and the Trustee shall authenticate
and deliver to or on the order of the holder of such Notes, without service
charge, a new Note(s), of any authorized denomination or denominations as
requested by such holder, in aggregate principal amount equal to the unpaid
portion of the principal amount of the Notes so presented.
Any Notes presented for redemption by the holder may be withdrawn by the
person(s) presenting the same upon delivery of a written request for such
withdrawal to the Trustee not later than five (5) business days before the
Interest Reset Date.
Interest installments whose Stated Maturity is on the Redemption Date will
be payable to the Holders of such Notes, or one or more Predecessor Notes, of
record at the close of business on the relevant Regular Record Date referred to
on the face hereof, as all provided in the Indenture. In the event of
redemption of this Note in
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part only, a new Note or Notes for the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the surrender hereof.
Except as may be provided in the Indenture, if an Acceleration Event with
respect to the Notes shall occur and be continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Notes may declare
the principal of all the Notes due and payable in the manner and with the effect
provided in the Indenture. The Indenture provides that such declaration and its
consequences may, in certain events, be annulled by the Holders of a majority in
principal amount of the Outstanding Notes.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes at the time Outstanding,
on behalf of the Holders of all Notes, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provisions of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note may be registered on the Note Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company to be maintained for that purpose or at such other
office or agency as may be established by the Company for such purpose pursuant
to the Indenture (initially the Corporate Trust Office), duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and duly executed by, the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form, without coupons, in
denominations of $1,000 or any amount in excess thereof which is an integral
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multiple of $1,000. As provided in the Indenture, and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes in authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to the due presentment of this Note for registration of transfer or
exchange, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Each holder of a Note covenants and agrees by such Holder's acceptance
thereof to comply with and be bound by the foregoing provisions.
This Note shall be governed and construed in accordance with the laws of
the State of Nebraska.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
Subject to Section 612, the Trustee's certificate of authentication shall
be in substantially the following form:
This is one of the Notes referred to in the within-mentioned Indenture.
Harris Trust and Savings Bank,
as Trustee
By________________________
Authorized Officer
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ARTICLE THREE
THE NOTES
Section 301. Title and Terms.
(a) The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $50,000,000, except for Notes
authenticated and delivered upon transfer of, or in exchange for, or in lieu of
other Notes pursuant to Sections 304, 305, 306, 905, 1107 and 1204.
(b) The Notes shall be known and designated as the Subordinated Extendible
Notes due 2006 of the Company. Their Stated Maturity shall be December 1, 2006,
and they shall bear interest from the date and at the rate per annum specified
in, and such interest shall be payable on the dates specified in, the form of
Note set forth in Sections 202 and 203, until the principal thereof is paid or
made available for payment.
(c) The principal of and interest on the Notes shall be payable at the
Office or Agency of the Company maintained for such purposes pursuant to Section
1002 ("Place of Payment"); provided, however, that, at the option of the
Company, payment of interest may be made (subject to collection) by check mailed
to the address of the Person entitled thereto as such address shall appear on
the Note Register.
(d) The Notes shall be redeemable at the option of the Company as a whole
prior to maturity on each Interest Reset Date as provided in Article Eleven.
(e) The Notes shall be redeemable at the option of the Noteholder before
any Interest Reset Date as provided in Article Twelve.
(f) The Notes shall be subordinated in right of payment to Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
created, as provided in Article Thirteen.
Section 302. Currency; Denominations.
The principal of and interest on the Notes shall be payable in United
States dollars or other equivalent unit of legal tender for payment of public or
private debts in the United States of America. Notes shall be issuable in
registered form only without coupons in denominations of $1,000 and any integral
multiple thereof.
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Section 303. Execution, Authentication, Delivery and Dating.
(a) Notes shall be executed on behalf of the Company by its Chairman of
the Board, one of its Vice Chairmen of the Board, its Chief Executive Officer,
its President, its Treasurer or one of its Vice Presidents under its corporate
seal reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Notes may be manual
or facsimile.
(b) Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes, executed by the Company, to the
Trustee for authentication up to the aggregate principal amount authorized
hereunder and, provided that a Company Order for the authentication and delivery
of such Notes has been delivered to the Trustee, the Trustee, in accordance with
the Company Order and subject to the provisions hereof, shall authenticate and
deliver such Notes.
(d) Each Note shall be dated the date of its authentication.
(e) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in Section
204 or 612 executed by or on behalf of the Trustee by the manual signature of
one of its authorized officers or by an Authenticating Agent. Such certificate
upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder.
Section 304. Temporary Notes.
(a) Pending the preparation of definitive Notes, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary Notes
in lieu thereof which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they are issued, in registered form and
with such appropriate insertions, omissions, substitutions and other variations
as the officers of the Company executing such Notes may determine, as
conclusively evidenced by their execution of such Notes.
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(b) If temporary Notes are issued, the Company shall cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, such temporary Notes shall be exchangeable for such definitive
Notes upon surrender of such temporary Notes at an Office or Agency for such
Notes, without charge to any Holder thereof. Upon surrender for cancellation of
any one or more temporary Notes, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes.
Section 305. Registration, Transfer and Exchange.
(a) The Company shall cause to be kept a register (herein sometimes
referred to as the "Note Register") at an Office or Agency maintained pursuant
to Section 1002 in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Notes and of
transfers of the Notes. The Trustee is hereby initially appointed as Note
Registrar for the Notes. In the event that the Trustee shall cease to be Note
Registrar it shall have the right to examine the Note Register at all reasonable
times.
(b) Upon surrender for registration of transfer of any Note at the Office
or Agency of the Company, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, denominated as authorized in this Indenture,
of a like aggregate principal amount bearing a number not contemporaneously
outstanding and containing identical terms and provisions.
(c) At the option of the Holder, Notes may be exchanged for other Notes,
in any authorized denominations, and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such Office or Agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company evidencing the same debt and
entitling the Holders thereof to the same benefits under this Indenture as the
Notes surrendered upon such registration of transfer or exchange.
(e) Every Note presented or surrendered for registration of transfer or
for exchange or redemption shall (if so required by the Company or the Note
Registrar for such Note) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing.
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(f) No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 304, 905 or 1107 not involving any transfer.
(g) The Company shall not be required (1) to issue, register the transfer
of or exchange any Notes during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
under Section 1103 and ending at the close of business on the day of the mailing
of the relevant notice of redemption, (2) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except in the
case of any Note to be redeemed in part, the portion thereof not to be redeemed,
or (3) to issue, register the transfer of or exchange any Note which, in
accordance with its terms, has been surrendered for redemption at the option of
the Holder, except the portion, if any, of such Note not to be so redeemed.
Section 306. Mutilated, Destroyed, Lost and Stolen Notes.
(a) If any mutilated Note is surrendered to the Trustee, subject to the
provisions of this Section, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Note containing identical
terms and of like principal amount and bearing a number not contemporaneously
outstanding.
(b) If there be delivered to the Company and to the Trustee (1) evidence
to their satisfaction of the destruction, loss or theft of any Note, and (2)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and, upon the Company's request the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
destroyed, lost or stolen Note, a new Note containing identical terms and of
like principal amount and bearing a number not contemporaneously outstanding.
(c) Notwithstanding the foregoing provisions of this Section, in case any
mutilated, destroyed, lost or stolen Note has become or is about to become due
and payable, the Company in its discretion may, instead of issuing a new Note,
pay such Note.
(d) Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
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charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
(e) Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an additional original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
(f) The provisions of this Section, as amended or supplemented pursuant to
this Indenture, shall be exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
Section 307. Payment of Interest; Rights to Interest Preserved.
(a) Any interest on any Note which shall be payable and is punctually paid
or duly provided for on any Interest Payment Date shall be paid to the Person in
whose name such Note (or one or more Predecessor Notes) is registered as of the
close of business on the Regular Record Date for such interest.
(b) Any interest on any Note which shall be payable, but shall not be
punctually paid or duly provided for, on any Interest Payment Date for such Note
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder thereof on the relevant Regular Record Date by virtue of having been such
Holder; and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below. Such Defaulted Interest
shall accrue interest, to the extent legally enforceable, at the rate of
interest borne by the Notes.
(1) The Company may elect to make payment of any Defaulted Interest to the
Person in whose name such Note (or a Predecessor Note thereof) shall be
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on such Note and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of Money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
on or prior to the date of the proposed payment, such Money when so deposited to
be held in trust for the benefit of the Person entitled to such Defaulted
Interest as in this Clause provided. Thereupon, the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and
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not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to the Holder of such Note
(or a Predecessor Note thereof) at such Holder's address as it appears in the
Note Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company
cause a similar notice to be published at least once in an Authorized Newspaper
of general circulation in each Place of Payment, but such publication shall not
be a condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Person in whose name such Note (or a Predecessor Note thereof) shall
be registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee.
(c) At the option of the Company, interest on the Notes may be paid by
mailing a check to the address of the person entitled thereto as such address
shall appear in the Note Register.
(d) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered in the Note Register as the owner
of such Note for the purpose of receiving payment of principal of and (subject
to Section 307) interest on such Note and for all other purposes whatsoever,
whether or not any payment with respect to such Note shall be overdue, and
neither the Company, nor
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the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 309. Cancellation.
All Notes surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Notes, as well as Notes surrendered
directly to the Trustee for any such purpose, shall be canceled promptly by the
Trustee. The Company may at any time deliver to the Trustee for cancellation
any Notes previously authenticated and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Notes so delivered shall be
canceled promptly by the Trustee. No Notes shall be authenticated in lieu of or
in exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed by the Trustee, unless by a Company Order the Company directs
their return to it.
Section 310. Authentication and Delivery of Original Issue.
Forthwith upon the execution and delivery of this Indenture, or from time
to time thereafter, Notes up to the aggregate principal amount of $50,000,000
may be executed by the Company and delivered to the Trustee for authentication,
and shall thereupon be authenticated and delivered by the Trustee upon Company
Order, without any further action by the Company.
Section 311. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
(a) Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect and the Trustee, on receipt of such Company
Order, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
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(A) all Notes theretofore authenticated and delivered (other than (i)
Notes which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 306 and (ii) Notes for whose payment Money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for cancellation;
or
(B) as to all Notes not so theretofore delivered to the Trustee for
cancellation the Company has irrevocably deposited or caused to be deposited
with the Trustee, as trust funds or obligations in trust for such purpose, Money
or Government Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms, without consideration of any
reinvestment thereof, will provide not later than the opening of business on the
due dates of any payment of principal and interest with respect thereto, or a
combination thereof, Money in an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, including the principal thereof and interest thereon, to the date
of such deposit (in the case of Notes which have become due and payable) or to
the Maturity thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee a certificate of Independent
Public Accountants certifying as to the sufficiency of the amounts deposited
pursuant to subclause (B) of Clause (1) of this Section for payment of the
principal and interest on the dates such payments are due, and an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein providing for or relating to the satisfaction and discharge of
this Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 612 and, if Money or
Government Obligations shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
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Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all Money
and Government Obligations deposited with the Trustee pursuant to Section 401
and all Money received by the Trustee in respect of Government Obligations
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such Money has or Government Obligations have been deposited with
or received by the Trustee; but such Money and Government Obligations need not
be segregated from other funds of the Trustee except to the extent required by
law.
Section 403. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Four by reason of any order or judgement of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Four until such time as the Trustee or Paying Agent is permitted to
apply all money held in trust with respect to the Notes; provided, however, that
if the Company makes any payment principal of or any premium or interest on any
Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of the Notes to receive such payment
from the money so held in trust.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or be effected by operation of law pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest on any Note when such interest
becomes due and payable, and continuance of such default for a period of 10
days, whether or not such payment is prohibited by the provisions of Article
Thirteen;
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(b) default in the payment of the principal of any Note when it becomes
due and payable at its Maturity or upon redemption, whether or not such payment
is prohibited by the provisions of Article Thirteen;
(c) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture or the Notes (other than a covenant or warranty a
default in the performance or the breach of which is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a period
of 30 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Notes a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder;
(d) default in the payment at stated maturity of any indebtedness of the
Company or a Significant Subsidiary for money borrowed in principal amount due
at stated maturity in excess of $7,000,000, and such default shall continue,
without being cured, waived or consented to and without such indebtedness being
discharged, for a period of 30 days beyond any applicable period of grace;
(e) the occurrence of an event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or by which there may
be secured or evidenced, any indebtedness of the Company or any Significant
Subsidiary for money borrowed (or the payment of which is guaranteed by the
Company), whether such indebtedness now exists or shall hereafter be created,
provided, however, that no such event of default shall constitute an Event of
Default hereunder unless the effect of such event of default is to cause the
acceleration of such indebtedness prior to its expressed maturity, which
together with the principal amount of any such other indebtedness so caused to
be accelerated, aggregates $7,000,000 or more at any one point in time and such
default shall not have been cured or waived and such acceleration shall not have
been rescinded or annulled;
(f) the entry by a court or agency or supervisory authority having
competent jurisdiction of: (1) a decree or order for relief in respect of the
Company or any Significant Subsidiary in an involuntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; (2) a decree or order adjudging the Company or any Significant
Subsidiary to be insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of the Company or any Significant
Subsidiary and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (3) a decree or order appointing the FDIC or
the RTC or any other Person to act as a custodian, conservator, receiver,
liquidator, assignee, trustee or other similar official
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of the Company, the Bank or any other Significant Subsidiary or of any
substantial part of the property of the Company, the Bank or any other
Significant Subsidiary, as the case may be, or ordering the winding up or
liquidation of the affairs of the Company, the Bank or any other Significant
Subsidiary and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days;
(g) the commencement by the Company or any Significant Subsidiary of a
voluntary proceeding under any applicable bankruptcy, insolvency, reorganization
or other similar law or of a voluntary proceeding seeking to be adjudicated
insolvent or the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in an involuntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any insolvency proceedings against it, or the filing by the
Company or any Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable law, or the consent by the Company
or any Significant Subsidiary to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or similar official of the Company or any Significant
Subsidiary or any substantial part of the property of the Company or any
Significant Subsidiary or the making by the Company or any Significant
Subsidiary of an assignment for the benefit of creditors, or the taking of
corporate action by the Company or any Significant Subsidiary in furtherance of
any such action; or
(h) a final judgment, judicial decree or order for the payment of money in
excess of $7,000,000 shall be rendered against the Company or any Subsidiary and
such judgment, decree or order shall continue unsatisfied for a period of 60
days without a stay of execution.
Section 502. Acceleration of Maturity; Rescission and Annulment.
(a) If an Event of Default described in Clauses (f) or (g) of Section 501
occurs and is continuing (an "Acceleration Event"), then the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Notes may
declare the principal of all the Notes, and the interest accrued thereon, to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such amount
shall become immediately due and payable.
(b) At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the Money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Notes, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
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(1) the Company has paid or deposited with the Trustee a sum of Money
sufficient to pay:
(A) all overdue installments of any interest on all Notes,
(B) the principal of any Notes which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by such
Notes,
(C) to the extent that payment of such interest is lawful, interest upon
overdue installments of any interest at the rate borne by such Notes,
(D) all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and
(2) all Events of Default, shall have been cured or waived as provided in
Section 513.
(c) No such rescission shall affect any subsequent Acceleration Event or
impair any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
(a) The Company covenants that upon the occurrence of any Event of
Default, the Company shall, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Notes, the whole amount of Money then due and
payable with respect to such Notes, with interest upon the overdue principal
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installments of interest at the rate borne by such Notes, and,
in addition thereto, such further amount of Money as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
(b) If the Company fails to pay the Money it is required to pay the
Trustee pursuant to the preceding paragraph forthwith upon the demand of the
Trustee, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the money so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Notes and
collect the Money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Notes,
wherever situated.
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(c) If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders of Notes by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or such Notes or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
of any overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Notes and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents or counsel) and of the
Holders of Notes allowed in such judicial proceeding, and
(2) to collect and receive any Monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder of Notes to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders of Notes, to pay
to the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 607.
(b) Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Note any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder of a Note in any such proceeding;
provided, however, that the
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Trustee may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar office and may be a member of the creditors' committee.
Section 505. Trustee May Enforce Claims without Possession of Notes.
All rights of action and claims under this Indenture or any of the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery or judgment, after provision for
the payment of the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, shall be for the ratable benefit of each
and every Holder of a Note in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any Money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such Money on account of principal or interest,
upon presentation of the Notes, and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
(a) First to the payment of costs and expenses of collection, including
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses and disbursements of the Trustee, its agents and counsel
and all other amounts due the Trustee and any predecessor Trustee under Section
607;
(b) Second, subject to the provisions of Article Thirteen hereof, in the
case the principal of the Notes shall not have become due and payable to the
payment of the amounts then due and unpaid upon the Notes for interest in
respect of which or for the benefit of which such Money has been collected, in
the order of the Maturity of the installments of such interest, with interest,
to the extent that such interest has been collected by the Trustee, upon overdue
installments of interest at the rate borne by the Notes, such payments to be
made ratably, without preference or priority of any kind, according to the
aggregate amounts due and payable on such Notes for interest;
(c) Third, in the case the principal of the Notes shall have become due
and payable, to the payment of the amounts then due and unpaid upon the Notes
for principal and interest in respect of which or for the benefit of which such
Money has been collected, with interest, to the extent that such interest has
been collected by the Trustee, upon overdue installments of interest at the rate
borne by the Notes, such payments to be made ratably, without preference or
priority of any kind, according to
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the aggregate amounts due and payable on such Notes for principal and interest,
respectively; and
(d) Fourth, the balance, if any, to the Company.
Section 507. Limitations on Suits.
No Holder of any Note shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request (including reasonable fees of counsel);
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Note to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all such Holders.
Section 508. Unconditional Right of Holders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject to Section 307) interest on such Note
on the respective Stated Maturity or Maturities therefor specified in such Note
(or, in the
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case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Note has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and each such Holder shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and each such
Holder shall continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to each
and every Holder of a Note is intended to be exclusive of any other right or
remedy, and every right and remedy, to the extent permitted by law, shall be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to any Holder of a Note may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by such Holder, as the
case may be.
Section 512. Control by Holders of Notes.
The Holders of a majority in principal amount of the Outstanding Notes
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Notes, provided that:
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(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(c) subject to Section 601, the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken or
if the Trustee in good faith shall determine that the action or proceedings so
directed might involve the Trustee in personal liability or if the Trustee in
good faith shall so determine that the actions or forbearances specified in or
pursuant to such direction shall be unduly prejudicial to the interest of
Holders of the Notes not joining in the giving of said direction, it being
understood that the Trustee shall have no duty to ascertain whether or not such
actions or forbearances are unduly prejudicial to such Holders.
Section 513. Waiver of Past Defaults.
(a) The Holders of not less than a majority in principal amount of the
Outstanding Notes on behalf of the Holders of all the Notes may waive any past
default hereunder and its consequences, except a default
(1) in the payment of the principal of or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Note.
(b) Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully do so) it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenant, that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will
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suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties, and only such duties, as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
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Holders of a majority in principal amount of the Outstanding Notes, relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Notes, provided such direction shall
not be in conflict with any rule of law or with this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section and
subject to Sections 315 and 316 of the Trust Indenture Act.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder, the Trustee
shall transmit, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of or interest
on any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Notes; and
provided, further, that in the case of any default of the character specified in
Section 501(c) with respect to Notes, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
Section 603. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, coupon or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
shall be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) before the Trustee acts or refrains from acting, the Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Notes pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity reasonable to it against the costs,
expenses and liabilities which might be incurred by it, including reasonable
fees of counsel, in complying with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
coupon or other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine, during business hours and upon
reasonable notice, the books, records and premises of the Company, personally or
by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(i) the Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder;
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(j) the Trustee shall not be bound to ascertain or inquire as to the
performances or observance of any covenants, conditions, or agreements on the
part of the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein and shall be entitled in
connection herewith to examine the books, records and premises of the Company;
(k) the permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or willful misconduct;
(l) except for (i) a default under Section 501 (a) or (b) hereof, or (ii)
any other event of which the Trustee has "actual knowledge" and which event,
with the giving of notice or the passage of time or both, would constitute an
Event of Default under this Indenture, the Trustee shall not be deemed to have
notice of any default or event unless specifically notified in writing of such
event by the Company or the Holders of not less than 25% in aggregate principal
amount of the Notes outstanding; as used herein, the term "actual knowledge"
means the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
Section 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the Trustee's
certificate of authentication, shall be taken as the statements of the Company
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility and Qualification on Form T-
1 supplied to the Company are true and accurate, subject to the qualifications
set forth therein. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Notes or the
proceeds thereof
Section 605. May Hold Notes.
The Trustee, any Authenticating Agent, any Paying Agent, any Note Registrar
or any other Person that may be an agent of the Trustee or the Company, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note Registrar or such other Person.
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Section 606. Money Held in Trust.
Except as provided in Section 402 and Section 1003, Money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any Money received by it hereunder except as
otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
(a) The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for all
services rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to the Trustee's negligence or willful
misconduct; and
(3) to indemnify the Trustee and its agents for, and to hold them harmless
against, any loss, liability or expense incurred without negligence or willful
misconduct on their part, arising out of or in connection with the acceptance or
administration of the trust hereunder, including the costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties hereunder.
(b) As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of and interest on the Notes. "Trustee"
for the purposes of this Section includes any predecessor Trustee, but
negligence or bad faith of any Trustee shall not be attributed to any other
Trustee. The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of the indenture.
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(c) When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(f) or (g), the expenses and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law.
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a Corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, or any other person permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
Section 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 610.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 610 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Trustee
and the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the obligations imposed upon it
under Section 310(b) of the Trust Indenture Act after written request therefor
by the Company or any Holder of a Note who has been a bona fide Holder of a Note
for at least six months, or
(2) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of
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its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (A) the Company, by or pursuant to a Board Resolution,
may remove the Trustee, or (B) subject to Section 315(e) of the Trust Indenture
Act, any Holder of a Note who has been a bona fide Holder of a Note for at least
six months may, on behalf of such Holder and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by or pursuant to a Board Resolution, shall promptly appoint a successor Trustee
and shall comply with the applicable requirements of Section 610. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 610, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders of Notes and accepted
appointment in the manner required by Section 610, any Holder of a Note who has
been a bona fide Holder of a Note for at least six months may, on behalf of such
Holder and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Notes as their names and addresses appear in the Note Register. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Section 610. Acceptance of Appointment by Successor.
(a) Upon the appointment hereunder of any successor Trustee, such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Company and the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
hereunder of the retiring Trustee; but, on the request of the Company or such
successor Trustee, such retiring Trustee, upon payment of its charges, shall
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor
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Trustee all property and Money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 607.
(b) Upon request of any Person appointed hereunder as a successor Trustee,
the Company shall execute any and all instruments for more fully vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in this Section.
(c) No Person shall accept its appointment hereunder as a successor
Trustee unless at the time of such acceptance such successor Person shall be
qualified and eligible under this Article.
Section 611. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated but
not delivered by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes.
Section 612. Appointment of Authenticating Agent.
(a) The Trustee may appoint one or more Authenticating Agents acceptable
to the Company with respect to the Notes which shall be authorized to act on
behalf of the Trustee to authenticate Notes issued upon original issue,
exchange, registration of transfer, partial redemption or pursuant to Section
306, and Notes so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Notes by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
(b) Each Authenticating Agent shall be acceptable to the Company and,
except as provided in this Indenture, shall at all times be a corporation that
would be permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter
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to act as an Authenticating Agent and has a combined capital and surplus
(computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at
least $50,000,000. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect specified in this Section.
(c) Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall be the successor of
such Authenticating Agent hereunder, provided such Corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
(d) An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Notes,
if any, as their names and addresses appear in the Note Register. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
(e) The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 607.
(f) The provisions of Sections 308, 604 and 605 shall be applicable to
each Authenticating Agent.
(g) If an Authenticating Agent is appointed pursuant to this Section, the
Notes may have endorsed thereon, in addition to or in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication in the
following form:
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This is one of the Notes referred to in the within-mentioned Indenture.
--------------------------
As Authenticating Agent
By__________________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(a) semi-annually on October 1 and April 1 of each year, a list, in each
case in such form as the Trustee may reasonably require, of the names and
addresses of Holders as of the applicable date, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that so long as the Trustee is the Note Registrar no such
list shall be required to be furnished for Notes for which the Trustee acts as
Note Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall comply with the obligations imposed upon it pursuant
to Section 312 of the Trust Indenture Act.
(b) Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company, the Trustee, any Paying
Agent or any Note Registrar shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
of Notes in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 312(b) of the Trust Indenture Act.
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Section 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year, if required by Section
313(a) of the Trust Indenture Act, the Trustee shall transmit, pursuant to
Section 313(c) of the Trust Indenture Act, a brief report dated as of such May
15 with respect to any of the events specified in said Section 313(a) which may
have occurred since the later of the immediately preceding May 15 and the date
of this Indenture.
(b) The Trustee shall transmit the reports required by Section 313(b) of
the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(a) file with the Trustee, within 15 days after the date on which the
Company would be required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall file
with the Trustee substantially comparable information;
(b) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company, as
the case may be, with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations;
(c) transmit to the Holders of Notes within 30 days after the filing
thereof with the Trustee, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs (a) and
(b) of this Section as may be required by rules and regulations prescribed from
time to time by the Commission; provided that notwithstanding the requirements
of such rules and regulations, so long as any Note is Outstanding the Company
shall transmit to the Holders of Notes, within 30 days after the filing thereof
with the Trustee, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, the information, documents and other reports required
to be filed by the Company
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pursuant to paragraph (a) of this Section; provided further that in lieu of any
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, the Company may
transmit an annual or quarterly report, respectively, containing financial
statements and an undertaking to transmit such Form 10-K or Form 10-Q, as the
case may be, to any Holder upon request, and in lieu of any Current Report on
Form 8-K, the Company may transmit a notice containing a brief description of
the event that is the subject of such Current Report and an undertaking to
transmit such Form 8-K upon request; and
(d) furnish to the Trustee the Officers' Certificates and notices required
by Section 1012 hereof.
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
Nothing contained in this Indenture shall prevent any consolidation or
merger of the Company with or into any other Person or Persons (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any conveyance, transfer or lease of the property of the Company as an
entirety or substantially as an entirety, to any other Person (whether or not
affiliated with the Company); provided, however, that:
(a) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the entity formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a Corporation organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed by the
successor Person and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and interest on all
the Notes and the performance of every other covenant of this Indenture on the
part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no event which,
after notice or lapse of time, or both, would become an Event of Default shall
have occurred and be continuing;
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(c) immediately after giving effect to such transaction, each Insured
Institution controlled by the Company or the successor Person shall be in
compliance with all applicable minimum capital requirements or shall have filed
a capital plan acceptable to its primary regulator; and
(d) either the Company or the successor Person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 802. Successor Person Substituted for Company.
Upon any consolidation or merger or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and thereafter, except in the case of a lease to another Person, the predecessor
Person shall be released from all obligations and covenants under this Indenture
and the Notes.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holder of Notes, the Company (when authorized by
or pursuant to a Board Resolution) and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, which shall
conform with the requirements of the Trust Indenture Act as then in effect and
be in form satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and in
the Notes; or
(b) to add to or change any of the provisions of this Indenture to change
or eliminate any restrictions on the payment of principal of or interest on
Notes or to permit or facilitate the issuance of Notes in uncertificated form,
provided any such
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action shall not adversely affect the interests of the Holders of Notes in any
material respect; or
(c) to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not adversely affect the interests of the Holders of
Notes in any material respect; or
(d) to supplement any of the provisions of this Indenture to such extent
as shall be necessary to permit or facilitate the defeasance and discharge of
any Notes pursuant to Article Four; provided that any such action shall not
adversely affect the interests of any Holder of a Note in any material respect;
or
(e) to add to the covenants of the Company for the benefit of the Holders
of the Notes (as shall be specified in such supplemental indenture or
indentures) or to surrender any right or power herein conferred upon the
Company.
Section 902. Supplemental Indentures with Consent of Holders.
(a) With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Notes, by Act of said Holders delivered to
the Company and the Trustee, the Company (when authorized by or pursuant to a
Board Resolution), and the Trustee may enter into one or more indentures
supplemental hereto (which shall conform with the requirements of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Notes under this
Indenture; provided, however, that no such supplemental indenture, without the
consent of the Holder of each Outstanding Note, shall
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any Note, or reduce the principal amount payable upon the
redemption thereof or otherwise, or change the rate of interest thereon, or
adversely affect the right of redemption at the option of any Holder as
contemplated by Article Twelve, or change the Place of Payment, currency in
which the principal of or interest on, is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the Outstanding Notes, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required
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for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, or Section 513 or Section
1013, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Note.
(b) It shall not be necessary for any Act of Holders of Notes under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Note theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 905. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Notes.
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Section 906. Effect on Senior Indebtedness.
No supplemental indenture shall directly or indirectly modify the
provisions of Article Thirteen in any manner which might terminate or impair the
rights and benefits of subordination provided to the holders of Senior
Indebtedness pursuant to Article Thirteen.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms thereof and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment an Office or Agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration, transfer or exchange and where notices and demands
to or upon the Company in respect of the Notes and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such Office or Agency. The Company hereby
initially designates the Corporate Trust Office of the Trustee as its Office or
Agency for each of the foregoing purposes. If at any time the Company shall fail
to maintain any such required Office or Agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands. The Company hereby initially
appoints the Trustee as the Paying Agent.
Section 1003. Money for Note Payments to Be Held in Trust.
(a) If the Company shall at any time act as its own Paying Agent, it
shall, on or before each due date of the principal of or interest on the Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum of Money sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and shall promptly notify the Trustee of its action or failure so to
act.
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(b) Whenever the Company shall have one or more Paying Agents, it shall,
on or prior to each due date of the principal of or interest on the Notes,
deposit with any Paying Agent a sum of Money sufficient to pay the principal or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled thereto, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
(c) The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of or
interest on Notes in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as provided in
this Indenture;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal or interest on
the Notes; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
(d) The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such Money.
(e) Any Money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for six years after such principal or interest
shall have become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust Money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of
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Payment, or to be mailed to Holders of Notes, or both, notice that such Money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
balance of such Money then remaining will be repaid to the Company.
Section 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and its
Subsidiaries, and shall comply with all statutes, rules, regulations and orders
of and restrictions imposed by governmental and administrative authorities and
agencies applicable to the Company and its Subsidiaries; provided, however, that
subject to Section 1005 the foregoing shall not obligate the Company to preserve
any such right or franchise if the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries and that the loss thereof is not disadvantageous in any
material respect to any Holder.
Section 1005. Bank Existence; Maintenance of Status as an Insured
Institution.
The Company shall do or cause to be done all things necessary to preserve
and keep in full force and effect the Bank's status as an Insured Institution
and do all things necessary to ensure that savings accounts of the Bank are
insured by the FDIC or any successor organization up to the maximum amount
permitted by the Federal Deposit Insurance Act and regulations thereunder or any
succeeding federal law hereinafter enacted.
Section 1006. Maintenance of Properties.
The Company will:
(a) cause its properties and the properties of its Subsidiaries used or
useful in the conduct of the business of the Company and its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary facilities and equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that the foregoing shall not prevent the
Company or a Subsidiary from discontinuing the operation and maintenance of any
of its properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business and not disadvantageous in any material
respect to any Holder; and
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(b) take all appropriate steps to preserve, protect and maintain the
trademarks, trade names, copyrights, licenses and permits used in the conduct of
the business of the Company and its Subsidiaries; provided, however, that the
foregoing shall not prevent the Company or a Subsidiary from selling, abandoning
or otherwise disposing of any such trademark, trade name, copyright, license or
permit if such sale, abandonment or disposition is, in the judgment of the
Company, desirable in the conduct of its business and not disadvantageous in any
material respect to any Holder.
Section 1007. Restrictions on Dividends, Redemptions and Other Payments.
The Company shall not declare or pay any dividends on, or purchase, redeem
or otherwise acquire or retire for value, any of its capital stock now or
hereafter outstanding, or return any capital to holders of its capital stock as
such, or make any distribution of assets to holders of its capital stock as
such, except that the Company may (a) declare and pay dividends in capital stock
of the Company, (b) declare and pay dividends or make distributions in cash or
property (other than capital stock of the Company) and (c) purchase, redeem or
otherwise acquire or retire for value any of its capital stock now or hereafter
outstanding, provided that no such dividend, redemption or distribution shall
occur if the amount of such dividend, redemption or distribution, together with
the amount of all previous such dividends, redemptions and distributions by the
Company subsequent to September 30, 1996, would exceed in the aggregate the sum
of: (1) $50,000,000, plus (2) 75% of the Company's aggregate Consolidated Net
Income (reduced by 100% of any consolidated net loss), based upon audited annual
financial statements, for each fiscal year commencing after the year ended June
30, 1996, plus (3) 100% of the net proceeds received by the Company on account
of any capital stock issued by the Company (other than to a Subsidiary)
subsequent to June 30, 1996. For purposes of the preceding sentence, the
amount of any dividend payable in property other than cash, or property other
than cash received upon the issuance or sale of capital stock, shall be deemed
to be the fair market value of such property as determined by the Board of
Directors.
Section 1008. Insurance.
Subject to the right to sell, abandon or otherwise dispose of any building
or property whenever in the opinion of the Company the retention thereof is
inadvisable or not necessary to the business of the Company and its
Subsidiaries, the Company will at all times cause all buildings, equipment and
other insurable properties owned or operated by it or any Subsidiary to be
properly insured and kept insured with responsible insurance carriers, or
adequately insured by means of proper inter-insurance contracts, against loss or
damage by fire and other hazards, to
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the extent that such properties are usually insured by corporations owning or
operating properties of a similar character; provided, however, that the
foregoing shall not prevent the Company or any Subsidiary from maintaining any
self-insurance program covering minor risks if adequate reserves are maintained
in connection with such program.
Section 1009. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (b) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
Section 1010. Books and Records.
The Company shall, and shall cause each Subsidiary to, at all times keep
proper books of record and account in which proper entries shall be made in
accordance with generally accepted accounting principles and, to the extent
applicable, regulatory accounting principles.
Section 1011. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate (for purposes of this Section 1011, at least one such officer shall
be the principal executive, principal financial or principal accounting officer
of the Company), stating whether or not to the best knowledge of the signers
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture, setting forth the
arithmetical computations required to show compliance with the provisions of
Sections 1007 during the previous year, and, if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
(b) The Company will deliver to the Trustee, within five days after the
occurrence thereof, written notice of any event which after notice or lapse of
time or both would become an Event of Default pursuant to Clause (d) or (e) of
Section 501 of an Officer's Certificate specifying such default or event, the
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto.
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Section 1012. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 through 1007 with respect to
the Notes if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Notes, by Act of such Holders,
either shall waive such compliance in such instance or generally shall have
waived compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES AT COMPANY'S OPTION
Section 1101. Right of Redemption.
The Company may, at its option, redeem the Notes as a whole prior to the
Stated Maturity thereof on any Interest Reset Date, at the 100% of the principal
amount thereof, without premium, together with interest accrued to the
Redemption Date; provided, however, that the Company may not redeem any Notes
pursuant to such option prior to December 1, 2001. Redemption of Notes at the
option of the Company as permitted hereby shall be made in accordance with the
terms of such Notes and this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Notes, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Notes to be redeemed.
Section 1103. Notice of Redemption.
(a) Notice of redemption shall be given in the manner provided in Section
106, not less than 30 nor more than 60 days prior to the Redemption Date, to the
Holders of Notes. Failure to give notice by mailing in the manner herein
provided to the Holder of any Notes, or any defect in the notice to any such
Holder,
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shall not affect the validity of the proceedings for the redemption of any other
Notes.
(b) Any notice that is mailed to the Holder of any Notes in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives the notice.
(c) All notices of redemption shall state;
(1) the Redemption Date;
(2) the Redemption Price;
(3) that, on the Redemption Date, the Redemption Price shall become
due and payable upon each such Note to be redeemed and that
interest thereon shall cease to accrue on and after said date;
and
(4) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
(d) Notice of redemption of Notes at the election of the Company shall be
given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
Section 1104. Deposit of Redemption Price.
On or prior to the business day immediately preceding any Interest Reset
Date upon which redemption is to take place, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
Money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) any accrued interest on, all the Notes
which are to be redeemed on that date.
Section 1105. Notes Payable on Redemption Date.
(a) Notice of redemption having been given as aforesaid, the Notes shall,
on the Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Notes shall cease to
bear interest. Upon surrender of any such Note for redemption in accordance with
said notice, such Note shall be paid by the Company at the Redemption Price,
together with any accrued interest to the Redemption Date; provided, however,
that installments of interest on Notes whose Stated Maturity is on or prior to
the
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Redemption Date shall be payable to the Holders of such Notes, or one or more
Predecessor Notes, registered as such at the close of business on the Regular
Record Dates therefor according to their terms and the provisions of Section
307.
(b) If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal, until paid, shall bear interest from the
Redemption Date at the rate prescribed therefor in the Note.
ARTICLE TWELVE
REDEMPTION AT THE OPTION OF HOLDERS
Section 1201. Redemption Option upon an Interest Rate Reset Notice.
Unless pursuant to the terms of Section 501 the Notes have been declared
due and payable prior to their maturity by reason of an Event of Default and
such Event of Default has not been waived and such declaration has not been
rescinded or annulled, a Noteholder has the right to present all but not less
than all of his Notes for payment prior to their maturity during the period from
the date of the Interest Rate Reset Notice pertaining to an Interest Reset Date
to the fifth business day preceding the Interest Reset Date, and the Company
will redeem the same on the Interest Reset Date if Notes have been properly
presented for payment on behalf of beneficial holders who are natural persons.
Section 1202. Redemption Procedure at Holder's Option Upon an Interest
Reset Date.
Notes presented for redemption by a Holder exercising his option to have
his Notes redeemed on an Interest Reset Date will be redeemed on such Interest
Reset Date. Holders of Notes presented for redemption shall be entitled to and
shall receive scheduled monthly payments of interest thereon on scheduled
Interest Payment Dates until their Notes are redeemed.
Notes may be presented for redemption by delivering to the Trustee: (A) a
written request for redemption, in form satisfactory to the Trustee, signed by
the registered holder(s) or his duly authorized representative and (B) the Note
to be redeemed, free and clear of any liens or encumbrances of any kind. No
particular forms of request for redemption or no authority to request redemption
are necessary. The price to be paid by the Company for all Notes or portions
thereof presented to it pursuant to the provisions described in this Article
Twelve is 100% of the principal amount thereof or portion thereof plus accrued
but unpaid interest on the principal amount redeemed to the Redemption Date.
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Section 1203. Withdrawal.
Any Notes presented for redemption at the option of the holder may be
withdrawn by the person(s) presenting the same upon delivery of a written
request for such withdrawal to the Trustee not later than five (5) business days
before the relevant Interest Reset Date.
Section 1204. Deposit of Redemption Price.
Within 30 days after the receipt by the Company or the Trustee of any
request for redemption of a Note or Notes or any portion thereof duly made
pursuant to Section 1202, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of Money sufficient to
pay the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) any accrued interest on all the Notes or portions thereof
which are to be redeemed on that date.
Section 1205. Notes Payable on Redemption Date.
(a) A written request having been made as aforesaid, the Note or Notes so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price, and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Notes shall
cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said request, such Note shall be paid by the Company at the
Redemption Price, together with any accrued interest to the Redemption Date;
provided, however, that installments of interest on Notes whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the Regular Record Dates therefor according to their terms and the
provisions of Section 307.
(b) If any Note to be redeemed shall not be so paid upon surrender thereof
for redemption, the principal, until paid, shall bear interest from the
Redemption Date at the rate prescribed therefor in the Note.
Section 1206. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered at any
Office or Agency for such Note (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Note, without
service
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<PAGE>
charge, a new Note or Notes, containing identical terms and provisions, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unpaid portion of the principal of the
Note so surrendered.
Section 1207. Redemption Register.
The Trustee shall maintain at its main office a register (the "Redemption
Register") in which it shall record, in order of receipt, all requests for
redemption received by the Trustee under Section 1202. Unless withdrawn, all
such requests shall remain in effect during the period in which they are
received and thereafter from period to period, until the Notes which are the
subject of such request have been redeemed.
Section 1208. Redemption of Notes Subject to Article Eleven.
In the case of any Notes or portion thereof which are presented for
redemption pursuant to this Article Twelve and which have not been redeemed at
the time the Company gives notice of its election to redeem Notes pursuant to
Article Eleven, such Notes or portion thereof shall first be subject to
redemption pursuant to Article Eleven and if any such Notes or portion thereof
are not redeemed pursuant to Article Eleven they shall remain subject to
redemption pursuant to Article Twelve.
ARTICLE THIRTEEN
SUBORDINATION OF NOTES
Section 1301. Notes Subordinated to Senior Indebtedness.
(a) The Company covenants and agrees, and each Holder of Notes, by such
Holder's acceptance thereof, likewise covenants and agrees, and for purposes of
Section 508 consents, that the indebtedness represented by the Notes and the
payment of the principal of and interest on each and all of the Notes is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all Senior Indebtedness.
(b) Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings, or upon an assignment
for the benefit of creditors or any other marshalling of the assets and
liabilities of the Company or otherwise, except a distribution in connection
with a merger or consolidation or a conveyance or transfer of all or
substantially all of the properties
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<PAGE>
of the Company which complies with the requirements of Article Eight, or if an
event of default shall have occurred and be continuing with respect to any
Senior Indebtedness, or if the principal of the Notes shall have been declared
due and payable pursuant to Section 502 and such declaration shall not have been
rescinded and annulled as provided in said Section 502, then:
(1) the holders of all Senior Indebtedness shall first be entitled to
receive payment of the full amount due thereon in respect of principal and
interest, or adequate provision shall be made for such payment, before the
Holders of any of the Notes are entitled to receive any payment on account of
the principal of or interest on the indebtedness evidenced by the Notes;
(2) any payment by, or distribution of assets of, the Company of any kind
or character, whether in cash, property or securities (other than securities of
the Company as reorganized or readjusted or securities of the Company or any
other Corporation provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided in this Article
with respect to the Notes, to the payment of all Senior Indebtedness, provided
that the rights of the holders of Senior Indebtedness are not altered by such
reorganization or readjustment), to which the Holders of any of the Notes or the
Trustee would be entitled except for the provisions of this Article shall be
paid or delivered by the person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly
to the holders of Senior Indebtedness or their representative or representatives
or to the trustee or trustees under any indenture under which any instruments
evidencing any such Senior Indebtedness may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Senior Indebtedness
held or represented by each, to the extent necessary to make payment in full of
all Senior Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holders of the
indebtedness evidenced by the Notes or to the Trustee under this instrument; and
(3) in the event that, notwithstanding the foregoing, any payment by, or
distribution of assets of, the Company of any kind or character, whether such
payment shall be in cash, property or securities (other than securities of the
Company as reorganized or readjusted or securities of the Company or any other
Corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Article with
respect to the Notes, to the payment of all Senior Indebtedness, provided that
the rights of the holders of Senior Indebtedness are not altered by such
reorganization or readjustment), and the
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Company shall have made payment to the Trustee or directly to the Holders of any
of the Notes before all Senior Indebtedness is paid in full, such payment or
distribution shall be paid over by the Trustee (if the Notice required by
Section 1309 hereof has been received by the Trustee) or by the Holders of any
Notes, to the representative or representatives or to the trustee or trustees of
such Senior Indebtedness under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably as
aforesaid, for application to the payment of all Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution (or provision therefor)
to the holders of such Senior Indebtedness.
Section 1302. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the Holders of
the Notes shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to such Senior Indebtedness until all
amounts owing on the Notes shall be paid in full, and, as between the Company,
its creditors other than holders of Senior Indebtedness, and the Holders of the
Notes, no such payment or distribution made to the holders of Senior
Indebtedness by virtue of this Article which otherwise would have been made to
the Holders of the Notes shall be deemed to be a payment by the Company on
account of the Senior Indebtedness, and no such payments or distributions to the
Holders of the Notes of cash, property or securities otherwise distributable to
the holders of Senior Indebtedness shall, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the Notes, be
deemed to be a payment by the Company on account of the Notes, it being
understood that the provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Notes, on the
one hand, and the holders of Senior Indebtedness, on the other hand.
Section 1303. Obligation of Company Unconditional.
(a) Nothing contained in this Article or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Notes the principal of and interest on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders of the Notes and creditors
of the Company other than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the Holder of any Note from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness
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<PAGE>
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
(b) Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee or agent or other person making any payment or distribution,
delivered to the Trustee or to the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount paid or
distributed thereon and all other facts pertinent thereto or to this Article.
Section 1304. Payments on Notes Permitted.
Nothing contained in this Article or elsewhere in this Indenture, or in any
of the Notes, shall affect the obligation of the Company to make, or prevent the
Company from making, payment of the principal of and interest on the Notes in
accordance with the provisions hereof and thereof, except as otherwise provided
in this Article.
Section 1305. Effectuation of Subordination by Trustee.
Each Holder of Notes, by such Holder's acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee such Holder's attorney-in-fact for any and all
such purposes.
Section 1306. Knowledge of Trustee.
Notwithstanding the provisions of this Article or any other provisions of
this Indenture, the Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and it undertakes to perform or observe only such
of its covenants and obligations as are specifically set forth in this Article,
and no implied covenants or obligations with respect to the Senior Indebtedness
shall be read into this Indenture against the Trustee and the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment of moneys to or by the Trustee, or the taking of any other
action by the Trustee, unless and until the Trustee shall have received written
notice thereof from the Company, any Holder of Notes, any Paying Agent of the
Company or the holder or representative of any class of Senior Indebtedness.
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<PAGE>
Section 1307. Trustee May Hold Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article
with respect to any Senior Indebtedness at the time held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder.
Section 1308. Rights of Holders of Senior Indebtedness Not Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Section 1309. Notice to Trustee.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee located at the Corporate Trust Office of any fact known to the
Company which would prohibit the making of any payment to or by the Trustee in
respect of the Notes. Notwithstanding the provisions of this Article or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Notes, unless and until a
Responsible Officer of the Trustee shall have received at its Corporate Trust
Office written notice thereof from the Company or a holder of Senior
Indebtedness or from any trustee therefor, and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 601, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Note) then
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it during or after such three
Business Day period.
Subject to the provisions of Section 601, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee therefor) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee
therefor). In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in
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<PAGE>
any payment or distribution pursuant to this Article, the Trustee may request
that such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article,
and if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
Nothing in this Article shall subordinate to Senior Indebtedness the claim
of, or payments to, the Trustee under or pursuant to Section 607.
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* * * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[SEAL] COMMERCIAL FEDERAL
CORPORATION
By
------------------------
Name:
Title:
Attest:
- ---------------------------
[SEAL] HARRIS TRUST AND SAVINGS
BANK, AS TRUSTEE
By
------------------------
Name:
Title:
Attest:
- ---------------------------
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<PAGE>
STATE OF NEBRASKA )
: SS.:
COUNTY OF DOUGLAS )
On the ____ day of _____________________________, 1996, before me
personally came ______________________________, to me known, who, being by me
duly ______________________________ sworn, did depose and say that he
is a ________________________________ of Commercial Federal Corporation, a
Nebraska corporation, one of the persons described in and who executed the
foregoing instrument; that he knows the seal of said Corporation; that the seal
affixed to said instrument is such Corporation's seal; that it was so affixed by
authority of the Board of Directors of said Corporation; and that he signed his
name thereto by like authority.
--------------------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF ILLINOIS )
: SS.:
COUNTY OF ILLINOIS)
On the _______ day of ___________________________________, 1996,
before me personally came _____________________________, to me known, who,
being by me duly sworn, did depose and say that he is a ______________________
__________ of ______________, a ______________ corporation, one of the persons
described in and who executed the foregoing instrument; that he knows the seal
of said Corporation; that the seal affixed to said instrument is such
Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
--------------------------
Notary Public
[NOTARIAL SEAL]
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<PAGE>
EXHIBIT 12
COMMERCIAL FEDERAL CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
September 30, Year Ended June 30,
--------------------------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPUTATION OF EARNINGS:
- ------------------------
Income (loss) before income taxes, extraordinary items and
cumulative effects of changes in accounting principles $ (6,532) $ 17,737 $ 82,268 $ 54,327 $ 15,248 $ 56,197 $ 73,489
Fixed charges 82,683 84,822 329,262 305,506 256,999 277,347 326,202
-------- -------- -------- -------- -------- -------- --------
Total earnings for computation $ 76,151 $102,559 $411,530 $359,833 $272,247 $333,544 $399,691
======== ======== ======== ======== ======== ======== ========
Total earnings for computation excluding interest on deposits $ 21,361 $ 49,416 $197,490 $179,670 $129,690 $194,044 $222,794
======== ======== ======== ======== ======== ======== ========
COMPUTATION OF FIXED CHARGES:
- -----------------------------
Net rental expense $ 567 $ 657 $ 2,834 $ 2,939 $ 2,690 $ 2,289 $ 2,025
======== ======== ======== ======== ======== ======== ========
Portion of rentals deemed representative of interest $ 189 $ 219 945 $ 980 $ 897 $ 763 $ 675
-------- -------- -------- -------- -------- -------- --------
Interest:
Interest on deposits 54,790 53,143 214,040 180,163 142,557 139,500 176,897
Interest on borrowings 27,704 31,460 114,277 124,363 113,545 137,084 175,630
-------- -------- -------- -------- -------- -------- --------
Total interest 82,494 84,603 328,317 304,526 256,102 276,584 352,527
-------- -------- -------- -------- -------- -------- --------
Total fixed charges $ 82,683 $ 84,822 329,262 $305,506 $256,999 $277,347 $353,202
======== ======== ======== ======== ======== ======== ========
Total fixed charges excluding interest on deposits $ 27,893 $ 31,679 $115,222 $125,343 $114,442 $137,847 $176,305
======== ======== ======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES:
- -----------------------------------
Excluding interest on deposits .77x 1.56x 1.71x 1.43x 1.13x 1.41x 1.26x
Including interest on deposits .92x 1.21x 1.25x 1.18x 1.06x 1.20x 1.13x
</TABLE>
<PAGE>
Exhibit 23(b)
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the incorporation by reference in this Post-Effective Amendment
No. 1 to Registration Statement No. 333-01831 of Commercial Federal Corporation
on Form S-3 of our report dated August 23, 1996 (which expresses an unqualified
opinion and includes an explanatory paragraph relating to a change in the method
of accounting for mortgage servicing rights in fiscal year 1996 and a change in
the method of accounting for income taxes, a change in the method of accounting
for postretirement benefits, and a change in the method of accounting for
intangible assets in fiscal year 1994), appearing in and incorporated by
reference in the Annual Report on Form 10-K of Commercial Federal Corporation
for the year ended June 30, 1996 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of such Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Omaha, Nebraska
November 14, 1996
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Judith Bartolini, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2527 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
Commercial Federal Corporation
(Name of obligor)
Nebraska 47-0658852
(State of Incorporation) (I.R.S. Employer Identification No.)
2120 South 72nd Street
Omaha, Nebraska 68124
(Address of principal executive offices)
Subordinated Extendible Notes due 2006
(Title of indenture securities)
<PAGE>
1. GENERAL INFORMATION. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in effect
which includes the authority of the trustee to commence business and to
exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between Harris
Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which
constitutes the articles of association of the Trustee as now in effect
and includes the authority of the Trustee to commence business and to
exercise corporate trust powers was filed in connection with the
Registration Statement of Louisville Gas and Electric Company, File No.
2-44295, and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in connection
with the Registration Statement of C-Cube Microsystems Inc., File No.
33-97166, and is incorporated herein by reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 14th day of November 1996.
HARRIS TRUST AND SAVINGS BANK
By: /s/J. Bartolini
-----------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By:/s/J. Bartolini
-----------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1996 as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO] HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1996 a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
THOUSANDS
ASSETS OF DOLLARS
Cash and balances due from depository
institutions:
Non-interest bearing balances $ 1,751,494
and currency and coin..........
Interest bearing balances....... $ 839,856
Securities:.............................
a. Held-to-maturity securities $ 0
b. Available-for-sale securities $ 3,137,919
Federal funds sold and securities
purchased under agreements to resell in
domestic offices of the bank
and of its Edge and Agreement
subsidiaries, and in IBF's:
Federal funds sold.............. $ 478,625
Securities purchased under $ 0
agreements to resell...........
Loans and lease financing receivables:
Loans and leases, net of $ 7,897,067
unearned income................
LESS: Allowance for loan and $ 108,949
lease losses................... ------------
Loans and leases, net of
unearned income, allowance, $7,788,118
and reserve
(item 4.a minus 4.b)............
Assets held in trading accounts......... $ 74,302
Premises and fixed assets (including $ 172,267
capitalized leases)....................
Other real estate owned................. $ 142
Investments in unconsolidated $ 60
subsidiaries and associated companies..
Customer's liability to this bank on $ 100,950
acceptances outstanding................
Intangible assets....................... $ 299,478
Other assets............................ $ 563,022
---------
TOTAL ASSETS $15,206,233
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices................... $ 8,013,146
Non-interest bearing.................. $ 3,248,897
Interest bearing...................... $ 4,764,249
In foreign offices, Edge and $ 2,055,520
Agreement subsidiaries, and IBF's....
Non-interest bearing.................. $ 32,775
Interest bearing...................... $ 2,022,745
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of
its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds purchased............... $ 886,457
Securities sold under agreements to $ 1,841,475
repurchase........................... $ 40,157
Trading Liabilities
Other borrowed money:...................
a. With original maturity of one year $ 606,331
or less $ 9,434
b. With original maturity of more than
one year
Bank's liability on acceptances $ 100,950
executed and outstanding
Subordinated notes and debentures....... $ 310,000
Other liabilities....................... $ 186,408
-------------------------------
TOTAL LIABILITIES $ 14,049,878
===============================
EQUITY CAPITAL
Common stock............................ $ 100,000
Surplus................................. $ 600,295
a. Undivided profits and capital $ 486,054
reserves............................... $ (29,994)
b. Net unrealized holding gains -------------------------------
(losses) on available-for-sale
securities
TOTAL EQUITY CAPITAL $ 1,156,355
-------------------------------
Total liabilities, limited-life $ 15,206,233
preferred stock, and equity capital....
===============================
I, Steve Neudecker, Vice President of the above-named bank, do hereby declare
that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
STEVE NEUDECKER
10/30/96
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
MARIBETH S. RAHE
Directors.
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