<PAGE>
As filed with the Securities and Exchange Commission on April 15, 1998
Registration No.333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMMERCIAL FEDERAL CORPORATION
(Exact name of the registrant as specified in its articles of incorporation)
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<S> <C> <C>
NEBRASKA 6135 47-0658852
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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2120 SOUTH 72ND STREET
OMAHA, NEBRASKA 68124
(402) 554-9200
(Address, including zip code, and telephone number, including area code, of the
registrant's principal executive offices)
MR. 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 OF ALL COMMUNICATIONS TO:
CYNTHIA R. CROSS, ESQUIRE
HOUSLEY KANTARIAN & BRONSTEIN, P.C.
1220 19TH STREET, N.W., SUITE 700
WASHINGTON, D.C. 20036
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
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 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration 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 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. [_]
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 THIS 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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
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==========================================================================================================================
Proposed maximum Proposed maximum Amount
Title of each class of Amount to aggregate price aggregate offering of
securities to be registered be registered per unit price registration fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value (and
associated stock purchase rights) (1) 1,915,709 shares (2) N/A $71,532,574(3) $21,103
==========================================================================================================================
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(1) Prior to the occurrence of certain events, the stock purchase rights will
not be evidenced separately from the common stock.
(2) Represents the maximum number of shares of common stock, par value $.01 per
share, of Commercial Federal Corporation ("Commercial"), expected to be
issued in exchange for up to 250,000 shares of common stock, par value $.01
per share, of AmerUs Bank ("AmerUs"), upon consummation of the acquisition
of AmerUs by Commercial, described herein.
(3) Estimated solely for the purpose of calculating the registration fee. The
registration fee has been computed pursuant to Rule 457(c) under the
Securities Act of 1933, as amended, based on the average of the high and
low prices for the stock as reported on the New York Stock Exchange on
April 14, 1998.
<PAGE>
PROSPECTUS
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SUBJECT TO COMPLETION, DATED APRIL 15, 1998
COMMERCIAL FEDERAL CORPORATION
1,915,709 SHARES OF COMMON STOCK
PAR VALUE $.01 PER SHARE
This Prospectus relates to 1,915,709 shares (the "Shares") of the common
stock, $.01 par value per share (the "Common Stock"), of Commercial Federal
Corporation ("Commercial") issued in connection with Commercial's acquisition of
all of the issued and outstanding shares of AmerUs Bank ("AmerUs"), a federally
chartered savings bank based in Des Moines, Iowa, which may be offered by the
selling stockholder named herein or its respective pledgees, donees, transferees
or other successors in interest from time to time (the "Selling Stockholder").
Commercial will receive no part of the proceeds from sales of the Shares offered
hereby. The Shares are listed on the New York Stock Exchange ("NYSE") under the
symbol "CFB." On _______________, 1998, the closing price of the Common Stock
on the NYSE was $_____ per share.
The Shares may be offered for sale from time to time by the Selling
Stockholder, or by certain other persons who are named in an amendment or
supplement to this Prospectus, in one or more transactions described herein on
the NYSE or on any other securities exchange on which the Common Stock is
traded, in the over-the-counter market, in one or more private transactions or
in a combination of such methods of sale, at prices and on terms then
prevailing, at prices related to such prices or at negotiated prices. See "Plan
of Distribution" below. The price at which any of the Shares of Common Stock
may be sold, and the commissions, if any paid in connection with such sale, may
vary from transaction to transaction.
Commercial will bear all expenses incurred in connection with the offering
of the Shares pursuant to this Prospectus other than underwriting discounts and
commissions, brokerage fees and similar compensation.
SEE "RISK FACTORS" ON PAGE ___ FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
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.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY STATE AGENCY, NOR HAS SUCH COMMISSION, OFFICE,
CORPORATION OR AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT
INSURED BY THE SAVINGS ASSOCIATION INSURANCE FUND, THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
The date of this Prospectus is ________, 1998.
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AVAILABLE INFORMATION
Commercial has filed with the Securities and Exchange Commission (the
"Commission") the Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act") relating to the Shares of Commercial Common
Stock. This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted pursuant to
the rules and regulations of the Commission. The information omitted may be
obtained from the public reference facilities of the Commission or inspected and
copied at the principal or regional offices of the Commission at the addresses
listed below.
Commercial is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can 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 its regional offices at Northwestern Atrium Center, 500 West
Madison, Suite 1400, Chicago, Illinois 60601, and World Trade Center, 13th
Floor, New York, New York 10048. Copies of such materials also can be obtained
from the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. 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 Common Stock is listed and traded on the
New York Stock Exchange. Reports, proxy statements and other information
regarding Commercial may be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by Commercial
(File No. 1-11515) are hereby incorporated by reference in this Prospectus:
(i) Commercial's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997;
(ii) Commercial's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1997 and December 31, 1997;
(iii) Commercial's Current Reports on Form 8-K dated August 18, 1997,
September 2, 1997, September 11, 1997, November 18, 1997, December 8,
1997, December 15, 1997, February 11, 1998 and March 9, 1998;
(iv) the pro forma data set forth under the captions "Unaudited Pro Forma
Combined Per Share Data" and "Unaudited Historical Pro Forma Combined
Financial Information" included in Commercial's prospectus filed
as part of Commercial's Registration Statement on Form S-4 filed
April 10, 1998; and
(v) the description of the Common Stock set forth at Item 1 of Commercial's
registration statement on Form 8-A dated July 17, 1995.
All documents subsequently filed by Commercial with the Commission pursuant
to Sections 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 Shares
made hereby shall be deemed to be incorporated by reference in this Prospectus
and to be part hereof from the date of filing of such documents.
Any statement contained in a document 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 herein modifies or supersedes such
1
<PAGE>
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as so modified or superseded.
This Prospectus incorporates by reference other documents relating to
Commercial which are not presented herein or delivered herewith. These
documents are available upon request without charge, directed to Mr. Gary L.
Matter, Commercial's Corporate Secretary, 2120 South 72nd Street, Omaha,
Nebraska 68124, telephone (402) 390-5176.
COMMERCIAL FEDERAL CORPORATION
Commercial is a unitary non-diversified savings and loan holding company
whose primary asset is Commercial Federal Bank, a Federal Savings Bank (the
"Bank"), which is one of the largest depository institutions in the Midwest. At
December 31, 1997, Commercial had total assets of $7.2 billion and total
stockholders' equity of $458.4 million. Based upon total assets at that date,
Commercial was the 13th largest publicly held thrift holding company in the
United States. Commercial is a consumer-oriented financial institution that
emphasizes single-family residential and construction real estate lending,
consumer lending, commercial real estate lending, retail deposit activities,
including demand deposit accounts, and mortgage banking. At March 31, 1998,
after its completed acquisitions of First National Bank Shares, LTD. ("First
National") (January 30, 1998), Liberty Financial Corporation ("Liberty")
(February 13, 1998) and Mid Continent Bancshares, Inc. ("Mid Continent")
(February 27, 1998) and including anticipated branch consolidations, Commercial
operated 34 branch offices in Nebraska, 21 branch offices in greater
metropolitan Denver, Colorado, 19 branch offices in Oklahoma, 38 branch offices
in Kansas, 45 branch offices in Iowa and seven branch offices in Arizona.
Throughout its 111 year history, Commercial has emphasized customer service. To
serve its customers, Commercial conducts loan origination activities through its
164 branch office network, loan offices of its wholly-owned mortgage banking
subsidiary and a nationwide correspondent network of mortgage loan originators.
Commercial also provides insurance and securities brokerage and other retail
financial services.
Commercial'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), community
banking, 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,
Commercial 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. Commercial's retail strategy will
continue to be centered on attracting new customers and selling both new and
existing customers multiple products and services. Additionally, Commercial
will continue to build and leverage an infrastructure designed to increase fee
and other income.
Complementing its strategy of internal growth, Commercial continues to grow
its present six-state franchise through an ongoing program of selective
acquisitions of other financial institutions. Future acquisition candidates
will be selected based on the extent to which the candidates can enhance
Commercial's retail presence in new or underserved markets and complement
Commercial's existing retail network. In addition to the acquisitions of First
National, Liberty and Mid Continent which were consummated during the first
calendar quarter of 1998, as of the date of this Prospectus, Commercial had
entered into agreements to acquire three other institutions, Perpetual Midwest
Financial, Inc. ("Perpetual"), a savings and loan holding company headquartered
in Cedar Rapids, Iowa, AmerUs, a federally chartered savings bank headquartered
in Des Moines, Iowa and First Colorado Bancorp, Inc. ("First Colorado"), a
savings and loan holding company headquartered in Lakewood, Colorado. Together,
these pending or recently completed acquisitions will add 142 branches (before
any consolidation) to Commercial's existing network and approximately $4.7
billion in total assets, approximately $3.4 billion in deposits and
approximately $2.0 billion in loans serviced for others. For additional
information regarding these acquisitions, see "The Acquisition" and "Recent
Developments -- Recently Completed and Pending Acquisitions."
Commercial's principal executive offices are located at 2120 South 72nd
Street, Omaha, Nebraska 68124, and its telephone number is (402) 554-9200.
2
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THE ACQUISITION
On February 11, 1998, Commercial and the Bank entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") with AmerUs and its sole stockholder,
AmerUs Group Co. ("Group") pursuant to which Commercial agreed to purchase all
of the issued and outstanding shares of AmerUs for consideration consisting of
(i) cash in an amount equal to $95,750,000, plus the amount of any gains (net of
tax) and minus the amount of any losses (net of tax benefit) realized upon the
disposition of certain assets of AmerUs prior to the Closing, and assuming Group
made a $5,000,000 contribution to AmerUs prior to the Closing as required under
the Stock Purchase Agreement), (ii) 1,915,709 shares of Common Stock, and (iii)
Purchase Notes, in the form attached as Exhibit B to the Stock Purchase
Agreement, in an aggregate principal amount equal to $40,000,000 maturing on the
first anniversary of the Closing Date (unless earlier prepaid in full by
Commercial) and bearing an interest rate, adjusted monthly on the first business
day of each calendar month, equal to the "Ask Yield" reported in The Wall Street
---------------
Journal on such date for Treasury Bills maturing in one year plus 1.5%.
- -------
The Stock Purchase Agreement provides for the acquisition by Commercial of
all of the issued and outstanding shares of common stock of AmerUs from Group
(the "Stock Purchase"), and the subsequent merger of AmerUs with and into the
Bank, with the Bank as the surviving institution (the "Bank Merger" and,
together with the Stock Purchase, the "Acquisition"). At the effective time of
the Bank Merger (the "Bank Merger Effective Time"), AmerUs will be merged with
and into the Bank, and the Bank will be the resulting subsidiary savings
institution. It is anticipated that the Bank Merger Effective Time will occur
immediately following the closing (the "Closing") of the Stock Purchase.
Pursuant to the terms of the Stock Purchase Agreement, Commercial was
required to register the Shares under the Securities Act pursuant to an
effective registration statement as of the Closing or enter into a registration
rights agreement at Closing.
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RISK FACTORS
Before investing in the Common Stock offered hereby, prospective investors
should consider carefully the matters set forth below, along with the other
information set forth or incorporated by reference herein.
COMPETITION
Banking is a highly competitive industry. The Bank competes directly with
other financial institutions and other lending entities in the markets in which
it operates. The Bank also competes for loans and deposits with other providers
of financial services such as money market and mutual funds, brokerage firms,
investment companies, credit companies and insurance companies.
POTENTIALLY ADVERSE IMPACT OF INTEREST RATES AND ECONOMIC AND INDUSTRY
CONDITIONS
The financial institution industry is affected by fluctuations in market
interest rates. Like most financial institution holding companies, Commercial's
net interest income is affected by general economic and other factors that
influence market interest rates and Commercial's ability to respond to changes
in such rates. General economic conditions also affect the credit quality of
Commercial'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.
Significant and rapid changes have occurred in the thrift industry in
recent years, and the future of the industry is subject to various
uncertainties. 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 industry, regulatory and otherwise, will not
adversely affect the financial condition and results of operations of
Commercial.
RISKS INVOLVED IN ACQUISITION STRATEGY
Commercial has grown and intends to continue to grow through acquisitions
of other financial institutions. Such acquisitions involve risks of adversely
changing results of operations, changes in Commercial's capital structure, or
asset quality problems of acquired institutions and other conditions beyond the
control of Commercial, such as adverse personnel relations, loss of customers
because of change in identity and deterioration in local economic conditions.
While to date Commercial has successfully integrated all of the institutions it
has acquired , it is possible that this risk may be heightened somewhat due to
the number of acquisitions recently completed or pending as of the date of this
Prospectus. See "Recent Developments."
Management believes that future increases in the assets and earnings of
Commercial will depend in part on consummation of acquisitions. The ability of
Commercial to pursue this strategy depends in part on its capital position and,
in the case of cash acquisitions, on its liquid assets or ability to acquire
cash. Commercial must compete with a variety of institutions for suitable
acquisition candidates and there can be no assurance that the acquisition
activities of competitors will not increase. Such competition is likely to
affect Commercial's ability to make acquisitions, increase the price that
Commercial pays for certain acquisitions and increase Commercial's costs in
analyzing possible acquisitions.
REGULATION AND GOVERNMENT POLICY
The federal laws and regulations that are applicable to Commercial and its
depository institution subsidiary give regulatory authorities extensive
discretion in connection with their supervisory and enforcement activities and
generally have been promulgated to protect depositors and the deposit insurance
funds and not for the purpose of protecting holders of securities issued by
financial institutions or their holding companies. Any change in such
regulation, whether by an applicable federal regulatory authority or federal
legislative bodies, could have a significant
4
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impact on Commercial and the Bank. In addition, government policies and
regulations concerning, among other things, monetary and fiscal affairs,
significantly affect the operations of financial institutions such as the Bank.
YEAR 2000 COMPLIANCE
As the year 2000 approaches, an important business issue has emerged
regarding how existing application software programs and operating systems can
accommodate this date value. Many computer programs that can only distinguish
the final two digits of the year entered (a common programming practice in
earlier years) are expected to read entries for the year 2000 as the year 1900
and compute payment, interest or delinquency based on the wrong date or are
expected to be unable to compute payment, interest or delinquency.
All of the material computer programs of Commercial that could be affected
by this problem are provided by major third party vendors. While such third
party vendors of have advised Commercial that all such computer systems and
programs will be year 2000 compliant, if the third party vendors are unable to
resolve year 2000 issues in time, Commercial would likely experience significant
data processing delays, mistakes or failures. These delays, mistakes or
failures could have a significant adverse impact on the financial condition and
results of operations of Commercial.
RECENT DEVELOPMENTS
RECENTLY COMPLETED AND PENDING ACQUISITIONS. In addition to the
Acquisition, Commercial entered into definitive agreements to acquire five other
financial institution holding companies: First National, a bank holding company;
Liberty, a commercial bank and thrift holding company; Mid Continent, a savings
and loan holding company, Perpetual, a savings and loan holding company and
First Colorado, a savings and loan holding company. The acquisition of First
National, headquartered in Great Bend, Kansas, was completed January 30, 1998,
the acquisition of Liberty, headquartered in West Des Moines, Iowa, was
completed February 13, 1998 and the acquisition of Mid Continent, headquartered
in El Dorado, Kansas, was completed February 27, 1998. Under the terms of the
First National agreement, all of the outstanding shares of First National's
common stock were exchanged for 992,842 shares of Common Stock for total
consideration of approximately $32.3 million. First National operated seven
branch offices in Kansas and at January 30, 1998 had assets of approximately
$147.8 million, deposits of approximately $131.3 million and stockholders'
equity of approximately $12.0 million. This acquisition was accounted for as a
purchase. Under the terms of the Liberty agreement, all of the outstanding
shares of Liberty's common stock were exchanged for 4,015,555 shares of Common
Stock for total consideration of approximately $136.3 million. This
acquisition was accounted for as a pooling. Under the terms of the Mid
Continent agreement, all of the outstanding shares of Mid Continent's common
stock were exchanged for approximately 2,641,945 shares of Common Stock for
total consideration of approximately $93.5 million. This acquisition was
accounted for as a pooling. Under the terms of the Perpetual agreement, all of
the outstanding shares of Perpetual's common stock will be exchanged for
approximately 1,633,067 shares of Common Stock for total consideration at the
date of the agreement of approximately $57.6 million. It is expected that this
acquisition will be accounted for as a pooling of interests. Under the terms of
the First Colorado agreement, all of the outstanding shares of First Colorado's
common stock (including stock options and 1.8 million shares to be issued prior
to closing the transaction) will be exchanged for approximately 16,566,918
shares of Common Stock for total consideration of approximately $602.6 million
(assuming that the average per share Common Stock price was $36.375). It is
expected that this acquisition will be accounted for as a pooling of interests.
Together with AmerUs, these pending or recently completed acquisitions will add
142 branches (before any consolidation) to Commercial's existing network and
approximately $4.7 billion in total assets, approximately $3.4 billion in
deposits and approximately $2.0 billion in loans serviced for others. Liberty
operated seven bank subsidiaries and one thrift subsidiary with 38 branch
locations in Iowa and seven branch locations in the Tucson, Arizona metropolitan
area. Mid Continent operated ten branch offices in Kansas. Perpetual operates
five branch offices in Iowa. On February 11, 1998, the date of the Stock
Purchase Agreement, AmerUs Bank operated 27 branches in Iowa, eight branches in
Missouri, six branches in Nebraska, four branches in Kansas, two branches in
Minnesota and one branch in South Dakota. First Colorado operates 27 branches in
Colorado. Future acquisition candidates will be selected based on the extent to
which the candidates can enhance Commercial's retail presence in new or
underserved markets and complement Commercial's existing retail network.
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NEW DIRECTOR. Effective February 13, 1998, Mr. William A. Krause, the
former Chairman and a director of Liberty, was appointed to the Board of
Directors of Commercial for a term to expire at Commercial's 1998 annual meeting
of stockholders in November 1998. Mr. Krause has also been appointed to the
Board of Directors of the Bank. Pursuant to the terms of Commercial's merger
agreement with First Colorado, Commercial has also agreed that Malcolm E.
Collier, Jr., Chairman, Chief Executive Officer and President of First
Colorado, will be named to Commercial's Board of Directors effective at and
conditioned upon the closing of Commercial's acquisition of First Colorado.
POTENTIAL INCREASE IN AUTHORIZED SHARES. At the _________, 1998 Special
Meeting of Stockholders, stockholders of Commercial will be asked to approve an
amendment to Commercial's Articles of Incorporation to increase the number of
authorized shares of Common Stock from 50,000,000 shares to 120,000,000 shares.
SELLING STOCKHOLDER
The following table sets forth certain information as of the date of this
Prospectus with respect to the Shares which are covered by this Prospectus,
including the name of the Selling Stockholder, the nature of any position,
office or other material relationship that such Selling Stockholder has had
within the past three years with Commercial or an affiliate of Commercial and
the number of shares of Common Stock owned by such Selling Stockholder as of the
date of this Prospectus and the number of shares which are covered by this
Prospectus.
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<CAPTION>
NUMBER OF
NUMBER OF SHARES SHARES TO BE
BENEFICIALLY NUMBER OF BENEFICIALLY
NAME OF SELLING OWNED PRIOR TO SHARES OFFERED OWNED AFTER
STOCKHOLDER THE OFFERING HEREBY THE OFFERING
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AmerUs Group Co. 1,915,709
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PLAN OF DISTRIBUTION
Subject to the limitations described below, the Selling Stockholder may
offer Shares from time to time depending on market conditions and other factors,
in one or more transactions on the NYSE or other securities exchanges on which
the Shares are traded, in the over-the-counter market or otherwise, at market
prices prevailing at the time of sale, at negotiated prices or at fixed prices.
The Shares may be offered in any manner permitted by law, including through
underwriters, brokers, dealers or agents, and directly to one or more
purchasers. Sales of Shares may involve (i) sales to underwriters who will
acquire Shares for their own account and resell them in one or more transactions
at fixed prices or at varying prices determined at the time of sale; (ii) block
transactions in which the broker or dealer so engaged will attempt to sell the
Shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction; (iii) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account; (iv) an exchange
distribution in accordance with the rules of any such exchange; and (v) ordinary
brokerage transactions and transactions in which a broker solicits purchasers.
Brokers and dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholder and/or
purchasers of Shares for whom they may act as agent (which compensation may be
in excess of customary commissions). The Selling Stockholder and any broker or
dealer that participates in the distribution of Shares may be deemed to be
underwriters and any commissions received by them and any profit on the resale
of Shares positioned by a broker or dealer may be deemed to be underwriting
discounts and commissions under the Securities Act. In the event a Selling
Stockholder engages an underwriter in connection with the sale of the Shares, to
the extent required, a Prospectus Supplement will be distributed, which will set
forth the number of Shares being offered and the terms of the offering,
including the names of the underwriters, any discounts, commissions and other
items constituting compensation to underwriters, dealers or agents, the public
offering price and any discounts, commissions or concessions allowed or
reallowed or paid by underwriters to dealers.
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In connection with distributions of the Common Stock or otherwise, the
Selling Stockholder may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions, broker-
dealers or other financial institutions may engage in short sales of Common
Stock in the course of hedging the positions they assume with the Selling
Stockholder. The Selling Stockholder also may sell Common Stock short and
redeliver the Shares to close out such short positions. The Selling Stockholder
also may enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to such broker-dealer or other
financial institution of the Common Stock offered hereby, which Common Stock
such broker-dealer or other financial institution may resell pursuant to this
Prospectus (as supplemented or amended, to the extent required, to reflect such
transaction). The Selling Stockholder also may pledge the Shares registered
hereunder to a broker-dealer or other financial institution, including
affiliates of Commercial, and, upon a default, such broker-dealer or other
financial institution may effect sales of the pledged Common Stock pursuant to
this Prospectus (as supplemented or amended, to the extent required, to reflect
such transaction).
In addition, the Selling Stockholder may from time to time sell Shares in
transactions under Rule 144 under the Securities Act.
Pursuant to the terms of the Stock Purchase Agreement, Group has agreed
that from and after the Closing of the Acquisition, none of Group or its
affiliates will sell, assign, transfer or otherwise dispose of any of the Shares
unless such transfer constitutes a "Permitted Disposition." For purposes of the
Stock Purchase Agreement, the term "Permitted Disposition" means (i) a transfer
to an affiliate of Group; (ii) a transfer in a widely distributed public
offering; (iii) a transfer pursuant to a non-directed broker transaction; (iv) a
transfer to any person if, immediately following such transfer, such person,
together with its affiliates, would own beneficially less than 5% of the
outstanding shares of Common Stock on the date of transfer; (v) a transfer to
any person if, immediately following such transfer, such person, together with
affiliates, would own beneficially no shares of Common Stock other than the
shares acquired by such person and its affiliates pursuant to the transfer; (vi)
a transfer pursuant to a merger, consolidation or other similar transaction
involving Commercial if such transaction has been approved by a majority of the
members of the Board of Directors of Commercial; or (vii) a transfer pursuant to
a bona fide pledge of, or the grant of a security interest in, any or all of
such Shares to secure indebtedness of Group or any of its affiliates for money
borrowed in connection with such pledge or grant of a security interest,
provided that the secured party has agreed to be bound by the terms and
conditions with respect to such Shares set forth in the Stock Purchase Agreement
to the same extent and in the same manner as Group. Further, in the event that
Group or any of its affiliates intends to transfer a number of Shares which
constitute more than 2% of the shares of Common Stock outstanding on the date of
the transaction, Group is required to give notice of such intent to Commercial
prior to the consummation of the transfer.
Group has also agreed that for a period of six months following the Closing
of the Acquisition, when any matter is brought to the vote of Commercial's
stockholders, Group will appoint Commercial or its nominee as Group's proxy,
with full power of substitution, to vote any and all of the Shares which, at the
time of such vote, are owned by Group, of record or beneficially, directly or
indirectly, at every annual, special or adjourned meeting of the stockholders of
Commercial including the right to sign its name (as stockholder) and to any
consent, certificate or other document relating to such vote as permitted under
applicable law, at Commercial's sole discretion.
In connection with the filing of the Registration Statement, Commercial and
Group entered into an agreement pursuant to which, among other things, (i)
Commercial agreed to maintain the effectiveness of the Registration Statement
for a period ending on the earlier of (x) the one year anniversary of the
Closing Date (subject to extension) and (y) the date on which all of the Shares
have been disposed of pursuant to this Prospectus, (ii) Group agreed to suspend
sales of the Shares pursuant to the Registration Statement for specified periods
upon the request of Commercial under certain circumstances and (iii) each of
Group and Commercial agreed to indemnify the other against certain liabilities,
including liabilities under the Securities Act.
7
<PAGE>
USE OF PROCEEDS
The shares offered hereby are being sold solely for the account of the
Selling Stockholder. Therefore, Commercial will not receive any of the proceeds
of this offering.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for
Commercial by Fitzgerald, Schorr, Barmettler & Brennan, P.C., Omaha, Nebraska.
EXPERTS
The consolidated financial statements of Commercial as of June 30, 1997 and
1996 and for each of the three years in the period ended June 30, 1997
incorporated in this Prospectus by reference from Commercial's Annual Report on
Form 10-K for the fiscal year ended June 30, 1997 have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference herein (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 have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
CERTAIN FORWARD-LOOKING STATEMENTS
From time to time, Commercial may communicate in oral or written form
statements relating to the future results of Commercial that may be considered
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements may relate to, among other
things, the Year 2000 project, loan loss reserve adequacy, simulation of changes
in interest rates and litigation results. Actual results may differ materially
from those expressed or implied as a result of certain risks and uncertainties,
including, but not limited to, changes in political and economic conditions,
interest rate fluctuations, competitive product and pricing pressures within
Commercial's markets, equity and fixed income market fluctuations, personal and
corporate customers' bankruptcies, inflation, acquisitions and integrations of
acquired businesses, technological change, changes in law, changes in fiscal,
monetary, regulatory and tax policies, monetary fluctuations, success in gaining
regulatory approvals when required as well as other risks and uncertainties
detailed from time to time in the filings of Commercial with the Commission.
8
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED IN CONNECTION WITH THE
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER
THAN AS CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST BE NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY COMMERCIAL OR BY ANY UNDERWRITER, AGENT OR DEALER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY, BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
-------------
TABLE OF CONTENTS
Page
----
Available Information.......................................................
Incorporation of Certain Documents by Reference.............................
Commercial Federal Corporation..............................................
The Acquisition.............................................................
Risk Factors................................................................
Recent Developments.........................................................
Selling Stockholder.........................................................
Plan of Distribution........................................................
Use of Proceeds.............................................................
Legal Matters...............................................................
Experts.....................................................................
Certain Forward-Looking Statements..........................................
1,915,709 SHARES
COMMERCIAL FEDERAL CORPORATION
COMMON STOCK
---------------
PROSPECTUS
---------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
<S> <C>
Registration fee.................................... $ 21,103
Accounting fees..................................... 10,000 *
Legal fees.......................................... 27,000 *
Printing and filing fees............................ 5,000
Miscellaneous....................................... 1,897 *
----------------
Total............................................... $ 65,000 *
================
</TABLE>
- -------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Indemnification of directors and officers of Commercial is provided under
Article VI of the Articles of Incorporation of Commercial 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 Commercial and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
Article VI of Commercial's Articles of Incorporation provides that an
outside director shall not be personally liable to Commercial or its
stockholders for monetary damages for breach of his fiduciary duty as a director
and authorizes Commercial 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
Commercial 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 Commercial through management agreements,
voting trusts, directorships in related corporations or any other device or
relationship.
Commercial 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
Commercial 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 Commercial. 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 Commercial
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful.
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
II-1
<PAGE>
right of Commercial 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
Commercial. 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 Commercial 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.
Exhibit
Number Description of Exhibit
------ ----------------------
2 Stock Purchase Agreement, dated February 11, 1998, by and among
Commercial Federal Corporation, Commercial Federal Bank, a
Federal Savings Bank, AmerUs Group Co. and AmerUs Bank
5 Opinion of Fitzgerald, Schorr, Barmettler & Brennan, P.C.
regarding the legality of the shares being registered (including
consent)
23.1 Consent of Fitzgerald, Schorr, Barmettler & Brennan, P.C.
(included in opinion filed as Exhibit 5)
23.2 Consent of Deloitte & Touche LLP
24 Power of Attorney (reference is made to the signature page)
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) 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 Section 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-2
<PAGE>
(c) 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
Securities 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 the 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 Securities
Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby 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
the 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 purpose 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Omaha, Nebraska as of April 10, 1998.
COMMERCIAL FEDERAL CORPORATION
By:/s/ William A. Fitzgerald
--------------------------------------------------
William A. Fitzgerald
Chairman of the Board and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Commercial Federal
Corporation, do hereby severally constitute and appoint William A. Fitzgerald
and James A. Laphen and each of them singly, our true and lawful attorneys and
agents, to do any and all things and acts in our names in the capacities
indicated below and to execute any and all instruments for us and in our names
in the capacities indicated below which said William A. Fitzgerald and/or James
A. Laphen may deem necessary or advisable to enable Commercial Federal
Corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission,
in connection with the registration statement on Form S-3 relating to the
offering of Commercial's Common Stock, including specifically, but not limited
to, power and authority to sign for us in our names in the capacities indicated
below the registration statement and any and all amendments (including post-
effective amendments) thereto; and we hereby ratify and confirm all that said
William A. Fitzgerald and/or James A. Laphen shall do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated.
Signature Capacity Date
- --------- -------- ----
/s/ William A. Fitzgerald Principal Executive Officer April 10, 1998
- ----------------------------------
William A. Fitzgerald and Director
Chairman of the Board and
Chief Executive Officer
/s/ James A. Laphen Principal Financial Officer April 10, 1998
- ----------------------------------
James A. Laphen
President, Chief Operating Officer
and Chief Financial Officer
/s/ Gary L. Matter Principal Accounting Officer April 10, 1998
- ----------------------------------
Gary L. Matter
Senior Vice President, Controller
and Secretary
II-4
<PAGE>
/s/ Talton K. Anderson Director April 10, 1998
- ----------------------------------
Talton K. Anderson
/s/ Michael P. Glinsky Director April 10, 1998
- ----------------------------------
Michael P. Glinsky
/s/ William A. Krause Director April 10, 1998
- ----------------------------------
William A. Krause
/s/ Robert F. Krohn Director April 10, 1998
- ----------------------------------
Robert F. Krohn
/s/ Carl G. Mammel Director April 10, 1998
- ----------------------------------
Carl G. Mammel
/s/ Robert S. Milligan Director April 10, 1998
- ----------------------------------
Robert S. Milligan
/s/ James P. O'Donnell Director April 10, 1998
- ----------------------------------
James P. O'Donnell
/s/ Robert D. Taylor Director April 10, 1998
- ----------------------------------
Robert D. Taylor
/s/ Aldo J. Tesi Director April 13, 1998
- ----------------------------------
Aldo J. Tesi
<PAGE>
EXHIBIT 2
================================================================================
STOCK PURCHASE AGREEMENT
BY AND AMONG
COMMERCIAL FEDERAL CORPORATION,
COMMERCIAL FEDERAL BANK, A FEDERAL SAVINGS BANK,
AMERUS GROUP CO.
AND
AMERUS BANK
DATED AS OF FEBRUARY 11, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions..........................................2
ARTICLE II
THE STOCK PURCHASE
Section 2.1 General.............................................10
Section 2.2 Closing.............................................10
Section 2.3 Instruments of Transfer; Payment of Purchase
Consideration.......................................10
Section 2.4 Allocation of Purchase Price........................11
Section 2.5 Reservation of Right to Revise Transaction..........11
ARTICLE III
THE MERGER
Section 3.1 The Merger..........................................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SELLER
Section 4.1 Organization, Good Standing, Authority, Insurance,
Etc.................................................12
Section 4.2 Capitalization......................................13
Section 4.3 Ownership of Subsidiaries...........................13
Section 4.4 Financial Statements; Undisclosed Liabilities.......13
Section 4.5 Absence of Changes..................................14
Section 4.6 No Broker's or Finder's Fees........................14
Section 4.7 Litigation and Other Proceedings....................14
Section 4.8 Compliance with Law.................................14
Section 4.9 Corporate Actions...................................15
Section 4.10 Authority...........................................15
Section 4.11 Employment Arrangements.............................16
Section 4.12 Employee Benefits...................................17
Section 4.13 Reports.............................................18
Section 4.14 Property and Assets.................................18
Section 4.15 Agreements and Instruments..........................18
Section 4.16 Material Contract Defaults..........................19
Section 4.17 Tax Matters.........................................19
<PAGE>
Section 4.18 Environmental Matters...............................20
Section 4.19 Loan Portfolio: Portfolio Management...............20
Section 4.20 [Intentionally Omitted].............................21
Section 4.21 Derivatives Contracts...............................21
Section 4.22 Insurance...........................................21
Section 4.23 Purchase for Investment.............................21
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 5.1 Organization, Good Standing, Authority, Insurance,
Etc.................................................22
Section 5.2 Capitalization......................................22
Section 5.3 Ownership of Subsidiaries...........................23
Section 5.4 Financial Statements; Undisclosed Liabilities.......23
Section 5.6 No Broker's or Finder's Fees........................24
Section 5.7 Litigation and Other Proceedings....................24
Section 5.8 Compliance With Law.................................24
Section 5.9 Corporate Actions...................................24
Section 5.10 Authority...........................................25
Section 5.11 Reports.............................................25
Section 5.12 Agreements and Instruments..........................26
Section 5.13 Cash Consideration..................................26
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business by the Company..................26
Section 6.2 Maintenance of Records..............................29
Section 6.3 Employees; Employee Benefits........................30
Section 6.4 Further Assurances..................................33
Section 6.5 Efforts of Parties to Close.........................33
Section 6.6 Confidentiality and Announcements...................33
Section 6.7 Access; Certain Communications......................34
Section 6.8 Regulatory Matters; Third Party Consents............35
Section 6.9 Notification of Certain Matters.....................37
Section 6.10 Expenses............................................37
Section 6.11 Third Party Proposals...............................37
Section 6.12 Stock Listing.......................................38
Section 6.13 Loan, Accrual and Reserve Policies..................38
Section 6.14 Voting of Shares and Buyer Common Stock;
Transfer of Buyer Common Stock......................39
Section 6.15 Disposition of Listed Assets; Sale/Lease of
Properties..........................................40
Section 6.16 Non-Competition.....................................40
Section 6.17 Tax Matters. .......................................42
<PAGE>
Section 6.18 Loan Production Offices; Sale of LPO Loans..........43
Section 6.19 Name Change.........................................44
Section 6.20 Contribution of Dividend............................44
Section 6.21 Environmental Reports...............................44
Section 6.22 Registration Rights Agreement.......................46
Section 6.23 Affiliate Contracts.................................46
ARTICLE VII
CONDITIONS TO CONSUMMATION
OF THE STOCK PURCHASE
Section 7.1 Mutual Conditions...................................46
Section 7.2 Conditions to Buyer's Obligations...................47
Section 7.3 Conditions to Seller's and the Company's
Obligations.........................................48
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations, Warranties and
Covenants...........................................49
Section 8.2 Obligations of Seller...............................49
Section 8.3 Obligations of Buyer................................51
Section 8.4 Procedure...........................................52
Section 8.5 Survival of Indemnity...............................54
Section 8.6 Minimum Losses......................................54
Section 8.7 Maximum Indemnification.............................55
Section 8.8 Subrogation.........................................55
Section 8.9 Adjustments to Indemnification Obligations..........55
Section 8.10 Exclusive Remedy....................................55
Section 8.11 Limitation..........................................56
Section 8.12 Duty to Mitigate....................................56
Section 8.13 No Waiver...........................................56
ARTICLE IX
TERMINATION
Section 9.1 Termination.........................................56
Section 9.2 Survival After Termination..........................57
ARTICLE X
MISCELLANEOUS
Section 10.1 Amendments; Waiver..................................58
Section 10.2 Entire Agreement....................................58
Section 10.3 Interpretation......................................58
Section 10.4 Severability........................................58
<PAGE>
Section 10.5 Notices.............................................58
-------
Section 10.6 Binding Effect; Persons Benefiting; No Assignment...60
-------------------------------------------------
Section 10.7 Counterparts........................................60
------------
Section 10.8 Governing Law.......................................60
-------------
Section 10.9 Specific Performance................................60
--------------------
Section 10.10 WAIVER OF JURY TRIAL................................61
--------------------
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of February 11, 1998 (the
"Agreement"), by and among Commercial Federal Corporation, a Nebraska
corporation ("Buyer"), Commercial Federal Bank, A Federal Savings Bank, a
federally chartered savings bank and wholly-owned subsidiary of Buyer (the
"Bank"), AmerUs Group Co., an Iowa corporation (the "Seller"), and AmerUs Bank,
a federally chartered savings bank and wholly-owned subsidiary of Seller (the
"Company").
WHEREAS, Buyer, a non-diversified, unitary savings and loan holding
company, with principal offices in Omaha, Nebraska, wishes to acquire all of the
issued and outstanding capital stock of the Company;
WHEREAS, Seller, a unitary thrift holding company, with principal
offices in Des Moines, Iowa, is the owner of the Shares (defined below) of the
Company, which Shares constitute all of the issued and outstanding capital stock
of the Company, with its principal offices in Des Moines, Iowa, and wishes to
sell the Shares to Buyer;
WHEREAS, Buyer and Seller both intend the Stock Purchase (defined
below) to be a taxable acquisition of the Shares and therefore a qualified stock
purchase as defined in Sections 338(d)(3) and 338(h)(3) of the Code (defined
below);
WHEREAS, Buyer will not make an election under Section 338(a) of the
Code;
WHEREAS, Buyer intends for the Merger (defined below) to qualify as a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(1)(D) of
the Code by virtue of the application of Treasury Regulation Section 1.338-
2(C)(3);
WHEREAS, the purchase and sale of the Shares (the "Stock Purchase")
upon the terms and subject to the conditions set forth herein have been approved
by the Boards of Directors of Buyer and Seller;
WHEREAS, Buyer and Seller have agreed, in connection with the Stock
Purchase and upon the terms and subject to the conditions set forth herein, to
enter into a Registration Rights Agreement in substantially the form attached
hereto as Exhibit A (the "Registration Rights Agreement") relating to the shares
of Buyer Common Stock (defined below) that may be issued to Seller in the Stock
Purchase; and
WHEREAS, the parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated by this Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and
subject to the conditions and other terms herein set forth, the parties hereto
hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement (as
-----------
defined below), the following terms shall have the respective meanings set forth
in this Section 1.1 (such definitions to be equally applicable to both the
singular and plural forms of the terms herein defined):
"Acquisition Proposal" shall have the meaning set forth in Section
6.11.
"Affected Property" shall have the meaning set forth in Section 6.21.
"Affiliate" shall mean any individual, partnership, corporation,
entity or other Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.
"Aggregate Estimated Remediation Costs" shall have the meaning set
forth in Section 6.21.
"Agreement" shall have the meaning set forth on the first page hereof.
"Applicable Law" shall mean any domestic or foreign federal, state or
local statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree, policy, guideline or other
requirement applicable to Buyer, Seller, the Company or any of their respective
Affiliates, properties, assets, officers, directors, employees or agents, as the
case may be.
"Asset Gain Disposition Adjustment" shall mean either (i) if the
Proceeds Amount is greater than the Net Book Value, then an amount equal to (x)
the Proceeds Amount minus (y) the Net Book Value, or (ii) if the Proceeds Amount
is equal to or less than the Net Book Value, then $0.00.
"Asset Loss Disposition Adjustment" shall mean either (i) if the
Proceeds Amount, is less than the Net Book Value, then an amount equal to (x)
the Net Book Value minus (y) the Proceeds Amount, or (ii) if the Proceeds
Amount is equal to or greater than the Net Book Value, then $0.00.
"Average NYSE Closing Price" shall mean the arithmetic mean (carried
to four decimal places) of the closing prices per share of Buyer Common Stock as
reported on the NYSE
2
<PAGE>
Composite Tape (as reported in The Wall Street Journal or, if not reported
therein, in another mutually agreed upon authoritative source) for the five
trading days, ending on (and including) the third trading day immediately
preceding the Closing Date.
"Business Day" shall mean any day that the NYSE is normally open for
trading and that is not a Saturday, a Sunday or a day on which banks in the
State of Nebraska are generally closed for regular banking business.
"Buyer" has the meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.
"Buyer Common Stock" shall mean the common stock, par value $0.01 per
share, of Buyer, together with the rights attached thereto pursuant to the
Shareholder Rights Agreement, dated as of December 19, 1988, by and between
Buyer and Manufacturers Hanover Trust Company, as Rights Agent.
"Buyer Material Adverse Effect" shall mean, with respect to Buyer or
any of its Affiliates, a material adverse effect on (i) the business, financial
condition, or results of operations of Buyer and the Buyer Subsidiaries taken as
a whole or (ii) the ability of the Buyer to complete the transactions
contemplated hereby; provided, however, that a Buyer Material Adverse Effect
-------- -------
shall not be deemed to include (x) any change attributable to or resulting from
any change in Applicable Law or GAAP or regulatory accounting principles,
including, but not limited to, changes resulting from amendments to or
modifications of any Applicable Law relating to the bad debt reserve of or
deduction taken by thrift institutions or any special insurance premium
assessments by the FDIC on SAIF-insured deposits, in each case which affects
thrift institutions generally, or (y) the effects of any change attributable to
or resulting from changes in economic conditions applicable to depository
institutions generally or in general levels of interest rates.
"Buyer Subsidiary" and "Buyer Subsidiaries" shall have the respective
meanings set forth in Section 5.1.
"Cash Election" shall have the meaning set forth in Section 2.3(a).
"Cash Consideration" shall mean an amount in cash equal to (w)
$90,750,000.00, plus (x) the Dividend Repayment Adjustment, plus (y) the Asset
Gain Disposition Adjustment, minus (z) the Asset Loss Disposition Adjustment.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall have the meaning set forth in Section 2.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
together with the Treasury regulations thereunder.
3
<PAGE>
"Commercial Property" shall have the meaning set forth in Section
6.21.
"Company" shall have the meaning set forth on the first page hereof.
"Company Balance Sheet" has the meaning set forth in Section 4.4.
"Company Employee" shall mean any individual who is employed by the
Company or any Company Subsidiary as of the Closing.
"Company Financial Statements" has the meaning set forth in Section
4.4.
"Company Material Adverse Effect" shall mean, with respect to the
Company or any of its Affiliates, a material adverse effect on (i) the business,
financial condition, or results of operations of the Company and the Company
Subsidiaries taken as a whole or (ii) the ability of Seller or the Company to
complete the transactions contemplated hereby; provided, however, that a Company
-------- -------
Material Adverse Effect shall not be deemed to include (x) any change
attributable to or resulting from any change in Applicable Law or GAAP or
regulatory accounting principles, including, but not limited to, changes
resulting from amendments to or modifications of any Applicable Law relating to
the bad debt reserve of or deduction taken by thrift institutions or any special
insurance premium assessments by the FDIC on SAIF-insured deposits, in each case
which affects thrift institutions generally, (y) the effects of any change
attributable to or resulting from changes in economic conditions applicable to
depository institutions generally or in general levels of interest rates or (z)
the effects of any matter to the extent relating to (A) any Affected Property
which is purchased by Seller pursuant to a Qualifying Purchase Commitment, (B)
any Listed Asset or (C) any Loan Production Office.
"Company Plan" has the meaning set forth in Section 4.12(a).
"Company Property" shall have the meaning set forth in Section 6.21.
"Company Subsidiary" and "Company Subsidiaries" shall have the
respective meanings set forth in Section 4.1.
"Competing Thrift Business" shall mean, with respect to a particular
Person, the Thrift Operations of such Person if more than 50% of such Person's
consolidated total liabilities are FDIC-insured liabilities; provided, however,
-------- -------
that if such Person operates more than ten (10) Retail Branches in the Specified
States, then such Person's Thrift Operations shall constitute a Competing Thrift
Business if more than 30% of such Person's consolidated total liabilities are
FDIC-insured liabilities.
"Confidentiality Agreement" shall mean that certain letter agreement,
dated December 10, 1997, relating to confidential information provided by Seller
and the Company to Buyer and its Affiliates.
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"Contract" has the meaning set forth in Section 4.10.
"Current Property" shall have the meaning set forth in Section 6.21.
"Dividend Repayment Adjustment" shall mean either (i) if, following
the date hereof, Seller shall have contributed $5,000,000.00 in cash to the
Company as of the close of business on the second Business Day prior to the
Closing Date and shall have provided reasonably satisfactory evidence to Buyer
of same as of such time, then $5,000,000.00, or (ii) if Seller shall not have
made such $5,000,000.00 cash contribution as of such time or so provided
reasonably satisfactory evidence to Buyer of same, then $0.00.
"Encumbrance" shall mean any lien, pledge, security interest, charge,
easement, encroachment, restriction or encumbrance of any kind or nature
whatsoever, except that Encumbrance shall not include (a) such items which are
reflected in the financial statements of the relevant party or in the notes
thereto, (b) liens for current taxes not yet delinquent, (c) customary title
exceptions that have no material adverse effect upon the current use of the
relevant property, (d) such items related to property which has been sold or
transferred in the ordinary course of business consistent with past practice or
(e) such items as shall have been Previously Disclosed.
"Environmental Firm" shall have the meaning set forth in Section 6.21.
"Environmental Laws" shall mean all foreign, federal, state and local
laws, regulations, rules and ordinances relating to pollution or protection of
the environment, including, without limitation, laws relating to releases or
threatened releases of Hazardous Substances into the environment (including,
without limitation, ambient air, surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, release, transport or handling of
Hazardous Substances.
"Environmental Termination Date" shall have the meaning set forth in
Section 6.21.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
"Facility Property" shall have the meaning set forth in Section 6.21.
"FDIC" shall mean the Federal Deposit Insurance Corporation and any
successor thereto.
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"GAAP" shall mean generally accepted accounting principles as used in
the United States of America as in effect at the time any applicable financial
statements were prepared or any act requiring the application of GAAP was
performed.
"Governmental Authority" shall mean any government, any state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including the SEC or any other government authority, agency, department, board,
commission or instrumentality of the United States, any State of the United
States or any political subdivision thereof, and any court or tribunal of
competent jurisdiction, and any governmental or non-governmental self-regulatory
organization, agency or authority (including the NYSE and the National
Association of Securities Dealers, Inc.).
"Hazardous Substances" shall mean all substances defined as such in
the National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R.
(S) 300.5, or defined as such by, or regulated as such under, any Environmental
Law, including, but not limited to, petroleum, asbestos, or polychlorinated
biphenyls.
"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Income Tax" shall mean any federal, state, local or foreign income
tax, withholding tax, back-up withholding tax, payroll tax or employment tax,
including any interest, penalty or addition thereto, whether disputed or not.
"Income Tax Return" shall mean any Tax Return relating to Income
Taxes.
"Indemnifiable Claim" shall mean any Loss for which a party is
entitled to indemnification under this Agreement.
"Indemnified Party" shall mean the party entitled to the benefits of
indemnification hereunder.
"Indemnifying Party" shall mean the party obligated to provide
indemnification hereunder.
"IRS" shall mean the Internal Revenue Service and any successor
thereto.
"Knowledge of Buyer", "Known to Buyer" or "Buyer's Knowledge" means to
the actual knowledge of the Chief Executive Officer, President, any Executive
Vice President or any Senior Vice President of Buyer or the Bank.
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"Knowledge of Seller" or "Seller's Knowledge" means to the actual
knowledge of the Chief Executive Officer, President, any Executive Vice
President or any Senior Vice President of Seller or the Company.
"Listed Assets" shall mean those assets of the Company and the Company
Subsidiaries identified on Annex A attached hereto.
"Loan Production Offices" shall mean (i) all "agency" offices (as
provided in the Code of Federal Regulations, Title 12, Section 545.96) of the
Company that only service and originate loans, (ii) the administrative office
located at 1910 Bell Avenue, Des Moines, Iowa and (iii) the home office located
at 418 Sixth Avenue, Des Moines, Iowa, including all Records, office leases,
equipment, equipment leases, software and employees relating to the servicing
and origination activities of such offices; provided, however, that "Loan
-------- -------
Production Offices" shall not include any loans that are Listed Assets.
"Loss" shall mean any and all losses, liabilities, costs, penalties,
fines and expenses (including reasonable expenses for attorneys, accountants,
consultants and experts), damages, obligations to third parties, expenditures,
proceedings, judgments, awards or settlements that are imposed upon or otherwise
incurred, suffered or sustained by the relevant party.
"Merger" has the meaning set forth in Section 3.1.
"Net Book Value" shall mean the aggregate net book value of all Listed
Assets (the net book values of which have been Previously Disclosed, with
respect to those Listed Assets owned by the Company or any Company Subsidiary as
of the date hereof, or, if acquired thereafter, will be determined at the time
of sale or, if not sold, as of two Business Days prior to the Closing Date, as
the case may be, in each case in accordance with GAAP consistently applied and
then adjusted, in each case, to be net of the allocable portion of the loan loss
reserve).
"Non-Third Party Claim" has the meaning set forth in Section 8.4(e).
"Note Consideration" shall mean an amount equal to $40,000,000.00.
"NYSE" means the New York Stock Exchange, Inc. and any successor
thereto.
"OTS" shall mean the Office of Thrift Supervision and any successor
thereto.
"Person" shall mean any individual, corporation, company, partnership
(limited or general), joint venture, association, trust or other entity or
similar contractual arrangement or relationship.
"Previously Disclosed" by a party shall mean information referenced or
set forth in a schedule (with respect to Seller and the Company, the "Company
Disclosure Schedule"; and with
7
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respect to Buyer, the "Buyer Disclosure Schedule"), correspondingly enumerated
to the representations, warranties or covenants to which it relates, that is
delivered by such party to the other party contemporaneously with the execution
of this Agreement and specifically designated as information "Previously
Disclosed" pursuant to this Agreement.
"Proceeds Amount" shall mean the amount of aggregate cash proceeds
received by the Company and the Company Subsidiaries following the date hereof
from the disposition of all Listed Assets, net of any Taxes payable on the
difference between the cash proceeds and the book value as computed in
accordance with GAAP and plus any Tax benefit to be received on the difference
between the cash proceeds and the book value as computed in accordance with
GAAP, in each case at an assumed Tax rate of 40%.
"Purchase Consideration" shall mean the aggregate of the Cash
Consideration, Note Consideration and Share Consideration.
"Purchase Notes" shall mean those four (4) notes of Buyer payable to
Seller, each in a face amount equal to $10,000,000.00 and each in form and
substance and with such terms as the Form of Note attached hereto as Exhibit B.
"Qualifying Purchase Commitment" shall have the meaning set forth in
Section 6.21.
"Records" shall mean, with respect to any Person, all records and
original documents (including original source documents, such as invoices) (and
copies thereof) in the Person's possession, or in the possession of an Affiliate
of such Person, as of the Closing Date (a) which pertain to or are utilized by
such Person or Affiliate to administer, reflect, monitor, evidence or record
information respecting the business or conduct of the Company or the Company
Subsidiaries, or (b) necessary or appropriate for the Company or the Company
Subsidiaries to comply with any Applicable Law, and shall include in the case of
(a) and (b) above, all such records maintained on electronic or magnetic media,
or in the electronic data base system of or used by such Person or Affiliate.
"Regulatory Documents" shall mean, with respect to a Person, all
forms, reports, registration statements, schedules and other documents filed, or
required to be filed by such Person with any Governmental Authority or pursuant
to any Applicable Law.
"Retail Branch" shall have the meaning set forth in Section 6.16.
"Right" shall have the meaning set forth in Section 6.1(ii).
"SAIF" shall have the meaning set forth in Section 4.1.
"Savings Plan" shall have the meaning set forth in Section 6.1(xiii).
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"SEC" shall mean the Securities and Exchange Commission and any
successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder.
"Seller" has the meaning set forth on the first page hereof and
includes any direct or indirect successor or assign.
"Share Consideration" shall mean either (i) if Buyer has not made a
Cash Election pursuant to Section 2.3, then a number of shares of Buyer Common
Stock equal to 1,915,709, or (ii) if Buyer has made a Cash Election pursuant to
Section 2.3, then an amount in cash equal to the product of (x) the Average NYSE
Closing Price times (y) 1,915,709. If, between the date of this Agreement and
the Closing, the outstanding shares of Buyer Common Stock shall have been
changed into a different number of shares or a different class by reason of any
subdivision or combination, recapitalization, exchange of shares, readjustment,
split-up or reclassification, or a stock dividend thereon shall be paid, then
the number and class of shares of Buyer Common Stock, if any, to be issued and
delivered at the Closing in exchange for the Shares or, if Buyer shall have made
a Cash Election pursuant to Section 2.3, then the number and class of shares of
Buyer Common Stock in respect of which Buyer shall pay cash, in each case as
provided in this Agreement, shall be appropriately adjusted, if necessary, to
represent the number and class of shares of Buyer Common Stock in proportion to
and with the same aggregate economic value as the number and class of shares of
Buyer Common Stock as would have been provided or in respect of which cash would
have been paid, as the case may be, in the absence of such change.
"Shares" shall mean the 250,000 shares of common stock, par value
$1.00, of the Company ("Company Common Stock") issued and outstanding on the
date of this Agreement and as of the Closing.
"Stock Purchase" shall have the meaning set forth on the first page
hereof.
"Straddle Period" shall mean any taxable year or taxable period
beginning before and ending after the Closing Date.
"Tax Return" shall mean any return, declaration, report, claim for
refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Taxes" shall mean all federal, provincial, territorial, state,
municipal, local, foreign or other taxes, imposts, rates, levies, assessments
and other charges (and all interest and penalties thereon), including, without
limitation, all income, excise, franchise, gains, capital, real property, goods
and services, transfer, value added, gross receipts, windfall profits,
severance, ad valorem, personal property, production, sales, use, license,
stamp, documentary stamp, mortgage recording, em-
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ployment, payroll, social security, unemployment, disability, estimated or
withholding taxes, and all customs and import duties, and all interest,
penalties and Losses thereon or associated therewith or associated with any Tax
Return.
"Third Party Claim" has the meaning set forth in Sections 8.4(a).
"Threshold Amount" shall have the meaning set forth in Section 6.21.
"Thrift Operations" shall mean the operation of Retail Branches.
"Wire Transfer" shall mean a payment in immediately available funds by
wire transfer in lawful money of the United States of America to such account or
to a number of accounts up to, but not in excess of, fifteen accounts, as shall
have been designated by written notice to the paying party.
ARTICLE II
THE STOCK PURCHASE
Section 2.1 General. Upon the terms and subject to the conditions
-------
hereof, on the Closing Date, Seller agrees to sell, transfer, assign, convey and
deliver to Buyer (or at Buyer's election, an Affiliate of Buyer) and Buyer (or
at Buyer's election, an Affiliate of Buyer) agrees to purchase, redeem and
accept from Seller the Shares for the Purchase Consideration.
Section 2.2 Closing. The consummation of the Stock Purchase as
-------
contemplated by this Agreement (the "Closing") shall take place at the offices
of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York 10019
on the fifth Business Day after all of the conditions set forth in Article VII
(other than conditions which relate to actions to be taken at the Closing) have
been satisfied or waived, or at such other date, time and place as Buyer and
Seller shall agree (the date on which the Closing takes place being referred to
herein as the "Closing Date").
Section 2.3 Instruments of Transfer; Payment of Purchase
--------------------------------------------
Consideration. (a) Not less than two nor more than five Business Days prior to
- -------------
the Closing Date, (i) Seller shall deliver to Buyer written Wire Transfer
instructions and (ii) Buyer, at its sole discretion, shall deliver to Seller
irrevocable written notice of Buyer's intention, if any, to pay cash in lieu of
shares of Buyer Common Stock as the Share Consideration (a "Cash Election"), it
being understood among the parties hereto that a Cash Election shall be deemed
made for purposes of this Agreement only if such written notice is so delivered.
(b) At the Closing, Seller shall deliver to Buyer the following:
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(1) one or more certificates representing all of the Shares,
duly executed in blank or accompanied by stock powers duly executed in blank, in
proper form for transfer; and
(2) the documents required to be delivered pursuant to
Section 7.2.
(c) At the Closing, Buyer shall deliver, or shall cause to be
delivered, to Seller the following:
(1) an amount in cash equal to the Cash Consideration by Wire
Transfer;
(2) if Buyer has made a Cash Election, then an amount in cash
equal to the Share Consideration by Wire Transfer;
(3) if Buyer has not made a Cash Election, then one or more
duly executed certificates representing a number of shares of Buyer Common Stock
equal to the Share Consideration;
(4) the Purchase Notes executed by Buyer in an aggregate face
amount equal to the Note Consideration; and
(5) the documents required to be delivered pursuant to
Section 7.3.
Section 2.4 Allocation of Purchase Price. The amount of the
----------------------------
Purchase Consideration allocated to the covenant not to compete set forth in
Section 6.16 of this Agreement shall be $10,000,000. Seller and Buyer shall
prepare and file Tax Returns in a manner consistent with such allocation.
Section 2.5 Reservation of Right to Revise Transaction. With the
------------------------------------------
prior written consent of Seller, Buyer may at any time change the method of
effecting the acquisition of the Company by Buyer (including, without
limitation, changes to the provisions of Articles II and III to effect the
acquisition of the Company by Buyer through a merger or otherwise); provided,
--------
however, that no such change shall (i) alter or change the amount or kind of the
- -------
Purchase Consideration (except as otherwise specifically permitted under this
Agreement), (ii) adversely affect the tax treatment to Seller as a result of
receiving the Purchase Consideration or (iii) delay or jeopardize consummation
of the Stock Purchase.
ARTICLE III
THE MERGER
Section 3.1 The Merger. As soon as practicable following the
----------
Closing, Buyer shall cause the Company to be merged (the "Merger") with and
into the Bank pursuant to the terms and
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conditions set forth herein and in the Plan of Merger attached hereto as Exhibit
C (the "Bank Plan of Merger") and pursuant to 12 U.S.C. (S)(S) 1467(a)(s),
1815(d)(3) and 1828(c) and (S) 552.13 of the rules and regulations of the OTS
promulgated thereunder, and the separate existence of the Company shall
thereupon cease, the Bank shall be the surviving institution in the Merger and
shall retain the name "Commercial Federal Bank, A Federal Savings Bank"
(sometimes hereinafter referred to as the "Surviving Bank"), all of its rights,
privileges, powers, immunities, purposes and franchises shall continue
unaffected by the Merger and the Bank shall continue at the effective time of
the Merger to be regulated by the OTS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SELLER
Seller represents and warrants to Buyer as of the date of this
Agreement and as of the Closing Date, except as otherwise Previously Disclosed,
as follows:
Section 4.1 Organization, Good Standing, Authority, Insurance, Etc.
------------------------------------------------------
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Iowa, and is duly registered as a
savings and loan holding company with the OTS under the HOLA. The Company is a
federal savings bank. Each "subsidiary" of the Company within the meaning of
Section 10(a)(1)(G) of HOLA (individually a "Company Subsidiary" and
collectively the "Company Subsidiaries"), has been Previously Disclosed. Each
of the Company Subsidiaries is duly organized, validly existing and in good
standing under the laws of the respective jurisdiction under which it is
organized, as set forth in the Company Disclosure Schedule. Each of the
Company and the Company Subsidiaries has all requisite power and authority and
is duly qualified and licensed to own, lease and operate its properties and
conduct its business as it is now being conducted, except for such failure or
failures to be so qualified or licensed as would not have, in the aggregate, a
Company Material Adverse Effect. The Company has made available to Buyer a
true, complete and correct copy of the articles of incorporation, charter, or
other organizing documents and of the by-laws, as in effect on the date of this
Agreement, of the Company and each Company Subsidiary. Each of the Company and
the Company Subsidiaries is qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which qualification is necessary
under Applicable Law, except to the extent that any failures to so qualify
would not, in the aggregate, have a Company Material Adverse Effect. The
Company is a member in good standing of the Federal Home Loan Bank of Des
Moines, Iowa, and all eligible accounts issued by the Company are insured by the
FDIC through the Savings Association Insurance Fund ("SAIF") to the maximum
extent permitted under Applicable Law. The Company is a "domestic building and
loan association" as defined in Section 7701(a)(19) of the Code, and is a
"qualified thrift lender" as defined in Section 10(m) of the HOLA.
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(b) The minute books of the Company which have been made available to
Buyer contain records of all meetings and other corporate actions held or taken
by its shareholders and Board of Directors (including the committees of such
Board) since January 1, 1995.
Section 4.2 Capitalization. The authorized capital stock of the
--------------
Company consists of 10,000,000 shares of Company Common Stock, of which 250,000
shares were issued and outstanding as of the date of this Agreement, all of
which are owned beneficially and of record directly by Seller. As of the date
of this Agreement, there are no shares of Company Common Stock held in the
Company's treasury. All Shares are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Seller has the full and
unrestricted power to sell, assign, transfer and deliver the Shares in
accordance with the terms of this Agreement free and clear of any Encumbrances.
There are no outstanding Rights to purchase or acquire any of the Company's
capital stock and no oral or written agreement, contract, arrangement,
understanding, plan or instrument of any kind to which any of Seller, the
Company or any of their Affiliates is subject with respect to the issuance,
voting or sale of issued or unissued shares of the Company's capital stock.
Section 4.3 Ownership of Subsidiaries. All the outstanding shares
-------------------------
of the capital stock of the Company Subsidiaries are validly issued, fully paid
and, nonassessable. All of the outstanding capital stock or other ownership
interests in each of the Company Subsidiaries is owned directly, or indirectly
through one or more Company Subsidiaries, by the Company, free and clear of any
Encumbrance. There are no outstanding Rights to purchase or acquire any capital
stock of any Company Subsidiary and no oral or written agreement, contract,
arrangement, understanding, plan or instrument of any kind to which any of
Seller, the Company or any of their Affiliates is subject with respect to the
issuance, voting or sale of issued or unissued shares of the capital stock of
any of the Company Subsidiaries. Neither the Company nor any Company Subsidiary
owns any of the capital stock or other equity securities (including securities
convertible or exchangeable into such securities) of or profit participations in
any Person or "company" (as defined in Section 10(a)(1)(C) of the HOLA) other
than the Federal Home Loan Bank of Des Moines, Iowa and the Company
Subsidiaries.
Section 4.4 Financial Statements; Undisclosed Liabilities. (a) The
---------------------------------------------
Company has previously delivered to Buyer copies of the audited consolidated
balance sheets of the Company as of December 31st for the fiscal years 1996 and
1997, and the related audited statements of income, changes in shareholders'
equity and cash flows for the fiscal years 1995, 1996 and 1997, inclusive, in
each case accompanied by the audit report of KPMG Peat Marwick LLP, independent
public accountants with respect to the Company (collectively, the balance sheets
and statements referred to above being referred to as the "Company Financial
Statements" and the audited consolidated balance sheet as of December 31, 1997
being referred to as the "Company Balance Sheet"). The balance sheets referred
to in the previous sentence (including the related notes) present fairly the
consolidated financial position of the Company and the Company Subsidiaries as
of the dates thereof, and the other financial statements referred to in this
Section 4.4(a) present fairly the consolidated results of operations and cash
flows of the Company and the Company Subsidiaries for the respective fiscal
periods therein set forth; each of such balance sheets and statements (including
the
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related notes) comply in all material respects with applicable accounting
requirements with respect thereto; and each of such balance sheets and
statements (including the related notes) has been prepared in accordance with
GAAP consistently applied during the periods involved (except as indicated in
the notes thereto) and in accordance with the books and records of the Company
and the Company Subsidiaries, which books and records are complete and accurate
in all material respects and have been maintained in all material respects in
accordance with Applicable Law.
(b) Except for (i) those liabilities that are reflected or reserved
against on the Com pany Balance Sheet and (ii) liabilities incurred in the
ordinary course of business since the date of the Company Balance Sheet and
which would not have, individually or in the aggregate, a Company Material
Adverse Effect, the Company has no liabilities or obligations of any nature,
whether absolute, accrued, contingent or otherwise and whether due or to
become due, in any case which are required by GAAP to be shown on a
consolidated balance sheet of the Company.
Section 4.5 Absence of Changes. (a) Since December 31, 1997, there
------------------
has been no event, occurrence or development which, individually or in the
aggregate, has had a Company Material Adverse Effect.
(b) Except as contemplated by this Agreement, since December 31,
1997, each of the Company and the Company Subsidiaries has carried on its
respective businesses in the ordinary course of business and consistent with
past practice. As of the date of this Agreement, since December 31, 1997,
neither the Company nor any Company Subsidiary has taken any action that, if
taken after the date of this Agreement, would violate Section 6.l.
Section 4.6 No Broker's or Finder's Fees. No agent, broker,
----------------------------
investment banker, Person or firm acting on behalf or under authority of Seller,
the Company or any of the Company Subsidiaries is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly in connection with the Stock Purchase, the Merger or any other
transaction contemplated hereby, except Seller has engaged ABN AMRO Chicago
Corp. and Hovde Financial, Inc., each an investment banking firm, to provide
financial advisory services and to deliver "fairness opinions" as to whether or
not the Purchase Consideration is fair to Seller from a financial point of view.
Section 4.7 Litigation and Other Proceedings. All pending and, to
--------------------------------
Seller's Knowledge threatened, claims, actions, suits, investigations and
proceedings in which the Company or any Company Subsidiary is a defendant and
where the other party thereto has asserted a right to recover damages in excess
of $25,000 have been Previously Disclosed. All unsatisfied judicial orders,
judgments or decrees to which the Company or any Company Subsidiary is subject
where the Company or such Company Subsidiary has been ordered to pay in excess
of $25,000 or is subject to an injunction or other restriction have been
Previously Disclosed.
Section 4.8 Compliance with Law. Except with respect to Applicable
-------------------
Laws relating to ERISA and employee benefit matters, tax matters and
environmental matters, which are
14
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specifically and exclusively addressed in Sections 4.12, 4.17 and 4.18,
respectively, the Company and the Company Subsidiaries have been and are in
compliance in all respects with all Applicable Laws, except where such non-
compliance would not have a Company Material Adverse Effect, and neither the
Company nor any Company Subsidiary has received notice from any Governmental
Authority of any material violation of, and to Seller's Knowledge, there is no
material violation of, any Applicable Law.
Section 4.9 Corporate Actions. (a) The Boards of Directors of
-----------------
Seller and the Company have duly authorized their respective officers to execute
and deliver (as appropriate) this Agreement and the Bank Plan of Merger and to
take all action necessary to consummate the Stock Purchase, the Merger and the
other transactions contemplated hereby and thereby. As the sole shareholder
of the Company, Seller has approved this Agreement, together with the Stock
Purchase, the Merger and all other actions hereunder requiring such approval.
All corporate authorizations by the Boards of Directors and shareholders of
Seller and the Company required for the consummation of the Stock Purchase and
the Merger have been obtained.
(b) The Boards of Directors of Seller and the Company have taken or
will take all necessary action to exempt this Agreement and Bank Plan of Merger
and the transactions contemplated hereby and thereby from (i) any applicable
state takeover laws, (ii) any Applicable Laws limiting or restricting the voting
rights of shareholders, (iii) any Applicable Laws requiring a shareholder
approval vote in excess of the vote normally required in transactions of similar
type not involving a "related person," "interested shareholder" or Person of
similar type, and (iv) any provision in its or any of the Company
Subsidiaries' articles of incorporation, charter or by-laws, (A) restricting or
limiting stock ownership or the voting rights of shareholders, or (B) requiring
a shareholder approval vote in excess of the vote normally required in
transactions of similar type not involving a "related person," interested
shareholder" or Person of similar type.
Section 4.10 Authority. (a) The execution, delivery and performance
---------
by each of Seller and the Company of their respective obligations under this
Agreement and the consummation thereby of the transaction contemplated hereby do
not and will not violate or conflict with any of the provisions of, or
constitute a breach or default (or an event which, with notice or lapse of time,
or both, would constitute a breach or default) under, terminate, give any Person
the right to terminate, modify or accelerate payment or performance under or
result in the creation of any Encumbrance upon any of the respective properties
or assets of the Company or any Company Subsidiary under (i) the articles of
incorporation, charter or by-laws of Seller, the Company or any Company
Subsidiary, (ii) any Applicable Law to which Seller, the Company or any of the
Company Subsidiaries is subject (other than any Applicable Law which is referred
to in or otherwise covered by paragraph (c) below, which shall be solely and
exclusively addressed in paragraph (c) below) or (iii) except, in each case,
where such violation, conflict, breach, default, termination (or right to
terminate), modification, acceleration or Encumbrance would not, individually or
in the aggregate, have a Company Material Adverse Effect, any agreement, lease,
contract, note, mortgage, indenture, arrangement or other obligation or
instrument involving aggregate annual payments in excess of $150,000 (other than
any such agreement, lease, contract, note, mortgage, indenture, arrangement
15
<PAGE>
or other obligation or instrument which can be terminated by the Company or such
Company Subsidiary without material penalty on twelve months or less notice and
other than any Loan (as defined below) made in the ordinary course of business)
(each such agreement, lease, contract, note, mortgage, indenture, arrangement or
other obligation or instrument is referred to herein as a "Contract") to which
Seller, the Company or any of the Company Subsidiaries is a party or is subject
or by which any of their properties or assets is bound or affected.
(b) Each of Seller and the Company has all requisite corporate power
and authority to enter into this Agreement and the Bank Plan of Merger, as the
case may be, and to perform its respective obligations hereunder and thereunder.
This Agreement constitutes the valid and binding obligation of Seller and the
Company and is enforceable against Seller and the Company in accordance with its
terms, except as enforceability may be limited by Applicable Laws relating to
bankruptcy, insolvency or creditors rights generally and general principles of
equity.
(c) The parties acknowledge that the consummation of the Stock
Purchase and the Merger and the other transactions contemplated hereby is
subject to various regulatory approvals. Except as Previously Disclosed, no
filings, notices, approvals or consents with or of the Governmental Authorities
(the "Governmental Approvals") are required on behalf of Seller, the Company or
any Company Subsidiary in connection with the consummation of the transactions
contemplated by this Agreement and the Bank Plan of Merger. As of the date of
this Agreement, to Seller's Knowledge, there is no reason why the Governmental
Approvals cannot be obtained or granted on a timely basis.
Section 4.11 Employment Arrangements. There are no employment,
-----------------------
incentive compensation, severance or other agreements, plans or arrangements
(including the Company Plans (as defined below)) with any current or former
directors, officers or employees of the Company or any Company Subsidiary which
may not be terminated without penalty or liability (including any augmentation
or acceleration of benefits) on thirty (30) days or less notice to such person.
Neither the execution of this Agreement nor the consummation of the transactions
contemplated hereby will (either alone or upon the occurrence of additional
events or acts) result in, cause the accelerated vesting or delivery of, or
increase the amount or value of, any payment or benefit to any employee, officer
or director of the Company or any Company Subsidiary under any agreement,
arrangement or plan in effect as of the Closing Date. No amount paid or payable
to directors, officers or employees of the Company or the Company Subsidiaries
in connection with the transactions contemplated hereby (either solely as a
result of such transactions or as a result of such transactions in conjunction
with any other event) will cause the imposition of excise taxes under Section
4999 of the Code or the disallowance of a deduction to the Company or any
Company Subsidiary pursuant to Sections 162 or 280G of the Code. There are no
amounts and there will be no amounts to be paid or payable under any employment
or severance agreement or arrangement by the Company or any of its Affiliates as
a result of consummation of the Stock Purchase, the Merger and the other
transactions contemplated hereby.
16
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Section 4.12 Employee Benefits. (a) Neither the Company nor any of
-----------------
the Company Subsidiaries nor any entity, trade or business that is or was at any
time required to be aggregated with the Company or any Company Subsidiary under
Section 414(b), (c), (m) or (o) of the Code ("ERISA Affiliate"), maintains,
contributes to or sponsors any funded deferred compensation plans (including
profit sharing, pension, savings or stock bonus plans), unfunded deferred
compensation arrangements or employee benefit plans as defined in Section 3(3)
of ERISA for the benefit of Company Employees, other than any plans ("Company
Plans") Previously Disclosed (true and correct copies of which have been
delivered or made available to Buyer). Except as Previously Disclosed, neither
the Company nor any of the Company Subsidiaries (i) provides health, medical,
death or survivor benefits to any former employee or beneficiary thereof (other
than (x) coverage mandated by Applicable Law, (y) death benefits under the
AmerUs "pension plan" or (z) benefits the full cost of which is borne by the
current or former employee (or his beneficiary)), or (ii) maintains any form of
current (exclusive of base salary and base wages) or deferred compensation,
bonus, stock option, stock appreciation right, benefit, severance pay,
retirement, incentive, group or individual health insurance, welfare or similar
plan or arrangement for the benefit of any single or class of directors,
officers or employees, whether active or retired (collectively "Benefit
Arrangements").
(b) All Company Plans and Benefit Arrangements which are in effect
were in effect for substantially all of calendar year 1997 and there has been no
material amendment thereof (other than amendments required to comply with
Applicable Law) and no material increase in the cost thereof or benefits payable
thereunder on or after January 1, 1997.
(c) To the Knowledge of Seller, with respect to all Company Plans and
Benefit Arrangements, the Company and each Company Subsidiary are in substantial
compliance with the requirements prescribed by any and all Applicable Laws
currently in effect, including but not limited to ERISA and the Code, applicable
to such Company Plans or Benefit Arrangements. None of the Company Plans which
are defined benefit pension plans have incurred any "accumulated funding
deficiency" (whether or not waived) as that term is defined in Section 412 of
the Code and the fair market value of the assets of each such plan equals or
exceeds the accrued liabilities of such plan. To the Knowledge of Seller, there
are not now nor have there been any non-exempt "prohibited transactions," as
such term is defined in Section 4975 of the Code or Section 406 of ERISA,
involving the Company Plans which could subject the Company or Company
Subsidiaries to the penalty or Tax imposed under Section 502(i) of ERISA or
Section 4975 of the Code. No Company Plan which is subject to Title IV of ERISA
has been completely or partially terminated; no proceedings to completely or
partially terminate any Company Plan have been instituted within the meaning of
Subtitle C of said Title IV of ERISA; and no reportable event, within the
meaning of Section 4043(c) of said Subtitle C for which the 30-day notice
requirement of ERISA has not been waived, has occurred with respect to any
Company Plan. No Company Plan or Benefit Arrangement is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA or a plan that has two or more
contributing sponsors at least two of whom are not under common control, within
the meaning of Section 4063 of ERISA. Neither the Company nor any Company
Subsidiary nor any ERISA Affiliate has engaged in any transaction described in
Section 4069 of ERISA within the last five
17
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years. There does not now exist, nor do any circumstances exist that would
result in, any material liability of the Company, any Company Subsidiary or any
ERISA Affiliate under Title IV of ERISA, Section 302 of ERISA, Sections 412 and
4971 of the Code, the continuation coverage requirements of Section 601 et seq.
------
of ERISA and Section 4980B of the Code, that would be a liability of the
Company, a Company Subsidiary, Buyer or any of its Affiliates following
consummation of the Stock Purchase or the Merger. Neither the Company nor any
Company Subsidiary has failed to make any contribution or pay any amount due and
owing as required by the terms of any Company Plan or Benefit Arrangement. None
of the Company or any of the Company Subsidiaries or ERISA Affiliate has
incurred or reasonably expects to incur any liability to the Pension Benefit
Guaranty Corporation except for required premium payments which, to the extent
due and payable, have been paid. The Company Plans intended to be qualified
under Section 401(a) of the Code have been determined by the IRS to be so
qualified, and to Seller's Knowledge, there is no fact which would adversely
affect the qualified status of such plans.
Section 4.13 Reports. Since January 1, 1995, the Company and the
-------
Company Subsidiaries have timely filed all Regulatory Documents required to be
filed by them, except to the extent that all failures to so file, in the
aggregate, would not have a Company Material Adverse Effect; and, as of their
respective dates, all such documents, as finally amended, complied in all
material respects with applicable requirements of Applicable Law and, as of
their respective date or the date as amended, did not contain any 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, except that
information as of a later date shall be deemed to modify information as of an
earlier date.
Section 4.14 Property and Assets. The Company and the Company
-------------------
Subsidiaries have good and marketable title to all of their real property
reflected in the Company Balance Sheet or acquired subsequent to the date
thereof, free and clear of all Encumbrances. The Company and the Company
Subsidiaries enjoy peaceful and undisturbed possession under all material leases
for the use of real property under which they are the lessee; all of such
leases are valid and binding and in full force and effect and neither the
Company nor any Company Subsidiary is in default in any respect under any such
lease, except where such failure or failures to be valid and binding and in full
force and effect, or where such default or defaults, would not have, in the
aggregate, a Company Material Adverse Effect. No consent of the lessor of any
material real property or material personal property lease is required for
consummation of the Stock Purchase or the Merger. There has been no material
physical loss, damage or destruction, whether or not covered by insurance,
affecting the real properties of Company and the Company Subsidiaries since
December 31, 1997, except such loss, damage or destruction which would not have
a Company Material Adverse Effect.
Section 4.15 Agreements and Instruments. Except as Previously
--------------------------
Disclosed and except for any contract or agreement relating to the Loan
Production Offices which are assumed by Seller pursuant to Section 6.18, neither
the Company nor any Company Subsidiary is a party to (a) any Contract, (b) any
Contract relating to the borrowing of money by the Company or any Company
Subsidiary or the guarantee by the Company or any Company Subsidiary of any such
obligation
18
<PAGE>
(other than Federal Home Loan Bank advances with a maturity of one year or less
from the date hereof), (c) any Contract to make loans or for the provision,
purchase or sale of goods, services or property between the Company or any
Company Subsidiary and any director or officer of Seller or the Company, or any
member of the immediate family or Affiliate of any of the foregoing (other than
loans or deposits made on an arms-length basis in the ordinary course of
business), (d) any Contract with or concerning any labor or employee
organization, (e) any Contract between the Company or any Company Subsidiary and
any Affiliate thereof (other than Contracts solely between the Company and a
Company Subsidiary or solely between Company Subsidiaries) ("Affiliate
Contracts"), (f) any agreements, directives, orders, or similar arrangements
between or involving the Company or any Company Subsidiary and any Governmental
Authority, (g) any Contract which materially restricts the conduct of any line
of business by the Company or any current or future Affiliates thereof or (h)
any Contract pursuant to which the Company or any Company Subsidiary is or may
become obligated to invest in or contribute capital to any Company Subsidiary.
Section 4.16 Material Contract Defaults. Neither the Company nor any
--------------------------
Company Subsidiary nor, to the Knowledge of Seller, the other party thereto is
in default in any respect under any Contract to which any of the Company or the
Company Subsidiaries is a party or by which its respective assets, business, or
operations may be bound or affected or under which it or its respective assets,
business, or operations receives benefits, other than any such default or
defaults which would not have either individually or in the aggregate a Company
Material Adverse Effect, and there has not occurred any event that, with the
lapse of time or the giving of notice or both, would constitute such a default.
All such Contracts are valid, binding and in full force and effect, except where
such failure or failures to be valid and binding and in full force and effect
would not have, in the aggregate, a Company Material Adverse Effect.
Section 4.17 Tax Matters. The Company, each of the Company
-----------
Subsidiaries and any affiliated group (within the meaning of Section 1504(a) of
the Code) of which the Company or any of the Company Subsidiaries is a member
have duly and properly filed all material federal, state, local and other Tax
Returns required to be filed by them and have made timely payments of all
material Taxes due and payable, whether disputed or not; such material Tax
Returns are true, correct and complete in all material respects; the current
status of audits of such material Tax Returns by the IRS and other applicable
agencies has been Previously Disclosed; and there is no agreement by the Company
or any Company Subsidiary for the extension of time or for the assessment or
payment of any material Taxes payable. Neither the IRS nor any other taxing
authority is now asserting or, to the Knowledge of Seller, threatening to assert
any deficiency or claim for additional material Taxes, nor, to the Knowledge of
Seller, is there any basis for any such assertion or claim. The Company and
each of the Company Subsidiaries have complied in all material respects with
applicable material IRS backup withholding requirements and have filed all
appropriate and material information reporting returns for all Tax years for
which the statute of limitations has not closed. The Company and each of the
Company Subsidiaries have complied in all material respects with all Applicable
Laws relating to material Taxes, including all applicable and material state law
sales and use Tax collection and reporting requirements. The total net amount
of adjustments required to be
19
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taken into account by the Company and the Company Subsidiaries under Section
593(g) of the Code as reflected on the Company's 1996 federal Income Tax Return
is $499,416.
Section 4.18 Environmental Matters. (a) The Company and the Company
---------------------
Subsidiaries have been and are in compliance with all applicable Environmental
Laws, where the failure to comply with such Environmental Laws, individually or
in the aggregate, would have a Company Material Adverse Effect. Such compliance
includes, but is not limited to, the possession by the Company or one of the
Company Subsidiaries of all permits and other governmental authorizations
required under applicable Environmental Laws;
(b) There is no pending or threatened claim, lawsuit, or
administrative proceeding against the Company or any of the Company Subsidiaries
under any Environmental Law, which, individually or in the aggregate, would have
a Company Material Adverse Effect. Neither Seller nor the Company nor any of
the Company Subsidiaries has received written notice from any Person, including
but not limited to any federal, state, or local governmental agency, alleging
that the Company is in violation of any applicable Environmental Law, which
violation or liability is unresolved and, individually or in the aggregate,
would have a Company Material Adverse Effect. Neither the Company nor any of the
Company Subsidiaries is subject to a judicial or administrative order that is
still in effect relating to any applicable Environmental Law, other than such
orders that, individually or in the aggregate, would not have a Company Material
Adverse Effect; and
(c) There have been no releases, spills or discharges of Hazardous
Substances on or underneath any of the real property owned or leased by the
Company or the Company Subsidiaries, that, individually or in the aggregate,
would have a Company Material Adverse Effect.
Section 4.19 Loan Portfolio: Portfolio Management. (a) Each loan
-------------------------------------
agreement, note or borrowing arrangement (collectively, "Loans") in original
principal amount in excess of $25,000 which is reflected as an asset in the
Company Balance Sheet or was acquired since the date thereof (except with
respect to those Loans which are no longer assets of the Company or any Company
Subsidiary), (i) is the binding obligation of the respective obligor named
therein except as enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors rights generally, and except
that the availability of equitable remedies, including specific performance, is
subject to the discretion of the court before which any proceeding may be
brought, and (ii) to the extent secured by an interest in real property, is
secured by a valid and perfected mortgage lien having the priority specified in
the loan documents. The Company and the Company Subsidiaries administer their
loan and investment portfolios (including, but not limited to, adjustments to
adjustable mortgage loans) in accordance in all material respects with all
Applicable Laws and the terms of applicable instruments. The records of the
Company regarding all loans outstanding on its books are accurate in all
material respects and the risk classification system has been established in
accordance in all material respects with the requirements of the OTS.
(b) Seller and the Company have Previously Disclosed a list, accurate
and complete in all material respects, of the aggregate amounts of Loans of the
Company and the Company
20
<PAGE>
Subsidiaries that have been adversely designated, criticized or classified by
any bank examiner (whether regulatory or internal) as of December 31, 1997,
separated by category of classification or criticism (the "Asset
Classification"); and no amounts of loans, extensions of credit or other assets
that have been adversely designated, classified or criticized as of the date
hereof by any representative of any Government Authority as "Special Mention,"
"Substandard," "Doubtful," "Loss" or words of similar import are excluded from
the amounts disclosed in the Asset Classification, other than amounts of loans,
extensions of credit or other assets that were charged off by the Company or any
of the Company Subsidiaries before the date hereof.
Section 4.20 [Intentionally Omitted].
Section 4.21 Derivatives Contracts. (a) Neither the Company nor any
---------------------
of the Company Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter swap, forward, future, option, cap, floor or
collar financial contract or any other contract not included on the Company
Balance Sheet which is a derivatives contract (including various combinations
thereof) (each, a "Derivatives Contract") or owns securities that are identified
in Thrift Bulletin No. 65 or otherwise referred to as structured notes (each,
a "Structured Note"), except for those Derivatives Contracts and Structured
Notes Previously Disclosed, including a list, as applicable, of any of its or
any of its Subsidiaries' assets pledged as security for a Derivatives Contract.
(b) All Derivative Contracts to which the Company or any Company
Subsidiary is a party or by which any of their properties or assets may be
bound were entered into in the ordinary course of business and with
counterparties believed by the Company or the appropriate Company Subsidiaries
to be financially responsible at the time.
Section 4.22 Insurance. A schedule of all insurance policies in
---------
effect as to the Company and the Company Subsidiaries (the "Insurance Policies")
has been Previously Disclosed (other than policies pertaining to mortgage loans
made in the ordinary course of business). All of the Insurance Policies are in
full force and effect, all premiums with respect thereto covering all periods up
to and including the date of this Agreement have been paid, such premiums
covering all periods from the date hereof up to and including the Effective Date
shall have been paid on or before the Effective Date, to the extent then due and
payable (other than retrospective premiums which may be payable with respect to
worker's compensation insurance policies). The Insurance Policies are valid and
enforceable in accordance with their respective terms. Neither the Company nor
any Company Subsidiary has been refused any insurance with respect to any
material properties, assets or operations, nor has any coverage been limited or
terminated by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three (3)
years.
Section 4.23 Purchase for Investment. Seller, with respect to all
-----------------------
shares of Buyer Common Stock to be acquired by it in the Stock Purchase, is
acquiring such securities for investment purposes only and not with a present
view to, or for resale in connection with, the distribution or other disposition
thereof or with any present intention of distributing or reselling any thereof
in any
21
<PAGE>
transaction which would be in violation of the securities laws of the United
States of America or any State, without prejudice, however, to Seller's right,
subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of such
shares of Common Stock under an effective registration statement under the
Securities Act of 1933, as amended, and other applicable State securities laws
or under an exemption from such registration requirements, and subject,
nevertheless, to the disposition of Seller's property being at all times within
its control.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date of this
Agreement and as of the Closing Date, except as otherwise Previously Disclosed,
as follows:
Section 5.1 Organization, Good Standing, Authority, Insurance, Etc.
------------------------------------------------------
(a) Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nebraska, and is duly registered as a
savings and loan holding company with the OTS under the HOLA. Each "subsidiary"
of Buyer within the meaning of Section 10(a)(1)(G) of HOLA (individually a
"Buyer Subsidiary" and collectively the "Buyer Subsidiaries") is duly organized,
validly existing, and in good standing under the laws of the respective
jurisdiction under which it is organized. Each of Buyer and the Buyer
Subsidiaries has all requisite power and authority and is duly qualified and
licensed to own, lease and operate its properties and conduct its business as it
is now being conducted, except for such failure or failures to be so qualified
or licensed as would not have, in the aggregate, a Buyer Material Adverse
Effect. Buyer has made available to the Company a true, complete and correct
copy of the articles of incorporation and by-laws of Buyer as in effect on the
date of this Agreement. Each of Buyer and the Buyer Subsidiaries is qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which qualification is necessary under Applicable Law, except to
the extent that any failures to so qualify would not, in the aggregate, have a
Buyer Material Adverse Effect. The Bank is a member in good standing of the
Federal Home Loan Bank of Topeka, and all eligible accounts issued by the Bank
are insured by the FDIC through the SAIF to the maximum extent permitted under
Applicable Law. The Bank is a "domestic building and loan association" as
defined in Section 7701(a)(19) of the Code, and is a "qualified thrift lender"
as defined in Section 10(m) of the HOLA.
(b) The minute books of Buyer which have been made available to Seller
contain records of all meetings and other corporate actions held or taken by its
shareholders and Board of Directors (including committees of such Board) since
January 1, 1995.
Section 5.2 Capitalization. The authorized capital stock of Buyer
--------------
consists of 50,000,000 shares of Buyer Common Stock, of which 33,640,771 shares
were issued and outstanding as of the date of this Agreement, and 10,000,000
shares of serial preferred stock, par
22
<PAGE>
value of $.01 per share ("Buyer Preferred Stock"), of which no shares were
outstanding as of the date of this Agreement. As of the date of this Agreement,
there are no shares of Buyer Common Stock held in Buyer's treasury and, except
as Previously Disclosed, there are no shares of Buyer Common Stock or Buyer
Preferred Stock reserved for issuance. All issued and outstanding shares of
Buyer Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. As of the date of this Agreement,
except as Previously Disclosed, there are no outstanding Rights to purchase or
acquire any capital stock of Buyer and no oral or written agreement, contract,
arrangement, understanding, plan or instrument of any kind to which Buyer or any
of its Affiliates is subject with respect to the issuance, voting or sale of
issued or unissued shares of the capital stock of Buyer. The shares of Buyer
Common Stock, if any, to be issued pursuant to the Stock Purchase will be duly
authorized and validly issued and, at the Closing, all such shares will be fully
paid, nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof.
Section 5.3 Ownership of Subsidiaries. All the outstanding shares
-------------------------
of the capital stock of the Buyer Subsidiaries are validly issued, fully paid
and nonassessable. All of the outstanding capital stock or other ownership
interests in each of the Buyer Subsidiaries is owned directly, or indirectly
through one or more Buyer Subsidiaries, by Buyer, free and clear of any
Encumbrance. There are no outstanding Rights to purchase or acquire any capital
stock of any Buyer Subsidiary and no oral or written agreement, contract,
arrangement, understanding, plan or instrument of any kind to which Buyer or any
of its Affiliates is subject with respect to the issuance, voting or sale of
issued or unissued shares of the capital stock of any of the Buyer Subsidiaries.
Section 5.4 Financial Statements; Undisclosed Liabilities. (a)
---------------------------------------------
Buyer has previously delivered to Seller copies of (i) the audited consolidated
balance sheets of Buyer as of June 30th for the fiscal years 1996 and 1997, and
the related audited statements of income, changes in shareholders' equity and
cash flows for the fiscal years 1995, 1996 and 1997, inclusive, in each case
accompanied by the audit report of Deloitte & Touche LLP, independent public
accountants with respect to Buyer, and (ii) the unaudited interim consolidated
balance sheet and related statement of income, changes in shareholders' equity
and cash flows of Buyer at or for the period ending September 30, 1997
(collectively, the balance sheets and statements referred to above being
referred to as the "Buyer Financial Statements", and the audited balance sheet
as of June 30, 1997 being referred to as the "Buyer Balance Sheet"). The
balance sheets referred to in the previous sentence (including the related
notes, where applicable) present fairly the consolidated financial position of
Buyer and the Buyer Subsidiaries as of the dates thereof, and the other
financial statements referred to in this Section 5.4(a) present fairly (except
for (i) the omission of notes to unaudited statements and (ii) year-end
adjustments to interim results normal in nature and amount) the consolidated
results of operations and cash flows of Buyer and the Buyer Subsidiaries for the
respective fiscal periods therein set forth; each of such balance sheets and
statements (including the related notes, where applicable) comply in all
material respects with applicable accounting requirements with respect thereto;
and each of such balance sheets and statements (including the related notes,
where applicable) has been prepared in accordance with GAAP consistently applied
during the periods involved (except as indicated in the notes thereto) and in
accordance with the books and records of
23
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Buyer and the Buyer Subsidiaries, which books and records are complete and
accurate in all material respects and have been maintained in all material
respects in accordance with Applicable Law.
(b) Except for (i) those liabilities that are fully reflected or
reserved against on the Buyer Balance Sheet and (ii) liabilities incurred in the
ordinary course of business since the date of the Buyer Balance Sheet and which
would not have, individually or in the aggregate, a Buyer Material Adverse
Effect, Buyer has no liabilities or obligations of any nature, whether absolute,
accrued, contingent or otherwise and whether due or to become due, in any case
which are or required by GAAP to be shown on a consolidated balance sheet of
Buyer.
Section 5.5 Absence of Changes. (a) Since June 30, 1997, there has
------------------
been no event, occurrence or development which, individually or in the
aggregate, has had a Buyer Material Adverse Effect.
(b) Except as contemplated by this Agreement, since June 30, 1997,
each of the Buyer and the Buyer Subsidiaries has carried on its respective
businesses in the ordinary course of business and consistent with past practice.
Section 5.6 No Broker's or Finder's Fees. No agent, broker,
----------------------------
investment banker, Person or firm acting on behalf or under authority of Buyer
or any of the Buyer Subsidiaries is or will be entitled to any broker's or
finder's fee or any other commission or similar fee directly or indirectly in
connection with the Stock Purchase, the Merger or any other transaction
contemplated hereby, except Buyer has engaged Merrill Lynch & Co., an investment
banking firm, to provide financial advisory services and to deliver "fairness
opinions" as to whether or not the Purchase Consideration is fair to Buyer from
a financial point of view.
Section 5.7 Litigation and Other Proceedings. Neither Buyer nor any
--------------------------------
Buyer Subsidiary is a defendant in, nor is any of its property subject to, any
pending, or, to the Knowledge of Buyer, threatened claim, action, suit,
investigation, or proceeding as to which there is a reasonable possibility of an
adverse determination and which, if adversely determined, would have, in the
aggregate, a Buyer Material Adverse Effect. There is no judicial order,
judgment or decree to which any of Buyer, the Buyer Subsidiaries or their
respective properties is subject which has had or could reasonably be expected
to have a Buyer Material Adverse Effect.
Section 5.8 Compliance With Law. Buyer and the Buyer Subsidiaries
-------------------
have been and are in compliance in all respects with all Applicable Laws, except
where such non-compliance would not have a Buyer Material Adverse Effect, and
neither Buyer nor any Buyer Subsidiary has received notice from any Governmental
Authority of any material violation of, and to Buyer's Knowledge, there is no
material violation of, any Applicable Law.
Section 5.9 Corporate Actions. The Boards of Directors of Buyer and
-----------------
the Bank have duly authorized their respective officers to execute and deliver
(as appropriate) this Agreement, the Bank Plan of Merger and the Registration
Rights Agreement and to take all action necessary to
24
<PAGE>
consummate the Stock Purchase, the Merger and the other transactions
contemplated hereby and thereby. All corporate authorizations by the Boards of
Directors of Buyer and the Bank required for the consummation of the Stock
Purchase, the Merger and transactions contemplated by the Registration Rights
Agreement have been obtained.
Section 5.10 Authority. (a) The execution, delivery and performance
---------
by Buyer of its obligations under this Agreement and the Registration Rights
Agreement and the consummation thereby of the transactions contemplated hereby
and thereby do not, and will not, violate or conflict with any of the provisions
of, or constitute a breach or default (or an event which, with notice or lapse
of time, or both, would constitute a breach or default) under, terminate, give
any Person the right to terminate, modify or accelerate payment or performance
under or result in the creation of any Encumbrance upon any of the properties or
assets of Buyer under (i) the articles of incorporation, charter or by-laws of
Buyer, the Bank or any other Buyer Subsidiary, (ii) any Applicable Law to which
Buyer or any of the Buyer Subsidiaries is subject (other than any Applicable Law
which is referred to in or otherwise covered by paragraph (c) below, which shall
be solely and exclusively addressed in paragraph (c) below) or (iii) except, in
each case, where such violation, conflict, breach, default, termination (or
right to terminate), modification, acceleration or Encumbrance would not,
individually or in the aggregate, have a Buyer Material Adverse Effect, any
Contract to which Buyer or any of the Buyer Subsidiaries is a party or is
subject or by which any of their properties or assets is bound or affected.
(b) Each of Buyer and the Bank has all requisite corporate power and
authority to enter into this Agreement, the Registration Rights Agreement and
the Bank Plan of Merger, as the case may be, and to perform its respective
obligations hereunder and thereunder. This Agreement and the Bank Plan of
Merger constitute, and the Registration Rights Agreement, when executed, will
constitute, the valid and binding obligation of Buyer and the Bank, as the case
may be, and are, or will be, enforceable against Buyer and the Bank, as the case
may be, in accordance with their terms, except as enforceability may be limited
by Applicable Laws relating to bankruptcy, insolvency or creditors rights
generally and general principles of equity.
(c) The parties acknowledge that the consummation of the Stock
Purchase and the Merger and the other transactions contemplated hereby is
subject to various regulatory approvals. Except as Previously Disclosed, no
Governmental Approvals are required on behalf of Buyer, the Bank or any Buyer
Subsidiary in connection with the consummation of the transactions contemplated
by this Agreement, the Registration Rights Agreement and the Bank Plan of
Merger. As of the date of this Agreement, to Buyer's Knowledge, there is no
reason why the Governmental Approvals cannot be obtained or granted on a timely
basis.
Section 5.11 Reports. Since January 1, 1995, Buyer and the Buyer
-------
Subsidiaries have timely filed all Regulatory Documents required to be filed by
them, except to the extent that all failures to so file, in the aggregate, would
not have a Buyer Material Adverse Effect; and, as of their respective dates, all
such documents, as finally amended, complied in all material respects with
applicable requirements of Applicable Law and, as of their respective date or
the date as amended,
25
<PAGE>
did not contain any 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, except that information as of a later date shall be deemed to modify
information as of an earlier date.
Section 5.12 Agreements and Instruments. As of the date of this
--------------------------
Agreement, there are no orders or similar arrangements between or involving
Buyer or any Buyer Subsidiary and any Governmental Authority.
Section 5.13 Cash Consideration. Buyer or one or more Buyer
------------------
Subsidiaries will have sufficient cash on hand to pay the Cash Consideration
and, if a Cash Election is made, the Share Consideration as of the Closing.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business by the Company. During the period
----------------------------------
from the date of this Agreement and continuing through the Closing Date, except
as Previously Disclosed and except as contemplated and permitted by this
Agreement or with the prior written consent of Buyer, each of the Company and
the Company Subsidiaries shall, and Seller shall cause each of the Company and
the Company Subsidiaries to, (a) carry on its business in the ordinary course
consistent with past practice; (b) use its reasonable best efforts to preserve
its present business organization and relationships; (c) use its reasonable
best efforts to keep available the present services of its employees; and (d)
use its reasonable best efforts to preserve its rights, franchises, goodwill and
relations with its customers and others with whom it conducts business. Without
limiting the generality of the foregoing, except as contemplated and permitted
by this Agreement, consented to in writing by Buyer or Previously Disclosed,
during the period from the date of this Agreement and continuing through the
Closing, none of the Company and the Company Subsidiaries shall, and Seller
shall not permit any of the Company or the Company Subsidiaries to, directly or
indirectly:
(i) amend, or agree to amend its articles/certificate of incorporation,
charter or by-laws (or comparable governing instruments) or merge with or into
or consolidate with, or agree to merge with or into or consolidate with, any
other Person, subdivide, combine or in any way reclassify any shares of its
capital stock, or change or agree to change in any manner the rights of its
outstanding capital stock;
(ii) issue or sell or purchase any shares of its capital stock, or
issue or sell or purchase any option, warrant, convertible or exchangeable
security, right, subscription, call, unsatisfied pre-emptive right or other
agreement or right of any kind to purchase or otherwise acquire (including,
without limitation, by exchange or conversion) (each a "Right") any shares
26
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of its capital stock, or enter into any contracts, agreements or arrangements to
issue or sell or purchase any shares of its capital stock;
(iii) incur any indebtedness for borrowed money or guarantee the
indebtedness of other Persons, except in the ordinary course of business
consistent with past practice;
(iv) waive, or agree to waive, any right of material value to its
business;
(v) make, or agree to make, any material change in its accounting
methods or practices for Tax or accounting purposes or make, or agree to make,
any material change in depreciation or amortization policies or rates adopted by
it for Tax or accounting purposes, except in each case as required by GAAP or
Applicable Law; provided, however, that prior to the Closing Date there shall be
-------- -------
transferred from the Company to Seller (A) that accounting reserve general
ledger #0101-244318 (net of deferred taxes) which accounting reserve represents
an accrual for post-retirement medical and life insurance coverage for certain
Company Employees, and (B) that accounting reserve general ledger # 0101-244340
(net of deferred taxes) which accounting reserve represents an accrual for
deferred board of directors fees;
(vi) materially change, or agree to materially change, any of its
lending activities, policies or practices, except as required by Applicable Law
or by any Governmental Authority;
(vii) make any loan or advance to any of its Affiliates, officers,
directors, employees, consultants, agents or other representatives (other than
travel advances made in the ordinary course of business consistent with past
practice and except for loans and advances made in the ordinary course of
business on an arms length basis), or make any other loan or advance otherwise
than in the ordinary course of business consistent with past practice;
(viii) sell, offer to sell, abandon or make any other disposition
of any of its material assets (other than Listed Assets in the manner
contemplated by this Agreement), including selling or closing any branches;
grant or suffer, or agree to grant or suffer, any Encumbrance on any of its
assets, except that the Company and the Company Subsidiaries shall be entitled
to do any of the foregoing (other than selling or closing branches) in the
ordinary course of business consistent with past practice;
(ix) except in the ordinary course of business consistent with past
practice, incur or assume, or agree to incur or assume, any liability or
obligation (whether or not currently due and payable) relating to its business
or any of its assets;
(x) except as permitted pursuant to clause (vii) above with respect
to individuals who are Affiliates, enter into, or agree to enter into, any
contract, agreement or arrangement with any of its Affiliates, other than any
such contract, agreement or arrangement which will not survive the Closing;
27
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(xi) declare, set aside or pay any dividends or declare or make any
other distributions of any kind on or in respect of its capital stock, or make
any direct or indirect redemption, retirement, purchase or other acquisition of
any shares of its capital stock or Rights;
(xii) create, renew, amend, terminate or cancel, or take any other
action that may result in the creation, renewal, amendment, termination or
cancellation of, any Contract, except in the ordinary course of business
consistent with past practice and as would not have, in the aggregate, a
Company Material Adverse Effect; enter into or amend, or agree to enter into or
amend, any agreement pursuant to which it agrees to indemnify any party on
behalf of its business (other than in the ordinary course of business consistent
with past practice and as would not have, in the aggregate, a Company Material
Adverse Effect) or pursuant to which it agrees to refrain from competing with
any party with respect to its business;
(xiii) adopt, amend, renew or terminate any Company Plan or Benefit
Arrangement or any other employee program, agreement, arrangement or policy
between any of the Company and the Company Subsidiary and one or more of its
employees, except as required by Applicable Law, provided, however, that (x) the
-------- -------
All AmerUs Savings and Retirement Plan and any related trust agreement (the
"Savings Plan") may be amended prior to the Closing Date to provide that certain
of the Company Employees shall be fully vested in his or her account balance in
the Savings Plan as of the Closing Date, to provide that, as of the Closing
Date, Company Employees will receive (and immediately vest in) a pro-rata
portion (based on the number of days between January 1 and the Closing Date) of
the 4% employer core contribution and the interim benefit supplement
contribution provided for in the Savings Plan and to provide that distributions
from the Savings Plan may be made solely in cash at the discretion of the
trustee of the Savings Plan as permitted by Applicable Law, (y) Seller shall be
permitted to make a cash payment to those Company Employees eligible (had such
employees retired as of the Closing Date) to receive post-retirement medical
benefits pursuant to the terms of the All AmerUs Financing Plan for Retiree
Health and Welfare Benefits in settlement of their entitlements under such plan,
and (z) the Company shall be permitted to amend the Directors Deferred
Compensation Plan of AmerUs Bank, and any individual deferred compensation
agreements entered into in connection with such plan (the "Directors Plan"), to
require participants in the Directors Plan to elect a uniform deferral period
for all amounts deferred under such plan;
(xiv) commit any act or omission which constitutes a breach or
default under any Contract or license to which it is a party or by which it or
any of its properties or assets is bound except as would not have, in the
aggregate, a Company Material Adverse Effect;
(xv) enter into any new line of business;
(xvi) acquire or agree to acquire in any manner, including by way
of merger, consolidation, purchase of an equity interest or assets, any business
or any corporation, partnership, association or other business organization or
division thereof;
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(xvii) materially increase the salary or wages of any employees of
the Company or of any Company Subsidiary, provided, however, that Company and
-------- -------
the Company Subsidiaries shall be permitted to (i) provide for salary increases
for employees of the Company or any Company Subsidiary in the ordinary course of
business and consistent with past practice during the normal review period for
such employees, and (ii) pay to employees of the Company or any Company
Subsidiary the bonus and other incentive compensation payments which have been
Previously Disclosed;
(xviii) purchase any debt securities or derivative securities,
including CMO or REMIC products, that are defined as "high risk mortgage
securities" under OTS Thrift Bulletin No. 52 dated January 10, 1992 as revised
or purchase any Derivatives Contracts;
(xix) make any investment which would cause the Company to not be
a qualified thrift lender under Section 10(m) of the HOLA, or not to be a
"domestic building and loan association" as defined in Section 7701(a)(19) of
the Code;
(xx) change its existing investment guidelines Previously Disclosed,
except as required by Applicable Law or any Governmental Authority;
(xxi) authorize or make any capital expenditure, except for any such
expenditures which are not in excess of $50,000 individually and $500,000 in the
aggregate and except as and to the extent set forth in the 1998 capital budget
of the Company previously made available to Buyer;
(xxii) make any loan in which participation interests therein are
to be sold to other Persons or acquire a participation interest in a loan
originated by another Person, other than consistent with past practice; or
(xxiii) agree (by contract or otherwise) to do any of the foregoing.
Notwithstanding anything in this Agreement to the contrary, nothing shall
prohibit the Company or any Company Subsidiary from (i) taking any action
required in connection with the transfer of the Loan Production Offices as
contemplated by Section 6.18 hereof, (ii) making loans through correspondent
institutions (provided that such loans otherwise meet the Company's loan
underwriting criteria), (iii) selling the Listed Assets or (iv) reinvesting
proceeds from the sale of assets.
Section 6.2 Maintenance of Records. Through the Closing Date,
----------------------
Seller and its Affiliates, the Company and the Company Subsidiaries will
maintain the Records in the same manner and with the same care that the Records
have been maintained prior to the execution of this Agreement. As of the
Closing Date, Seller shall deliver to the Company all Records in the possession
of Seller or any of its Affiliates (other than the Company or the Company
Subsidiaries), other than Records relating to the Loan Production Offices which
are retained by
29
<PAGE>
Seller pursuant to Section 6.18. Seller may retain copies of such Records,
provided that Seller agrees to hold such Records confidential to the same extent
as Seller holds its own confidential and proprietary information. From and after
the Closing Date, each party to this Agreement shall permit the other parties
reasonable access to any applicable Records in its possession reasonably
necessary in connection with any claim, action, litigation or other proceeding
involving the party requesting access to such Records or in connection with any
legal obligation owed by such party to any Governmental Authority or any present
or former client of the Companies, except that no party shall be required to
provide access to or to disclose confidential customer account information or
jeopardize the attorney-client privilege of the institution in possession or
control of such information (the parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which such restrictions apply).
Notwithstanding anything in this Agreement to the contrary, Buyer shall, and
shall cause each of the Company, the Company Subsidiaries and/or Buyer's, the
Company's and each Company Subsidiary's respective successor[s] to, retain and
provide, upon Seller's request, Records and any other information which may be
relevant to any audit, litigation, indemnifiable claim or other proceeding or in
connection with any legal obligation and make employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, except that none of Buyer, the Company or the
Company Subsidiaries shall be required to provide access to or to disclose
confidential customer account information or jeopardize the attorney-client
privilege of the institution in possession or control of such information (the
parties hereto will make appropriate substitute disclosure arrangements under
circumstances in which such restrictions apply). Notwithstanding anything in
this Agreement to the contrary, Buyer shall, and shall cause each of the
Company, the Company Subsidiaries and/or Buyer's, the Company's and each Company
Subsidiary's respective successor[s] to, (i) retain and provide, upon Seller's
request, all Records with respect to matters concerning Taxes including copies
of all Tax Returns, supporting work schedules and other information and Records
which may be relevant to such Tax Returns pertinent to the Company and its
Subsidiaries relating to any taxable period beginning before the Closing Date
and until expiration of the statutory period of assessment as extended plus 90
days of the respective taxable periods, and expiration of the statutory period
for any and all carrybacks and carryforwards of any item related to Taxes of the
Company and the Company Subsidiaries, and receipt by Buyer of a letter mailed
certified mail return receipt requested from Seller stating that the applicable
statutory periods have expired and authorizing Buyer to desist from retaining
and providing such Records, and to abide by all record retention agreements
entered into with any taxing authority, and (ii) give Seller reasonable written
notice prior to transferring, destroying or discarding any such Records and, if
Seller so requests, Buyer shall, and shall cause each of the Company, the
Company Subsidiaries and/or Buyer's, the Company's and each Company Subsidiary's
respective successor[s] to, allow Seller to take possession of such Records.
Section 6.3 Employees; Employee Benefits. (a) Buyer shall, or shall
----------------------------
cause the Bank, to provide employees of the Company or any Company Subsidiary
who commence employment with Buyer or the Bank after the effective time of the
Merger ("Transferred Employees") with participation in the employee benefit
plans, programs and arrangements of Buyer
30
<PAGE>
or Bank, as applicable (the "Buyer Plans"), on the same terms as such plans and
benefits are offered to similarly situated employees of Buyer or Bank, as
applicable. Buyer shall recognize, or shall cause the Bank to recognize, each
Transferred Employee's service with the Company or any Company Subsidiary for
purposes of determining eligibility to participate in and vesting under the
Buyer Plans, but not for purposes of benefit accruals under any such plans.
(b) Buyer will, and will cause the Company or a Company Subsidiary to,
give Transferred Employees full credit for purposes of eligibility, vesting, and
determination of the level of benefits under any employee benefit plans or
arrangements maintained by the Buyer, the Company or a Company Subsidiary (but
not for purposes of benefit accruals under any retirement plan maintained by, or
contributed to by, any such entity) for such Transferred Employees' service with
the Company or any Company Subsidiary to the same extent recognized by the
Company or any Company Subsidiary immediately prior to the Closing Date.
Without limiting the generality of the foregoing, Buyer will, or will cause the
Company or a Company Subsidiary to recognize such Transferred Employees' service
with the Company or a Company Subsidiary for purposes of participation in any
retirement, disability, medical insurance, tuition reimbursement, vacation pay
accrual and sick leave plans, policies, programs or arrangements (but not for
purposes of benefit accruals under any retirement plan maintained by, or
contributed to by, any such entity). Buyer agrees to take all actions necessary
and appropriate to remove any age restrictions contained in any qualified
retirement plan maintained by Buyer ("Buyer Pension Plans") which would, if not
removed, prevent Transferred Employees who were eligible to participate in the
Savings Plan as of the Closing Date from participating in such Buyer Pension
Plan.
(c) Buyer agrees that (i) prior to the Closing Date and continuing
through December 31, 1998, employees of the Company and each Company Subsidiary
shall continue to accrue vacation in accordance with the existing vacation
policy of the Company and each Company Subsidiary (and during the period from
the Closing Date until December 31, 1998, Buyer shall honor such accruals) and
subsequent to December 31, 1998, such employees shall be subject to Buyer's
vacation policy, as in effect at such time, including for purposes of
determining carryover of accrued vacation days from year to year; provided,
--------
however, Buyer shall allow Transferred Employees to carry forward into calendar
- -------
year 1999 under Buyer's vacation policy up to five (5) days of vacation accrued
under the vacation policy of the Company and each Company Subsidiary to the
extent such accrued vacation is not used prior to January 1, 1999. Buyer, the
Company and each Company Subsidiary shall permit each Transferred Employee to
take all accrued vacation prior to January 1, 1999.
(d) Seller shall be responsible for the payment of any severance
obligations, including, but not limited to, any amounts to be paid or payable
under any employment or severance agreement or arrangement in effect as of the
Closing, with respect to (i) any Company Employee who is not a Transferred
Employee, and (ii) those Transferred Employees listed on a schedule to be
provided to Seller by Buyer at or prior to the Closing (each an "Interim
Employee), provided, however, that Seller shall be responsible only for the
-------- -------
payment of severance to Interim
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Employees whose employment with Buyer, the Company or a Company Subsidiary
terminates prior to October 31, 1998. Buyer shall be responsible for the payment
of all other severance obligations with respect to Transferred Employees
(including Interim Employees) and, without limiting the generality of the
foregoing, Buyer shall provide the severance payments set forth on Schedule 6.3
to any Transferred Employee (other than an Interim Employee whose employment
with Buyer, the Company or a Company Subsidiary terminates prior to October 31,
1998) whose employment with Buyer, the Company, or a Company Subsidiary is
involuntarily terminated (other than for cause) during the 180-day period
following the Closing Date.
(e) Seller agrees to indemnify Buyer, the Company and any Company
Subsidiary from any liability, cost or expense relating to (i) those post-
retirement medical and life insurance benefits referred to in Section 6.1(v)(A)
hereof and (ii) those accrued deferred board of directors fees referred to in
Section 6.1(v)(B) hereof.
(f) Buyer shall take all actions necessary and appropriate to amend
the tax-qualified defined contribution plan maintained by Buyer (the "Buyer
Savings Plan") to (i) allow for the establishment of accounts for those
Transferred Employees who elected in the manner and under the conditions
prescribed by the Savings Plan to have their accounts transferred to the Buyer
Savings Plan, including such notes as are held within any Transferred Employee's
account in the Savings Plan that were executed by such Transferred Employee,
(ii) permitting each Transferred Employee to elect to have such transferred
funds invested under one or more investment options, one or more of which is not
the Buyer's or an affiliate's security or securities, and (iii) recognizing for
all purposes under the Buyer Savings Plan all service which was recognized under
the Savings Plan as if it were service rendered to Buyer. Seller shall direct
the trustee of the Savings Plan to transfer to the trustee of the Buyer Savings
Plan the account balances in cash under the Savings Plan as of the date of
transfer in respect of current participants in the Savings Plan who are
Transferred Employees and who have elected such account transfer. Upon such
transfer Buyer and the Buyer Savings Plan shall assume the liabilities for the
account balances under the Savings Plan in respect of Transferred Employees who
elected such account transfers and each of Seller and the Savings Plan shall be
relieved of all liabilities for such transferred account balances; provided,
however, that Seller and the Savings Plan shall retain the liabilities in
respect of Transferred Employees for accrued benefits related to the portion of
the Savings Plan which relate to the accounts of Transferred Employees who have
not elected to have their accounts in the Savings Plan transferred to Buyer
Savings Plan. Upon the transfer of assets in accordance with this Section,
Buyer agrees to indemnify and hold harmless Seller from and against any and all
costs, expenses, and liabilities arising out of or related to the Buyer Savings
Plan; provided, however, that Buyer shall not indemnify or hold harmless Seller
with respect to those costs, expenses and liabilities which relate to the
portion of the Savings Plan which relates to the accounts of Transferred
Employees who have not elected to have their accounts in the Savings Plan
transferred to the Buyer Savings Plan. Buyer and Seller shall cooperate in the
filing of documents required by the transfer of assets and liabilities described
herein and, notwithstanding anything contained herein to the contrary, no such
transfer shall take place until the later of (x) the 31st day following the
filing of all required forms in connection therewith and (y)
32
<PAGE>
receipt by Seller of a written statement from Buyer that the Buyer Savings Plan
is intended to be qualified under Section 401 of the Code.
Section 6.4 Further Assurances. Each party to this Agreement shall
------------------
execute such documents and other papers and perform such further acts as may be
reasonably required to carry out the provisions hereof and the transactions
contemplated hereby. For a reasonable period of time after the Closing Date
upon the request of Buyer, Seller shall promptly execute and deliver such
further instruments of assignment, transfer, conveyance, endorsement, direction
or authorization and other documents as Buyer may reasonably request to
effectuate the purposes of this Agreement. Seller hereby agrees to cause the
Company at or prior to the Closing to perform and comply with all of
obligations, covenants and agreements to be performed or complied with by the
Company at or prior to the Closing as provided under this Agreement. For a
reasonable period of time after the Closing Date upon the request of Seller,
Buyer shall, and shall cause the Company or the Bank to, promptly execute and
deliver such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and other documents as Seller may
reasonably request to effectuate the transfer of the Loan Production Offices
contemplated by Section 6.18 and any Affected Property purchased by Seller
pursuant to a Qualifying Purchase Commitment.
Section 6.5 Efforts of Parties to Close. During the period from the
---------------------------
date of this Agreement through the Closing Date, each party hereto shall use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to the consummation of the transactions contemplated hereby, including
the execution and delivery of any documents, certificates, instruments or
other papers that are reasonably required for the consummation of the
transactions contemplated hereby. During the period from the date of this
Agreement and continuing until the Closing, except as required by Applicable Law
or with the prior written consent of the other parties to this Agreement, no
party to this Agreement shall take any action which, or fail to take any action
the failure of which to be taken, would, or could reasonably be expected to,
(a) result in any of the representations and warranties set forth in this
Agreement on the part of the party taking or failing to take such action being
or becoming untrue in any material respect; (b) result in any conditions to the
Closing set forth in Article VII not being satisfied; or (c) adversely affect or
materially delay the receipt of any of the requisite regulatory approvals or the
consummation of the Stock Purchase, the Merger and the other transactions
contemplated hereby.
Section 6.6 Confidentiality and Announcements. (a) The parties
---------------------------------
agree to be bound by and comply with the provisions set forth in the
Confidentiality Agreement, the provisions of which are hereby incorporated
herein by reference.
(b) Other than as required by Applicable Law upon prior notice to the
other parties (where reasonably practicable) or with the prior consent of the
other parties, none of the Seller, the Company or Buyer shall, and each of the
foregoing shall cause each of its Affiliates, employees, directors, partners and
agents, including accountants, lenders, counsel and investment bankers not to,
disclose to any Person the fact of execution and delivery hereof, any of the
33
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contents hereof or any information with respect to the Stock Purchase, the
Merger or the other transactions contemplated hereby, except that nothing herein
shall prohibit any party from (i) providing any information as required by
Applicable Law or to its regulatory authorities (regardless of whether such
disclosure is required by Applicable Law), (ii) providing such information on a
confidential basis to its Affiliates, officers, directors, employees,
representatives, advisors, agents, rating agencies, lenders or regulators or
(iii) disclosing any such information which becomes public through no fault of
such party or any party to which such information was disclosed pursuant to the
immediately preceding clause (ii).
(c) Subject to Section 6.8(a) and (b), the parties to this Agreement
shall agree with each other as to the form and substance of any press release
related to this Agreement or the transactions contemplated hereby and shall
consult each other as to the form and substance of other public disclosures
related hereto and thereto.
Section 6.7 Access; Certain Communications. Between the date of
------------------------------
this Agreement and the Closing Date, subject to any Applicable Laws relating to
the exchange of information,
(a) Seller, the Company and the Company Subsidiaries shall afford to
Buyer and its authorized agents and representatives reasonable access, upon
reasonable notice and during normal business hours, to all Contracts, documents
and information of or relating to the assets, liabilities, business, operations,
personnel and other aspects of the business of the Company and the Company
Subsidiaries (other than the Loan Production Offices). Seller, the Company
and the Company Subsidiaries shall cause their personnel, attorneys and
accountants to provide assistance to Buyer in Buyer's investigation of matters
relating to the purchase of the Shares, including allowing Buyer and its
authorized agents and representatives access to their operating sites and
facilities; provided, however, that Buyer's investigation shall be conducted in
-------- -------
a manner which does not unreasonably interfere with the normal operations,
customers, and employee relations of the Company and the Company Subsidiaries.
Notwithstanding anything in this Agreement to the contrary, none of the
Seller, the Company or the Company Subsidiaries shall be required to provide
access to or to disclose confidential customer account information or jeopardize
the attorney-client privilege of the institution in possession or control of
such information. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) Buyer shall afford to Seller and its authorized agents and
representatives reasonable access, upon reasonable notice and during normal
business hours, to all contracts, documents and information of or relating to
the assets, liabilities, business, operations, personnel and other aspects of
relevance, in the reasonable judgment of Buyer, to the transactions contemplated
hereby. Buyer shall cause its personnel, attorneys and accountants to provide
assistance to Seller in Seller's investigation of matters relating to the Stock
Purchase or the Merger, including allowing Seller and its authorized agents and
representatives access to its operating sites and facilities; provided, however,
-------- -------
that Seller's investigation shall be conducted in a manner which
34
<PAGE>
does not unreasonably interfere with Buyer's normal operations, customers, and
employee relations.
(c) The investigations of the parties pursuant to this Section 6.7
shall not affect any of the representations or warranties contained herein.
Section 6.8 Regulatory Matters; Third Party Consents. (a) The
----------------------------------------
parties to this Agreement shall cooperate with each other and use their
reasonable best efforts promptly to prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals, waivers
and authorizations of all third parties and Governmental Authorities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement; provided, however, that notwithstanding the foregoing, Buyer shall
-------- ------
prepare and file the requisite applications and notices with the OTS within 60
days of the date of this Agreement, and provided, further, however, that nothing
-------- -------
contained herein shall require Seller to pay any sum to any third party in
connection with obtaining such party's consent or approval other than any fees
required to be paid by Seller in connection with obtaining any consents or
approvals of any Governmental Authorities. If any required consent of or waiver
by any third party (excluding any Governmental Authority) is not obtained prior
to the Closing, or if the assignment of any Contract would be ineffective or
would adversely affect any material rights or benefits thereunder so that Buyer
would not in fact receive all such rights and benefits, the parties hereto, each
without cost, expense or liability to the other (except as provided in Article
VIII hereof), shall cooperate in good faith to seek, if possible, an alternative
arrangement to achieve the economic results intended. The parties to this
Agreement will have the right to review in advance, and will consult with the
other on, in each case subject to Applicable Laws relating to the exchange of
information, all the information relating to Buyer, the Bank, Seller, the
Company or the Company Subsidiaries, as the case may be, which appear in any
filing made with, or written materials submitted to, any third party or any
Governmental Authority in connection with the transactions contemplated by this
Agreement; provided, however, that nothing contained herein shall be deemed to
-------- -------
provide any party to this Agreement with a right to review any executive
compensation information or three or five year budgets or projections, in each
case, provided to any Governmental Authority on a confidential basis in
connection with the transactions contemplated hereby. The parties to this
Agreement agree that they will consult with each other with respect to the
obtaining of all permits, consents, approvals and authorizations of all third
parties and Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the others
apprised of the status of matters relating to completion of the transactions
contemplated herein. The party responsible for a filing as set forth above shall
promptly deliver to the other parties hereto evidence of the filing of all
applications, filings, registrations and notifications relating thereto (except
for any confidential portions thereof), and any supplement, amendment or item of
additional information in connection therewith (except for any confidential
portions thereof). The party responsible for a filing shall also promptly
deliver to the other parties hereto a copy of each material notice, order,
opinion and other item of correspondence received by such filing party from any
Governmental Authority in respect of any such application (except for any
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confidential portions thereof). In exercising the foregoing rights and
obligations, Buyer and Seller shall, and Seller shall cause the Company and the
Company Subsidiaries to, each act reasonably and as promptly as practicable.
(b) Each party to this Agreement shall, upon request, furnish each
other with all information concerning themselves, directors, officers and
stockholders and such other matters as may be reasonably necessary or advisable
in connection with any statement, filing, notice or application made by or on
behalf of Buyer, the Bank, Seller, the Company or the Company Subsidiaries to
any Governmental Authority in connection with the transactions contemplated by
this Agreement (except to the extent that such information would be, or relates
to information that would be, filed under a claim of confidentiality).
(c) The parties to this Agreement shall promptly advise each other
upon receiving any communication from any Governmental Authority whose consent
or approval is required for consummation of the transactions contemplated by
this Agreement which causes such party to believe that there is a reasonable
likelihood that any requisite regulatory approval will not be obtained or that
the receipt of any such approval will be materially delayed.
(d) Each of Seller and the Company shall use its reasonable best
efforts to obtain and deliver to Buyer, and to otherwise assist Buyer in
obtaining, as of the Closing Date: (i) executed consents from all of the parties
to that certain agreement, dated as of February 1, 1995, between Hy-Vee Food
Stores, Inc. and the Company (the "Hy-Vee Agreement"), to any assignment, deemed
assignment or change of control thereunder that will result from the
consummation of the transactions contemplated under this Agreement, which
consents are reasonably acceptable to Buyer, (ii) executed waivers from all
parties to the Hy-Vee Agreement waiving any and all rights thereof thereunder to
terminate, modify or accelerate performance under such agreement as a result of
consummation of the transactions contemplated under this Agreement, which
waivers are reasonably acceptable to Buyer, and (iii) an agreement, executed by
all requisite parties, terminating any and all limitations on the ability of the
Company or any of its Affiliates to compete in any line of business or with any
Person and any and all restrictions on the geographical area in which, or method
by which, the Company or any of its Affiliates may carry on its business under
that certain agreement, dated October 1997, as amended, between MBNA America
Bank, N.A. and the Company, which termination agreement is reasonably acceptable
to Buyer; provided, however, that (x) nothing contained herein shall require
-------- -------
Seller to pay any sum to any third party in connection with obtaining any such
consents, waivers or agreements and (y) notwithstanding anything in this
Agreement to the contrary, the failure to receive any such consent, waiver or
agreement shall not be deemed to result in the failure of any of the conditions
to consummation of the Stock Purchase which are set forth in Article VII hereof.
(e) Each of Buyer, Seller and the Company shall use its reasonable
best efforts to obtain prior to the Closing from Systematics, Inc.
("Systematics") under each of the License Agreement, dated February 1, 1994, and
the Maintenance Renewal Agreement, dated as of February 1, 1994, each between
Systematics and the Company (collectively, the "Systematics
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Agreements") (i) any required consent to any assignment, deemed assignment or
change of control thereunder that will result from the consummation of the
transactions contemplated under this Agreement and (ii) the consent to the
provision of services covered by the Systematics Agreements by the Bank (as
successor to the Company) following the Closing to Seller or any Affiliate of
Seller that is conducting the business of the Loan Production Offices. Seller
and Buyer shall each bear one-half of any fees or other amounts which must be
paid to Systematics in connection with obtaining any such consent.
Notwithstanding anything in this Agreement to the contrary, the failure to
receive any such consent shall not be deemed to result in the failure of any of
the conditions to consummation of the Stock Purchase which are set forth in
Article VII hereof.
Section 6.9 Notification of Certain Matters. (a) Each party to
-------------------------------
this Agreement shall give prompt notice to the other parties of (i) the
occurrence, or any known failure to occur, of any event or existence of any
condition that has caused or could reasonably be expected to cause any of its
representations or warranties contained in this Agreement to be untrue or
inaccurate in any material respect at any time after the date of this Agreement,
up to and including the Closing Date, and (ii) any failure on its part to comply
with or satisfy, in any material respect, any covenant, condition or agreement
to be complied with or satisfied by it under this Agreement.
(b) During the period from the date of this Agreement to the Closing
Date, the Company will promptly notify Buyer of any material change in the
conduct of its business or in the operation of the properties of the Company and
of any material governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the institution
or, to the Knowledge of Seller the threat, of significant litigation involving
the Company or any Company Subsidiary, and will keep Buyer fully informed of
such events.
(c) Seller and the Company shall provide Buyer with true, correct and
complete copies of all financial and other written information regarding the
Company and the Company Subsidiaries provided to directors of the Company in
connection with any meetings of their Boards of Directors or committees thereof.
Section 6.10 Expenses. Except as otherwise expressly provided
--------
herein, the parties hereto shall each bear their respective direct and indirect
expenses incurred in connection with the negotiation and preparation of this
Agreement and the consummation of the transactions contemplated hereby
(including all fees and expenses payable to or on behalf of financial advisors,
attorneys, accountants and consultants); provided, however, that Seller shall
-------- -------
bear all the expenses of ABN AMRO Chicago Corp. and Hovde Financial, Inc.
incurred by the Company in connection with the Stock Purchase. Attached hereto
as Schedule 6.10 is an estimate of the fees and expenses to be incurred by the
Company in connection with the Stock Purchase.
Section 6.11 Third Party Proposals. None of Seller, the Company, any
---------------------
of the Company Subsidiaries, any of their respective Affiliates or any of their
respective officers, directors, employees, representatives or advisors
("Representatives") shall directly or indirectly so
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licit, encourage or facilitate inquiries or proposals, or enter into any
definitive agreement, with respect to, or initiate or participate in any
negotiations or discussions with any Person concerning, any acquisition or
purchase of all or any material portion of the assets of, or of any equity
interest in, the Company or any of the Company Subsidiaries or any merger or
business combination with the Company or any of the Company Subsidiaries other
than as contemplated by this Agreement (each, an "Acquisition Proposal") or
furnish any information regarding the Company or the Company Subsidiaries to any
such Person. Seller, the Company, and any of their respective Affiliates and
Representatives shall notify Buyer immediately if any Acquisition Proposal
(including the terms thereof) is received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated with,
any of Seller, the Company, the Company Subsidiaries or any of their respective
Affiliates or Representatives. Seller, the Company and each of the Company
Subsidiaries shall, and shall cause their respective Affiliates and
Representatives to, immediately cease or cause to be terminated any existing
activities, including discussions or negotiations with any parties, conducted
prior to the date hereof with respect to any Acquisition Proposal and shall seek
to have all materials distributed to such Persons by Seller, the Company, any
Company Subsidiary or any of their respective Affiliates and Representatives
returned to Seller promptly. None of Seller, the Company, the Company
Subsidiaries or any of their respective Affiliates and Representatives shall
amend, modify, waive or terminate, or otherwise release any Person from, any
standstill, confidentiality or similar agreement or arrangement currently in
effect with respect to the Company and the Company Subsidiaries. Seller, the
Company, and the Company Subsidiaries shall cause their respective Affiliates
and Representatives to comply with the provisions of this Section 6.11.
Section 6.12 Stock Listing. Buyer shall use its reasonable best
-------------
efforts to cause to be listed on the NYSE, subject to official notice of
issuance, the shares of Buyer Common Stock, if any, to be issued as Share
Consideration.
Section 6.13 Loan, Accrual and Reserve Policies. Notwithstanding
----------------------------------
that the Company believes that the Company and the Company Subsidiaries have
established all reserves and taken all provisions for possible loan losses
required by GAAP and Applicable Laws, the Company recognizes that Buyer may have
adopted different loan, accrual and reserve policies (including loan
classifications and levels of reserves for possible loan losses). From and
after the date of this Agreement to the Closing (a) the Company shall be
entitled to comply with its existing loan, accrual and reserve policies and (b)
Seller, the Company and Buyer shall consult and cooperate with each other with
respect to conforming the loan, accrual and reserve policies of the Company and
the Company Subsidiaries to those policies of Buyer effective at the Closing to
the extent consistent with GAAP and applicable regulatory accounting principles;
provided, however, that none of Seller, the Company or any Company Subsidiary
- -------- -------
shall be required to take any action with respect to the modification of any
such policy (i) if such action would cause Seller, the Company or such Company
Subsidiary, as the case may be, to be in violation of any Applicable Law or (ii)
unless and until (x) all of the conditions to Seller's obligation to consummate
the Stock Purchase shall have been satisfied and (y) Buyer shall have
irrevocably agreed in writing that (A) all conditions to Buyer's obligation to
consummate the Stock Purchase
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have been satisfied, (B) Buyer waives any and all rights that it may have to
terminate this Agreement and (C) Buyer will consummate the Stock Purchase.
Notwithstanding anything in this Agreement to the contrary, no such modification
shall be the basis of any indemnification claim by Buyer pursuant to Section 8.2
hereof or any adjustment to the Purchase Consideration.
Section 6.14 Voting of Shares and Buyer Common Stock; Transfer of
----------------------------------------------------
Buyer Common Stock. (a) During the period from the date of this Agreement and
- ------------------
continuing through the Closing Date, and except as otherwise provided herein,
Seller shall not (i) deposit the Shares into a voting trust or enter into a
voting agreement or arrangement with respect to such Shares or grant any proxy
with respect thereto or (ii) enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect acquisition or
sale, assignment, pledge, transfer or other disposition of any of the Shares.
(b) For a period of 6 months from and after the Closing, Seller hereby
agrees that when any matter is brought to the vote of Buyer's stockholders,
Seller will appoint Buyer or Buyer's nominee as Seller's proxy, with full power
of substitution, to vote all shares of Buyer Common Stock issued in the Stock
Purchase which, at the time of such vote, are owned by Seller, of record or
beneficially, directly or indirectly, at every annual, special or adjourned
meeting of the stockholders of Buyer (including the right to sign its name (as
stockholder) to any consent, certificate or other document relating to such vote
that Applicable Law may permit or require), at Buyer's sole discretion.
(c) Seller hereby agrees that, from and after the Closing, none of
Seller or any of its Affiliates shall sell, assign, transfer or otherwise
dispose of ("Transfer") any shares of Buyer Common Stock issued to Seller as
Share Consideration in the Stock Purchase unless such Transfer constitutes a
Permitted Disposition. For purposes of this Agreement, a "Permitted
Disposition" shall mean (i) a Transfer to an Affiliate of Seller, (ii) a
Transfer in a widely distributed public offering, (iii) a Transfer pursuant to a
non-directed broker transaction, (iv) a Transfer to any Person if, immediately
following such Transfer, such Person, together with its Affiliates, would own
beneficially less than 5% of the Outstanding Share Amount (as defined below) on
the date of such Transfer, (v) a Transfer to any Person if, immediately
following such Transfer, such Person, together with its Affiliates, would own
beneficially no shares of Buyer Common Stock other than the shares acquired by
such Person and its Affiliates pursuant to such Transfer, (vi) a Transfer
pursuant to a merger, consolidation or other similar transaction involving Buyer
if such transaction has been approved by a majority of the members of the Board
of Directors of Buyer, or (vii) a Transfer pursuant to a bona fide pledge of, or
the grant of a security interest in, any or all of such shares of Buyer Common
Stock to secure indebtedness of Seller or such Affiliate for money borrowed in
connection with such pledge or grant of security interest, provided that the
secured party has agreed in writing to be bound by the terms and conditions of
this Section 6.14 to the same extent and in the same manner as Seller. For
purposes of this Agreement, the "Outstanding Share Amount" shall mean, with
respect to a particular date, the sum of (x) the number of shares of Buyer
Common Stock reported to be outstanding in Buyer's most recent quarterly or
annual report, or any current report subsequent thereto, filed with the
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SEC pursuant to the Exchange Act prior to such date and (y) the number of shares
issued by Buyer pursuant to an effective registration statement under the
Securities Act subsequent to the date of such most recent Exchange Act report.
(d) In the event that Seller or any of its Affiliates intends to
Transfer a number of shares of Buyer Common Stock issued to Seller as Share
Consideration in the Stock Purchase which constitute more than 2% of the
Outstanding Share Amount, Seller shall give notice of such intent to Buyer prior
to consummation of such Transfer.
Section 6.15 Disposition of Listed Assets; Sale/Lease of Properties.
------------------------------------------------------
(a) During the period from the date of this Agreement and continuing until the
Closing Date, Seller and the Company shall, and shall cause the Company
Subsidiaries to, use their reasonable best efforts to sell the Listed Assets;
provided, however, that with respect to the second mortgage servicing rights set
- -------- -------
forth in Annex A, Seller shall provide Buyer with a reasonable opportunity to
make an offer to purchase such servicing rights.
(b) Seller agrees to promptly enter into good faith negotiations with
Buyer for the purchase or lease by Buyer or an Affiliate thereof of those
certain properties set forth on Annex B attached hereto, all of which are
currently owned or leased by Seller or an Affiliate thereof, on commercially
reasonable terms, with a view towards consummating any such purchases or
commencing any such leases as of the Closing.
Section 6.16 Non-Competition. (a) Subject to Section 6.16(b), for a
---------------
period of three years following the Closing Date (the "Restricted Period"),
Seller and its Affiliates shall not establish or maintain in the nine states
listed on Annex C attached hereto (the "Specified States") any retail bank
branches in which it conducts lending and deposit taking activities (including
any supermarket retail bank branches, but not including any home office, agency
office, data processing or administrative office or remote service unit)
("Retail Branches") or otherwise conduct any retail bank lending and deposit
taking activities by direct mail or other solicitation (other than normal and
customary advertising which is not targeted specifically to Persons within a
Specified State) in the Specified States through or in respect of a Retail
Branch located outside the Specified States; provided, however, that the
-------- -------
foregoing shall not prevent Seller or any of its Affiliates from (i) originating
loans directly or indirectly through (including through direct mail
solicitations and related activities), and operating, the Loan Production
Offices (including through a thrift charter), (ii) conducting internet or
electronic banking operations (including taking deposits and originating loans),
(iii) purchasing whole loans, (iv) engaging in correspondent lending activities,
or (v) soliciting or acquiring brokered deposits.
(b) Section 6.16(a) shall not prevent Seller or any of its Affiliates
from:
(i) acquiring no more than 5% of the outstanding capital stock,
partnership or other equity interests in any Person which conducts Thrift
Operations which constitute a Competing Thrift Business;
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(ii) acquiring up to 100% of the outstanding capital stock,
partnership or other equity interests in any Person, or merging with or into any
such other Person, which conducts Thrift Operations which do not constitute a
Competing Thrift Business;
(iii) acquiring up to 100% of the outstanding capital stock,
partnership or other equity interests in any Person, or merging with or into any
such other Person which conducts Thrift Operations which constitute a Competing
Thrift Business, provided, that Seller shall use its reasonable best efforts to
--------
cause such Person to divest the Retail Branches of the Competing Thrift
Business which are located in the Specified States on commercially reasonable
terms as soon as practicable after acquisition of such ownership interest or
such merger; or
(iv) acquiring shares of capital stock, partnership or other equity
interests in any Person as investments of the pension funds of Seller or any
Affiliate or funds of any other employee benefit plan of Seller or any
Affiliate.
In the event that Seller or any of its Affiliates acquires any Thrift Operations
during the Restricted Period pursuant to clauses (ii) or (iii) above, then
neither Seller nor any of its Affiliates shall (x) open any additional Retail
Branches in any Specified State during the Restricted Period or (y) operate any
such Thrift Operations under any name which includes the words "AmerUs" and
"Bank", "AmerUs" and "fsb" or "AmerUs" and "Savings" (provided, however, that
-------- -------
nothing contained herein shall prevent Seller or any of its Affiliates from
conducting any operations (including the business of the Loan Production
Offices) other than such Thrift Operations under the name "AmerUs Home Equity",
or using the words "bank,""fsb" or "savings" together with "AmerUs" if required
by Applicable Law or any Governmental Authority) in any Specified State during
the Restricted Period. In addition, during the Restricted Period, neither
Seller nor any of its Affiliates shall conduct business in any Specified State
under any name which includes the words "AmerUs" and "Bank", "AmerUs" and "fsb"
or "AmerUs" and "Savings" (provided, however, that, except as provided in the
-------- -------
preceding sentence with respect to acquired Thrift Operations, nothing contained
herein shall prevent Seller or any of its Affiliates from conducting any
operations (including the business of the Loan Production Offices) under the
name "AmerUs Home Equity", or using the words "bank", "fsb" or "savings"
together with "AmerUs" if required by Applicable Law or any Governmental
Authority).
(c) For a period of two years following the Closing Date, Seller and its
Affiliates shall not, directly or indirectly, solicit for purposes of employment
(other than through general advertising or other general solicitation not
targeted to the Buyer's employees), any Person who is employed by Buyer or of
any of its Affiliates at the time of such solicitation, except that Seller shall
be entitled to solicit any Interim Employee.
(d) For a period of two years following the Closing Date, Buyer and its
Affiliates shall not, directly or indirectly, solicit for purposes of employment
(other than through general
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advertising or other general solicitation not targeted to Seller's employees)
any Person who is employed by Seller or any of its Affiliates in connection with
the Loan Production Offices at the time of such solicitation.
Section 6.17 Tax Matters. (a) Seller shall prepare and file or
-----------
shall cause the Company and the Company Subsidiaries to prepare and file the
following Tax Returns with respect to the Company and the Company Subsidiaries:
(i) all Income Tax Returns and franchise Tax Returns for any taxable period
ending on or before the Closing Date, (ii) the consolidated federal Income Tax
Return for the affiliated group of which the Company and the Company
Subsidiaries are members for the taxable year that includes the Closing Date,
and (iii) all Tax Returns required to be filed (taking into account
extensions) prior to the Closing Date with respect to Taxes other than Income
Taxes and franchise Taxes.
(b) Buyer shall, and shall cause the Company and each of the Company
Subsidiaries to, file all Tax Returns with respect to the Company and the
Company Subsidiaries, other than Tax Returns that Seller is required to file
pursuant to Section 6.17(a).
(c) Any Tax Sharing Agreements between Seller and the Company and any
of the Company Subsidiaries shall be terminated as of the Closing Date and shall
have no further effect for any taxable year (whether the current year, a future
year, or a past year).
(d) At Seller's request, Buyer will cause any of the Company and the
Company Subsidiaries or successors thereto to make and/or join with Seller in
making any election that does not have an adverse impact on Buyer.
(e) The income of the Company and the Company Subsidiaries will be
apportioned to the period up to and including the Closing Date and the period
after the Closing Date by closing the books of the Company and the Company
Subsidiaries as of the end of the Closing Date.
(f) Buyer and Seller agree to report all transactions not in the
ordinary course of business occurring on the Closing Date after the Closing on
Buyer's Income Tax Return to the extent permitted by Reg. Section 1.1502-
76(b)(1)(B).
(g) At Buyer's expense, Buyer shall, and shall cause the Company and
each Company Subsidiary to, furnish Tax information to Seller for the period
which includes the Closing Date in accordance with the Company's past custom and
practice.
(h) Notwithstanding anything in this Agreement to the contrary, at
any time and from time to time prior to the Closing, Seller shall be entitled to
cause the Company and the Company Subsidiaries to transfer to Seller, whether by
dividend, distribution or otherwise, an amount in cash equal to the amount of
accrued tax liabilities reflected on the Company's consolidated books as of such
date with respect to Taxes of the Company or the Company
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Subsidiaries for any taxable period ending on or before the Closing Date or for
that portion, beginning before and ending on the Closing Date, of any taxable
period that includes the Closing Date. Such transfer shall not (i) result in the
breach of any representation, warranty, covenant or agreement of Seller
contained herein, or in the failure of any condition set forth in Article VII,
(ii) be deemed to have or result in a Company Material Adverse Effect or (iii)
result in any adjustment to the Purchase Consideration.
(i) From the date of this Agreement until the Closing Date, Seller
shall cause the Company and the Company Subsidiaries to accrue all taxes under
the Tax Sharing Agreement consistent with past practice, except to the extent
required by changes in Applicable Law.
(j) Buyer shall not make an election under Section 338(a) of the
Code.
Section 6.1.8 Loan Production Offices; Sale of LPO Loans. (a)
------------------------------------------
Notwithstanding anything in this Agreement to the contrary, during the period
from the date of this Agreement and continuing until the Closing Date, (i) the
Company and any Company Subsidiary may transfer, by way of dividend or otherwise
in Seller's sole discretion, to Seller or any Affiliates of Seller the Loan
Production Offices, and enter into any Contract with Seller or any Affiliates of
Seller in connection with such transfer, (ii) Seller or any Affiliate thereof
may hire any employee of the Company or any Company Subsidiary set forth on
Schedule 6.18, (iii) in the event that Seller elects to cause the Company and
the Company Subsidiaries to transfer the Loan Production Offices as contemplated
by clause (i) above, Seller shall cause the Company or any Company Subsidiary to
transfer to Seller or an Affiliate thereof any real estate, equipment or
software, and any leases or licenses in connection therewith, relating solely to
the Loan Production Offices, (iv) Seller may cause the Company or any Company
Subsidiary to transfer to Seller or an Affiliate thereof any Records relating
solely to the Loan Production Offices (including any loan applications as to
which no lending decision has been made) and (v) Seller may cause the Company or
any Company Subsidiary to transfer to Seller or an Affiliate thereof any real
estate, equipment or software, and any leases or licenses in connection
therewith, which are set forth on Schedule 6.18 attached hereto. Neither the
transfer of the Loan Production Offices nor any other action permitted under
this Section 6.18(a) shall (x) result in the breach of any representation,
warranty, covenant or agreement of Seller contained herein, or in the failure of
any condition set forth in Article VII, (y) be deemed to have or result in a
Company Material Adverse Effect or (z) result in any adjustment to the Purchase
Consideration, including any Asset Loss Disposition Adjustment.
(b) Notwithstanding anything in this Agreement to the contrary,
during the period from the date of this Agreement and continuing until the
Closing Date, Seller may cause the Company or any Company Subsidiary to enter
into contracts with respect to the sale of loans (x) originated by the Loan
Production Offices or (y) originated through correspondent lending or direct
mail activities, and no such action shall (i) result in the breach of any
representation, warranty, covenant or agreement of Seller contained herein
(subject to the provisions contained herein relating to determination of the
Purchase Consideration), or in the failure of any condition
43
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set forth in Article VII or (ii) be deemed to have or result in a Company
Material Adverse Effect.
Section 6.19 Name Change. Immediately following the Closing, Buyer
-----------
shall, and shall cause the Company and each Company Subsidiary to, take any and
all action necessary to effectuate a change of the name of the Company and such
Company Subsidiary to eliminate any reference to the names "AmerUs Group Co.",
"AmerUs Bank" or any derivative thereof. Furthermore, following the Closing,
Buyer shall not, and Buyer shall cause the Company and each Company Subsidiary
not to, use such names or any derivative thereof in connection with any signage,
letterhead, logos, advertising, marketing or solicitation efforts, except as
shall be required by Applicable Law; provided, however, that for a reasonable
-------- -------
period of time following the Closing, not to exceed 180 days, the Company shall
be entitled to refer to the name "AmerUs Bank" in correspondence with customers
and the public regarding the consummation of the transactions contemplated
hereby. Buyer acknowledges and agrees that it does not have, and that from and
after the Closing, none of the Company nor any Company Subsidiary nor any of
their respective successors shall have, any rights in the "AmerUs" name or any
derivative thereof or in any trademark or servicemark using or incorporating
such name or any derivative thereof.
Section 6.20 Contribution of Dividend. Notwithstanding anything to
------------------------
the contrary contained in this Agreement, following the date hereof, Seller
shall contribute $5,000,000 in cash to the Company no later than the close of
business on the second Business Day prior to the Closing Date and shall provide
reasonably satisfactory evidence to Buyer of the same as of such time.
Section 6.21 Environmental Reports. (a) Buyer, at its expense, may
---------------------
cause a reputable environmental firm selected by Buyer (the "Environmental
Firm") to perform a phase one environmental investigation and/or asbestos survey
on (i) each parcel of commercial real estate ("Commercial Property") owned or
leased by, (ii) each office and premise used as a facility ("Facility Property")
by, and (iii) each property ("Loan Property") that serves as security for any
commercial real estate loan having an original principal balance greater than
$500,000 made by, the Company or any Company Subsidiary (collectively, clauses
(i), (ii) and (iii), the "Current Property"); provided, however, that Buyer
-------- -------
shall cause the Environmental Firm to complete any such investigation or survey
as soon as reasonably practicable, but not later than forty-five (45) days after
the date hereof. In addition, Buyer, at its expense, may cause the
Environmental Firm to perform a phase one environmental examination and/or
asbestos survey on any Commercial Property acquired or leased by the Company or
any of the Company Subsidiaries after the date hereof (together with the Current
Property, the "Company Property"); provided, however, that Buyer shall cause the
-------- -------
Environmental Firm to complete any such investigation or survey as soon as
reasonably practicable, but not later than fifteen (15) days after being
notified by Seller or the Company of the acquisition or lease of such commercial
real estate.
(b) If a phase one report provided by the Environmental Firm
recommends that a phase two environmental survey be performed with respect to
any parcel of the Company Property, then Buyer, at its expense, may, subject to
the terms of any lease with respect to such
44
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Company Property, cause the Environmental Firm to perform a phase two
environmental investigation of such Company Property; provided, however, that
Buyer shall cause the Environmental Firm to complete any such phase two
investigation as soon as reasonably practicable, but not later than forty-five
(45) days after the date that such phase one report is received by Buyer.
(c) Buyer shall promptly provide Seller with a copy of all draft and
final reports and other information obtained by the Environmental Firm, shall
make a good faith effort to accept any comments or suggestions of Seller
relating to the Environmental Firm's scope of work and reports and, prior to the
Closing, shall not disclose to any third Person any information relating to the
phase one and phase two investigations, except as required by Applicable Law.
With respect to any Affected Property (as defined below) purchased by Seller
pursuant to a Qualifying Purchase Commitment, Buyer's confidentiality obligation
shall continue indefinitely, and following the Closing, Seller shall be deemed
the owner of all work produced by the Environmental Firm relating to such
property.
(d) Notwithstanding anything in this Agreement to the contrary, none
of (i) any fact, event or circumstance related to any Affected Property(ies)
purchased or to be purchased by Seller pursuant to a Qualifying Purchase
Commitment or (ii) the transfer of such Affected Property(ies) to Seller or an
Affiliate thereof, shall constitute an inaccuracy in or a breach of any
representation or warranty, a breach of any covenant or agreement, or the
failure of any condition to consummation of the Stock Purchase which are set
forth in Article VII hereof.
(e) For purposes of this Agreement, the following terms shall have the
meanings ascribed below.
(i) "Aggregate Estimated Remediation Cost" shall mean the
aggregate costs of taking all remedial or other corrective actions and measures
on the Company Properties that are required by applicable Environmental Law
(each Company Property as to which any such remedial or other corrective action
is required is referred to herein as an "Affected Property" and collectively, as
the "Affected Properties"), as such costs are reasonably estimated by the
Environmental Firm in its final report, less the amount of any reserve in
respect of such remediation costs which exists on the books of the Company or
any Company Subsidiary as of the date of this Agreement.
(ii) "Environmental Termination Date" shall mean the date that is
five (5) Business Days following the earlier to occur of (x) the date on which
the last of the reports of the Environmental Firm with respect to the Company
Properties must be completed pursuant to paragraphs (a) and (b) above and (y)
the date on which the last of such reports is actually completed.
(iii) "Qualifying Purchase Commitment" shall mean a written
commitment of Seller, which commitment may be conditioned upon consummation of
the Closing, to take,
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effective immediately prior to the Closing, any combination of the following
actions with respect to the Affected Properties: (x) purchase from the Company
or any Company Subsidiary, such owned Commercial Property(ies) or Facility
Property(ies) constituting Affected Property(ies) as shall be specified by
Seller in such commitment, at a price equal to the net book value of such
Affected Property(ies) or portion thereof, less deferred taxes, at the time of
the Closing; (y) assume the lease with respect to any leased Commercial
Property(ies) or Facility Property(ies) constituting Affected Property(ies) as
shall be specified by Seller in such commitment; and (z) purchase from the
Company or any Company Subsidiary, such loan(s) secured by such Loan
Property(ies) constituting Affected Property(ies) as shall be specified by
Seller in such commitment, at a price equal to the net book value of such
loan(s) at the time of Closing, less the allocable portion of the loan loss
reserve; provided, however that no such commitment shall constitute a Qualifying
-------- -------
Purchase Commitment unless the aggregate costs of taking all remedial or other
corrective actions and measures on the Affected Properties which are not
specified in such commitment, as such costs are reasonably estimated by the
Environmental Firm in its final report, less the amount of any reserve in
respect of such remediation costs with respect to such remaining Affected
Properties which exists on the books of the Company or any Company Subsidiary as
of the date of this Agreement is less than or equal to the Threshold Amount. The
purchase price of any property pursuant to a Qualifying Purchase Commitment
shall be paid in cash.
(iv) "Threshold Amount" shall mean $3,000,000.
Section 6.22 Registration Rights Agreement. In the event that (i)
-----------------------------
Buyer shall not have made a Cash Election and (ii) the shares of Buyer Common
Stock to be issued to Seller in the Stock Purchase shall not have been
registered under the Securities Act pursuant to an effective registration
statement as of the Closing Date (so that such shares are resalable by Seller
without restriction under the Securities Act), Buyer shall execute and deliver
to Seller the Registration Rights Agreement at or prior to the Closing.
Section 6.23 Affiliate Contracts. Buyer and Seller shall cooperate
-------------------
to determine which Affiliate Contracts shall survive the Closing.
ARTICLE VII
CONDITIONS TO CONSUMMATION
OF THE STOCK PURCHASE
Section 7.1 Mutual Conditions. The obligations of each party to
-----------------
this Agreement to consummate the Stock Purchase shall be subject to the
following conditions, any of which may be waived in writing by both Seller and
the Company, on the one hand, and Buyer, on the other hand:
46
<PAGE>
(a) No order, injunction or decree issued by any Governmental
Authority of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the transactions contemplated by
this Agreement shall be in effect. No proceeding initiated by any Governmental
Authority seeking an Injunction shall be pending. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Authority which prohibits, restricts or makes
illegal consummation of the transactions contemplated hereby; and
(b) All consents, waivers, authorizations and approvals required from
all Governmental Authorities to consummate the transactions contemplated hereby
shall have been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired or terminated.
Section 7.2 Conditions to Buyer's Obligations. The obligations of
---------------------------------
Buyer to consummate the Stock Purchase shall be subject to the following
conditions, any of which may be waived in writing by Buyer:
(a) Each of the representations and warranties of each of Seller and
the Company set forth in this Agreement shall be true and correct in all
respects as of the date of this Agreement and (except to the extent such
representation and warranty speaks as of an earlier date) as of the Closing Date
as though made on and as of the Closing Date, except where the failure or
failures of such representations or warranties to be so true and correct would
not have, in the aggregate, a Company Material Adverse Effect; provided,
--------
however, that for purposes of determining the satisfaction of the condition
- -------
contained in this Section 7.2(a), no effect shall be given to any exception or
qualification in such representations and warranties relating to materiality or
a Company Material Adverse Effect;
(b) Seller and the Company shall have performed and complied in all
material respects with each agreement, covenant, obligation and condition
required by this Agreement to be performed or complied with by them at or prior
to the Closing Date;
(c) Seller and the Company shall have delivered to Buyer a
certificate, dated as of the Closing Date, signed on behalf of Seller by an
Executive Vice President and signed on behalf of the Company by its President
and a Senior Vice President confirming the satisfaction of the conditions
contained in paragraphs (a) and (b) of this Section 7.2;
(d) Seller and the Company shall have obtained all required third-
party consents or approvals under any Contract in connection with the Stock
Purchase, the Merger and consummation of the transactions contemplated under
this Agreement, except as would not have, in the aggregate, a Company Material
Adverse Effect or a Buyer Material Adverse Effect; and
47
<PAGE>
(e) If Seller shall have made a Qualifying Purchase Commitment, then
Seller and the Company shall have completed the transactions contemplated by
such Qualifying Purchase Commitment effective as of the Closing.
Section 7.3 Conditions to Seller's and the Company's Obligations.
----------------------------------------------------
The obligation of Seller and the Company to consummate the Stock Purchase shall
be subject to the following conditions, which may be waived in writing by Seller
and the Company:
(a) Each of the representations and warranties of Buyer set forth in
this Agreement shall be true and correct in all respects as of the date of this
Agreement and (except to the extent such representation and warranty speaks as
of an earlier date) as of the Closing Date as though made on and as of the
Closing Date, except where the failure or failures of such representations or
warranties to be so true and correct would not have, in the aggregate, a Buyer
Material Adverse Effect; provided, however, that for purposes of determining the
satisfaction of the condition contained in this Section 7.3(a), no effect shall
be given to any exception or qualification in such representations and
warranties relating to materiality or a Buyer Material Adverse Effect;
(b) Buyer shall have performed and complied in all material respects
with each agreement, covenant, obligation and condition required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date;
(c) Buyer shall have delivered to Seller and the Company a
certificate, dated as of the Closing Date, signed on behalf of Buyer by its
Chief Executive Officer and Chief Financial Officer confirming the satisfaction
of the conditions contained in paragraphs (a) and (b) of this Section 7.3;
(d) The shares of Buyer Common Stock, if any, to be issued as Share
Consideration in the Stock Purchase shall have been approved for listing on the
NYSE, subject to official notice of issuance; and
(e) If a Cash Election has not been made and if the shares of Buyer
Common Stock to be issued to Seller in the Stock Purchase shall not have been
registered under the Securities Act pursuant to an effective registration
statement as of the Closing Date (so that such shares are resalable by Seller
without restriction under the Securities Act), Buyer shall have executed and
delivered to Seller a Registration Rights Agreement in substantially the form
attached hereto as Exhibit A.
(f) Seller and the Company shall have obtained all required third-
party consents or approvals under any Contract in connection with the Stock
Purchase, the Merger and consummation of the transactions contemplated under
this Agreement, except as would not have, in the aggregate, a Buyer Material
Adverse Effect or a material adverse effect on (i) the business,
48
<PAGE>
financial condition, or results of operations of Seller and its Subsidiaries
taken as a whole or (ii) the ability of Seller or the Company to complete the
transactions contemplated hereby;
(g) Seller shall have received an opinion, dated the Closing Date, of
counsel to Buyer (which may be the general counsel of Buyer), in form and
substance reasonably satisfactory to Seller, regarding the satisfaction of the
condition set forth in Section 7.1(b).
ARTICLE VII
INDEMNIFICATION
Section 8.1 Survival of Representations, Warranties and Covenants.
-----------------------------------------------------
The representations and warranties of the parties set forth in Sections 4.1,
4.2, 4.3, 4.6, 4.8, 4.9, 4.10(a), 4.10(b), 4.11, 4.12, 5.1, 5.2, 5.3, 5.6, 5.8,
5.9 and 5.10 of this Agreement, including any schedules made a part of any such
Sections, shall survive the Closing hereunder for a period of eighteen months
following the Closing Date. All representations and warranties of the parties
contained in this Agreement and not set forth in the Sections of this Agreement
identified in the preceding sentence as surviving the Closing shall expire as of
and shall not survive the Closing and notwithstanding anything herein to the
contrary, no party shall have any liability with respect to any such
representation or warranty. Any covenant or other agreement herein any portion
of the performance of which may or is specified to occur after the Closing shall
survive the Closing hereunder indefinitely or for such lesser period of time as
may be specified therein.
Section 8.2 Obligations of Seller. From and after the Closing Date,
---------------------
subject to the terms and conditions of this Article VIII, Seller hereby agrees
to indemnify, defend and hold harmless Buyer and its respective employees,
officers, partners and other Affiliates from and against any and all Losses
which any of them may suffer, incur or sustain arising out of, attributable
to, or resulting from:
(a) any inaccuracy in or breach of any of the representations or
warranties of Seller made in this Agreement and identified in Section 8.1
as surviving the Closing (it being agreed that solely for purposes of
establishing whether any matter is indemnifiable pursuant to this clause
(a), the accuracy of the representations and warranties made by Seller
shall be determined without giving effect to the qualifications to such
representations and warranties concerning a Company Material Adverse
Effect); provided, however, that (i) Seller shall not have any
-------- -------
indemnification obligation with respect to any such Losses arising out of,
attributable to or resulting from any inaccuracy in or breach of the
representation and warranty set forth in Section 4.8 unless such inaccuracy
or breach results in out-of-pocket payments by Buyer or any of its
Affiliates to un-Affiliated third parties, and in such event, Seller's only
obligation shall be the reimbursement of such out-of-pocket payments
(subject to the other terms and conditions of this Article VIII), (ii)
Seller shall not have any indemnification obligation with respect to any
Losses arising out of, attributable to or resulting from any inaccuracy in
or breach
49
<PAGE>
of any representation or warranty if (x) the effect of the fact or
circumstance giving rise to such inaccuracy or breach is a Company Material
Adverse Effect entitling Buyer not to consummate the transactions
contemplated hereby pursuant to Section 7.2(a) and (y) such fact or
circumstance was Known to Buyer prior to the Closing, regardless of whether
Buyer expressly waived the condition set forth in Section 7.2(a) and (iii)
the limitations set forth in Sections 8.6 and 8.7 shall not apply to any
inaccuracy in or breach of the representation and warranty made in the
second sentence of Section 4.11;
(b) any breach or nonperformance of any of the covenants made by
Seller or the Company in this Agreement which survive the Closing pursuant
to Section 8.1; provided, however, that (x) in the event of any such breach
-------- -------
by the Company, such breach shall have occurred prior to the Closing and
(y) the limitations set forth in Sections 8.6 and 8.7 shall not apply to
any breach by Seller of its obligations under Section 6.3(d) or 6.3(e);
(c) any failure of (i) the Company Balance Sheet (including the
related notes) to present fairly the consolidated financial position of the
Company and the Company Subsidiaries as of the date thereof, and the
audited statements of income, changes in shareholders' equity and cash
flows for the fiscal year 1997 to present fairly the consolidated results
of operations and cash flows of the Company and the Company Subsidiaries
for the fiscal period therein set forth or (ii) the Company Balance Sheet
or the audited statements of income, changes in shareholders' equity and
cash flows for the fiscal year 1997 (in each case, including the related
notes) to comply in all material respects with applicable accounting
requirements with respect thereto or to have been prepared in accordance
with GAAP consistently applied during the periods involved (except as
indicated in the notes thereto); provided, however, that, notwithstanding
-------- -------
anything in this Agreement to the contrary, Seller shall not have any
indemnification obligation under this clause (c) with respect to any such
Losses arising out of, attributable to or resulting from any such failure
unless Buyer shall have given written notice to Seller specifying in detail
the source of the Loss or potential Loss on or prior to the eighteen month
anniversary of the Closing Date;
(d) (i) any Income Taxes of the Company and the Company
Subsidiaries for any taxable period ending on or before the Closing Date
and that portion, beginning before and ending on the Closing Date, of any
taxable period that includes the Closing Date, (ii) any several liability
of the Company or the Company Subsidiaries for any Taxes of Seller or any
of its Affiliates other than the Company and the Company Subsidiaries under
Treasury Regulation Section 1.1502-6 or any comparable or similar provision
under Applicable Laws for any period and (iii) any Taxes (other than Income
Taxes) of the Company and the Company Subsidiaries for any taxable period
ending on or before the Closing Date and that portion, beginning before and
ending on the Closing Date, of any taxable period that includes the Closing
Date (based on the number of days in that portion of such period);
provided, however, that, (x) notwithstanding anything in this Agreement
-------- -------
50
<PAGE>
to the contrary, Seller shall not have any indemnification obligation under
clause (i) or (ii) of this sentence with respect to any such Income Taxes
or any such several liability unless Buyer shall have given written notice
to Seller specifying in detail such Income Tax or liability on or prior to
expiration of the applicable statute of limitations with respect thereto,
and Seller shall not have any indemnification obligation under clause (iii)
of this sentence with respect to any such other Tax unless Buyer shall have
given written notice to Seller specifying in detail such Tax on or prior to
the eighteen month anniversary of the Closing Date, (y) Seller's
indemnification obligations with respect to clauses (i) and (ii) of this
paragraph (d) shall be without regard to the limitations set forth in
Sections 8.6 and 8.7 and (z) Seller shall have no indemnification
obligation with respect to any such Tax or liability to the extent that
Buyer has an indemnification obligation with respect thereto under Section
8.3(d); and
(e) any remedial or other corrective actions and measures that
are required by applicable Environmental Law with respect to any Affected
Property which is purchased by Seller pursuant to a Qualifying Purchase
Commitment; provided, however, that Seller's indemnification obligations
-------- -------
with respect to this paragraph (e) shall be without regard to the
limitations set forth in Sections 8.6 and 8.7.
Section 8.3 Obligations of Buyer. From and after the Closing Date,
--------------------
subject to the terms and conditions of this Article VIII, Buyer hereby agrees to
indemnify, defend and hold harmless Seller and its employees, officers,
directors, partners and other Affiliates from and against any and all Losses
which any of them may suffer, incur, or sustain arising out of, attributable
to, or resulting from:
(a) any inaccuracy in or breach of any of the representations
and warranties of Buyer made in this Agreement and identified in Section
8.1 as surviving the Closing (it being agreed that solely for purposes of
establishing whether any matter is indemnifiable pursuant to this clause
(a), the accuracy of the representations and warranties made by Buyer shall
be determined without giving effect to the qualifications to such
representations and warranties concerning a Buyer Material Adverse Effect);
(b) any breach or nonperformance of any of the covenants made by
Buyer in this Agreement which survive the Closing pursuant to Section 8.1;
provided, however, that the limitations set forth in Sections 8.6 and 8.7
-------- -------
shall not apply to any breach by Buyer of its obligations under Sections
6.3(f) or 6.17(b);
(c) any failure of (i) the Buyer Balance Sheet (including the
related notes) to present fairly the consolidated financial position of
Buyer and the Buyer Subsidiaries as of the date thereof, and the audited
statements of income, changes in shareholders' equity and cash flows for
the fiscal year 1997 to present fairly the consolidated results of
operations and cash flows of Buyer and the Buyer Subsidiaries for the
fiscal period therein set forth or (ii) the Buyer Balance Sheet or the
audited statements of income,
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<PAGE>
changes in shareholders' equity and cash flows for the fiscal year 1997 (in
each case, including the related notes) to comply in all material respects
with applicable accounting requirements with respect thereto or to have
been prepared in accordance with GAAP consistently applied during the
periods involved (except as indicated in the notes thereto); provided,
--------
however, that, notwithstanding anything in this Agreement to the contrary,
-------
Buyer shall not have any indemnification obligation under this clause (c)
with respect to any such Losses arising out of, attributable to or
resulting from any such failure unless Seller shall have given written
notice to Buyer specifying in detail the source of the Loss or potential
Loss on or prior to the eighteen month anniversary of the Closing Date;
(d) any and all Taxes of any kind of the Company, the Company
Subsidiaries, any of their respective successors or Seller arising out of,
attributable to, or resulting from the failure of Buyer and/or any
successor(s) thereof to provide to Seller on a timely basis any requested
Records or other information which may be relevant to Taxes of the Company,
any Company Subsidiary, any of their respective successors, Seller or its
Affiliates; provided, however, that Buyer's indemnification obligations
-------- -------
with respect to this paragraph (d) shall be without regard to the
limitations set forth in Sections 8.6 and 8.7;
(e) any additional Tax owed by Seller (including Tax owed by
Seller due to this indemnification payment) resulting from any transaction
not in the ordinary course of business occurring on the Closing Date after
the Closing; provided, however, that Buyer's indemnification obligations
-------- -------
with respect to this paragraph (e) shall be without regard to the
limitations set forth in Sections 8.6 and 8.7; and
(f) (i) any Income Taxes of the Company or any Company Subsidiary
for any taxable period that begins after the Closing Date and that portion,
beginning after the Closing Date, of any taxable period that includes the
Closing Date and (ii) any Taxes (other than Income Taxes) of the Company or
any Company Subsidiary for any taxable period that begins after the Closing
Date and that portion, beginning after the Closing Date, of any taxable
period that includes the Closing Date (based on the number of days in that
portion of such period); provided, however, that Buyer's indemnification
-------- -------
obligations with respect to this paragraph (f) shall be without regard to
the limitations set forth in Sections 8.6 and 8.7.
Section 8.4 Procedure. (a) Notice of Third Party Claims. Any
--------- ----------------------------
Indemnified Party seeking indemnification for any Loss or potential Loss arising
from a claim asserted by a third party against the Indemnified Party (a "Third
Party Claim") shall give written notice to the Indemnifying Party specifying in
detail the source of the Loss or potential Loss under Section 8.2 or 8.3, as the
case may be. Written notice to the Indemnifying Party of the existence of a
Third Party Claim shall be given by the Indemnified Party promptly after notice
of the potential claim; provided, however, that the Indemnified Party shall not
-------- -------
be foreclosed from seeking in-
52
<PAGE>
demnification pursuant to this Article VIII by any failure to provide such
prompt notice of the existence of a Third Party Claim to the Indemnifying Party
except and only to the extent that the Indemnifying Party actually incurs an
incremental out-of-pocket expense or otherwise has been materially damaged or
prejudiced as a result of such delay.
(b) Defense. Except as otherwise provided herein, the Indemnifying
-------
Party may elect to compromise or defend, at such Indemnifying Party's own
expense and by such In demnifying Party's own counsel (which counsel shall be
reasonably satisfactory to the Indemnified Party), any Third Party Claim. If
the Indemnifying Party elects to compromise or defend such Third Party Claim, it
shall, within 30 days after receiving notice of the Third Party Claim (10 days
if the Indemnifying Party states in such notice that prompt action is
required), notify the Indemnified Party of its intent to do so, and the
Indemnified Party shall cooperate, at the expense of the Indemnifying Party, in
the compromise of, or defense against, such Third Party Claim. If the
Indemnifying Party elects not to compromise or defend against the Third Party
Claim, or fails to notify the Indemnified Party of its election to do so as
herein provided, or otherwise abandons the defense of such Third Party Claim,
(i) the Indemnified Party may pay (without prejudice of any of its rights as
against the Indemnifying Party), compromise or defend such Third Party Claim
(until such defense is assumed by the Indemnifying Party) and (ii) the costs and
expenses of the Indemnified Party incurred in connection therewith shall be
indemnifiable by the Indemnifying Party pursuant to the terms of this Agreement.
Notwithstanding anything to the contrary contained herein, in connection with
any Third Party Claim in which the Indemnified Party shall reasonably conclude,
based upon advice of its outside legal counsel, that (x) there is a conflict of
interest between the Indemnifying Party and the Indemnified Party in the conduct
of the defense of such Third Party Claim or (y) there are specific defenses
available to the Indemnified Party which are different from or additional to
those available to the Indemnifying Party and which could be materially
adverse to the Indemnifying Party, then the Indemnified Party shall have the
right to assume and direct the defense of such Third Party Claim. In such an
event, the Indemnifying Party shall pay the reasonable fees and disbursements of
counsel of the Indemnifying Party and one counsel to all the Indemnified
Parties. Notwithstanding the foregoing, neither the Indemnifying Party nor the
Indemnified Party may settle or compromise any claim (however, if the sole
settlement relief payable to a third party in respect of such Third Party Claim
is monetary damages that are paid in full by the Indemnifying Party, the
Indemnifying Party may settle such claim without the consent of the Indemnified
Party) over the objection of the other; provided, however, that consent to
-------- -------
settlement or compromise shall not be unreasonably withheld by the Indemnified
Party. In any event, except as otherwise provided herein, the Indemnified Party
and the Indemnifying Party may each participate, at its own expense, in the
defense of such Third Party Claim. If the Indemnifying Party chooses to defend
any claim, the Indemnified Party shall make available to the Indemnifying Party
any personnel or any books, records or other documents within its control that
are reasonably necessary or appropriate for such defense, subject to the receipt
of appropriate confidentiality agreements.
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<PAGE>
(c) Settlement. If a settlement offer solely for money damages is
----------
made by a third party claimant, and the Indemnifying Party notifies the
Indemnified Party in writing of the Indemnifying Party's willingness to accept
the settlement offer and pay the amount called for by such offer, and the
Indemnified Party declines to accept such offer, the Indemnified Party may
continue to contest such claim, free of any participation by the Indemnifying
Party, and the amount of any ultimate liability with respect to such
Indemnifiable Claim that the Indemnifying Party has an obligation to pay
hereunder shall be limited to the lesser of (A) the amount of the settlement
offer that the Indemnified Party declined to accept plus the costs and expenses
of the Indemnified Party prior to the date the Indemnifying Party notifies the
Indemnified Party of the Indemnifying Party's willingness to settle or
compromise such Third Party Claim and (B) the aggregate Losses of the
Indemnified Party with respect to such claim.
(d) Miscellaneous. The procedures set forth in Section 8.4(a)-(c)
-------------
above shall apply solely with respect to Third Party Claims and shall not be
deemed to apply to, or otherwise affect or limit, an Indemnified Party's rights
under this Agreement with respect to any claim other than a Third Party Claim.
(e) Notice of Non-Third Party Claims. Any Indemnified Party seeking
--------------------------------
indemnification for any Loss or potential Loss arising from a claim asserted by
any party to this Agreement against the Indemnifying Party (a "Non-Third Party
Claim") shall give written notice to the Indemnifying Party specifying in detail
the source of the Loss or potential Loss under Section 8.2 or 8.3, as the case
may be. Written notice to the Indemnifying Party of the existence of a Non-
Third Party Claim shall be given by the Indemnified Party promptly after the
Indemnified Party becomes aware of the potential claim; provided, however, that
-------- -------
the Indemnified Party shall not be foreclosed from seeking indemnification
pursuant to this Article VIII by any failure to provide such prompt notice of
the existence of a Non-Third Party Claim to the Indemnifying Party except and
only to the extent that the Indemnifying Party actually incurs an incremental
out-of-pocket expense or otherwise has been materially damaged or prejudiced as
a result of such.
Section 8.5 Survival of Indemnity. Any matter as to which a claim
---------------------
has been asserted by formal notice pursuant to Section 8.4 and within the time
limitation applicable by reason of Section 8.1 that is pending or unresolved at
the end of any applicable limitation period under this Article VIII or
Applicable Law shall continue to be covered by this Article VIII notwithstanding
any applicable statute of limitations (which the parties hereby waive) or the
expiration dates set forth in Section 8.1 until such matter is finally
terminated or otherwise resolved by the parties under this Agreement or by a
court of competent jurisdiction and any amounts payable hereunder are finally
determined and paid.
Section 8.6 Minimum Losses. No party shall have any right to obtain
--------------
indemnification under this Agreement until aggregate Losses of such party and
its Affiliates and the successors and assigns of such party and its Affiliates
exceed $3,000,000, after which time only the aggregate amount of such Losses in
excess of $3,000,000 shall be recoverable in accordance with the terms hereof.
54
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Section 8.7 Maximum Indemnification. No party shall have any right
-----------------------
to obtain an indemnification payment under this Agreement to the extent the
aggregate amounts received by such party and its Affiliates and the successors
and assigns of such party and its Affiliates as indemnification payments
hereunder exceed $40,000,000.
Section 8.8 Subrogation. Any Indemnifying Party shall be subrogated
-----------
to any right of action which the Indemnified Party may have against any other
Person with respect to any matter giving rise to a claim for indemnification
hereunder.
Section 8.9 Adjustments to Indemnification Obligations. (a) All
------------------------------------------
indemnity payments made under this Article VIII shall be treated as adjustments
to the Purchase Consideration. All computations of indemnity payments due
under this Article VIII shall reflect the actual present cash cost of the
obligation with respect to which the indemnity payment relates. If any
Indemnified Party receives a Tax deduction, Tax credit or other Tax benefit
("Tax Benefit") by virtue of having paid or accrued an amount for which an
indemnity payment is provided, the amount of such Tax Benefit will be refunded
to the Party making such indemnity payment when, as and if such Indemnified
Party realizes a cash Tax savings from such Tax Benefit. If for any reason an
Indemnified Party has any Tax imposed on it on account of its receipt of an
indemnity payment including payments pursuant to this sentence ("Additional
Indemnity Taxes"), such indemnity payment shall be "grossed-up" for the
Additional Indemnity Taxes so that the net payments received by the Indemnified
Party will be equal to the amount of the indemnity payment such Indemnified
Party would have received had no such Additional Indemnity Taxes been imposed.
(b) The amount which any Indemnifying Party is or may be required to
pay any Indemnified Party pursuant to this Article VIII shall be reduced
(including without limitation, retroactively) by any insurance proceeds or other
amounts actually recovered by or on behalf of such Indemnified Party in
reduction of the related Loss. If an Indemnified Party shall have received the
payment required by this Agreement from an Indemnifying Party in respect of a
Loss and shall subsequently actually receive insurance proceeds or other amounts
in respect of such Loss, then such Indemnified Party shall pay to such
Indemnifying Party a sum equal to the amount of such insurance proceeds or other
amounts actually received (net of any expenses in obtaining the same).
Section 8.10 Exclusive Remedy. Subject to Section 8.13, except as
----------------
provided in Section 10.9, the right to indemnification, if any, with respect to
breaches of representations, warranties and covenants pursuant to this Article
VIII shall constitute the sole and exclusive remedy with respect thereto, shall
preclude any other monetary award (whether at law or in equity) and shall
preclude assertion by any party hereto of any right to any such monetary award
from the Indemnifying Party.
55
<PAGE>
Section 8.11 Limitation. In the event that the existence of an
----------
obligation for the payment of money to a third party causes any representation
or warranty of Seller contained in Article IV of this Agreement which survives
the Closing to be untrue, then, if Seller satisfies such obligation to such
third party in full (subject to the minimums and maximums set forth in Sections
8.6 and 8.7, respectively, to the extent applicable), Seller shall not be
required to indemnify Buyer or any of its affiliates for any Losses because of
such breach of representation or warranty, other than any Losses incurred by
Buyer in connection with providing Seller with notice of such obligation and/or
enforcing Seller's obligation to discharge such obligation (subject, in each
case, to the minimums and maximums set forth in Sections 8.6 and 8.7,
respectively, to the extent applicable).
Section 8.12 Duty to Mitigate. Each party shall use its reasonable
----------------
best efforts to mitigate any and all Losses suffered, incurred or sustained by
such party arising out of, attributable to or resulting from any inaccuracy in
or breach of any of the representations or warranties of the other party hereto.
Section 8.13 No Waiver. Notwithstanding anything in this Agreement
---------
to the contrary, nothing in this Agreement shall constitute a waiver of any
rights or claims that Seller may have under the Securities Act or the Exchange
Act.
ARTICLE IX
TERMINATION
Section 9.1 Termination. (a) This Agreement may be terminated
-----------
prior to the Closing as follows:
(i) by written consent of the parties hereto;
(ii) by Seller or Buyer if a condition to the terminating
party's obligation to close set forth in Section 7.1 (or 7.2 or 7.3, as the
respective case may be) cannot be satisfied prior to the date set forth in
Section 9.1(a)(iv) below (as may be extended as provided therein) unless caused
by the breach of any covenant or agreement under this Agreement (x) by Seller or
the Company, in the case of a termination by Seller, or (y) by Buyer, in the
case of termination by Buyer;
(iii) by Seller or Buyer (provided that the terminating party
--------
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein) if there shall have been a material breach of
any of the covenants or agreements or any of the representations or warranties
set forth in this Agreement on the part of Seller or the Company, in the case of
a termination by Buyer, or on the part of Buyer, in the case of a termination by
Seller, which breach would entitle the terminating party to not consummate the
Stock Purchase
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pursuant to Article VII and which breach is not cured within thirty (30) days
following written notice given by the terminating party to the party committing
such breach, or which breach, by its nature, cannot be cured prior to the date
set forth in Section 9.1(a)(iv) below (as may be extended as provided therein);
(iv) by Seller or Buyer, if the Closing has not occurred on or
before November 15, 1998 (the "Outside Termination Date"); provided, however,
that if the only condition to consummation of the Stock Purchase which shall not
have been satisfied (other than conditions which relate to actions to be taken
at the Closing) is the receipt of the approval of the OTS contemplated by
Section 7.1(b), then the Outside Termination Date may be extended by up to 60
days by either party upon written notice to the other party, provided, that (x)
Buyer shall not be entitled to extend the Outside Termination Date unless (A)
Buyer shall have diligently pursued receipt of the OTS approval, (B) Buyer shall
have obtained any required shareholder approvals in connection with the Stock
Purchase and (C) Buyer shall certify in writing to Seller that Buyer has no
reason to believe that such OTS approval will not be obtained prior to the end
of such extension period and (y) Seller shall not be entitled to extend the
Outside Termination Date unless Seller shall have complied with its obligations
pursuant to Section 6.8 to cooperate with Buyer with respect to Buyer's pursuit
of the OTS approval; and
(v) by Buyer, if the Aggregate Estimated Remediation Cost exceeds
the Threshold Amount and Buyer notifies Seller in writing of Buyer's intent to
terminate this Agreement on or prior to the Environmental Termination Date;
provided, however, that Buyer shall not have a termination right pursuant to
this paragraph (v) if, within ten (10) Business Days of Seller's receipt of
Buyer's written notice, Seller shall make a Qualifying Purchase Commitment;
(b) The termination of this Agreement shall be effectuated by the
delivery by the party terminating this Agreement to each other party of a
written notice of such termination. If this Agreement so terminates, it shall
become null and void and have no further force or effect, except as provided in
Section 9.2.
Section 9.2 Survival After Termination. If this Agreement is
--------------------------
terminated in accordance with Section 9.1 hereof and the transactions
contemplated hereby are not consummated, this Agreement shall become void and of
no further force and effect, without any liability on the part of any party
hereto, except for the provisions of Sections 6.6 and 6.10. Notwithstanding the
foregoing, nothing in this Article IX shall relieve any party to this Agreement
of liability for a willful breach of any provision of this Agreement.
ARTICLE X
MISCELLANEOUS
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Section 10.1 Amendments; Waiver. This Agreement may not be amended,
------------------
altered or modified except by written instrument executed by all the parties
hereto. Any agreement on the part of any party to waive (i) any inaccuracies in
the representations and warranties contained herein by any other party or in
any document, certificate or writing delivered pursuant hereto by any other
party, or (ii) compliance with any of the agreements, covenants or conditions
contained herein, shall be valid only if set forth in an instrument in writing
signed on behalf of such party. No such waiver shall constitute a waiver of, or
estoppel with respect to, any subsequent or other inaccuracy, breach or failure
to strictly comply with the provisions of this Agreement.
Section 10.2 Entire Agreement. This Agreement (including the
----------------
schedules, Annexes, Exhibits, certificates, lists and documents referred to
herein, and any documents executed by the parties simultaneously herewith or
pursuant thereto) constitutes the entire agreement of the parties hereto, except
as provided herein, and supersedes all prior agreements and understandings,
written and oral, among the parties with respect to the subject matter hereof.
Nothing contained in this Agreement shall be deemed to limit any rights Seller
may have under the Purchase Notes or as a holder of Buyer Common Stock (other
than as provided in Section 6.14).
Section 10.3 Interpretation. When a reference is made in this
--------------
Agreement to Sections, Annexes, Exhibits or Disclosure Schedules, such reference
shall be to a Section of or Annex or Exhibit or Disclosure Schedule to this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrases "the date
of this Agreement," "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to the date set forth in
the first paragraph of this Agreement.
Section 10.4 Severability. Any term or provision of this Agreement
------------
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 10.5 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if (a) delivered in person, (b)
transmitted by telecopy (with written confirmation), (c) mailed by certified or
registered mail (return receipt requested) or (d) delivered by an express
courier (with written confirmation) to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
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If to Seller or the Company:
AmerUs Group Co.
611 Fifth Avenue
Des Moines, Iowa 50309
Telecopy: (515) 362-3648
Attention: Michael E. Sproul, Executive Vice
President and Chief Financial Officer
With copies to:
AmerUs Group Co.
611 Fifth Avenue
Des Moines, Iowa 50309
Telecopy: (515) 362-3648
Attention: Joseph K. Haggerty
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Telecopy: (212) 735-2000
Attention: Fred B. White, III, Esq.
If to Buyer or the Bank:
Commercial Federal Corporation
2120 South 72nd Street
Omaha, Nebraska 68124
Telecopy: (402) 390-5361
Attention: James A. Laphen, President
59
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With copies to:
Fitzgerald, Schorr, Barmettler & Brennan, P.C.
1000 Commercial Federal Tower
2120 South 72nd Street
Omaha, Nebraska 68124
Telecopy: (402) 390-2866
Attention: Douglas Reno
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Edward D. Herlihy, Esq.
Section 10.6 Binding Effect; Persons Benefiting; No Assignment. This
-------------------------------------------------
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns. Nothing in this Agreement is
intended or shall be construed to confer upon any Person other than the parties
hereto and their respective successors and permitted assigns any right, remedy
or claim under or by reason of their Agreement or any part hereof. This
Agreement may not be assigned by any of the parties hereto without the prior
written consent of each of the other parties hereto.
Section 10.7 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
taken together shall con stitute one and the same agreement, it being
understood that all of the parties need not sign the same counterpart.
Section 10.8 Governing Law. THIS AGREEMENT, THE LEGAL RELATIONS
-------------
BETWEEN THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE
GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO APPLICABLE CHOICE OF LAW
PROVISIONS THEREOF.
Section 10.9 Specific Performance. The parties hereto each
--------------------
acknowledge that, in view of the uniqueness of its business and the transactions
contemplated by this Agreement, each party would not have an adequate remedy at
law for money damages in the event that the covenants to be performed after the
Closing Date have not been performed in accordance with their terms, and
therefore agree that the other parties shall be entitled to specific enforcement
of the terms hereof in addition to indemnification hereunder and any other
equitable remedy to which such parties may be entitled.
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Section 10.10 WAIVER OF JURY TRIAL. AFTER THE CLOSING DATE, THE
--------------------
PARTIES TO THIS AGREEMENT AGREE TO WAIVE ANY RIGHT TO A JURY TRIAL AS TO ALL
DISPUTES.
[Signature page follows.]
61
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
COMMERCIAL FEDERAL CORPORATION
By: /s/ James A. Laphen
------------------------------------
Name:
Title:
COMMERCIAL FEDERAL BANK, A FEDERAL
SAVINGS BANK
By: /s/ James A. Laphen
------------------------------------
Name:
Title:
AMERUS GROUP CO.
By: /s/ Roger K. Brooks
------------------------------------
Name: Roger K. Brooks
Title: President & CEO
AMERUS BANK
By: /s/ Marcia S. Hanson
------------------------------------
Name: Marcia S. Hanson
Title: President & CEO
62
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EXHIBIT 5
[LETTERHEAD OF FITZGERALD, SCHORR, BARMETTLER & BRENNAN, P.C. APPEARS HERE]
April 15, 1998
Board of Directors
Commercial Federal Corporation
1500 Commercial Federal Tower
2120 South 72nd Street
Omaha, Nebraska 68124
Re: Commercial Federal Corporation
Registration Statement on S-3
-----------------------------------
Gentlemen:
We have acted as special counsel to Commercial Federal Corporation
("Commercial") in connection with the preparation of the Registration Statement
on Form S-3 (the "Registration Statement") filed on or about April 15, 1998,
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended relating to 1,915,709 authorized but unissued shares of common stock,
par value $.01 per share ("Common Stock"), of Commercial which may be issued
under the Stock Purchase Agreement by and among Commercial Federal Corporation
and Commercial Federal Bank and AmerUs Group Co. and AmerUs Bank dated February
11, 1998 (the "Agreement"), as more fully described in the Registration
Statement. You have requested the opinion of this firm with respect to certain
legal aspects of the proposed offering.
We have examined such documents, records and matters of laws as we have deemed
necessary for purposes of this opinion, and based thereon, we are of the opinion
that the Common Stock to be issued pursuant to and in accordance with the terms
of the Agreement will be duly and validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to references to our firm included under the caption
"Legal Matters" in the Prospectus which is part of the Registration Statement.
Very truly yours,
FITZGERALD, SCHORR,
BARMETTLER & BRENNAN, P.C.
By: /s/ William A. Tintsman
------------------------
William A. Tintsman
For the Firm
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Commercial Federal Corporation on Form S-3 of our report dated August 15, 1997
(September 11, 1997 as to Note 29) (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),
appearing in the Annual Report on Form 10-K of Commercial Federal Corporation
for the year ended June 30, 1997 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
- -------------------------
DELOITTE & TOUCHE LLP
Omaha, Nebraska
April 15, 1998
