CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
Dated as of August 13, 1997
Among
AmerUs Life Holdings, Inc.,
AmerUs Acquisition Corporation
And
Delta Life Corporation
Table of Contents
Page
ARTICLE I
DEFINITIONS . . . . . . . . . 2
1.1 "Affiliate" . . . . . . . . . . . . . . . . 2
1.2 "Agreement" . . . . . . . . . . . . . . . . 2
1.3 "Annual Statement" . . . . . . . . . . . . . 3
1.4 "Acquired Companies" . . . . . . . . . . . . 3
1.5 "Acquiror" . . . . . . . . . . . . . . . . . 3
1.6 "Assets and Properties" . . . . . . . . . . 3
1.7 "AVR" . . . . . . . . . . . . . . . . . . . 3
1.8 "Benefit Plans" . . . . . . . . . . . . . . 3
1.9 "Books and Records" . . . . . . . . . . . . 4
1.10 "Business Day" . . . . . . . . . . . . . . 4
1.11 "CERCLA" . . . . . . . . . . . . . . . . . 4
1.12 "Closing" . . . . . . . . . . . . . . . . . 4
1.13 "Closing Date" . . . . . . . . . . . . . . 4
1.14 "Code" . . . . . . . . . . . . . . . . . . 4
1.15 "Common Stock" . . . . . . . . . . . . . . 4
1.16 "Common Stock Class A" . . . . . . . . . . 4
1.17 "Common Stock Class B" . . . . . . . . . . 4
1.18 "Contract" . . . . . . . . . . . . . . . . 5
1.19 "Delta Affiliate" . . . . . . . . . . . . . 5
1.20 "Delta Employee" . . . . . . . . . . . . . 5
1.21 "Delta Employee Stock Option" . . . . . . . 5
1.22 "Delta Stock Plan" . . . . . . . . . . . . 5
1.23 "Designated Subsidiary" . . . . . . . . . . 5
1.24 "DGCL" . . . . . . . . . . . . . . . . . . 5
1.25 "Disclosure Schedule" . . . . . . . . . . . 5
1.26 "Employee Benefit Plan" . . . . . . . . . . 5
1.27 "Employee Welfare Benefit Plan" . . . . . . 6
1.28 "Environmental Laws" . . . . . . . . . . . 6
1.29 "ERISA" . . . . . . . . . . . . . . . . . . 6
1.30 "ERISA Affiliate" . . . . . . . . . . . . . 6
1.31 "Escrow Agent" . . . . . . . . . . . . . . 6
1.32 "GAAP" . . . . . . . . . . . . . . . . . . 6
1.33 "GAAP Statements" . . . . . . . . . . . . . 6
1.34 "Hazardous Substance" . . . . . . . . . . . 6
1.35 "HSR Act" . . . . . . . . . . . . . . . . . 6
1.36 "IMR" . . . . . . . . . . . . . . . . . . . 7
1.37 "IRS" . . . . . . . . . . . . . . . . . . . 7
1.38 "Knowledge of Acquiror" . . . . . . . . . . 7
1.39 "Knowledge of Delta" . . . . . . . . . . . 7
1.40 "Laws" . . . . . . . . . . . . . . . . . . 7
1.41 "Liabilities" . . . . . . . . . . . . . . . 7
1.42 "Lien" . . . . . . . . . . . . . . . . . . 7
1.43 "Material Adverse Effect" . . . . . . . . . 7
1.44 "PBGC" . . . . . . . . . . . . . . . . . . 8
1.45 "Permitted Encumbrances" . . . . . . . . . 8
1.46 "Person" . . . . . . . . . . . . . . . . . 9
1.47 "Preferred Stock" . . . . . . . . . . . . . 9
1.48 "Quarterly Statement" . . . . . . . . . . . 9
1.49 "Real Estate" . . . . . . . . . . . . . . . 9
1.50 "Release" . . . . . . . . . . . . . . . . . 9
1.51 "Reserve Liabilities" . . . . . . . . . . . 9
1.52 "SAP" . . . . . . . . . . . . . . . . . . . 9
1.53 "SAP Statements" . . . . . . . . . . . . . 10
1.54 "Subsidiaries" . . . . . . . . . . . . . . 10
1.55 "subsidiary" . . . . . . . . . . . . . . . 10
1.56 "Taxes" . . . . . . . . . . . . . . . . . 10
1.57 "Tax Returns" . . . . . . . . . . . . . . . 10
ARTICLE II
THE MERGER . . . . . . . . . 11
2.1 The Merger . . . . . . . . . . . . . . . . . 11
2.2 Closing . . . . . . . . . . . . . . . . . . 11
2.3 Effective Time . . . . . . . . . . . . . . . 11
2.4 Effects of the Merger . . . . . . . . . . . 12
2.5 Certificate of Incorporation and Bylaws . . 12
2.6 Directors . . . . . . . . . . . . . . . . . 12
2.7 Officers . . . . . . . . . . . . . . . . . . 12
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE
OF CERTIFICATES . . . . . . . . . . . . . . . . 12
3.1 Effect on Capital Stock . . . . . . . . . . 12
3.2 Exchange of Certificates . . . . . . . . . . 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DELTA . . 18
4.1 Organization, Standing and Corporate Power . 18
4.2 Acquired Companies . . . . . . . . . . . . . 18
4.3 Capital Structure . . . . . . . . . . . . . 19
4.4 Authority . . . . . . . . . . . . . . . . . 20
4.5 No Subsidiaries . . . . . . . . . . . . . . 21
4.6 No Conflicts or Violations . . . . . . . . . 21
4.7 Books and Records . . . . . . . . . . . . . 22
4.8 Financial Statements . . . . . . . . . . . . 22
4.9 Reserves . . . . . . . . . . . . . . . . . . 23
4.10 Absence of Changes . . . . . . . . . . . . 24
4.11 No Undisclosed Liabilities . . . . . . . . 28
4.12 Taxes . . . . . . . . . . . . . . . . . . . 28
4.13 Litigation . . . . . . . . . . . . . . . . 34
4.14 Compliance with Laws . . . . . . . . . . . 35
4.15 Benefit Plans, ERISA . . . . . . . . . . . 40
4.16 Properties . . . . . . . . . . . . . . . . 42
4.17 Contracts . . . . . . . . . . . . . . . . . 44
4.18 Threats of Cancellation . . . . . . . . . . 47
4.19 Licenses and Permits . . . . . . . . . . . 48
4.20 Operations Insurance . . . . . . . . . . . 48
4.21 Intercompany Liabilities . . . . . . . . . 49
4.22 Bank Accounts . . . . . . . . . . . . . . . 49
4.23 Brokers . . . . . . . . . . . . . . . . . . 49
4.24 Disclosure . . . . . . . . . . . . . . . . 49
4.25 Stockholders and Related Matters . . . . . 50
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AMERUS . . 51
5.1 Organization of AmerUs and Sub . . . . . . . 51
5.2 Authority of AmerUs and Sub . . . . . . . . 51
5.3 Organization of Designated Subsidiaries . . 51
5.4 No Conflicts or Violations . . . . . . . . . 52
5.5 Financing . . . . . . . . . . . . . . . . . 53
5.6 Brokers . . . . . . . . . . . . . . . . . . 53
5.7 Disclosure . . . . . . . . . . . . . . . . . 53
ARTICLE VI
COVENANTS OF DELTA . . . . . . . 54
6.1 Lender and Regulatory Approvals . . . . . . 54
6.2 HSR Filings . . . . . . . . . . . . . . . . 54
6.3 Investigation by AmerUs . . . . . . . . . . 55
6.4 No Negotiations, etc. . . . . . . . . . . . 55
6.5 Conduct of Business . . . . . . . . . . . . 57
6.6 Financial Statements and Reports . . . . . . 59
6.7 Investments . . . . . . . . . . . . . . . . 60
6.8 Employee Matters . . . . . . . . . . . . . . 60
6.9 No Charter Amendments . . . . . . . . . . . 62
6.10 No Issuance of Securities . . . . . . . . . 62
6.11 No Dividends . . . . . . . . . . . . . . . 62
6.12 No Disposal of Property . . . . . . . . . . 62
6.13 No Breach or Default . . . . . . . . . . . 63
6.14 No Indebtedness . . . . . . . . . . . . . . 63
6.15 No Acquisitions . . . . . . . . . . . . . . 63
6.16 Liabilities to Delta Affiliates . . . . . . 63
6.17 Tax Matters . . . . . . . . . . . . . . . . 64
6.18 Notice and Cure . . . . . . . . . . . . . . 64
6.19 Supplements to Schedules . . . . . . . . . 64
6.20 Stockholders Agreement . . . . . . . . . . 64
6.21 Stockholder Approval . . . . . . . . . . . 65
6.22 WARN Act Notification . . . . . . . . . . . 65
6.23 London Life Reinsurance Company
Negotiations . . . . . . . . . . . . . . . 65
ARTICLE VII
COVENANTS AND CERTAIN AGREEMENTS OF AMERUS . 66
7.1 Regulatory Approvals . . . . . . . . . . . . 66
7.2 HSR Filings . . . . . . . . . . . . . . . . 66
7.3 Notice and Cure . . . . . . . . . . . . . . 66
7.4 Employment and Consulting Agreements . . . . 67
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF AMERUS AND SUB . 67
8.1 Representations and Warranties . . . . . . . 67
8.2 Performance . . . . . . . . . . . . . . . . 67
8.3 Officer's Certificates . . . . . . . . . . . 68
8.4 HSR Act Approval . . . . . . . . . . . . . . 68
8.5 No Injunction . . . . . . . . . . . . . . . 68
8.6 No Proceeding or Litigation . . . . . . . . 69
8.7 Consents, Authorizations, etc. . . . . . . . 69
8.8 No Adverse Change . . . . . . . . . . . . . 69
8.9 Conformity With Annual Statement . . . . . . 70
8.10 Opinion of Counsel . . . . . . . . . . . . 70
8.11 Stockholder Matters . . . . . . . . . . . . 70
8.12 Dissenters' Rights . . . . . . . . . . . . 70
8.13 Employment and Non-Compete Agreement . . . 70
8.14 Severance Arrangements . . . . . . . . . . 70
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF DELTA . . . 71
9.1 Representations and Warranties . . . . . . . 71
9.2 Performance . . . . . . . . . . . . . . . . 71
9.3 Officer's Certificates . . . . . . . . . . . 71
9.4 HSR Act Approval. . . . . . . . . . . . . . 72
9.5 Merger Consideration . . . . . . . . . . . . 72
9.6 No Injunction . . . . . . . . . . . . . . . 72
9.7 Consents, Authorizations, etc. . . . . . . . 72
9.8 Opinion of Counsel. . . . . . . . . . . . . 72
ARTICLE X
SURVIVAL OF PROVISIONS; REMEDIES . . . . 72
10.1 Survival . . . . . . . . . . . . . . . . . 72
10.2 Available Remedies. . . . . . . . . . . . . 72
ARTICLE XI
TERMINATION . . . . . . . . . 73
11.1 Termination . . . . . . . . . . . . . . . . 73
11.2 Effect of Termination . . . . . . . . . . . 75
ARTICLE XII
NOTICES . . . . . . . . . . 77
12.1 Notices . . . . . . . . . . . . . . . . . . 77
ARTICLE XIII
MISCELLANEOUS . . . . . . . . . 78
13.1 Entire Agreement . . . . . . . . . . . . . 78
13.2 Expenses . . . . . . . . . . . . . . . . . 79
13.3 Public Announcements . . . . . . . . . . . 79
13.4 Confidentiality . . . . . . . . . . . . . . 80
13.5 Further Assurances . . . . . . . . . . . . 80
13.6 Waiver . . . . . . . . . . . . . . . . . . 81
13.7 Amendment . . . . . . . . . . . . . . . . . 81
13.8 Counterparts; Facsimile Signatures . . . . 81
13.9 No Third Party Beneficiary . . . . . . . . 81
13.10 Governing Law . . . . . . . . . . . . . . 81
13.11 Binding Effect . . . . . . . . . . . . . . 82
13.12 Assignment Limited . . . . . . . . . . . . 82
13.13 Headings, Gender, etc. . . . . . . . . . . 82
13.14 Invalid Provisions. . . . . . . . . . . . 82
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of
August 13, 1997, among AmerUs Life Holdings, Inc., an
Iowa corporation ("AmerUs", also sometimes referred to
herein as "Acquiror"), AmerUs Acquisition Corporation, a
Delaware corporation ("Sub") and a wholly owned
subsidiary of AmerUs, and Delta Life Corporation, a
Delaware corporation ("Delta").
WHEREAS, Delta owns all of the issued and
outstanding common stock of Delta Life and Annuity
Company ("Delta Insurance"), a Tennessee life insurance
company.
WHEREAS the respective Boards of Directors of
AmerUs, Sub and Delta have approved the acquisition of
Delta by AmerUs on the terms and subject to the
conditions set forth in this Agreement and Plan of
Merger;
WHEREAS, on the basis of its financial
condition Acquiror has demonstrated to the satisfaction
of Delta its financial capability of performing its
obligations under this Agreement and the Board of
Directors of Delta has negotiated the transaction to
provide that the obtaining of financing by Acquiror is
not a condition to consummation of the Merger, which was
an important factor to the Delta Board of Directors in
approving the Merger and this Agreement;
WHEREAS, the respective Boards of Directors of
AmerUs, Sub, and Delta have approved the merger of Sub
into Delta, as set forth below (the "Merger"), upon the
terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of
Delta Common Stock Class A, par value $1.00 per share
(the "Common Stock Class A"), each issued and outstanding
share of Delta Common Stock Class B, par value $1.00 (the
"Common Stock Class B") (Common Stock Class A and Common
Stock Class B are sometimes herein referred to as "Common
Stock"), each issued and outstanding share of Series B
Convertible Preferred Stock of Delta, par value $.01 per
share ("Series B Preferred Stock"), each issued and
outstanding share of Series C Convertible Preferred Stock
of Delta, par value $.01 per share ("Series C Preferred
Stock"), and each issued and outstanding share of Series
D Convertible Preferred Stock of Delta, par value $.01
per share ("Series D Preferred Stock") (Series B
Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock are sometimes herein referred to as
"Preferred Stock"), other than Dissenting Shares (as
defined in Section 3.1(d)) will be converted into the
right to receive $65.25 per share, in all cases without
interest;
WHEREAS as an inducement for AmerUs and Sub to
enter into this Agreement, and in partial consideration
of the representations, warranties, covenants and
agreements of AmerUs and Sub contained herein, certain
stockholders of Delta have entered into Voting
Agreements, dated the date hereof, between each such
stockholder and AmerUs (the "Voting Agreements"); and
WHEREAS AmerUs, Sub and Delta desire to make
certain representations, warranties, covenants and
agreements in connection with the Merger and also to
prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained in this Agreement, the parties agree as
follows:
ARTICLE I
DEFINITIONS
The capitalized terms used in this Agreement
and not defined herein shall have the meanings set forth
below. Other terms are also defined in the text of the
Agreement. Unless the context otherwise requires, such
capitalized terms shall include the singular and plural
and the conjunctive and disjunctive forms of the terms
defined.
1.1 "AFFILIATE" shall mean any Person that,
directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under
common control with the Person specified.
1.2 "AGREEMENT" shall mean this Agreement and
Plan of Merger, together with the exhibits attached
hereto, the Disclosure Schedule, and the other agreements
and documents to be executed and delivered pursuant
hereto.
1.3 "ANNUAL STATEMENT" shall mean any annual
statement of Delta Insurance filed with or submitted to
the insurance regulatory authority in the state in which
Delta Insurance is domiciled on forms prescribed or
permitted by such authority.
1.4 "ACQUIRED COMPANIES" shall mean Delta and
any subsidiary of Delta, all of which under the terms of
this Agreement are being acquired by AmerUs, Sub or a
Designated Subsidiary.
1.5 "ACQUIROR" shall have the meaning ascribed
to it in the preamble of this Agreement.
1.6 "ASSETS AND PROPERTIES" shall mean all
assets or properties of every kind, nature, character,
and description (whether real, personal, or mixed,
whether tangible or intangible, whether absolute,
accrued, contingent, fixed, or otherwise, and wherever
situated) as now operated, owned, or leased by a
specified Person, including without limitation cash, cash
equivalents, securities, accounts and notes receivable,
real estate, equipment, furniture, fixtures, insurance or
annuities in force, goodwill, and going concern value.
1.7 "AVR" shall mean the asset valuation
reserve required by insurance regulatory authorities to
stabilize statutory surplus from non interest-related
fluctuations in the market value of bonds, stocks,
mortgage loans, real estate and other invested assets.
1.8 "BENEFIT PLANS" shall mean all Employee
Pension Benefit Plans, all Employee Welfare Benefit
Plans, all stock bonus, stock ownership, stock option,
stock purchase, stock appreciation rights, phantom stock,
and other stock plans (whether qualified or non-
qualified), and all other pension, welfare, severance,
retirement, bonus, deferred compensation, incentive
compensation, insurance (whether life, accident and
health, or other and whether key man, group, workers
compensation, or other), profit sharing, disability,
thrift, day care, legal services, leave of absence,
layoff, and supplemental or excess benefit plans, and all
other benefit Contracts, arrangements, or procedures
having the effect of a plan, in each case existing on or
before the Closing Date under which Delta or Delta
Insurance is or may hereafter become obligated in any
manner (including without limitation obligations to make
contributions or other payments) and which cover some or
all of the Delta Employees.
1.9 "BOOKS AND RECORDS" shall mean all
accounting, financial reporting, Tax, business,
marketing, corporate, and other files, documents,
instruments, papers, books, and records of a specified
Person, including without limitation financial
statements, budgets, projections, ledgers, journals,
deeds, titles, policies, manuals, minute books, stock
certificates and books, stock transfer ledgers,
Contracts, franchises, permits, agency lists,
policyholder lists, supplier lists, complaint lists,
underwriting manuals, correspondence files, marketing and
sales materials, reports, computer files, retrieval
programs, operating data or plans, and environmental
studies or plans.
1.10 "BUSINESS DAY" shall mean a day other than
Saturday, Sunday, or any day on which the principal
commercial banks located in New York are authorized or
obligated to close under the Laws of New York.
1.11 "CERCLA" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act.
1.12 "CLOSING" shall mean the closing of the
transactions contemplated by this Agreement as provided
in Section 2.2 hereof.
1.13 "CLOSING DATE" shall have the meaning
ascribed to it in Section 2.2.
1.14 "CODE" shall mean the Internal Revenue
Code of 1986, as amended (including without limitation
any successor code), and the rules and regulations
promulgated thereunder.
1.15 "COMMON STOCK" shall have the meaning
ascribed to it in the Preamble.
1.16 "COMMON STOCK CLASS A" shall have the
meaning ascribed to it in the Preamble.
1.17 "COMMON STOCK CLASS B" shall have the
meaning ascribed to it in the Preamble.
1.18 "CONTRACT" shall mean any agreement,
lease, sublease, license, sublicense, promissory note,
evidence of indebtedness, insurance policy, annuity
contract, reinsurance agreement or other contract or
commitment (whether written or oral).
1.19 "DELTA AFFILIATE" shall mean (a) each
Affiliate of Delta, (b) each holder of 5% or more of any
class of capital stock of Delta, (c) each executive
officer or director of an Acquired Company and (d) each
of their respective Affiliates.
1.20 "DELTA EMPLOYEE" shall mean any present or
former officer, director, employee, agent, regional
director, consultant or other similar representative of
any Acquired Company, or any predecessor thereof.
1.21 "DELTA EMPLOYEE STOCK OPTION" shall have
the meaning ascribed to it in Section 3.1(e).
1.22 "DELTA STOCK PLAN" shall mean Delta Life
Corporation's 1993 Long-Term Incentive Plan, as amended
by Agreement dated January 4, 1995, the Second Amended
and Restated 1989 Delta Life Corporation Stock Option
Plan and the Delta Life Corporation Amended and Restated
1987 Stock Option Plan.
1.23 "DESIGNATED SUBSIDIARY" shall mean any
direct or indirect subsidiary organized by the Acquiror
or its assigns that is designated by the Acquiror
pursuant to Section 2.1 in a writing delivered to Delta
at or before the Closing.
1.24 "DGCL" shall mean the General Corporation
Law of the State of Delaware.
1.25 "DISCLOSURE SCHEDULE" shall mean the
schedule dated as of the date of this Agreement and
furnished by Delta to the Acquiror, and containing all
lists, descriptions, exceptions, and other information
and materials as are required to be included therein
pursuant to this Agreement.
1.26 "EMPLOYEE BENEFIT PLAN" shall mean each
employee pension benefit plan (whether or not insured),
as defined in Section 3(2) of ERISA, which is or was in
existence on or before the Closing Date and to which any
Acquired Company is or would hereafter become obligated
in any manner as an employer.
1.27 "EMPLOYEE WELFARE BENEFIT PLAN" shall mean
each employee welfare benefit plan (whether or not
insured), as defined in Section 3(1) of ERISA, which is
or was in existence on or before the Closing Date and to
which any Acquired Company is or would hereafter become
obligated in any manner as an employer.
1.28 "ENVIRONMENTAL LAWS" shall mean any
Federal, state or local law, statute, ordinance or
regulation pertaining to health, industrial hygiene, or
the environmental condition on or under any property
including, without limitation, CERCLA and the Toxic
Substance Control Act, and the rules and regulations
thereunder.
1.29 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended (including
without limitation any successor act), and the rules and
regulations promulgated thereunder.
1.30 "ERISA AFFILIATE" shall mean any Person
under common control (as defined in Section 414 of the
Code) with any of the Acquired Companies.
1.31 "ESCROW AGENT" shall mean First Tennessee
Bank National Association, Memphis, Tennessee.
1.32 "GAAP" shall mean generally accepted
accounting principles, consistently applied throughout
the specified period and in the immediately prior
comparable period.
1.33 "GAAP STATEMENTS" shall mean the
consolidated financial statements of the Acquired
Companies prepared accordance with GAAP.
1.34 "HAZARDOUS SUBSTANCE" shall mean (I) any
and all hazardous, toxic or dangerous waste, substance,
pollutant, contaminant, radiation or material defined as
such in (or deemed as such for purposes of) CERCLA, at
the Closing Date, or any other Environmental Law and (II)
any petroleum or petroleum-based products.
1.35 "HSR ACT" shall mean Section 7A of the
Xxxxxxx Act (Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976), as amended (including without
limitation any successor act), and the rules and
regulations promulgated thereunder.
1.36 "IMR" shall mean the interest maintenance
reserve required by insurance regulatory authorities to
capture interest-rate related realized capital gains and
losses (net of Taxes) on fixed income investments.
1.37 "IRS" shall mean the United States
Internal Revenue Service or any successor agency.
1.38 "KNOWLEDGE OF ACQUIROR" means the actual
knowledge of or knowledge which would have been obtained
in a reasonable investigation by an officer of AmerUs
with responsibility (sole or shared) for the particular
subject matter.
1.39 "KNOWLEDGE OF DELTA" means the actual
knowledge of or knowledge which would have been obtained
in a reasonable investigation by an officer of any
Acquired Company with responsibility (sole or shared) for
the particular subject matter.
1.40 "LAWS" shall mean all laws, statutes,
ordinances, regulations, and other pronouncements having
the effect of law of the United States of America or any
state, commonwealth, city, county, municipality, court,
tribunal, agency, government, department, commission,
bureau, or instrumentality thereof.
1.41 "LIABILITIES" shall mean all debts,
obligations, and other liabilities of a Person (whether
absolute, accrued, contingent, fixed, or otherwise, or
whether due or to become due) which are recognized as
liabilities in accordance with SAP or GAAP, as the case
may be.
1.42 "LIEN" shall mean any mortgage, pledge,
assessment, security interest, lease, sublease, lien,
adverse claim, levy, charge, covenant or other
encumbrance of any kind, or any conditional sale
Contract, title retention Contract, or other Contract to
give or to refrain from giving any of the foregoing other
than Permitted Encumbrances.
1.43 "MATERIAL ADVERSE EFFECT" shall mean, with
respect to any Person, a material adverse effect on (I)
the organization, existence, authority, capitalization,
business, licenses, condition (financial or otherwise),
cash flow, management, sales force, solvency, prospects,
SAP results of operations, insurance or annuities in
force, SAP capital and surplus, AVR, IMR, Liabilities, or
Assets and Properties of such Person, or (II) the ability
of such Person to perform its obligations under this
Agreement.
1.44 "PBGC" shall mean the Pension Benefit
Guaranty Corporation established under ERISA.
1.45 "PERMITTED ENCUMBRANCES" shall mean the
following encumbrances: (i) Liens for Taxes or
assessments or other governmental charges or levies,
either not yet due and payable or to the extent that
nonpayment thereof is expressly permitted by the terms of
this Agreement; (ii) pledges or deposits securing
obligations under worker's compensation, unemployment
insurance, social security or public liability laws or
similar legislation; (iii) pledges or deposits securing
bids, tenders, contracts (other than contracts for the
payment of money) or leases to which any of the Acquired
Companies is a party as lessee made in the ordinary
course of business; (iv) deposits securing public or
statutory obligations of any of the Acquired Companies;
(v) workers', mechanics', suppliers', carriers',
warehousemen's or other similar liens arising in the
ordinary course of business and securing indebtedness
aggregating not in excess of $100,000 at any time
outstanding, not yet due and payable; (vi) deposits
securing or in lieu of surety, appeal or customs bonds in
proceedings to which any of the Acquired Companies is a
party; (vii) pledges or deposits effected by any of the
Acquired Companies as a condition to obtaining or
maintaining any License of such Person; (viii) any
attachment or judgment lien, unless the judgment it
secures shall not, within 60 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within
60 days after the expiration of any such stay; (ix)
zoning restrictions, easements, licenses, or other
restrictions on the use of real property or other minor
irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the
use, value, or marketability of such real property,
leases or leasehold estates; and (x) Liens under the
provisions of insurance policies and annuities in force
and reinsurance and coinsurance contracts in force.
1.46 "PERSON" shall mean any natural person,
corporation, general partnership, limited partnership,
limited liability company, proprietorship, trust, union,
association, court, tribunal, agency, government,
department, commission, self-regulatory organization,
arbitrator, board, bureau, instrumentality, or other
entity, enterprise, authority, or business organization.
1.47 "PREFERRED STOCK" shall have the meaning
ascribed to it in the Preamble.
1.48 "QUARTERLY STATEMENT" shall mean (I) any
quarterly statement of Delta prepared in accordance with
GAAP, and (II) any quarterly statement of Delta Insurance
prepared in accordance with SAP and filed with or
submitted to the insurance regulatory authority in the
state in which it is domiciled on forms prescribed or
permitted by such authority.
1.49 "REAL ESTATE" means all real property and
interests therein, including without limitation leasehold
interests, owned or held at any time since January 1,
1992 by any Acquired Company or nominee thereof.
1.50 "RELEASE" shall mean any spilling,
leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migrating,
dumping or other disposal in any amount into or onto the
air, ground or surface water, land, or other parts of the
environment, however caused, not permitted by or in
compliance with Environmental Laws.
1.51 "RESERVE LIABILITIES" shall have the
meaning ascribed to it in Section 4.9 hereof.
1.52 "SAP" shall mean the accounting practices
required or permitted by the National Association of
Insurance Commissioners and the insurance regulatory
authority in the state in which Delta Insurance is
domiciled, consistently applied throughout the specified
period and in the immediately prior comparable period.
1.53 "SAP STATEMENTS" shall mean the Annual
Statements, Quarterly Statements, and other financial
statements and presentations of Delta Insurance prepared
in accordance with SAP and delivered to the Acquiror
pursuant to either or both of Sections 4.8 and 6.6
hereof.
1.54 "SUBSIDIARIES" shall mean all subsidiaries
of Delta, including without limitation Delta Insurance
and each such other subsidiary as of the date hereof
listed in Section 4.5 of the Disclosure Schedule.
1.55 "SUBSIDIARY" shall mean each of those
Persons, regardless of jurisdiction of organization, of
which another Person, directly or indirectly through one
or more subsidiaries, (I) owns beneficially securities
having more than 50% of the voting power in the election
of directors (or persons fulfilling similar functions or
duties) of the owned Person (without giving effect to any
contingent voting rights), or (II) controls as the
general partner or managing member.
1.56 "TAXES" shall mean all taxes, charges,
duties, fees, levies, or other similar assessments or
Liabilities, including without limitation all net and
gross income, gross receipts, ad valorem, premium,
excise, real property, personal property, windfall
profit, sales, use, transfer, license, withholding,
employment, payroll, Phase III, profit, estimated,
severance, stamp, occupation, value added, registration,
environmental, workers compensation, social security and
franchise taxes imposed by the United States of America,
any possession thereof, or any state, county, local, or
foreign government, or any subdivision, agency, or other
similar Person of any of the foregoing; and such term
shall include any interest, fines, penalties, correction
fees, sanction amounts, assessments, or additions to tax
relating to, resulting from, attributable to, or incurred
in connection with any such tax or any contest or dispute
thereof.
1.57 "TAX RETURNS" shall mean any report,
return, information return, or other document (including
any related or supporting information and any amendments
thereto) filed or required to be filed with any federal,
state, local, or foreign governmental entity or other
authority in connection with the determination,
assessment or collection of any Tax (whether or not such
Tax is imposed on any Acquired Company) or the
administration of any laws, regulations or administrative
requirements relating to any Tax, or any statement
required to be furnished to any Person under any Tax Law.
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to
the conditions set forth in this Agreement and in
accordance with the DGCL, Sub shall be merged with and
into Delta at the Effective Time (as hereinafter
defined). Following the Merger, the separate corporate
existence of Sub shall cease and Delta shall continue as
the surviving corporation (the "Surviving Corporation")
and shall succeed to and assume all the rights and
obligations of Delta in accordance with the DGCL. At the
election of AmerUs, any direct or indirect wholly owned
subsidiary of AmerUs may be substituted for Sub as a
constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to
this Agreement in order to reflect the foregoing.
2.2 CLOSING. The Closing of the Merger will
take place (subject to the satisfaction or waiver of all
the conditions set forth in Articles VIII and IX hereof)
at 10:00 a.m. on a date to be specified by AmerUs or Sub
not more than five Business Days following the
satisfaction or waiver of those conditions set forth in
Articles VIII and IX capable of being satisfied prior to
the Closing (the "Closing Date"), at the offices of Delta
in Memphis, Tennessee. The parties agree to use all
reasonable efforts to cause the Closing to occur on or
before September 30, 1997.
2.3 EFFECTIVE TIME. On the Closing Date, or as
soon as practicable thereafter, the parties shall file
with the Secretary of State of the State of Delaware a
certificate of merger or other appropriate documents (in
any such case, the "Certificate of Merger") executed in
accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under
the DGCL. The Merger shall become effective at such time
as the Certificate of Merger is duly filed with the
Delaware Secretary of State, or at such other later time
as Sub and Delta shall agree and specify in the
Certificate of Merger (the time the Merger becomes
effective being the "Effective Time").
2.4 EFFECTS OF THE MERGER. The Merger shall
have the effects set forth in the applicable provisions
of Delaware law, including Section 259 of the DGCL.
2.5 CERTIFICATE OF INCORPORATION AND BYLAWS.
(a) The Second Amended and Restated Certificate of
Incorporation of Delta, as in effect immediately prior to
the Effective Time of the Merger, shall become the
Certificate of Incorporation of the Surviving Corporation
after the Effective Time, and thereafter may be amended
in accordance with its terms and as provided by law and
this Agreement.
(b) The By-laws of Delta as in effect on the
Effective Time shall become the By-laws of the Surviving
Corporation.
2.6 DIRECTORS. The directors of Sub
immediately prior to the Effective Time shall become the
directors of the Surviving Corporation, until the earlier
of their resignation or removal or until their respective
successors are duly elected and qualified, as the case
may be. The directors of Delta and each Subsidiary will
tender their resignations at the Closing.
2.7 OFFICERS. The officers of Delta
immediately prior to the Effective Time shall become the
officers of the Surviving Corporation, until the earlier
of their resignation or removal or until their respective
successors are duly elected and qualified, as the case
may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
3.1 EFFECT ON CAPITAL STOCK. As of the
Effective Time, by virtue of the Merger and without any
action on the part of the holder of any shares of Delta
Common Stock or Preferred Stock or any shares of capital
stock of Sub:
(a) Capital Stock of Sub. Each share of the
capital stock of Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of Common
Stock.
(b) Cancellation of Subsidiary Stock. Each
share of Delta Common Stock that is owned by AmerUs or
any subsidiary thereof or by any subsidiary of Delta
shall automatically be cancelled and retired and shall
cease to exist, and no consideration shall be delivered
in exchange therefor.
(c) Conversion of Common Stock and Preferred
Stock. Subject to Section 3.1(e) and Section 13.2, each
issued and outstanding share of Common Stock and
Preferred Stock shall be converted into the right to
receive from the Surviving Corporation in cash, without
interest, $65.25 per share (the "Merger Consideration").
As of the Effective Time, all such shares of Common Stock
and Preferred Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall
cease to exist, and each holder of a certificate
representing any such shares of Common Stock or Preferred
Stock shall cease to have any rights with respect
thereto, except the right to receive the Merger
Consideration, without interest.
(d) Shares of Dissenting Holders.
Notwithstanding anything in this Agreement to the
contrary, any issued and outstanding shares of Common
Stock and Preferred Stock shall not be converted into the
right to receive the Merger Consideration unless and
until the holder shall have failed to perfect or shall
have effectively withdrawn or lost his right to dissent
from the Merger under the DGCL. If any such holder shall
have so failed to perfect or have effectively withdrawn
or lost such right, such holder's Common Stock and/or
Preferred Stock, as applicable, shall thereupon be
converted into the right to receive the Merger
Consideration. Delta shall give AmerUs (i) prompt notice
of any notice or demands for appraisal or payment for
shares of Common Stock or Preferred Stock received by
Delta, and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to
any such demands or notices. Delta shall not, without
the prior written consent of AmerUs, make any payment
with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
(e) Delta Equity-Based Awards. Immediately
prior to the Effective Time, each outstanding option to
purchase Common Stock granted under the Delta Stock Plans
(each, a "Delta Employee Stock Option") and each
outstanding stock appreciation right granted under
Delta's 1993 Stock Appreciation Rights Plan (each, a
"SAR") shall be cancelled and each holder of a Delta
Employee Stock Option or SAR as of such date, whether or
not then vested, or in the case of a Delta Employee Stock
Option, exercisable, shall be paid for such Delta
Employee Stock Option or SAR, as the case may be, cash
equal to the excess of the Merger Consideration over the
sum of (x) the exercise price of such Delta Employee
Stock Option or the xxxxx xxxxx of such SAR, as the case
may be, plus (y) the applicable amount required to be
withheld for applicable Taxes. Any Delta Employee Stock
Option or SAR that is not "in-the-money" shall be
cancelled and cease to exist, and no cash or other
consideration shall be paid or payable in exchange
therefor. A Delta Employee Stock Option or SAR shall be
"in-the-money" if the exercise price or xxxxx xxxxx is
less than the Merger Consideration. The cancellation of
a Delta Employee Stock Option or SAR or the surrender of
any Delta Employee Stock Option or SAR to Delta in
exchange for the consideration provided herein, in each
case, shall be deemed a release of any and all rights the
holder had or may have had in such Delta Employee Stock
Option or SAR. For purposes of this subsection (e), the
term "xxxxx xxxxx" means, with respect to a SAR, the
specified price of Common Stock set forth in the
agreement with respect to such SAR at the time the SAR
was granted.
(f) Delta Employee Termination Payments. (i)
Set forth on Exhibit 3.1(f)(i) attached hereto is a list
of certain Delta Employees who have employment agreements
with Delta or one of its Subsidiaries that provide
termination or severance payments in the event of a
change of control. Each such Delta Employee's employment
agreement shall be amended prior to Closing to provide
that the termination payments will be reduced as
necessary to assure that the aggregate payments to each
such Delta Employee that are contingent on a change in
ownership or control will not reach the threshold for
parachute payments under section 280G(b)(2)(A)(ii) of the
Code.
(ii) Set forth on Exhibit 3.1(f)(ii)
attached hereto is a list of certain Delta Employees who
have employment agreements with Delta or one of its
Subsidiaries that provide termination or severance
payments in the event of a change of control, which
agreements were amended by Delta and such Delta Employees
effective as of July 31, 1997. The terms and conditions
of each such Delta Employee's employment agreement, as so
amended, shall remain in full force and effect before, on
and after the Closing Date.
(iii) Exhibit 3.1(f)(iii) attached hereto
sets forth the name of one Delta Employee who has an
employment agreement with Delta that provides termination
or severance payments in the event of a change of
control. At Closing, such Delta Employee shall enter
into a mutually acceptable Employment and Non-Competition
Agreement with Delta, and such Delta Employee shall not
be "deemed" terminated for purposes of his employment
agreement.
(iv) Exhibit 3.1(f)(iv) attached hereto
sets forth the names of certain former Delta Employees
who had employment agreements with Delta or one of its
Subsidiaries that provided termination or severance
payments in the event of a change of control. Upon the
Closing Date, such Delta Employees shall receive the
change of control termination payments set forth in their
respective employment agreements net of any other
termination payments such Delta Employees have received
through the Closing Date.
(v) Exhibit 3.1(f)(v) attached hereto is
the name of a certain Delta Employee who has an
employment agreement with Delta or one of its
Subsidiaries that provides termination or severance
payments of six months' then current salary in the event
of a sale of Delta. Such Delta Employee shall receive
the payments described in her employment agreement on the
terms and conditions set forth therein.
(g) Payment of Accrued Dividend. Immediately
prior to the Effective Time, each issued and outstanding
share of Preferred Stock shall be paid a final dividend
in an amount equal to the regular dividend accrued
thereon from the preceding dividend payment date to the
Effective Time.
(h) Net Payments. The amount of any Merger
Consideration paid to any employees or agents of Delta or
any Acquired Company for shares of Common Stock or
Preferred Stock securing loans made to them by Delta or
an Acquired Company shall be paid net of the principal
amount of, and accrued interest on, any such loan at
Closing.
3.2 EXCHANGE OF CERTIFICATES.
(a) Exchange Procedure. Prior to the
Effective Time, Delta shall provide to each holder of
record of a certificate or certificates representing
outstanding shares of Common Stock and/or Preferred Stock
(the "Certificates"), whose shares are to be converted
into the right to receive the Merger Consideration
pursuant to Section 3.1, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Surviving
Corporation and shall be in such form and have such other
provisions as AmerUs may reasonably specify), and (ii)
instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration,
which in the case of both (i) and (ii) shall be
satisfactory in form and substance to AmerUs. On the
Closing Date, AmerUs or Sub shall deposit with the Escrow
Agent pursuant to the terms and conditions of the Escrow
Agreement attached hereto as Exhibit 3.2, in good funds,
the Merger Consideration payable with respect to each
issued and outstanding share of Common Stock and
Preferred Stock which is convertible into the right to
receive Merger Consideration pursuant to Section 3.1.
Upon surrender of a Certificate for cancellation to the
Escrow Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably
be required, and satisfaction of the conditions to
payment set forth in the Escrow Agreement, the holder of
such Certificate shall be paid in exchange therefor the
amount of cash into which the shares of Common Stock and
Preferred Stock theretofore represented by such
Certificate shall have been converted pursuant to Section
3.1, and the Certificate so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of
Common Stock or Preferred Stock which is not registered
in the transfer records of Delta, payment may be made to
a person other than the person in whose name the
Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such
payment shall pay any transfer or other taxes required by
reason of the payment to a person other than the
registered holder of such Certificate or establish to the
satisfaction of the Escrow Agent that such tax has been
paid or is not applicable. Until surrendered as
contemplated by this Section 3.2, each Certificate shall
be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender
the amount of cash, without interest, into which the
shares of Common Stock or Preferred Stock theretofore
represented by such Certificate shall have been converted
pursuant to Section 3.1. No interest will be paid or
will accrue on the cash payable upon the surrender of any
Certificate. Any funds deposited with the Escrow Agent
which remain undistributed to the former holders of the
Certificates representing shares of Common Stock or
Preferred Stock for 180 days after the Effective Time
shall be delivered to the Surviving Corporation, upon
demand, and any former holders of shares of Common Stock
or Preferred Stock who have not theretofore complied with
this Article III shall thereafter look only to the
Surviving Corporation for payment of their claim for any
Merger Consideration, without any interest thereon.
(b) No Further Ownership Rights in Common
Stock and Preferred Stock. All cash paid upon the
surrender of Certificates in accordance with the terms of
this Article III shall be deemed to have been paid in
full satisfaction of all rights pertaining to the shares
of Common Stock and Preferred Stock theretofore
represented by such Certificates, and, from and after the
Effective Time, there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of Common Stock and Preferred
Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation
for any reason, they shall be cancelled and exchanged as
provided in this Article III, except as otherwise
provided by law.
(c) No Liability. None of AmerUs, Sub, Delta,
Delta Insurance or the Paying Agent shall be liable to
any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property,
escheat or similar law.
(d) Maximum Merger Consideration. In no event
shall the aggregate Merger Consideration to be paid in
exchange for all shares of Common Stock, Preferred Stock,
and in respect of the Delta Employee Stock Options,
exceed $162,941,098.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DELTA
Delta hereby represents and warrants to AmerUs
and Sub as follows:
4.1 ORGANIZATION, STANDING AND CORPORATE POWER.
Each Acquired Company is a corporation, partnership or
other legal entity duly organized, validly existing and
in good standing under the laws of the jurisdiction in
which it is organized and has the requisite power and
authority to carry on its business as now being
conducted. Each Acquired Company is duly qualified to do
business and is in good standing in each jurisdiction in
which the nature of its business or the ownership or
leasing of its properties makes such qualification
necessary, other than in such jurisdictions where the
failure to be so qualified (individually or in the
aggregate) would not have a Material Adverse Effect.
Delta has made available to AmerUs complete and correct
copies of its Second Amended and Restated Certificate of
Incorporation and By-laws and, to the extent requested by
AmerUs, the certificates of incorporation and by-laws or
comparable organization documents of the Acquired
Companies, in each case as amended to the date of this
Agreement. Delta is not in violation of any provision of
its Second Amended and Restated Certificate of
Incorporation or By-laws, and no Acquired Company is in
violation of any provisions of its certificate of
incorporation, by-laws or comparable organizational
documents, except to the extent that such violations
would not, individually or in the aggregate, have a
Material Adverse Effect.
4.2 ACQUIRED COMPANIES. Section 4.2 of the
Disclosure Schedule lists each Acquired Company and the
ownership or interest therein of Delta. Except as
disclosed in Section 4.2 of the Disclosure Schedule, all
the outstanding shares of capital stock of each Acquired
Company have been validly issued and are fully paid and
nonassessable and are owned by Delta or by a Subsidiary
of Delta, free and clear of all Liens. Except for the
capital stock of the Acquired Companies and except for
the ownership interests set forth in Section 4.2 of the
Disclosure Schedule, Delta does not own, directly or
indirectly, any capital stock or other ownership
interest, with a fair market value as of the date of this
Agreement greater than $100,000, in any Person.
4.3 CAPITAL STRUCTURE. The authorized capital
stock of Delta (the "Delta Capital Stock") consists of
15,000,000 shares of Common Stock Class A, 1,650,000
shares of Common Stock Class B, 600,000 shares of Series
A Preferred Stock, 700,000 shares of Series B Preferred
Stock, 300,000 shares of Series C Preferred Stock, and
58,718 shares of Series D Preferred Stock. Except as
set forth in Section 4.3 of the Disclosure Schedule, as
of the date of this Agreement and at the Effective Time:
(i) 1,069,850 shares of Common Stock Class A are
outstanding, 720,746 shares of Common Stock Class B are
outstanding, no shares of Series A Preferred Stock are
outstanding, 319,065 shares of Series B Preferred Stock
are outstanding, 205,200 shares of Series C Preferred
Stock are outstanding and 58,718 shares of Series D
Preferred Stock are outstanding, all of which were
validly issued, fully paid and nonassessable, and no
shares of any other series of Delta Capital Stock were
outstanding; (ii) 0 shares of Common Stock are held by
Delta in its treasury; and (iii) 471,098 shares of Common
Stock Class A are issuable upon the exercise of
outstanding Delta Employee Stock Options. Except as set
forth on Section 4.3 of the Disclosure Schedule, no
shares of capital stock or other voting securities of
Delta (other than as set forth in the preceding sentence)
are issued, reserved for issuance or outstanding.
Section 4.3 of the Disclosure Schedule sets forth a true,
complete and accurate list of all outstanding,
unexercised Delta Employee Stock Options and SARs, and
the respective exercise prices and grant prices therefor.
Except as set forth above, there are not any bonds,
debentures, notes or other indebtedness of Delta having
the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters
on which stockholders of Delta must vote. Except as set
forth above and except as set forth in Section 4.3 of the
Disclosure Schedule, there are not any options, warrants,
calls, rights, commitments, agreements, arrangements or
undertakings of any kind (collectively, "Options") to
which any Acquired Company is a party or by which any of
them is bound relating to the issued or unissued capital
stock of any Acquired Company, or obligating any Acquired
Company to issue, transfer, grant or sell any shares of
capital stock or other equity interests in, or securities
convertible or exchangeable for any capital stock or
other equity interests in, any Acquired Company or
obligating any Acquired Company to issue, grant, extend
or enter into any such Options. All shares of Delta
Capital Stock that are subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in
the instrument pursuant to which they are issuable, will
be duly authorized, validly issued, fully paid and
nonassessable. Except as set forth in Section 4.3 of the
Disclosure Schedule, as of the date of this Agreement,
there are not any outstanding contractual obligations of
any Acquired Company to repurchase, redeem or otherwise
acquire any shares of capital stock of any Acquired
Company, or make any investment in excess of $100,000 (in
the form of a loan, capital contribution or otherwise)
in, any Acquired Company or any other person.
4.4 AUTHORITY. (a) Delta has all requisite
corporate power and authority to enter into this
Agreement and, except as otherwise indicated herein,
subject to the approval of its stockholders, to
consummate the transactions contemplated by this
Agreement. The Board of Directors of Delta has
unanimously approved this Agreement and the transactions
contemplated by this Agreement, has determined that this
Agreement and the transactions contemplated hereby
(including, without limitation, the Merger) are fair to
and in the best interests of the stockholders of Delta,
and has resolved to recommend to the stockholders that
they approve this Agreement and the transactions
contemplated hereby. The execution and delivery of this
Agreement by Delta and the consummation by Delta of the
transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the
part of Delta, subject to stockholder approval and
compliance with the Stockholders' Agreement (as defined
in Section 4.25(b) hereof), if and to the extent that
such Stockholders' Agreement contains provisions that are
determined to be applicable to the Merger. This
Agreement has been duly executed and delivered by Delta
and, assuming the due authorization, execution and
delivery by each of AmerUs and Sub, constitutes a valid
and binding obligation of Delta, enforceable against
Delta in accordance with its terms.
(b) The Board of Directors of Delta has duly
approved the transactions contemplated by this Agreement
for purposes of Section 203 of the DGCL such that the
provisions of Section 203 of the DGCL will not apply to
the transactions contemplated by this Agreement.
4.5 NO SUBSIDIARIES. Except for the
subsidiaries disclosed in Section 4.5 of the Disclosure
Schedule, each Acquired Company has no subsidiaries and
does not control (whether directly or indirectly, whether
through the ownership of securities or by Contract or
proxy or otherwise, and whether alone or in combination
with others) any corporation, partnership, business
organization, or other similar Person. For purposes of
this Section, "control" shall mean the right to elect a
majority of the Board of Directors or other governing
body of any such entity or Person or otherwise manage,
direct or govern the business operations of such entity
or Person.
4.6 NO CONFLICTS OR VIOLATIONS. Subject to the
items set forth in Section 4.6 of the Disclosure Schedule
the execution and delivery of this Agreement by Delta
does not, and the performance by Delta of its obligations
under this Agreement will not:
(a) violate any term or provision of any Law
or any writ, judgment, decree, injunction, or
similar order applicable to any Acquired Company;
(b) conflict with or result in a violation or
breach of, or constitute (with or without notice or
lapse of time or both) a default under, any of the
terms, conditions or provisions of the articles or
certificate of incorporation or by-laws of Delta;
(c) result in the creation or imposition of
any Lien upon any Acquired Company or any of their
respective Assets and Properties that individually
or in the aggregate with any other Liens has or
would reasonably be expected to have a Material
Adverse Effect on any Acquired Company;
(d) conflict with or result in a violation or
breach of, or constitute (with or without notice or
lapse of time or both) a default under, or give to
any Person any right of termination, cancellation,
acceleration, or modification in or with respect to,
any Contract to which any Acquired Company is a
party or by which any of their respective Assets or
Properties may be bound and as to which any such
conflicts, violations, breaches, defaults, or rights
individually or in the aggregate have or would
reasonably be expected to have a Material Adverse
Effect on any Acquired Company; or
(e) require any Acquired Company to obtain any
consent, approval, or action of, or make any filing
with or give any notice to, any Person (including
pursuant to any Laws) except those which the failure
to obtain, make, or give individually or in the
aggregate with any other such failures would not
have a Material Adverse Effect on any Acquired
Company. Section 4.6(e) of the Disclosure Schedule
contains a true, accurate and complete list of all
consents, approvals, actions, filings and notices
required in connection with the execution, delivery
and performance of this Agreement by Delta under any
Laws.
4.7 BOOKS AND RECORDS. The minute books and
other similar records of each Acquired Company contain a
record, which is true and complete in all material
respects, of all formal action taken at all meetings and
by all written consents in lieu of meetings of
stockholders, Boards of Directors, and each committee
thereof, with respect to each Acquired Company. The
Books and Records of each Acquired Company accurately
reflect in all material respects the business and
financial condition of Delta and each such Acquired
Company, and have been maintained in all material
respects in accordance with good business and bookkeeping
practices.
4.8 FINANCIAL STATEMENTS. Delta has previously
delivered to the Acquiror, or will have delivered to the
Acquiror upon completion, true and complete copies of the
following financial statements (the "Financial
Statements"):
(a) audited (i) annual GAAP Statements for
Delta and (ii) Annual Statements for Delta
Insurance, for each of the years ended December 31,
1992, 1993, 1994, 1995, and 1996, including all the
notes relating thereto; and
(b) unaudited Quarterly Statements for Delta
and Delta Insurance, for each of the first three
quarters of each of 1995 and 1996, and the first
quarter of 1997, including all the notes relating
thereto.
Each such Financial Statement (and the notes
relating thereto), and each quarterly GAAP Statement and
Quarterly Statement delivered by Delta pursuant to
Section 6.6, including without limitation each balance
sheet and each of the statements of operations, capital
and surplus account, and cash flow contained therein, is
accurate, was prepared in accordance with SAP ("SAP
Statements") or GAAP ("GAAP Statements"), as the case may
be, is true and complete and presents fairly in all
material respects the financial condition and results of
operations and cash flows of Delta and its consolidated
subsidiaries or Delta Insurance, as the case may be, as
of the respective dates thereof or for the respective
periods presented therein, subject, in the case of
quarterly statements, to normal year-end adjustments.
Each SAP Statement complied in all material respects with
all applicable Laws when filed with the applicable
insurance regulatory authority, and any deficiencies
known to Delta or Delta Insurance with respect to any
such SAP Statement have been cured or corrected to the
satisfaction of such insurance regulatory authority.
4.9 RESERVES.
(a) Except as set forth in Section 4.9 of the
Disclosure Schedule, all reserves and other
liabilities with respect to insurance and annuities
and for claims and benefits incurred but not
reported ("Reserve Liabilities") as established or
reflected in the SAP Statements of Delta Insurance
were determined in accordance with generally
accepted actuarial standards consistently applied,
are fairly stated in accordance with sound actuarial
principles, are based on actuarial assumptions that
are in accordance with those called for by the
provisions of the related insurance and annuity
Contracts and in the related reinsurance,
coinsurance and other similar Contracts of Delta
Insurance, and meet in all material respects the
requirements of the insurance Laws of its state of
domicile. Adequate provision for all such Reserve
Liabilities have been made (under generally accepted
actuarial principles consistently applied) to cover
the total amount of all reasonably anticipated
matured and unmatured benefits, dividends, claims
and other liabilities of Delta Insurance under all
insurance and annuity Contracts under which Delta
Insurance has any liability (including without
limitation any liability arising under or as a
result of any reinsurance, coinsurance or other
similar Contract) on the respective dates of such
SAP Statement based on then current information
regarding interest earnings, mortality and morbidity
experience, persistency and expenses. Delta
Insurance owns assets that qualify as legal reserve
assets under applicable insurance Laws in an amount
at least equal to all such Reserve Liabilities; and
(b) Except as set forth in Section 4.9 of the
Disclosure Schedule, adequate provision has been
made for all estimated losses, settlements, costs
and expenses from pending suits, actions and
proceedings included in the December 31, 1996 Annual
Statement and the latest Quarterly Statement, and
the reserves and accrued Liabilities relating
thereto were determined in accordance with SAP.
4.10 ABSENCE OF CHANGES. Except as disclosed
in Section 4.10 of the Disclosure Schedule, since
December 31, 1996: (i) there has not been, occurred, or
arisen any change in, or any event (including without
limitation any damage, destruction, or loss whether or
not covered by insurance), condition, or state of facts
of any character that individually or in the aggregate
has or would reasonably be expected to have a Material
Adverse Effect on any Acquired Company, (ii) each
Acquired Company has operated only in the ordinary course
of business and consistent with past practice, and (iii)
(without limiting the generality of the foregoing) there
has not been, occurred or arisen:
(a) any declaration, setting aside, or payment
of any dividend or other distribution in respect of
the capital stock of any Acquired Company or any
direct or indirect redemption, purchase or other
acquisition by any Acquired Company of any such
stock or of any interest in or right to acquire any
such stock;
(b) any employment, deferred compensation, or
other salary, wage or compensation Contract entered
into between any Acquired Company and any Delta
Employee, except for normal and customary Contracts
with agents and consultants in the ordinary course
of business and consistent with past practice; or
any increase in the salary, wages, or other
compensation of any kind, whether current or
deferred, of any Delta Employee, other than routine
increases that were made in the ordinary course of
business and consistent with past practice and that
did not result in an increase of more than 10% of
the respective salary, wages or compensation of any
such Person, except for increases which relate to
increases in production by agents consistent with
the terms of their existing Contracts; or any
creation of any Benefit Plan or any contribution to
(other than a contribution made in the ordinary
course of business and consistent with past
practice) or amendment or modification of any
Benefit Plan; or any election by or on behalf of any
Acquired Company made pursuant to the provisions of
any Benefit Plan to accelerate any payments,
obligations or vesting schedules under any Benefit
Plans;
(c) any issuance, sale or disposition by any
Acquired Company of any debenture, note, stock or
other security issued by such Acquired Company, or
any modification or amendment of any right of the
holder of any outstanding debenture, note, stock or
other security issued by such Acquired Company;
(d) any Lien created on or in any of the
Assets and Properties of any Acquired Company or
assumed by any Acquired Company with respect to any
of such Assets and Properties which Lien related to
Liabilities individually or in the aggregate
exceeding $100,000;
(e) any prepayment of any Liabilities (other
than pursuant to any insurance or annuity Contract)
individually or in the aggregate exceeding $10,000;
(f) any Liability involving the borrowing of
money by any Acquired Company, except in the
ordinary course of business and consistent with past
practice;
(g) any damage, destruction or loss (whether
or not covered by insurance), but not including
unrealized losses on investment securities,
affecting any of the Assets and Properties of any
Acquired Company which damage, destruction or loss
individually exceeds $100,000;
(h) any work stoppage, strike, labor
difficulty or union organizational campaign (in
process or, to the Knowledge of Delta, threatened)
materially affecting any Acquired Company;
(i) any material change in any crediting,
underwriting, actuarial, dividend, investment,
financial reporting, marketing or accounting
practice or policy followed by any Acquired Company,
or in any assumption underlying such a practice or
policy, or in any method of calculating any bad
debt, contingency, or other reserve for financial
reporting or any other accounting purposes;
(j) any payment, discharge, or satisfaction by
an Acquired Company of any Lien or Liability other
than Liens or Liabilities that (i) were paid,
discharged, or satisfied since December 31, 1996 in
the ordinary course of business and consistent with
past practice, or (ii) were paid, discharged, or
satisfied as required under this Agreement;
(k) except for fair value received, in the
ordinary course of business and consistent with past
practice, any cancellation of any Liability owed to
any Acquired Company by any other Person;
(l) any sale, transfer, or conveyance of any
investments, or any other Assets and Properties
except in the ordinary course of business and
consistent with past practice;
(m) any amendment, termination, waiver,
disposal or lapse of, or other failure to preserve,
or regulatory agreement with respect to, any
license, permit or other form of authorization of
any Acquired Company the result of which
individually or in the aggregate has or would
reasonably be expected to have a Material Adverse
Effect on such Acquired Company;
(n) any transaction or arrangement under which
any Acquired Company guaranteed, paid, lent or
advanced any amount to or in respect of, or sold,
transferred, pledged or leased any of its Assets and
Properties or any services to, (i) any Delta
Affiliate (except for payments of salaries and wages
to officers of the Acquired Companies in the
ordinary course of business and consistent with past
practice) or (ii) any business or other Person in
which an Acquired Company or any Delta Affiliate has
any material interest except for advances made to,
or reimbursements of, officers and directors of
Acquired Companies for travel and other business
expenses in reasonable amounts in the ordinary
course of business and consistent with past
practice;
(o) except for actions taken with respect to
insurance policies and annuities in force, in the
ordinary course of business and consistent with past
practice, any material amendment of or any failure
to perform all of its obligations under, or any
default under, or any waiver of any right under, or
any termination (other than on the stated expiration
date) of, any Contract that involves or reasonably
would involve the annual expenditure or receipt by
any Acquired Company of more than $10,000;
(p) any decrease of more than 3% in the amount
of, or any material change in the nature of, the
insurance and annuities in force of Delta Insurance
or any material change in the amount or nature of
the Reserve Liabilities of Delta Insurance;
(q) any amendment to the articles or
certification of incorporation or by-laws of any
Acquired Company;
(r) any agreement for the sale, merger or
transfer of any Acquired Company;
(s) any termination, amendment or entering
into by Delta Insurance as ceding or assuming
insurer of any reinsurance, coinsurance or other
similar Contract or any trust agreement or security
agreement related thereto;
(t) any expenditure or commitment for
additions to property, plant, equipment or other
tangible or intangible capital assets of any
Acquired Company, in excess of the budgeted amounts
set forth in Section 4.10(t) of the Disclosure
Schedule, which expenditures or commitments do not
exceed $100,000 in the aggregate;
(u) any amendment or introduction by Delta
Insurance of any insurance or annuity Contract other
than in the ordinary course of business consistent
with past practices;
(v) any restriction or limitation in any
license or other authorization or business or
operations of any Acquired Company, including Delta
Insurance; or
(w) any Contract to take any of the actions
described in this Section 4.10 other than actions
expressly permitted under this Section 4.10.
4.11 NO UNDISCLOSED LIABILITIES. Except to the
extent reflected in the balance sheet included in the
December 31, 1996 annual GAAP Statement (and the notes
relating thereto), or except as disclosed in Section 4.11
of the Disclosure Schedule, there were no Liabilities
(other than policyholder benefits payable in the ordinary
course of business and consistent with past practice)
against, relating to, or affecting any Acquired Company
as of December 31, 1996 exceeding $100,000 in the
aggregate.
4.12 TAXES. Except as disclosed in Section
4.12 of the Disclosure Schedule (with paragraph
references corresponding to those set forth below):
(a) All Tax Returns required to be filed with
respect to each Acquired Company or the affiliated,
combined or unitary group of which any such company
is or was a member have been duly and timely filed,
and all such Tax Returns are true, correct and
complete in all material respects. Each Acquired
Company (i) has duly and timely paid all Taxes and
other charges that are due on such Tax Returns, or
claimed or asserted by any taxing authority to be
due, from such company for the periods covered by
such Tax Returns and have made all required
estimated payments of Taxes sufficient to avoid any
penalties for underpayment unless such Taxes are
being contested in good faith and adequate reserves
therefor have been established on the Acquired
Companies' books and records, or (ii) has duly
provided for all such Taxes in the applicable
financial statements, and in the SAP and GAAP
Statements, in the case of Delta Insurance. There
are no Liens with respect to Taxes (except for Liens
with respect to real property Taxes not yet due)
upon any of the Assets and Properties of any such
company.
(b) With respect to any period or portion
thereof through the Closing for which Tax Returns
have not yet been filed, or for which Taxes are not
yet due or owing, each Acquired Company has
established due and sufficient reserves for the
payment of such Taxes in accordance with SAP and
GAAP in the case of Delta Insurance or otherwise in
accordance with GAAP, and such current reserves
through the Closing are duly and fully provided for
in all material respects in the SAP and GAAP
Statements of such company for the period then
ended.
(c) The United States federal income Tax
Returns of each Acquired Company and of each
affiliated group (within the meaning of the Code) of
which any Acquired Company is or has been a member
have been audited or examined by the IRS, or the
statute of limitations for all periods through the
respective years specified in Section 4.12(c) of the
Disclosure Schedule has expired. The state, local
and foreign income Tax Returns of each Acquired
Company and of each affiliated or consolidated group
of which they are or have been members have been
audited or examined, or all statutes of limitation
for all applicable state, local and foreign taxable
periods through the respective years specified in
Section 4.12(c) of the Disclosure Statement have
expired. All deficiencies which have been asserted,
proposed or assessed as a result of the above
referenced examinations have been paid in full or
finally settled or adequately reserved against to
the extent there is a reasonable possibility that
the position of any of the above referenced taxing
authorities will be sustained, and to the Knowledge
of Delta, no issue has been raised by any taxing
authority in any such examination which, by
application of the same or similar principles,
reasonably could be expected to result in a material
proposed deficiency for any other period not so
examined. To the Knowledge of Delta, no state of
facts exists or has existed which would constitute
grounds for the assessment of any material Tax
liability with respect to any Acquired Company for
the periods which have not been audited by the above
referenced taxing authorities. There are no
outstanding agreements, waivers or arrangements
extending the statutory period of limitation
applicable to any Tax Return or claim for, or the
period for the collection or assessment of, Taxes
due from any company for any taxable period. Delta
has previously delivered or made available to the
Acquiror true, correct and complete copies of each
of (i) the most recent audit reports relating to the
United States federal, state, local and foreign
income taxes due from each Acquired Company and (ii)
the United States federal, state, local and foreign
income Tax Returns, for each of the last three
taxable years, filed by each Acquired Company, and
Delta has made available to Acquiror for inspection
true, correct and complete copies of such Tax
Returns, (insofar as such Tax Returns relate to any
Acquired Company) filed by any affiliated or
consolidated group of which any Acquired Company was
then a member.
(d) No audit or other proceeding by any U.S.
or foreign court, governmental or regulatory
authority, or similar Person is pending or
threatened with respect to any Taxes due from any
Acquired Company or any Tax Return filed or required
to be filed by or relating to any Acquired Company.
No assessment or deficiency for any Tax is proposed
or, based on existing facts and circumstances, is
threatened against any Acquired Company or any
Assets and Properties of any Acquired Company.
(e) No election under any of Section 108, 168,
338, 441, 463, 472, 1017, 1033 or 4977 of the Code
(or any predecessor provisions) has been made or
filed by or with respect to any Acquired Company or
any of their Assets and Properties. No consent to
the application of Section 341(f)(2) of the Code (or
any predecessor provision) has been made or filed by
or with respect to any Acquired Company or any of
their Assets and Properties. None of the Assets and
Properties of any Acquired Company is an asset or
property that the Acquiror or any of its Affiliates
is or will be required to treat as being (i) owned
by any other Person pursuant to the provisions of
Section 168(f)(8) of the Internal Revenue Code of
1954, as amended and in effect immediately before
the enactment of the Tax Reform Act of 1986 or (ii)
tax-exempt use property within the meaning of
Section 168(h)(1) of the Code. No election has been
made under Section 815(d)(1) of the Internal Revenue
Code of 1954, as amended and in effect immediately
before the enactment of the Deficit Reduction Act of
1984. No closing agreement pursuant to Section 7121
of the Code (or any predecessor provision) or any
similar provision of any state, local or foreign Law
has been entered into by or with respect to any
Acquired Company or any of their Assets and
Properties.
(f) No Acquired Company has agreed to or is
required to make any material adjustment pursuant to
Section 481(a) or 807(f)(1) of the Code (or any
predecessor provision) by reason of any change in
any accounting method or change in basis for
determining the reserves of such company or
otherwise, and no Acquired Company has any
application pending with any taxing authority
requesting permission for any changes in any
accounting method or in the basis for determining
reserves of any of them. The IRS has not proposed
any such adjustment or change in accounting method
or in the basis of determining reserves of any of
them.
(g) No Acquired Company has been or is in
material violation (or with notice or lapse of time
or both, would be in violation) of any applicable
Law relating to the payment or withholding of Taxes
(including, without limitation, withholding of Taxes
pursuant to Sections 1441 and 1442 of the Code or
similar provisions under any foreign laws). Each
Acquired Company has duly and timely withheld in all
material respects from employee salaries, wages and
other compensation and paid over to the appropriate
taxing authorities all amounts required to be so
withheld and paid over for all periods under all
applicable Laws.
(h) Except as disclosed in Section 4.12(h) of
the Disclosure Schedule, no Acquired Company is a
party to, is bound by, or has any obligation under,
any tax sharing agreement or arrangement of any
kind, whether written or verbal or similar Contract.
Delta is not a foreign person within the meaning of
Section 1445(f)(3) of the Code.
(i) No Acquired Company has made any direct,
indirect or deemed distributions that have been or
to the Knowledge of Delta, could be taxed under
Section 815 of the Code.
(j) All ceding commission expenses paid or
accrued by Delta Insurance in connection with any
reinsurance arrangement or Contract or transaction
have been capitalized and amortized over the life or
lives of such reinsurance arrangement or Contract in
accordance with the decision of the United States
Supreme Court in Colonial American Life Insurance
Company v. Commissioner of Internal Revenue, 109
S.Ct. 240 (1989) or, in the case of any such expense
incurred on or after September 30, 1990, in
accordance with Sections 848 and 197 of the Code.
(k) No material Liabilities have been proposed
in connection with any audit or other proceeding by
any U.S. or foreign court, governmental or
regulatory authority, or similar person with respect
to any Taxes due from any Acquired Company or Tax
Return filed by or relating to any Acquired Company.
(l) Each reserve item with respect to each
Acquired Company set forth in its respective 1996
Federal income tax return was determined in all
material respects in accordance with Section 807 of
the Code or other applicable Code Sections, and has
been consistently applied with respect to the filing
of the Federal income tax returns for all years
through December 31, 1995 for which the statute of
limitations has not expired, and will be
consistently applied for any Tax Return filed on or
prior to the Closing Date.
(m) As of December 31, 1996, no Acquired
Company had and during the period from December 31,
1996 through the Closing Date will have, any Tax
liability in respect of Taxes to any stockholder of
Delta or any of such stockholder's Affiliates that
resulted or will result from a transaction with an
Affiliate prior to the Closing Date that would
require payment after December 31, 1996.
(n) No Acquired Company will make an election
to reattribute losses of such Acquired Company as
provided by Section 1.1502-20(g) of the Regulations
to the Code.
(o) Delta Insurance satisfies the definition
of life insurance company under section 816 of the
Code.
(p) Except as disclosed in Section 4.12(p) of
the Disclosure Schedule, none of the Acquired
Companies has entered into any compensatory
agreements (whether written or oral) with respect to
the performance of services for which payment
thereunder would result in a nondeductible expense
to such Company pursuant to section 162(m) or 280G
of the Code.
(q) All material elections with respect to
Federal income Taxes affecting the Acquired
Companies are set forth in Section 4.12(q) of the
Disclosure Schedule.
(r) Except as set forth in Section 4.12(r) of
the Disclosure Schedule, there is no power of
attorney given by or binding upon any of the
Acquired Companies with respect to Taxes for any
period for which the statute of limitations
(including any waivers or extensions) has not yet
expired.
(s) There are no outstanding balances of
deferred gain or loss accounts related to any
deferred intercompany transactions to which any of
the Acquired Companies was a party.
(t) None of the Acquired Companies is a party
to or otherwise subject to any arrangement entered
into in anticipation of the Closing, not in
accordance with past practice and not required by
this Agreement, (i) having the effect of or giving
rise to the recognition of a deduction or loss
before the Closing Date, and a corresponding
recognition of taxable income or gain after the
Closing Date, or (ii) that would reasonably be
expected to have the effect of or give rise to the
recognition of taxable income or gain by any
Acquired Company after the Closing Date without the
receipt of or entitlement to a corresponding amount
of cash.
(u) Section 4.12(u) of the Disclosure Schedule
sets forth the amount of any existing policyholders
surplus account and shareholders surplus account
with respect to the Acquired Companies within the
meaning of Section 815 of the Code.
(v) Except for federal income Tax Returns, the
Acquired Companies do not file or join in filing any
consolidated, unitary, combined or similar Tax
Returns with any corporation other than the Acquired
Companies.
(w) None of the Acquired Companies has
requested any extension of time within which to file
any Return, which Return has not since been filed.
(x) Delta has filed, as a common parent
corporation of an "affiliate group" (within the
meaning of Section 1504(a) of the Code) a
consolidated return for federal income tax purposes
on behalf of itself and each other Acquired
Corporation which is an "includible corporation"
(within the meaning of Section 1504(b) of the Code).
(y) Delta is not and has not been a United
States real property holding company (as defined in
Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1)(ii) of the
Code.
(z) All transactions which could give rise to
an understatement of federal income tax (within the
meaning of Section 6661 of the Code) were adequately
disclosed (or, with respect to Tax Returns filed
before the Closing will be adequately disclosed) on
the Tax Returns required in accordance with Section
6661(b)(2)(B) of the Code.
4.13 LITIGATION. Except as disclosed in
Section 4.13 of the Disclosure Schedule (with paragraph
references corresponding to those set forth below):
(a) There are no actions, suits,
investigations or proceedings pending, or, to the
Knowledge of Delta, threatened, against any Acquired
Company or its Assets and Properties, at law or in
equity, in, before, or by any Person that
individually or in the aggregate have or would
reasonably be expected to have a Material Adverse
Effect on any Acquired Company.
(b) There are no actions, suits,
investigations or proceedings pending or, to the
Knowledge of Delta, threatened, and no event, fact
or circumstance has arisen or occurred (other than
claims for benefits under insurance policies and
annuities in force) that may reasonably be expected
to result in the commencement of any action, suit,
proceeding or investigation, against any Acquired
Company or any of its Assets and Properties, at law
or in equity, in, before, or by any Person that
individually involves a claim or claims for any
injunction or similar relief or for damages
exceeding $50,000 or an unspecified amount of
damages, or that individually or in the aggregate
have or would reasonably be expected to have a
Material Adverse Effect on such Acquired Company.
(c) There are no writs, judgments, decrees or
similar orders of any Person outstanding against any
Acquired Company that individually exceed $25,000 or
that individually or in the aggregate have or would
reasonably be expected to have a Material Adverse
Effect on such Acquired Company and there are no
injunctions or similar orders of any Person
outstanding against any Acquired Company.
4.14 COMPLIANCE WITH LAWS. No Acquired Company
has been or is in violation (or with or without notice or
lapse of time or both, would be in violation) of any term
or provision of any Law or any writ, judgment, decree,
injunction or similar order applicable to any Acquired
Company or any of its Assets and Properties, except for
violations (i) which have been cured, (ii) which have
been resolved or settled through agreements with
applicable governmental authorities or which are barred
by an applicable statute of limitations, (iii) which have
not had, and are not reasonably likely to have, a
Material Adverse Effect on such Acquired Company, or (iv)
that have been previously disclosed to counsel for
Acquiror. Without limiting the generality of the
foregoing, except as disclosed in Section 4.14 of the
Disclosure Schedule or as previously disclosed to counsel
for Acquiror:
(a) Since January 1, 1990, each Acquired
Company has duly and validly filed or caused to be
so filed all material reports, statements,
documents, registrations, filings or submissions
that were required by Law to be filed with any
Person; all such filings complied with applicable
Laws in all material respects when filed, and no
material deficiencies have been asserted by any
Person with respect to any such filings.
(b) Delta has previously delivered to the
Acquiror the reports reflecting the results of the
two most recent market conduct and financial
examinations of Delta Insurance issued by any
insurance regulatory authority and all material
deficiencies or violations in such reports have been
resolved to the satisfaction of all applicable
insurance regulatory authorities.
(c) All outstanding insurance and annuity
Contracts issued, reinsured or underwritten by Delta
Insurance are, to the extent required under
applicable Laws, on forms approved by the insurance
regulatory authority of the jurisdiction where
issued or have been filed with and not objected to
by such authority within the period provided for
objection, and have been filed or registered as
required with all other applicable governmental
authorities.
(d) All insurance or annuity Contract benefits
payable by Delta Insurance and (to the Knowledge of
Delta) by any other Person that is a party to or
bound by any reinsurance, coinsurance, or other
similar Contract with Delta have in all material
respects been paid in accordance with the terms of
the insurance, annuity, and other Contracts under
which they arose.
(e) All insurance or annuity Contracts issued
or underwritten by Delta Insurance have been
marketed and sold in compliance with all applicable
Laws.
(f) No outstanding insurance or annuity
Contract issued, reinsured, or underwritten by Delta
Insurance entitles the holder thereof or any other
Person to receive dividends, distributions, or other
benefits based on the revenues or earnings of Delta
Insurance or any other Person.
(g) The underwriting standards utilized and
ratings applied by Delta Insurance and (to the
Knowledge of Delta) by any other Person that is a
party to or bound by any reinsurance, coinsurance,
or other similar Contract with Delta Insurance
conform in all material respects to industry
accepted practices and to the standards and ratings
required pursuant to the terms of the respective
reinsurance, coinsurance, or other similar Contracts
and by applicable Law.
(h) Neither Delta nor Delta Insurance has
received any information which would cause it to
believe that the financial condition of any other
party to any reinsurance, coinsurance, or other
similar Contracts with Delta Insurance is so
impaired as to result in a default thereunder.
(i) Each insurance agent, at the time such
agent wrote, sold, or produced business for Delta
Insurance at any time since December 31, 1990, was
duly licensed as an insurance agent (for the type of
business written, sold, or produced by such
insurance agent) in the particular jurisdiction in
which such agent wrote, sold, or produced such
business and no such insurance agent violated (or
with or without notice or lapse of time or both,
would have violated) any term or provision of any
Law or any writ, judgment, decree, injunction, or
similar order applicable to the writing, sale, or
production of business for Delta Insurance, except
for violations which have been cured, which have
been resolved or settled through agreements with
applicable governmental authorities or which are
barred by an applicable statute of limitations or
have not had, or are not reasonably likely to have,
a Material Adverse Effect on Delta Insurance.
(j) The tax treatment under the Code of all
insurance annuity or investment policies, plans, or
contracts; all financial products, employee benefit
plans, individual retirement accounts or annuities;
or any similar or related policy, contract, plan, or
product, whether individual, group, or otherwise,
issued or sold by Delta Insurance is and at all
times has been in all material respects the same or
more favorable to the purchaser, policyholder or
intended beneficiaries thereof as the tax treatment
under the Code for which such contracts qualified or
purported to qualify at the time of its issuance or
purchase, except for changes resulting from changes
to the Code effective after the date of such
issuance or purchase. For purposes of this Section
4.14(j), the provisions of the Code relating to the
tax treatment of such contracts shall include, but
not be limited to, Sections 72, 79, 101, 104, 105,
106, 125, 130, 401, 402, 403, 404, 408, 412, 415,
419, 419A, 457, 501, 505, 817, 818, 7702, and 7702A
of the Code, to the extent applicable.
(k) No regional director of Delta Insurance
produced in 1996 more than 5% of the premiums
written by Delta Insurance.
(l) No individual agent of Delta Insurance
produced in 1996 more than 1% of the premiums
written by Delta Insurance; and no individual
policyholder or contractholder represented in 1996
more than 1% of the premiums written by Delta
Insurance.
(m) All advertising and marketing materials
used with respect to the sales and marketing of
insurance and annuity Contracts issued by Delta
Insurance are in conformity in all material respects
with applicable Law.
(n) (i) Section 4.14 of the Disclosure
Schedule contains a true and complete list of
(I) each master or prototype (as well as any
individually designed) pension, profit sharing,
defined benefit, Code Section 401(k), and other
retirement or employee benefit plan or Contract
(including, but not limited to, simplified
employee pension plans, Code Section 403(a),
(b) and (c) annuities, Xxxxx plans, and
individual retirement accounts and annuities)
offered or sold by any Acquired Company to, or
maintained or sponsored for the benefit of any
employees of, any other Person, and (II) each
determination letter or opinion letter relating
to the creation or amendment of any such plan
or Contract. Each such plan or Contract in all
material respects conforms with, and has been
offered, sold, maintained and sponsored in
accordance with, all applicable Laws. Except
as set forth in Section 4.14(n) of the
Disclosure Schedule, no Acquired Company is a
fiduciary within the meaning of ERISA with
respect to any plan or Contract referenced in
this Section 4.14.
(ii) Each plan or Contract referenced in
Section 4.14(n)(i) has been timely amended to
comply with any amendment to the Code, ERISA or
other applicable Law or regulation, or in such
cases where the adoption of formal amendments
is not yet required, such plan or Contract has
been duly operated in compliance with any
applicable change in the Code, ERISA or other
applicable Law or regulations.
(iii) No Acquired Company has engaged in any
prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the
Code with respect to any plan or Contract
referenced in Section 4.14(n)(i).
(iv) To the Knowledge of Delta and except as
disclosed in Section 4.14(n) of the Disclosure
Schedule, no Person to whom any Acquired
Company has offered or sold any plan or
Contract referenced in Section 4.14(n)(i) is
under examination or investigation by the
Internal Revenue Service, the U.S. Department
of Labor or any other governmental agency with
respect to such plan or Contract or with
respect to the Tax liabilities of such Person
or such Person's current or former employees
with respect to such plan or Contract.
(v) No Acquired Company provides administrative
or other contractual services for any plan or
Contract referenced in Section 4.14(n)(1),
including, but not limited to, any third party
administrative services for an Employee Welfare
Benefit Plan.
(vi) To the extent that any Acquired Company
maintains any collective or commingled funds or
accounts which restrict the Persons who may
invest therein to tax-exempt entities or
qualified plans, each such fund or account (of
which a true and complete list and description
is disclosed in Section 4.14 of the Disclosure
Schedule) has been established, maintained and
operated in accordance with all applicable
Laws, has maintained its tax-exempt status and
has no Persons investing within it other than
Persons permitted under Section 401(a)(24) of
the Code.
(vii) In addition to the representations and
warranties contained in Section 4.14 hereof,
there are no claims pending, or (to the
Knowledge of Delta) threatened against any
Acquired Company or any of their respective
Assets or Properties, under any fiduciary
liability insurance policy issued by or to any
of them that individually or in the aggregate
has or would reasonably be expected to have a
Material Adverse Effect on any Acquired
Company.
(o) No Real Estate has been used for the
storage, treatment, generation, transportation,
manufacture, processing, handling, production,
distribution, deposit, burial, use, or disposal of
any Hazardous Substance except in compliance with
Environmental Laws. No Acquired Company has any
liability arising out of or resulting from a Release
of any Hazardous Substance on or from any Real
Estate. Each Acquired Company has complied in all
material respects with all applicable Environmental
Laws relating to Real Estate and the business,
activities and processing respectively conducted
thereon.
4.15 BENEFIT PLANS, ERISA. Each "employee
benefit plan" (as defined in Section 3 (3) of ERISA),
bonus, deferred compensation, stock option, stock
purchase or other equity compensation plan, program or
arrangement, each employment, termination or severance
agreement or plan, incentive compensation or other
agreement whether written or oral relating to employment
or fringe benefits for employees, former employees,
officers or directors of Delta or any of its
Subsidiaries, maintained or contributed to by Delta of
any of its Subsidiaries at any time during the 7-calendar
year period immediately preceding the Closing Date
(collectively, the "Plans") is listed at Section 4.15 of
the Disclosure Schedule, attached hereto, and except as
disclosed at Section 4.15 of the Disclosure Schedule, is
in material compliance with applicable Law and has been
administered and operated in all material respects in
accordance with such applicable Law and the terms of the
Plan. No Plan is or has been covered by Section 302 or
Title IV of ERISA or is or has been subject to the
minimum funding requirements of Section 412 of the Code.
Each Plan which is intended to be "qualified" within the
meaning of Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue
Service and no event has occurred and no condition exists
which could reasonably be expected to result in the
revocation of any such determination. All trusts
maintained under the Plans are exempt from taxation under
Section 501(a) of the Code. Full payment has been made
of all amounts which Delta or any of its Subsidiaries
were required under the terms of the Plans to have paid
as contributions to such Plans on or prior to the date
hereof (excluding any amounts not yet due). Neither
Delta nor any of its Subsidiaries nor any other
"disqualified person" or "party in interest" (as defined
in Section 4975(e)(2) of the Code and Section 3 (14) of
ERISA, respectively) has engaged in any transaction in
connection with any Plan that could reasonably be
expected to result in the imposition of a penalty
pursuant to Section 409 of ERISA or a Tax pursuant to
Section 4975(a) of the Code. No Plan provides medical,
surgical, hospitalization, death or similar benefits
(whether or not insured) for employees or former
employees of the Acquired Companies or any Subsidiary for
periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated
by applicable Law, (ii) death benefits under any "pension
plan," or (iii) benefits the full cost of which is borne
by the current or former employee (or his beneficiary).
Each Plan subject to the requirements of Section 601 or
ERISA has been operated in compliance therewith. Except
as listed at Section 4.15 of the Disclosure Schedule, no
individual shall accrue or receive additional benefits,
services or accelerated rights to payment of benefits as
a direct result of the transactions contemplated by this
Agreement. No material liability, claim, investigation,
audit, action or litigation has been incurred, made,
commenced or, to the Knowledge of Delta, is threatened or
anticipated, by or against Delta or any of its
Subsidiaries with respect to any Plan (other than for
benefits payable in the ordinary course). No plan or
related trust owns any securities in violation of Section
407 of ERISA. No material liability has been, or could
reasonably be expected to be, incurred under Title IV of
ERISA (other than for benefits payable in the ordinary
course of PBGC insurance premiums) or Section 412(f) or
(n) of the Code by any entity required to be aggregated
with Delta or any of its Subsidiaries pursuant to Section
4001 (b) of ERISA and/or Section 414(b) or (c) of the
Code (and the regulations promulgated thereunder) with
respect to any "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) which is not a Plan.
With respect to each Plan, Delta has delivered or caused
to be delivered to Acquiror and its counsel true and
complete copies of the following documents, as
applicable, for each respective Plan: (i) all Plan
documents, with all amendments thereto or, if the Plan is
not a written Plan, a description thereof; (ii) the
current summary plan description with any applicable
summaries of material modifications thereto as well as
any other material employee communications; (iii) all
current trust agreements and/or other documents
establishing Plan funding arrangements; (iv) the most
recent Internal Revenue Service determination letter and,
if a request for such a letter has been filed and is
currently pending with the Internal Revenue Service, a
copy of such filing; (v) the three most recently prepared
Internal Revenue Service Forms 5500; (vi) the most
recently prepared financial statements; and (vii) all
material related to contracts, service provider
agreements and investment management and investment
advisory agreements. Prior to 1997, Delta was exempt
from any requirement to prepare audited financial
statements for any Plan.
4.16 PROPERTIES. Except as disclosed in
Section 4.16 of the Disclosure Schedule (with paragraph
references corresponding to those set forth below):
(a) Delta Insurance has good and valid title
to all debentures, notes, stocks, securities, and
other assets that are of a type required to be
disclosed in Schedules A through E of its Annual
Statement, if applicable, and that are owned by it,
free and clear of all Liens.
(b) (i) None of the mortgage loans or other
long term invested assets held by Delta Insurance,
of the type required to be disclosed in Schedule B
or BA of its Annual Statement, if applicable, is or
has been at any time since December 31, 1995, in
default for more than 60 days as to any payment of
interest or principal due thereon and, to the
Knowledge of Delta, the financial condition of any
other party to such loan or asset is not so impaired
as to cause a default thereunder, (ii) there is no
existing circumstance or condition with respect to
such loan or asset or any property mortgaged or
pledged as collateral for the repayment thereof that
would cause such loan to be subject to imminent
default, and (iii) there is no valid right of
offset, defense or counterclaim to such loan or
asset.
(c) Except with respect to (i) Permitted
Encumbrances, (ii) real property owned by Delta or
Delta Insurance and leased to any Person, and (iii)
real property not used in the conduct of the
business of Delta or Delta Insurance, each of the
Acquired Companies owns good and indefeasible title
to, or has a valid leasehold interest in, all real
property used in the conduct of its business,
operations, or affairs, or of a type required to be
disclosed in Schedule A of an Annual Statement, if
applicable, free and clear of all Liens. No
improvement on any such real property owned, leased,
or held by such Acquired Company encroaches upon any
real property of any other Person. Each Acquired
Company owns, leases, or has a valid right under
Contract or otherwise to use adequate means of
ingress and egress to, from, and over all such real
property.
(d) Each Acquired Company owns good and
indefeasible title to, or has a valid leasehold
interest in or has a valid right under Contract to
use, all tangible personal property that is used in
the conduct of its business, operations, or affairs,
free and clear of all Liens. All such tangible
personal property is, except for reasonable wear and
tear, in good operating condition and repair and is
suitable for its current uses.
(e) Each Acquired Company has, and
immediately after the Closing will have, the
nonexclusive right to use, after the Closing, free
and clear of any royalty or other payment
obligations, claims of infringement or alleged
infringement, or other Liens, (i) all marks, names,
trademarks, service marks, patents, patent rights,
assumed names, logos, trade secrets, copyrights,
trade names, and service marks that are used in the
conduct of its business, operations, or affairs (of
which a true and complete list and description is
disclosed in Section 4.16(e) of the Disclosure
Schedule), and (ii) all material computer software,
programs, and similar systems owned by or licensed
to such Acquired Company or used in the conduct of
its business, operations, or affairs (of which a
true and complete list and description is disclosed
in Section 4.16(e) of the Disclosure Schedule). No
Acquired Company is in conflict with or in violation
or infringement of, nor has any Acquired Company
received any notice of any conflict with or
violation or infringement of or any claimed conflict
with any asserted rights of any other Person with
respect to any intellectual property or any material
computer software, programs, or similar systems,
including without limitation any of such items
disclosed in Section 4.16(e) of the Disclosure
Schedule.
4.17 CONTRACTS. Section 4.17 of the Disclosure
Schedule (with paragraph references corresponding to
those set forth below) contains a true and complete list
of each of the following Contracts or other documents or
arrangements (true and complete copies, or, if none,
written descriptions, of which have been made available
to the Acquiror, together with all amendments thereto) to
which any of the Acquired Companies is a party or by
which any of the Assets and Properties of any of the
Acquired Companies is bound:
(a) all employment, marketing, agency,
consultation, contracts for services or other
Contracts of any type (except insurance and annuity
Contracts or Benefit Plans including, without
limitation, loans or advances) with any present
Delta Employee, including, without limitation, any
"Super producer" contracts, if there exists any
present or future liability with respect to such
Contract, whether now existing or contingent) other
than (i) Contracts terminable without penalty or
other Liability upon 30 days or less notice, (ii)
Contracts with consultants and similar
representatives who do not receive compensation of
$100,000 or more per year, (iii) employment or
agency Contracts not containing terms which are
unduly burdensome to any of the Acquired Companies
with agents who do not receive compensation of
$100,000 or more per year, and (iv) agency Contracts
not on the standard form attached hereto as Exhibit
I, and the name, position, and rate of compensation
of each such Person and the expiration date of each
such Contract, as well as all sick leave, vacation,
holiday, and other similar practices, procedures,
and policies of any of the Acquired Companies
established or administered other than as Benefit
Plans;
(b) all Contracts with any Person containing
any provision or covenant limiting the ability of
any Acquired Company to engage in any line of
business or to compete with or to obtain products or
services from any Person or limiting the ability of
any Person to compete with or to provide products or
services to any Acquired Company;
(c) all material partnership, joint venture,
profit-sharing, or similar Contracts with any Person
except for any such arrangement disclosed in the
December 31, 1996 Annual Statement (and the notes
relating thereto) and Benefit Plans;
(d) all Contracts relating to the borrowing of
money by any Acquired Company or to the direct or
indirect guarantee by any Acquired Company of any
obligation for borrowed money in excess of $100,000
in the aggregate or any other Liability in respect
of indebtedness of any other Person, including
without limitation any Contract relating to (i) the
maintenance of compensating balances that are not
terminable by the Acquired Company without penalty
or other Liability upon not more than 60 calendar
days' notice, (ii) any line of credit or similar
facility, (iii) the payment for property, products,
or services of any other Person even if such
property, products, or services not conveyed, have
not yet been delivered, or rendered, or (iv) the
obligation to take-or-pay, keep-well, make-whole, or
maintain surplus or earnings levels or perform other
financial ratios or requirements; and Section
4.17(d) of the Disclosure Schedule contains a true
and complete list of any requirements for consents
or approvals of creditors needed for the Seller to
consummate the transactions contemplated hereby;
(e) all leases or subleases of real property
used in the business, operations, or affairs of
Delta, and all other material leases, subleases, or
rental or use Contracts for which Delta is liable;
(f) all Contracts relating to the future
disposition or acquisition of any material Assets or
Properties of any Person or of any interest in any
business enterprise (other than the disposition or
acquisition of material Assets or Properties in the
ordinary course of business and consistent with past
practice);
(g) all Contracts or arrangements (including
without limitation those relating to allocation of
expenses, personnel, services, or facilities) with
any Delta Affiliate;
(h) all reinsurance, coinsurance, or other
similar Contracts, and all investment contracts,
trust agreements or other security agreements
related thereto, indicating, with respect to each
group of such Contracts (by reinsurer or coinsurer)
or security agreement, the information required to
be disclosed in Schedule S of an Annual Statement;
(i) all outstanding proxies, powers of
attorney, or similar delegations of authority,
except for powers of attorney for the service of
process pursuant to applicable insurance or
corporate Laws;
(j) all Contracts for the provision of
administrative, underwriting, claims handling or
other services by or to any Acquired Company;
(k) all material Contracts for any product,
service, equipment, facility, or similar item (other
than insurance and annuity Contracts and other than
reinsurance, coinsurance, and other similar
Contracts) that by their respective terms do not
expire or terminate or are not terminable by an
Acquired Company, without penalty or other
Liability, within three months after December 31,
1997; and
(l) all other Contracts (other than insurance
and annuity Contracts and Contracts terminable
without penalty or other Liability upon 90 days or
less notice) that involve the payment or potential
payment, pursuant to the terms of such Contracts, by
or to any of the Acquired Companies of more than
$50,000 individually or $250,000 in the aggregate or
that are otherwise material to the Acquired
Companies, taken as a whole.
Each Contract disclosed or required to be disclosed in
the Disclosure Schedule pursuant to this Section 4.17,
is in full force and effect and constitutes a valid and
binding obligation of any of the Acquired Companies and,
to the Knowledge of Delta, of each other Person that is a
party thereto in accordance with its terms subject to
equitable rights and the rights of creditors; and none of
the Acquired Companies nor (to the Knowledge of Delta)
any other party to such Contract has materially violated,
breached or defaulted under any such Contract (or with or
without notice or lapse of time or both, would be in
material violation or breach of or default under any such
Contract). Except as disclosed in Section 4.17 of the
Disclosure Schedule, none of the Acquired Companies is a
party to or bound by any Contract that was not entered
into in the ordinary course of business and consistent
with past practice. None of the Acquired Companies is a
party to or bound by any collective bargaining or similar
labor Contract.
4.18 THREATS OF CANCELLATION. Except as
disclosed in Section 4.18 of the Disclosure Schedule,
since December 31, 1995, no policyholder, group of
policyholder Affiliates, or Persons writing, selling, or
producing, either directly or through reinsurance
assumed, insurance business that individually or in the
aggregate for each such policyholder, group or Person,
respectively, accounted for 3% or more of the premium or
annuity income of Delta Insurance for the year ended
December 31, 1996, has terminated or (to the Knowledge of
Delta) threatened to terminate its relationship with
Delta Insurance.
4.19 LICENSES AND PERMITS. Except as disclosed
in Section 4.19 of the Disclosure Schedule (with
paragraph references corresponding to those set forth
below):
(a) Each Acquired Company owns or validly
holds, all licenses, franchises, permits, approvals,
authorizations, exemptions, classifications,
certificates, registrations, and similar documents
or instruments that are required for its business,
operation, and affairs and that the failure to so
own or hold has or would reasonably be expected to
have a Material Adverse Effect on such Acquired
Company; and
(b) all such licenses, franchises, permits,
approvals, authorizations, exemptions,
classifications, certificates, registrations, and
similar documents or instruments are valid, binding,
and in full force and effect, and none of such
licenses, franchises, permits, approvals,
authorizations, exemptions, classifications,
certificates, registrations, and similar documents
or instruments will lapse or become invalid or
subject to any material limitations immediately
after the Closing as a result of the Merger.
4.20 OPERATIONS INSURANCE. Section 4.20 of the
Disclosure Schedule contains a true and complete list and
description of all liability, property, workers
compensation, directors and officers liability, and other
similar insurance Contracts that insure the business,
operations, or affairs of and Acquired Company or affect
or relate to the ownership, use, or operations of any of
their respective Assets and Properties and (a) that have
been issued to such Acquired Company (including without
limitation the names and addresses of the insurers, the
expiration dates thereof, and the annual premiums and
payment terms thereof) or (b) that are held by any
Affiliate of Delta (including any stockholder of Delta)
for the benefit of any Acquired Company following the
Closing. All such insurance is in full force and effect
and (to the Knowledge of Delta) is with financially sound
and reputable insurers and, in light of the business,
operations, and affairs of the Acquired Companies, is in
amounts and provides coverage that are reasonable and
customary for Persons in similar businesses.
4.21 INTERCOMPANY LIABILITIES. Except as
reflected in the December 31, 1996 Annual Statement, or
except as disclosed in Section 4.21 of the Disclosure
Schedule, (a) there are no Liabilities between any
Acquired Company and any other Affiliate (including any
stockholder of Delta) of Delta, and (b) no Affiliate of
Delta (including any stockholder of Delta) provides or
causes to be provided to Delta any products, services,
equipment, facilities, or similar items. Except as
disclosed in Section 4.21 of the Disclosure Schedule,
since December 31, 1996, no such intercompany Liabilities
in excess of an aggregate of $100,000 have been paid, and
no settlements of such intercompany Liabilities have been
made.
4.22 BANK ACCOUNTS. Section 4.22 of the
Disclosure Schedule contains (a) a true and complete list
of the names and locations of all banks, trust companies,
securities brokers, and other financial institutions at
which an Acquired Company has an account or safe deposit
box or maintains a banking, custodial, trading, or other
similar relationship and (b) a true and complete list and
description of each such account, box, and relationship,
indicating in each case the account number and the names
of the respective officers, employees, agents, or other
similar representatives of Delta transacting business
with respect thereto.
4.23 BROKERS. Except for the fee payable to
Lazard Freres & Co. LLC for providing a fairness opinion,
all negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out on
behalf of Delta without the intervention of any Person as
to give rise to any valid claim by any Person against the
Acquiror, a Designated Subsidiary, or Delta for a
finder's fee, brokerage commission, or similar payment.
4.24 DISCLOSURE. Neither this Agreement nor
any certificate required to be furnished by Delta to the
Acquiror, Sub or any Designated Subsidiary in connection
with this Agreement or the transactions contemplated
hereby contains any untrue statement of a material fact
concerning any of the Acquired Companies or omits to
state a material fact concerning any of the Acquired
Companies necessary to make the statements herein or
therein not misleading in light of the circumstances in
which they were made. Delta shall not be deemed to have
made to AmerUs, Sub or any Designated Subsidiary any
representation or warranty other than as expressly made
by Delta in Article IV hereof. Without limiting the
generality of the foregoing, and notwithstanding any
otherwise express representations and warranties made by
Delta in Article IV hereof, Delta makes no representation
or warranty with respect to:
(a) any projections, estimates or budgets
heretofore delivered to or made available to AmerUs, Sub
or any Designated Subsidiary of future revenues,
expenses, or expenditures or future results of
operations; or
(b) except as expressly covered by
representations and warranties contained in Article IV
hereof, any other information or documents (financial or
otherwise) made available to AmerUs, Sub or any
Designated Subsidiary or their respective counsel,
accountants or advisors with respect to Delta or any of
the Acquired Companies.
4.25 STOCKHOLDERS AND RELATED MATTERS.
(a) Delta represents and warrants that the Merger
requires the affirmative vote of holders of 66-2/3% of
the outstanding shares of each of the Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock
and Common Stock Class B. In addition, the Merger
requires the vote of holders of a majority of the
outstanding shares of Common Stock Class A, with each
series of Preferred Stock and the Common Stock Class B
being entitled to vote with the Common Stock Class A on
the basis of one vote for each share held.
(b) Delta has provided AmerUs with copies of
the Stockholders' Agreement dated as of December 21, 1990
and Amendment I to the Stockholders' Agreement dated as
of March 31, 1992 and Amendment II to the Stockholders'
Agreement, dated as of December 1, 1993 (together, the
"Stockholders' Agreement"). To the knowledge of Delta,
without any investigation, there are no other agreements,
verbal or written, by or among all or any of the
stockholders of Delta, other than a Letter Agreement,
dated February 23, 1996 which has been provided by Delta
to AmerUs. Nothing contained herein is intended to state
or imply that the Stockholders' Agreement (or such Letter
Agreement) is applicable to this Agreement or the Merger.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AMERUS
AmerUs hereby represents and warrants to Delta as
follows:
5.1 ORGANIZATION OF AMERUS AND SUB. AmerUs is
a corporation duly organized, and validly existing, under
the Laws of Iowa and Sub is a corporation duly organized,
and validly existing, under the Laws of Delaware, and
each of AmerUs and Sub has the requisite power and
authority to enter into this Agreement and to perform its
obligations under this Agreement. AmerUs is duly
licensed, qualified, or admitted to do business in all
jurisdictions in which the failure to be so licensed,
qualified, or admitted, individually or in the aggregate
with other such failures, has or would reasonably be
expected to have a Material Adverse Effect on AmerUs.
5.2 AUTHORITY OF AMERUS AND SUB. Each of
AmerUs and Sub has duly and validly approved this
Agreement and the transactions contemplated hereby. The
execution and delivery of this Agreement by AmerUs and by
Sub and the performance by AmerUs and Sub of their
respective obligations under this Agreement have been
duly and validly authorized by all necessary corporate
action. This Agreement constitutes a valid, and binding
obligation of AmerUs and of Sub and is enforceable
against AmerUs and Sub, respectively, in accordance with
its terms, except to the extent that (a) enforcement may
be limited by or subject to any bankruptcy, insolvency,
reorganization, moratorium, or similar Laws now or
hereafter in effect relating to or limiting creditors
rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable
relief are subject to certain equitable defenses and to
the discretion of the court or other similar Person
before which any proceeding therefor may be brought.
5.3 ORGANIZATION OF DESIGNATED SUBSIDIARIES.
On the Closing Date, each Designated Subsidiary will be a
corporation duly organized, and validly existing, and in
good standing under the Laws of its jurisdiction of
incorporation and will have full corporate power and
authority to consummate the transactions contemplated
hereby.
5.4 NO CONFLICTS OR VIOLATIONS. The execution
and delivery of this Agreement by AmerUs and by Sub do
not, and the performance by AmerUs and by Sub of their
respective obligations under this Agreement will not:
(a) subject to obtaining the approvals
contemplated by Sections 7.1 and 7.2 hereof, violate
any term or provision of any Law or any writ,
judgment, decree, injunction, or similar order
applicable to AmerUs or Sub;
(b) conflict with or result in a violation or
breach of, or constitute (with or without notice or
lapse of time or both) a default under, any of the
terms, conditions, or provisions of the articles or
certificate of incorporation or by-laws of AmerUs or
Sub;
(c) result in the creation or imposition of
any Lien upon AmerUs or Sub or any of their
respective Assets and Properties that individually
or in the aggregate with any other Liens has or
would reasonably be expected to have a Material
Adverse Effect on AmerUs or Sub;
(d) conflict with or result in a violation or
breach of, or constitute (with or without notice or
lapse of time or both) a default under, or give to
any Person any right of termination, cancellation,
acceleration, or modification in or with respect to,
any Contract to which AmerUs or Sub is a party or by
which any of their respective Assets and Properties
may be bound other than (i) the consent of The Chase
Manhattan Bank, as Administrative Agent, and the
holders of 66 2/3% of the outstanding debt, under
each of the Revolving Credit and Term Loan Agreement
dated as of December 11, 1996 of Acquiror, and the
Credit Agreement dated as of January 29, 1997 of
AmerUs Group Co., each as amended, (ii) the consent
of American Mutual Holding Company pursuant to the
Amended and Restated Intercompany Agreement by and
among American Mutual Holding Company, AmerUs Group
Co. and the Acquiror, and (iii) those Contracts as
to which any such conflicts, violations, breaches,
defaults, or rights individually or in the aggregate
do not have or would not reasonably be expected to
have a Material Adverse Effect on AmerUs or Sub; or
(e) require AmerUs or Sub to obtain any
consent, approval or action of, or make any filing
with or give any notice to, any Person except (i) as
contemplated in Section 7.1 or 7.2 hereof, (ii) or
those which the failure to obtain, make, or give
individually or in the aggregate with other such
failures has or would reasonably be expected to have
no Material Adverse Effect on AmerUs or Sub.
5.5 FINANCING. AmerUs will have the requisite
funds at Closing equal to the Merger Consideration as
contemplated by Article III hereof.
5.6 BROKERS. Except for the fee payable to
Xxx-Xxxx, Xxxxxx Inc., all negotiations relative to this
Agreement and the transactions contemplated hereby have
been carried out by AmerUs directly with Delta, without
the intervention of any Person on behalf of the AmerUs in
such manner as to give rise to any valid claim by any
Person against any of the Acquired Companies for a
finder s fee, brokerage commission, or similar payment.
5.7 DISCLOSURE. Neither this Agreement nor any
certificate to be furnished by AmerUs to Delta in
connection with this Agreement or the transactions
contemplated hereby, contains any untrue statement of a
material fact concerning any of AmerUs, Sub or any
Designated Subsidiary or omits to state a material fact
concerning any of the foregoing necessary to make the
statements herein or therein not misleading in light of
the circumstances in which they were made. Neither
AmerUs, nor Sub nor any Designated Subsidiary shall be
deemed to have made to Delta any representation or
warranty other than as expressly made by AmerUs in
Article V hereof. Without limiting the generality of the
foregoing, and notwithstanding any otherwise express
representations and warranties made by AmerUs in Article
V hereof, AmerUs makes no representation or warranty with
respect to:
(a) any projections, estimates or budgets
heretofore delivered to or made available to Delta of
future revenues, expenses or expenditures or future
results of operations; or
(b) except as expressly covered by
representations and warranties contained in Article V
hereof, any other information or documents (financial or
otherwise) made available to Delta or its counsel,
accountants or advisors with respect to AmerUs, Sub or
any Designated Subsidiary.
ARTICLE VI
COVENANTS OF DELTA
Delta covenants and agrees with AmerUs that, at
all times before the Closing, Delta will comply with all
covenants and provisions of this Article VI, except to
the extent AmerUs may otherwise consent in writing, or to
the extent otherwise required or permitted by this
Agreement.
6.1 LENDER AND REGULATORY APPROVALS. Delta
will (a) take all commercially reasonable steps necessary
or desirable, and proceed diligently and in good faith
and use all commercially reasonable efforts to obtain, as
promptly as practicable, all approvals required by any
applicable Contract, (b) take all commercially reasonable
steps necessary or desirable, and proceed diligently and
in good faith and use all commercially reasonable efforts
to obtain, as promptly as practicable, all approvals,
authorizations, and clearances of governmental and
regulatory authorities required to permit the
consummation of the transactions contemplated hereby, (c)
provide such other information and communications to such
governmental and regulatory authorities as AmerUs or such
authorities may reasonably request, and (d) cooperate
with AmerUs, Sub and each Designated Subsidiary in
obtaining, as promptly as practicable, all approvals,
authorizations, and clearances of governmental or
regulatory authorities and others required of AmerUs, Sub
or any Designated Subsidiary to consummate the
transactions contemplated hereby, including without
limitation any required approvals of the insurance
regulatory authorities in Tennessee.
6.2 HSR FILINGS. Delta will (a) take promptly
all actions necessary to make the filings required of it
and the Acquired Companies under the HSR Act, (b) comply
at the earliest practicable date with any request for
additional information received from the Federal Trade
Commission or Antitrust Division of the Department of
Justice pursuant to the HSR Act, (c) cooperate with
AmerUs and Sub in connection with their filings under the
HSR Act, and (d) request early termination of the
applicable waiting period.
6.3 INVESTIGATION BY AMERUS. Subject to the
provisions of Section 13.4, Delta will provide AmerUs,
its lenders, and their respective counsel, accountants,
actuaries, and other representatives with access, upon
reasonable notice and during normal business hours, to
all facilities, officers, employees, agents, accountants,
actuaries, Assets and Properties, and Books and Records
of Delta and will furnish AmerUs and such other Persons
during such period with all such information and data
(including without limitation copies of Contracts,
Benefit Plans, and other Books and Records) concerning
the business, operations, and affairs of Delta as AmerUs
or any of such other Persons reasonably may request.
6.4 NO NEGOTIATIONS, ETC. (a) Except as set
forth below, Delta shall not, nor shall Delta authorize
or permit any of its Subsidiaries, officers, directors,
employees, representatives or agents, to, directly or
indirectly, encourage, solicit, participate in, initiate
or continue discussions or negotiations with, or provide
any information to, any Person (other than AmerUs, Sub,
or any Designated Subsidiary) with respect to, or take
any action to facilitate any inquiries or the making of,
or enter into any agreement (including any preliminary
agreement) relating to, or approve any proposal that
constitutes, or may reasonably be expected to lead to,
any Acquisition Proposal (as defined below).
Notwithstanding the preceding sentence, at any time prior
to the approval of this Agreement and the Merger by
Delta's stockholders, whether at the Special Meeting (as
defined below) or by written consent, Delta may furnish
information and access, in each case only in response to
unsolicited requests therefor, to any Person pursuant to
a customary confidentiality agreement, and may
participate in discussions and negotiate with such Person
concerning an Acquisition Proposal, if the Board of
Directors of Delta determines in its good faith judgment
following consultation with outside counsel and an
independent financial advisor, that (i) such Person shall
have submitted an unsolicited Superior Proposal (as
defined below), and (ii) it is required to do so in order
to comply with its fiduciary duties to stockholders under
applicable Law. Delta's Board of Directors shall notify
AmerUs orally (within one Business Day), and in writing
(as promptly as practicable) of all the relevant details
relating to all inquiries and proposals that it and any
of its Subsidiaries, officers, directors, employees,
representatives or agents may receive relating to any
Acquisition Proposal and, if such inquiries or proposals
are in writing, Delta shall provide a copy of such
written Acquisition Proposal to AmerUs immediately after
receipt thereof and thereafter keep AmerUs promptly
advised of any development with respect thereto.
(b) Except as set forth in this Section
6.4(b), Delta's Board of Directors shall not withdraw or
modify, or propose to withdraw or modify, its
recommendation of this Agreement and the transactions
contemplated hereby or approve or recommend, or propose
to approve or recommend, any Acquisition Proposal.
Notwithstanding the foregoing, if Delta's Board of
Directors determines in its good faith judgment,
following consultation with outside counsel and an
independent financial advisor, that (i) it has received
an unsolicited Superior Proposal and (ii) it is required
to do so in order to comply with its fiduciary duties to
stockholders under applicable law, Delta's Board of
Directors may withdraw its recommendation of the
transactions contemplated hereby or approve or recommend
such unsolicited Superior Proposal, but in each case only
after providing at least five Business Days' prior
written notice to AmerUs (A) advising AmerUs that Delta's
Board of Directors has received or become aware of a
Superior Proposal, (B) specifying the material terms and
conditions of such Superior Proposal, (C) identifying the
person making the Superior Proposal, and (D) stating that
it intends to withdraw its recommendation or approve or
recommend such Superior Proposal.
(c) "Acquisition Proposal" means any proposal,
offer or expression of interest from any Person involving
a merger, consolidation or other business combination
with Delta or any of its Subsidiaries or any proposal,
offer or expression of interest to acquire or cause to be
acquired in any manner, directly or indirectly,
including, without limitation, through any reinsurance or
coinsurance transaction, all or a significant portion of
the business, assets, or capital stock of Delta or any of
its Subsidiaries, other than the transactions
contemplated by this Agreement.
(d) "Superior Proposal" means any bona fide
Acquisition Proposal from any Person for which any
required financing is committed and which is otherwise on
terms that Delta's Board of Directors determines in its
good faith reasonable judgment, following consultation
with outside counsel and an independent financial
advisor, to be more favorable to Delta's stockholders
than the Merger.
6.5 CONDUCT OF BUSINESS. Delta will, and will
cause the Acquired Companies to, conduct its and their
respective businesses only in the ordinary course and
consistent with past practice, except as otherwise
provided in this Agreement or except as may be consented
to by AmerUs in writing. Without limiting the generality
of the foregoing:
(a) Delta will use all commercially reasonable
efforts to and cause each of the Acquired Companies
to (i) preserve intact its present business
organization, field force, reputation, and
policyholder, annuitant or customer relations, (ii)
keep available the services of its present key
officers, directors, employees, agents, consultants,
and other similar representatives, (iii) except as
to Vermont, maintain all licenses, qualifications,
and authorizations to do business in each
jurisdiction in which it is so licensed, qualified,
or authorized, (iv) maintain in full force and
effect all Contracts, documents, and arrangements
set forth in Section 4.17 of the Disclosure
Schedule, except to the extent they are terminated
in the ordinary course of business, (v) maintain all
of its Assets and Properties in good working order
and condition, ordinary wear and tear excepted, (vi)
continue all current marketing and selling
activities relating to its business, operations, or
affairs in accordance with its current marketing
plan and applicable Law, and (vii) with respect to
Delta Insurance, maintain the rating classification,
or its equivalent, assigned as of the date hereof to
it by A.M. Best Company, Inc.
(b) Delta will maintain, and will cause each
of the Acquired Companies to maintain, their
respective Books and Records in the usual manner and
consistent with past practice and will not permit a
material change in any applicable underwriting,
investment, actuarial, financial reporting, or
accounting practice or policy of any Acquired
Company or in any assumption underlying such a
practice or policy, or in any method of calculating
any bad debt, contingency, or other reserve for
financial reporting purposes or for other accounting
purposes (including without limitation any practice,
policy, assumption, or method relating to or
affecting the determination of insurance or
annuities in force, premium or investment income,
Reserve Liabilities, or operating ratios with
respect to expenses, losses, or lapses).
(c) Delta will (i) prepare properly and file
duly and validly all reports and all Tax Returns
required to be filed with any governmental or
regulatory authorities with respect to its business,
operations, or affairs, and (ii) pay in full and
when due all Taxes indicated by such Tax Returns or
otherwise levied or assessed upon it or any of its
Assets and Properties, and withhold or collect and
pay to the proper taxing authorities or hold in
separate bank accounts for such payment all Taxes
that it is required to so withhold or collect and
pay, unless reasonable reserves therefor have been
established and reflected in its Books and Records.
(d) Delta will cause (i) all Reserve
Liabilities with respect to insurance and annuity
Contracts established or reflected in the Books and
Records of Delta Insurance to be (A) established in
accordance with the methods for establishing
Liabilities and reserving methods followed by Delta
Insurance in the preparation of the December 31,
1996 Annual Statement and (B) adequate (under
generally accepted actuarial principles consistently
applied) to cover the total amount of all reasonably
anticipated matured and unmatured benefits,
dividends, losses, claims, expenses, and other
Liabilities of Delta Insurance under all insurance
and annuity Contracts pursuant to which Delta
Insurance has or will have any liability (including
without limitation any liability arising under or as
a result of any reinsurance, coinsurance, or other
similar Contract); and (ii) Delta Insurance to
continue to own assets that qualify as legal reserve
assets under all applicable insurance Laws in an
amount at least equal to its required Reserve
Liabilities.
(e) Delta will use all commercially reasonable
efforts to maintain in full force and effect until
the Closing substantially the same levels of
coverage as the insurance afforded under the
Contracts listed in Section 4.20 of the Disclosure
Schedule. Any and all benefits under such Contracts
paid or payable to any Acquired Company prior to the
Closing with respect to the business, operations,
affairs, or Assets and Properties of such Acquired
Company shall be paid to such Acquired Company.
(f) Delta will continue to and will cause the
other Acquired Companies to comply, in all material
respects, with all Laws applicable to its business,
operations, or affairs.
(g) Delta will not and will cause the other
Acquired Companies not to incur any Liabilities
outside of the ordinary course of their respective
businesses and consistent with past practices.
6.6 FINANCIAL STATEMENTS AND REPORTS.
(a) As promptly as practicable after each
calendar quarter ending between the date hereof and
the Closing Date, Delta will deliver to AmerUs true
and complete copies of the Quarterly Statement filed
by Delta Insurance for each quarter then ended.
(b) As promptly as practicable but not later
than (i) sixty days following the end of each
calendar quarter, Delta will deliver to the Acquiror
a quarterly GAAP consolidated balance sheet of the
Acquired Companies and the related consolidated
statements of income of the Acquired Companies for
the quarter then ended, together with any
consolidating supplementary schedules related
thereto, and (ii) forty-five days following the end
of each calendar quarter, Delta will deliver to the
Acquiror a copy of the Quarterly Statement of Delta
Insurance for such quarter, prepared in accordance
with SAP.
(c) As promptly as practicable, Delta will
deliver to the Acquiror true and complete copies of
such other material financial statements, reports,
or analyses as may be prepared or received by it or
any of the Acquired Companies and as relate to any
of the business, operations, or affairs of the
Acquired Companies, including without limitation
normal internal reports which Delta prepares (such
as those reflecting monthly premiums, claims, and
cash flow) and special reports (such as those of
financial or actuarial consultants), as well as any
reports prepared for the stockholders of Delta.
(d) As promptly as practicable, Delta will
deliver to the Acquiror the calculation of the
accrued liability with respect to each Benefit Plan
which is a non-qualified deferred compensation plan.
6.7 INVESTMENTS. Each of the Acquired
Companies will invest its future cash flow, any cash from
matured and maturing investments, any cash proceeds from
the sale of its Assets and Properties, and any cash funds
currently held by it exclusively in cash equivalent
assets or in short-term investments (consisting of United
States government issued or guaranteed securities,
commercial paper rated A-1 or P-1, or certificates of
deposit issued by one or more of the banks or financial
institutions listed in Section 6.7 of the Disclosure
Schedule), except (i) as otherwise required by Law, (ii)
as required to provide cash (in the ordinary course of
business and consistent with past practice) to meet its
reasonably anticipated current obligations, (iii) in
accordance with past practices in the ordinary course of
business, and in the case of Delta and Delta Insurance,
with the investment policies set forth in Section 6.7 of
the Disclosure Schedule, or (iv) as consented to by the
Acquiror. Delta Insurance will not take any actions,
other than as otherwise permitted by this Agreement or in
the ordinary course of business and consistent with past
practice (including, without limitation, normal
amortization and depreciation of any depreciable asset)
designed to cause the assets of Delta Insurance that are
classified as nonadmitted under SAP or by the applicable
insurance regulatory authorities, to be greater or less
than their respective dollar amounts as of December 31,
1996.
6.8 EMPLOYEE MATTERS. Except as may be
required by Law, by this Agreement or as disclosed in
Section 6.8 of the Disclosure Schedule, or except for
such Contract representations, promises, changes,
alterations, or amendments that do not and will not
result in any Liability to any of the Acquired Companies,
the Acquired Companies will refrain from directly or
indirectly, without the consent of Acquiror:
(a) making any representation or promise,
oral or written, to any Delta Employee which is
inconsistent with the terms of any Benefit
Plan;
(b) making any change to, or amending in
any way, the Contracts, salaries, wages, or
other compensation of any Delta Employee whose
annual compensation exceeds $100,000 other than
routine changes or amendments that (a) are made
in the ordinary course of business and
consistent with past practice, (b) do not and
will not result in increases of more than 5% in
the salary, wages, or other compensation of any
such Person, and (c) do not and will not
exceed, in the aggregate, 5% of the total
salaries, wages, and other compensation of all
Delta Employees;
(c) adopting, entering into, amending,
altering or terminating, partially or
completely, any Benefit Plan; or any election
made pursuant to the provisions of any Benefit
Plan, to accelerate any payments, obligations
or vesting schedules under any Benefit Plans;
(d) adopting, entering into, amending,
altering, or terminating, partially or
completely, any employment, agency
consultation, or representation Contract that
is, or had it been in existence on the date of
this Agreement would have been, required to be
disclosed in Section 4.17(a) of the Disclosure
Schedule;
(e) approving any general or company wide pay
increases for Delta Employees; or
(f) entering into any Contract with any Delta
Employee that is not terminable by any of the
Acquired Companies, without penalty or other
Liability, upon not more than 60 calendar days
notice.
6.9 NO CHARTER AMENDMENTS. Each of the
Acquired Companies will refrain from amending its
certificate of incorporation or by-laws and from taking
any action with respect to any such amendment.
6.10 NO ISSUANCE OF SECURITIES. Each of the
Acquired Companies will refrain from authorizing or
issuing any shares of their capital stock or other equity
securities or entering into any Contract or granting any
option, warrant, or right calling for the authorization
or issuance of any such shares or other equity
securities, or creating or issuing any securities
directly or indirectly convertible into or exchangeable
for any such shares or other equity securities, or
issuing any options, warrants, or rights to purchase any
such convertible securities.
6.11 NO DIVIDENDS. Except as set forth in
Section 6.11 of the Disclosure Schedule, Delta will
refrain from declaring, setting aside, or paying any
dividend or other distribution in respect of its capital
stock and from directly or indirectly redeeming,
purchasing, or otherwise acquiring any of its capital
stock or any interest in or right to acquire any such
stock.
6.12 NO DISPOSAL OF PROPERTY. Except as set
forth in Section 6.12 of the Disclosure Schedule or as
otherwise expressly provided in this Agreement, each of
the Acquired Companies will refrain from (a) disposing of
any of its Assets and Properties and from permitting any
of its Assets and Properties to be subjected to any
Liens, except to the extent any such disposition or any
such Lien is made or incurred in the ordinary course of
the business and consistent with past practice, (b)
selling any material part of its insurance products,
operations, or business to any third party (other than
sales of insurance products in the ordinary course of
business consistent with past practice), (c) entering
into any contracts obligating it to administer the
insurance operations of any other Person, and (d)
entering into any Contracts permitting any other Person
to administer its insurance operations.
6.13 NO BREACH OR DEFAULT. Each of the
Acquired Companies will refrain from violating,
breaching, or defaulting, and from taking or failing to
take any action that (with or without notice or lapse of
time or both) would constitute a material violation,
breach, or default, in any way under any term or
provision of any Contract to which it is a party or by
which any of its Assets and Properties is or may be
bound.
6.14 NO INDEBTEDNESS. Except in the ordinary
course of business and consistent with past practice and
except for existing contractual obligations, each of the
Acquired Companies will refrain from creating, incurring,
assuming, guaranteeing, or otherwise becoming liable for,
and from canceling, paying, agreeing to cancel or pay, or
otherwise providing for a complete or partial discharge
in advance of a scheduled payment date with respect to,
any Liability, and from waiving any right to receive any
direct or indirect payment or other benefit under any
Liability owing to such company.
6.15 NO ACQUISITIONS. Delta will refrain from
(a) merging, consolidating, or otherwise combining or
agreeing to merge, consolidate, or otherwise combine with
any other Person, (b) acquiring or agreeing to acquire
blocks of business of all or substantially all the Assets
and Properties or capital stock or other equity
securities of any other Person, or (c) otherwise
acquiring or agreeing to acquire control of any other
Person.
6.16 LIABILITIES TO DELTA AFFILIATES. Except
for agreements between or among Delta and its
Subsidiaries, at least five Business Days before the
Closing, Delta will deliver to the Acquiror a true and
complete list and description of all Liabilities between
Delta and any Delta Affiliate to be outstanding on the
Closing Date. At or prior to the Closing, all such
Liabilities shall be paid, except as otherwise
specifically provided herein or agreed by Acquiror.
Delta will not enter into any Contract or, except as
required by any Contract disclosed in Section 4.17(g) of
the Disclosure Schedule, engage in any transaction with
any other Delta Affiliate. Except as otherwise
specifically provided herein or in a notice from Acquiror
prior to the Closing Date, on the Closing Date Delta will
terminate and will cause the other Acquired Companies to
terminate each Contract between Delta and any Delta
Affiliate, including without limitation each Contract
disclosed in Section 4.17(g) of the Disclosure Schedule.
6.17 TAX MATTERS. Delta shall not and shall
not permit any Acquired Company to settle any material
audit, make or change any material Tax election or file
any amended Tax Return (except as provided in Section
4.12(f) of the Disclosure Schedule). At least 10 days
prior to filing any income Tax Return or other material
Tax Return relating to Delta or any Acquired Company,
Delta shall deliver a copy of such Tax Return to Acquiror
for Acquiror's review and comment.
6.18 NOTICE AND CURE. Delta will notify the
Acquiror promptly in writing of, and contemporaneously
will provide the Acquiror with true and complete copies
of any and all information or documents relating to, and
will use all commercially reasonable efforts to cure
before the Closing, any event, transaction, or
circumstance occurring after the date of this Agreement
that causes or will cause any covenant or agreement under
this Agreement to be breached, or that renders or will
render untrue any representation or warranty of Delta
contained in this Agreement as if the same were made on
or as of the date of such event, transaction, or
circumstance. Delta also will use all commercially
reasonable efforts to cure, before the Closing, any
violation or breach of any representation, warranty,
covenant, or agreement made by it in this Agreement,
whether occurring or arising before or after the date of
this Agreement.
6.19 SUPPLEMENTS TO SCHEDULES. Delta shall at
any time or from time to time after the date hereof and
prior to the Closing Date, supplement or amend the
Disclosure Schedule with respect to any matter arising
after the date hereof which, if existing or occurring at
the date hereof, would have been required to be set forth
or described therein. No supplement or amendment to the
Disclosure Schedule shall be deemed to cure any breach of
a representation or warranty of Delta made herein, or
have any effect for the purpose of determining the
satisfaction of the conditions to Closing set forth in
Article VIII.
6.20 STOCKHOLDERS AGREEMENT. Delta shall take
all actions that may be necessary in order to obtain the
valid waiver of any provisions of the Stockholders
Agreement or shall otherwise comply with the provisions
of the Stockholders Agreement, to the extent applicable
to the Merger. Delta shall not, directly or indirectly,
assert any rights that it may have under the Stockholders
Agreement on account of this Agreement or the Merger, or
assign or transfer to any other Person any such rights,
it being understood that nothing in this Section 6.20 is
intended to state or imply that the Stockholders
Agreement is applicable to this Agreement or the Merger.
6.21 STOCKHOLDER APPROVAL. Delta shall, in
accordance with all applicable Laws, and the Second
Amended and Restated Certificate of Incorporation and By-
Laws of Delta, duly call, give notice of, convene and
hold a special meeting of its stockholders (the "Special
Meeting") or solicit the written consent of its
stockholders (the "Consent Solicitation") as promptly as
practicable after the date hereof for the purpose of
considering and taking action upon this Agreement and
such other matters as may be appropriate at the Special
Meeting or pursuant to the Consent Solicitation.
Notwithstanding anything in this Agreement to the
contrary, Delta shall not take any action which
interferes with the convening of the Special Meeting or
the taking of the stockholders' vote at the meeting or
the Consent Solicitation. The Board of Directors of
Delta will include its recommendation that the
stockholders of Delta approve and adopt this Agreement
and the transactions contemplated hereby in any proxy or
other solicitation materials or communications prepared
in connection with the Special Meeting or the Consent
Solicitation.
6.22 WARN ACT NOTIFICATION. Delta shall, upon the
request of Acquiror, provide any notices required under,
and otherwise take all steps necessary to comply with,
all applicable "plant closing", "mass layoff" or other
similar Laws, including, but not limited to, the Worker
Adjustment and Retraining Notification Act.
6.23 LONDON LIFE REINSURANCE COMPANY NEGOTIATIONS.
Delta shall jointly with Acquiror negotiate with London
Life Reinsurance Company to seek a reduction or
elimination of the margin relating to the Delta Insurance
Index Advantage product. If a reduction is agreed to,
then Acquiror shall have the right to determine the
amount of the new margin. London Life Reinsurance
Company shall remain the coinsurer in connection with the
Index Advantage product.
ARTICLE VII
COVENANTS AND CERTAIN AGREEMENTS OF AMERUS
7.1 REGULATORY APPROVALS. The Acquiror will,
or will cause Sub or any Designated Subsidiary to, (a)
take all commercially reasonable steps necessary or
desirable, and proceed diligently and in good faith and
use all commercially reasonable efforts to obtain, as
promptly as practicable, all approvals, authorizations,
and clearances of governmental and regulatory authorities
required of the Acquiror, Sub or such Designated
Subsidiary to consummate the transactions contemplated
hereby, including without limitation any required
approvals of the insurance regulatory authorities in
Tennessee, (b) provide such other information and
communications to such governmental and regulatory
authorities as Delta or such authorities may reasonably
request, and (c) cooperate with Delta in obtaining, as
promptly as practicable, all approvals, authorizations,
and clearances of governmental or regulatory authorities
required to consummate the transactions contemplated
hereby.
7.2 HSR FILINGS. The Acquiror will (a) take
promptly all actions necessary to make the filings
required of the Acquiror or its Affiliates under the HSR
Act, (b) comply at the earliest practicable date with any
request for additional information received by the
Acquiror or its Affiliates from the Federal Trade
Commission or Antitrust Division of the Department of
Justice pursuant to the HSR Act, (c) cooperate with Delta
in connection with the filings under the HSR Act, and (d)
request early termination of the applicable waiting
period.
7.3 NOTICE AND CURE. The Acquiror will notify
Delta promptly in writing of, and contemporaneously will
provide Delta with true and complete copies of any and
all information or documents relating to, and will use
all commercially reasonable efforts to cure before the
Closing, any event, transaction, or circumstance
occurring after the date of this Agreement that causes or
will cause any covenant or agreement of the Acquiror
under this Agreement to be breached, or that renders or
will render untrue any representation or warranty of the
Acquiror contained in this Agreement as if the same were
made on or as of the date of such event, transaction, or
circumstance. The Acquiror also will use all commercially
reasonable efforts to cure, before the Closing, any
violation or breach of any representation, warranty,
covenant, or agreement made by it in this Agreement,
whether occurring or arising before or after the date of
this Agreement.
7.4 EMPLOYMENT AND CONSULTING AGREEMENTS.
AmerUs will use all commercially reasonable efforts to
enter into (or to cause Delta to enter into) a mutually
agreeable Employment and Non-Competition Agreement with
the Delta Employee set forth on Exhibit 3.1(f)(iii)
hereto
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF AMERUS AND SUB
The obligations of AmerUs and Sub hereunder are
subject to the fulfillment, at or before the Closing, of
each of the following conditions (all or any of which may
be waived in whole or in part by the Acquiror).
8.1 REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Delta set forth in this
Agreement that are qualified as to materiality shall be
true and correct, and the representations and warranties
of Delta set forth in this Agreement that are not so
qualified shall be true and correct in all material
respects, in each case as of the date of this Agreement
and as of the Closing Date as though made on and as of
the Closing Date, except to the extent any such
representation or warranty expressly relates to an
earlier date (in which case as of such date), and AmerUs
shall have received a certificate signed on behalf of
Delta by its Chairman, President and Chief Executive
Officer, Executive Vice President and Chief Operating
Officer and (to the extent of her actual knowledge)
Senior Vice President, Secretary and General Counsel to
such effect.
8.2 PERFORMANCE. Delta shall have performed
and complied in all material respects with all
agreements, covenants, obligations, and conditions
required by this Agreement to be so performed or complied
with at or before the Closing, including those
specifically referred to elsewhere in this Article VIII,
and AmerUs shall have received a certificate signed on
behalf of Delta by its Chairman, President and Chief
Executive Officer, Executive Vice President and Chief
Operating Officer and (to the extent of her actual
knowledge) Senior Vice President, Secretary and General
Counsel to such effect.
8.3 OFFICER'S CERTIFICATES. Delta shall have
delivered to the Acquiror a certificate, dated the
Closing Date in form reasonably acceptable to Acquiror
and executed by the Chairman, President and Chief
Executive Officer, the Executive Vice President and Chief
Operating Officer and (to the extent of her actual
knowledge) the Senior Vice President, Secretary and
General Counsel of Delta, certifying with respect to the
fulfillment of the conditions set forth in this Article
VIII. In addition, Delta shall have delivered to the
Acquiror a certificate, dated the Closing Date and
executed by the Secretary of Delta, certifying (a) that
Delta has duly and validly taken all corporate action
necessary to authorize its execution and delivery of this
Agreement and its performance of its obligations under
this Agreement, (b) that the resolutions (true and
complete copies of which shall be attached to the
certificate) of the Board of Directors and stockholders
of Delta with respect to this Agreement and the
transactions contemplated hereby have been duly and
validly adopted and are in full force and effect and (c)
as to the aggregate amount of legal and investment
banking fees incurred by Delta in connection with the
transactions contemplated by this Agreement.
8.4 HSR ACT APPROVAL. All waiting periods
applicable to this Agreement and the transactions
contemplated hereby under the HSR Act shall have expired
or been waived.
8.5 NO INJUNCTION. There shall not be in
effect on the Closing Date any writ, judgment,
injunction, decree, or similar order of any court or
similar Person restraining, enjoining, or otherwise
preventing consummation of any of the transactions
contemplated by this Agreement.
8.6 NO PROCEEDING OR LITIGATION. There shall
not be instituted, pending, or threatened, any action,
suit, investigation, or other proceeding in, before, or
by any court, governmental or regulatory authority or
other Person, to restrain, enjoin, or otherwise prevent
consummation of any of the transactions contemplated by
this Agreement or to recover any damages or obtain other
relief as a result of this Agreement or any of the
transactions contemplated hereby or as a result of any
Contract entered into in connection with or as a
condition precedent to the consummation hereof, which
action, suit, investigation or other proceeding could, in
the reasonable opinion of the Acquiror, result in a
decision, ruling, or finding that individually or in the
aggregate has or could reasonably be expected to have a
Material Adverse Effect on the Surviving Corporation.
8.7 CONSENTS, AUTHORIZATIONS, ETC. Delta,
Delta Insurance and AmerUs shall have obtained or made,
as appropriate, such material consents, approvals,
orders, authorizations, registrations, declarations,
permits or filings in connection with this Agreement and
the transactions contemplated by this Agreement for the
conduct of their businesses as currently conducted or as
expected to be conducted. All orders, consents, permits,
authorizations, approvals, and waivers of every Person
disclosed pursuant to Section 4.6(e) (including without
limitation any requisite action of the insurance
regulatory authorities in Tennessee and the NASD), in
each case without the abrogation or diminishment of the
authority or license currently held by Delta Insurance or
Delta Life Securities, Inc. or the imposition of
significant restrictions upon the transactions
contemplated hereby or the conduct of the business of the
Surviving Corporation, shall have been obtained and shall
be in full force and effect.
8.8 NO ADVERSE CHANGE. There shall not have
been, occurred, or arisen since the date of this
Agreement any change, event (including without limitation
any damage, destruction, or loss whether or not covered
by insurance), condition, or state of facts of any
character that individually or in the aggregate has or
could reasonably be expected to have a Material Adverse
Effect on Delta or Delta Insurance.
8.9 CONFORMITY WITH ANNUAL STATEMENT. No
matter, event, condition or state of facts of any
character shall have come to the attention of AmerUs
which, in the judgment of AmerUs, differs materially and
adversely from the statements and information set forth
in the 1996 Annual Statement of Delta Life.
8.10 OPINION OF COUNSEL. Delta shall have
delivered to the Acquiror the opinion, substantially in
the form of Exhibit 8.10 hereto, dated the Closing Date,
of Waring Xxx, PLC, special counsel to Delta.
8.11 STOCKHOLDER MATTERS. The stockholders
of Delta shall have approved the Merger by the requisite
vote at the Special Meeting or through the Consent
Solicitation, and the transfer, option and disposition
provisions of the Stockholders' Agreement, if applicable
to the Merger, shall not have been exercised by any party
to the Stockholders' Agreement.
8.12 DISSENTERS' RIGHTS. Delta shall not have
received notices of intent to perfect rights as a
dissenting shareholder under the DGCL from the holders of
more than 5% of the outstanding Common Stock and
Preferred Stock.
8.13 EMPLOYMENT AND NON-COMPETE AGREEMENT.
The Acquiror and Xx. Xxxx Xxxxxxxx shall have entered
into a mutually acceptable Employment and Non-Competition
Agreement which shall be in full effect and force as of
the Closing Date.
8.14 SEVERANCE ARRANGEMENTS. No payments made
by any Acquired Company or by the Surviving Corporation
in connection with the transactions contemplated by this
Agreement would constitute "parachute payments" within
the meaning of Section 280G of the Code.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF DELTA
The obligations of Delta hereunder are subject
to the fulfillment, at or before the Closing, of each of
the following conditions (all or any of which may be
waived in whole or in part by Delta).
9.1 REPRESENTATIONS AND WARRANTIES. The
representations and warranties of AmerUs set forth in
this Agreement that are qualified as to materiality shall
be true and correct, and the representations and
warranties of AmerUs set forth in this Agreement that are
not so qualified shall be true and correct in all
material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on
and as of the Closing Date, except to the extent any such
representation or warranty expressly relates to an
earlier date (in which case as of such date), and Delta
shall have received a certificate signed on behalf of
AmerUs by the Chief Executive Officer and the Chief
Financial Officer to such effect.
9.2 PERFORMANCE. AmerUs shall have performed
and complied with all agreements, covenants, obligations,
and conditions required by this Agreement to be so
performed or complied with at or before the Closing and
Delta shall have received a certificate signed on behalf
of AmerUs by the Chief Executive Officer and the Chief
Financial Officer to such effect.
9.3 OFFICER'S CERTIFICATES. AmerUs shall have
delivered to Delta a certificate, dated the Closing Date
in form reasonably acceptable to Delta and executed by
the Chief Executive Officer and Chief Financial Officer
of AmerUs, certifying with respect to the fulfillment of
the conditions set forth in this Article IX. In
addition, AmerUs shall have delivered to Delta a
certificate, dated the Closing Date and executed by the
secretary or any assistant secretary of AmerUs,
certifying that AmerUs has duly and validly taken all
corporate action necessary to authorize its execution and
delivery of this Agreement and its performance of its
obligations under this Agreement, and that the
resolutions (true and complete copies of which shall be
attached to the certificate) of the Board of Directors of
AmerUs with respect to this Agreement and the
transactions contemplated hereby have been duly and
validly adopted and are in full force and effect.
9.4 HSR ACT APPROVAL. All waiting periods
applicable to this Agreement and the transactions
contemplated hereby under the HSR Act shall have expired
or been waived.
9.5 MERGER CONSIDERATION. The Merger
Consideration shall be deposited with the Escrow Agent
pursuant to Section 2.3.2.
9.6 NO INJUNCTION. There shall not be in
effect on the Closing Date any writ, judgment,
injunction, decree, or similar order of any court or
similar Person restraining, enjoining, or otherwise
preventing consummation of any of the transactions
contemplated by this Agreement.
9.7 CONSENTS, AUTHORIZATIONS, ETC. All orders,
consents, permits, authorizations, approvals and waivers
of every Person disclosed pursuant to Section 5.4(e) and
necessary to permit Delta to perform its obligations
under this Agreement and to consummate the transactions
contemplated hereby shall have been obtained and shall be
in full force and effect.
9.8 OPINION OF COUNSEL. AmerUs shall have
delivered to Delta the opinion, in form and substance
reasonably acceptable to Delta, dated the Closing Date,
of Xxxxxx X. Xxxxxxxx, Esq. counsel to AmerUs,
substantially in the form attached as Exhibit 9.8 hereto.
ARTICLE X
SURVIVAL OF PROVISIONS; REMEDIES
10.1 SURVIVAL. Except for Section 13.4, the
representations, warranties, covenants and agreements
respectively required to be made by Delta and the
Acquiror in this Agreement will not survive after the
Effective Time. Thereafter, Delta and its Affiliates
will have no liability (for damages, indemnification or
otherwise) with respect to any representation, warranty,
covenant or obligation to be performed or complied with
prior to the Closing (except to the extent such liability
is attributable to actual fraud on the part of Delta or
any such Affiliates).
10.2 AVAILABLE REMEDIES. Each party expressly
agrees that, consistent with its intention and agreement
to be bound by the terms of this Agreement and to
consummate the transactions contemplated hereby, subject
only to the performance or satisfaction of precedent
conditions or of precedent requirements imposed upon
another party hereto, the remedy of specific performance
shall be available to a non-breaching and non-defaulting
party to enforce performance of this Agreement by a
breaching or defaulting party, including, without
limitation, to require the consummation of the Closing on
the Closing Date. The rights and remedies provided for
in this Agreement are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have
at law or in equity.
ARTICLE XI
TERMINATION
11.1 TERMINATION. This Agreement may be
terminated, and the transactions contemplated hereby may
be abandoned, upon notice by the terminating party to the
other party:
(a) at any time before the Closing, by mutual
written agreement of the parties; or
(b) at any time by Delta if any of the
covenants set forth in Article VII shall have been
breached or any of the conditions set forth in
Article IX hereof shall not have been satisfied,
performed, or complied with, in any material
respect, at or before the Closing Date and such
breach, non-satisfaction, non-performance, or non-
compliance has not been cured or eliminated within
30 calendar days after notice thereof has been given
to the Acquiror, provided that at the time of such
termination Delta has neither breached any of the
covenants set forth in Article VI nor failed to
satisfy, perform, or comply with any of the
conditions set forth in Article VIII hereof, in any
material respect;
(c) at any time by the Acquiror if any of the
covenants set forth in Article VI shall have been
breached or any of the conditions set forth in
Article VIII hereof shall not have been satisfied,
performed, or complied with, in any material
respect, before the Closing Date and such breach,
non-satisfaction, non-performance, or non-compliance
has not been cured or eliminated within 30 days
after notice thereof has been given to Delta,
provided that at the time of such termination the
Acquiror has neither breached any of the covenants
set forth in Article VII nor failed to satisfy,
perform, or comply with any of the conditions set
forth in Article IX hereof, in any material respect;
(d) by the Acquiror if (i) any supplement to
the Disclosure Schedule or other information
provided pursuant to Section 6.6, 6.19 or 6.20
discloses any material event, trend, condition,
contract, Liability, action, suit, proceeding,
claim, circumstance or fact of any character that is
not acceptable to the Acquiror, in its sole
discretion, and the Acquiror gives notice thereof to
Delta within seven days after receipt by the
Acquiror of such supplement or information, and such
event, trend, condition, contract, Liability,
action, suit, proceeding, claim, circumstance or
fact has not been cured or eliminated within 20 days
after notice thereof has been given to Delta, or
(ii) the Quarterly Statement of Delta Insurance for
the second quarter of 1997, when filed with the
Tennessee insurance regulatory authorities, is not
substantially identical to the portions thereof
provided by Delta to the Acquiror on August 13,
1997;
(e) by the Acquiror or Delta, if this
Agreement and the Merger shall have failed to
receive the requisite approval of the stockholders
of Delta at the Special Meeting or by written
consent pursuant to the Consent Solicitation;
(f) at any time after December 31, 1997, by
Delta or the Acquiror, if the transactions
contemplated by this Agreement have not been
consummated on or before such date, provided, that
this Agreement shall be extended not more than
ninety days thereafter if the Merger shall not have
occurred as a result of the failure to receive the
governmental approvals set forth in Section 4.6(e)
of the Disclosure Schedule hereto, and such failure
to obtain approval is not caused by a breach of this
Agreement (or any representation, warranty,
covenant, or agreement included herein) by the party
electing to terminate pursuant to this clause (f);
(g) by Delta or the Acquiror if, at any time
prior to approval of this Agreement and the Merger
at the Special Meeting or by action of the
stockholders of Delta taken by written consent
pursuant to the Consent Solicitation, a third party
shall have made an Acquisition Proposal which the
Board of Directors of Delta determines by majority
vote in its good faith reasonable judgment, after
consultation with outside counsel and an independent
financial advisor, is a Superior Proposal;
(h) by the Acquiror if the Board of Directors
of Delta shall have withdrawn or modified, or
proposed to withdraw or modify, its recommendation
of this Agreement or the transactions contemplated
hereby or approves or recommends, or proposes to
approve or recommend, any Acquisition Proposal; or
(i) by the Acquiror if Delta, one or more
stockholders of Delta, or any other Person shall
have exercised a right or option to acquire or
purchase Common Stock or Preferred Stock pursuant to
the terms of the Stockholders' Agreement, it being
understood that nothing in this Section 11.1(i) is
intended to state or imply that the Stockholders'
Agreement is applicable to this Agreement or the
Merger.
11.2 EFFECT OF TERMINATION. (a) If this
Agreement is validly terminated pursuant to Section 11.1
hereof, this Agreement will forthwith become null and
void, and there will be no Liability on the part of Delta
or the Acquiror or Sub (or any of their respective
Affiliates, officers, directors, employees, agents,
consultants, or other representatives), except that (i)
the provisions of this Section 11.2, Article XII and
Section 13.2 will continue to apply following any such
termination, (ii) the provisions relating to
confidentiality in Section 13.4 hereof will continue to
apply following any such termination and (iii) any such
termination shall be without prejudice to any claim which
either party may have against the other for breach of
this Agreement (or any representation, warranty,
covenant, or agreement included herein). All reasonable
out-of-pocket expenses incurred in connection with this
Agreement and the transactions contemplated hereby by a
non-breaching party who terminates this Agreement
pursuant to Section 11.1 hereof will be reimbursed
promptly by the breaching party.
(b) In the event this Agreement is terminated
by Delta pursuant to Section 11.1(g) or by the Acquiror
pursuant to Section 11.1(h), Delta shall pay to Acquiror
by wire transfer of immediately available funds (A)
within two Business Days following such termination the
amount of $5 million, plus (B) within two Business Days
following receipt of a written demand therefor, an amount
equal to all reasonable out-of-pocket expenses incurred
by Acquiror in connection with this Agreement and the
transactions contemplated hereby, it being understood
that such amounts are intended to constitute liquidated
damages and not as a penalty.
(c) In the event this Agreement is terminated
by either Delta or the Acquiror pursuant to Section
11.1(e), or by the Acquiror pursuant to Section 11.1(g),
(i) Delta shall pay to Acquiror by wire transfer of
immediately available funds within two Business Days
following receipt of a written demand therefor, an amount
equal to all reasonable out-of-pocket expenses incurred
by Acquiror in connection with this Agreement and the
transactions contemplated hereby, and in addition (ii) if
Delta or one or more stockholders of Delta, at any time
within twenty-four months following the date of such
termination, approves, enters into an agreement with
respect to, or publicly announces, (A) a merger,
consolidation or other business combination involving
Delta or any of its Subsidiaries or (B) any direct or
indirect (including through any reinsurance or
coinsurance transaction) acquisition by any Person of all
or a significant portion of the business or assets of
Delta or any of its Subsidiaries or of the capital stock
of any of the Subsidiaries of Delta, or (C) any
transaction which would result in the direct or indirect
acquisition by any Person of the power to direct the
voting or disposition of shares of capital stock of Delta
representing 50% or more of the total voting power of all
outstanding shares of capital stock of Delta, or
otherwise resulting in a change in control of Delta, or
(D) the Company shall have filed a registration statement
with the Securities and Exchange Commission pursuant to a
demand made by a stockholder under the Registration
Rights Agreement, as amended, by and among the Company
and certain stockholders, and such registration statement
shall have been declared effective then within two
Business Days following the date of such approval,
agreement or public announcement, Delta shall pay to
Acquiror by wire transfer of immediately available funds
the amount of $5 million, it being understood that such
amounts are intended to constitute liquidated damages and
not as a penalty.
(d) In the event this Agreement is terminated
by Acquiror pursuant to Section 11.1(i), Delta shall pay
to Acquiror by wire transfer of immediately available
funds (A) within two Business Days following such
termination the amount of $5 million, plus (B) within two
Business Days following receipt of a written demand
therefor, an amount equal to all reasonable out-of-pocket
expenses incurred by Acquiror in connection with this
Agreement and the transactions contemplated hereby, it
being understood that such amounts are intended to
constitute liquidated damages and not as a penalty.
ARTICLE XII
NOTICES
12.1 NOTICES. All notices and other
communications under this Agreement must be in writing
and will be deemed to have been duly given upon (a)
confirmation of receipt of a facsimile transmission, (b)
confirmed delivery by a standard overnight carrier or
when delivered by hand or (c) the expiration of five
Business Days after the day when mailed by registered or
certified mail (postage prepaid, return receipt
requested), addressed to the respective parties at the
following addresses (or such other address for a party as
shall be specified by like notice):
If to Delta, to:
Delta Life Corporation
000 Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Xx.
Executive Vice President
and Chief Operating Officer
Fax No.: (000)000-0000
With a copy to:
Delta Life Corporation
000 Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Senior Vice President, Secretary and
General Counsel
Fax No.: (000)000-0000
And to:
Waring Xxx PLC
1300 Xxxxxx Xxxxxx Tower
00 Xxxxx Xxxxx Xx.
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
If to Acquiror:
AmerUs Life Holdings, Inc.
000 0xx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
Fax No.: (000)000-0000
With Copy to:
AmerUs Life Holdings. Inc.
000 0xx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Senior VP and General Counsel
Fax No.: (000)000-0000
And to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax No.:(000)000-0000
ARTICLE XIII
MISCELLANEOUS
13.1 ENTIRE AGREEMENT. Except for documents
executed by Delta and the Acquiror pursuant hereto, this
Agreement supersedes all prior discussions and agreements
between the parties with respect to the subject matter of
this Agreement, and this Agreement (including the
exhibits hereto, the Disclosure Schedule and other
Contracts and documents delivered in connection herewith)
contains the sole and entire agreement between the
parties hereto with respect to the subject matter hereof.
13.2 EXPENSES. Except as otherwise expressly
provided in this Agreement (including, without
limitation, Section 11.2 hereof), each of Delta and the
Acquiror will pay its own costs and expenses in
connection with this Agreement and the transactions
contemplated hereby. Notwithstanding the foregoing, any
expenses incurred by Delta for legal and investment
banking fees in connection with this Agreement and the
transactions contemplated hereby in excess of an
aggregate amount of $500,000 shall be borne and paid for
by the stockholders of Delta and shall be deducted from
the cash consideration otherwise payable to them under
Article III hereof. Such amount not in excess of
$500,000 shall be paid by the Surviving Corporation at
the Closing, and each party to whom any portion of such
amount is paid shall deliver to Acquiror a receipt for
such amount, which receipt shall state that such payment
fully satisfies all amounts relating to services rendered
in connection with this Agreement and the transactions
contemplated hereby.
13.3 PUBLIC ANNOUNCEMENTS. At all times at or
before the Closing, AmerUs and Delta will each consult
with the other before issuing or making any reports,
statements, or releases to the public with respect to
this Agreement or the transactions contemplated hereby
and will use good faith efforts to agree on the text of a
joint public report, statement, or release or will use
good faith efforts to obtain the other party's approval
of the text of any public report, statement, or release
to be made solely on behalf of a party. If Delta and the
Acquiror are unable to agree on or approve any such
public report, statement, or release and such report,
statement, or release is, in the opinion of legal counsel
to a party, required by Law or may be appropriate in
order to discharge such party's disclosure obligations,
then such party may make or issue the legally required
report, statement, or release. Any such report,
statement, or release approved or permitted to be made
pursuant to this Section 13.3 may be disclosed or
otherwise provided by Delta or the Acquiror to any
Person, including without limitation to any employee or
customer of either party hereto and to any governmental
or regulatory authority.
13.4 CONFIDENTIALITY. Each of Delta and the
Acquiror will hold, and will cause its respective
Affiliates and their respective officers, directors,
employees, agents, consultants, and other representatives
to hold, in strict confidence, unless compelled to
disclose by judicial or administrative process (including
without limitation in connection with obtaining the
necessary approval of insurance regulatory authorities)
or by other requirements of Law, all confidential
documents and confidential or proprietary information
concerning the other party furnished to it by the other
party or such other party's officers, directors,
employees, agents, consultants, or representatives in
connection with this Agreement or the transactions
contemplated hereby, except to the extent that such
documents or information can be shown to have been (a)
previously lawfully known by the party receiving such
documents or information, (b) in the public domain
through no fault of such receiving party, or (c) later
acquired by the receiving party from other sources not
themselves bound by, and in breach of, a confidentiality
agreement. Except as provided in Sections 6.1, 6.2, 7.1
and 7.2 hereof, no party hereto will disclose or
otherwise provide any such confidential or proprietary
documents or information to any other Person, except to
the Acquiror's lenders and investors and to either
party's respective auditors, actuaries, attorneys,
financial advisors, and other consultants and advisors
who need such documents or information in connection with
this Agreement, and the parties hereto agree to cause
each of the foregoing to be subject to and bound by the
confidentiality provisions hereof. Moreover in the event
of termination of this Agreement, as provided in Section
11.1, no party hereto or any of their respective
Affiliates will knowingly attempt to contact, solicit,
engage, or otherwise employ or hire any employee,
regional director or agent of the other for a period of
12 months immediately following such termination.
13.5 FURTHER ASSURANCES; COOPERATION WITH
CAPITAL-RAISING. (a) Upon the terms and subject to the
conditions set forth in this Agreement, each of the
parties shall use reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done,
and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions
contemplated by this Agreement including, without
limitation, providing all information needed to secure
the financing of the Merger Consideration.
(b) Delta shall assist and cooperate with the
Acquiror in connection with an offering of securities of
the Acquiror to the extent such cooperation is necessary
to comply with the rules and regulations of the
Securities and Exchange Commission or is otherwise
reasonably requested by the Acquiror.
13.6 WAIVER. Any term or condition of this
Agreement may be waived at any time by the party that is
entitled to the benefit thereof; such waiver must be in
writing and must be executed by the Chairman of the
Board, chief executive officer, chief financial officer,
general counsel, or chief operating officer of such
party. A waiver on one occasion will not be deemed to be
a waiver of the same or any other breach on a future
occasion. All remedies, either under this Agreement, or
by Law or otherwise afforded, will be cumulative and not
alternative.
13.7 AMENDMENT. This Agreement may be modified
or amended only by a writing duly executed by or on
behalf of all parties hereto.
13.8 COUNTERPARTS; FACSIMILE SIGNATURES. This
Agreement may be executed simultaneously in any number of
counterparts, each of which will be deemed an original,
but all of which will constitute one and the same
instrument. Signatures may be exchanged by facsimile,
and such signatures will be deemed originals.
13.9 NO THIRD PARTY BENEFICIARY. The terms and
provisions of this Agreement are intended solely for the
benefit of the parties hereto, and their respective
successors or assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any
other Person.
13.10 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the Laws of
the State of Delaware applicable to a Contract executed
and performable in such state.
13.11 BINDING EFFECT. This Agreement is
binding upon and will inure to the benefit of the parties
and their respective successors and assignees.
13.12 ASSIGNMENT LIMITED. Except as otherwise
provided herein, this Agreement or any right hereunder or
part hereof may not be assigned by any party hereto
without the prior written consent of the other party
hereto. As contemplated by Section 2.1 hereof, each of
AmerUs and Sub may assign its rights (but not its
obligations) in this Agreement pursuant to an assignment
under which a Designated Subsidiary assumes and agrees to
perform all of the obligations of AmerUs or Sub hereunder
provided.
13.13 HEADINGS, GENDER, ETC. The headings used
in this Agreement have been inserted for convenience and
do not constitute matter to be construed or interpreted
in connection with this Agreement. Unless the context of
this Agreement otherwise requires, (a) words of any
gender are deemed to include each other gender; (b) words
using the singular or plural number also include the
plural or singular number, respectively; (c) the terms
"hereof," "herein," "hereby," "hereto," and derivative or
similar words refer to this entire Agreement; (d) the
terms "Article" or "Section" refer to the specified
Article or Section of this Agreement; and (e) all
references to "dollars" or "$" refer to currency of the
United States of America.
13.14 INVALID PROVISIONS. If any provision of
this Agreement is held to be illegal, invalid, or
unenforceable under any present or future Law, and if the
rights or obligations of Delta or the Acquiror under this
Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable; (b)
this Agreement will be construed and enforced as if such
illegal, invalid, or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of
this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid, or
unenforceable provision or by its severance herefrom; and
(d) in lieu of such illegal, invalid, or unenforceable
provision, there will be added automatically as a part of
this Agreement a legal, valid, and enforceable provision
as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible.
IN WITNESS WHEREOF, this Agreement has been
duly executed and delivered by the duly authorized
officers of Delta, AmerUs and Sub, effective as of the
date first written above.
AMERUS LIFE HOLDINGS, INC.
by: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman, President
and Chief Executive
Officer
AMERUS ACQUISITION CORPORATION
by: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chairman, President
and Chief Executive
Officer
DELTA LIFE CORPORATION
by: /s/ Xxxxxx Xxxx, Xx.
Name: Xxxxxx Xxxx, Xx.
Title: Chairman, President
and Chief Executive
Officer
Exhibit 3.1(f)(i)
Xxxxxx Xxxx, Xx.
Xxxxx X. Xxxxx, Xx.
Exhibit 3.1(f)(ii)
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxxxx
Exhibit 3.1(f)(iii)
Xxxx Xxxxxxxx
Exhibit 3.1(f)(iv)
Xxxx Xxxxxxxx
Xxxxx X. Xxxxxx
Exhibit 3.1(f)(v)
Xxxxx Xxxxx
