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Comptroller of the Currency

Administrator of National Banks

Licensing Operations

Western District Office

1225 17^th^ Street, Suite 300

Denver, Colorado 80202

\(720\) 475-7650 Fax (301) 333-7010

July 28, 2005 **Conditional Approval #698**

# August 2005

Brad W. Merrill

Executive Vice President

Liquidating Agent

American Investment Bank, N.A.

200 East South Temple

Salt Lake, UT 84111-1241

Re: Merger of American Investment Bank, N.A., Salt Lake City, Utah, with
and into American Investment Holdings, LLC, Salt Lake City, Utah

[CAIS Control Number: 2005-WE-12-0191]{.underline}

Dear Mr. Merrill:

This is to inform you that, as of the date of this letter, the Office of
the Comptroller of the Currency ("OCC") approved the application by the
American Investment Bank, N.A, Salt Lake City, Utah (AIB), to merge into
its nonbank affiliate, American Investment Holdings, LLC, Salt Lake
City, Utah (AIH), under 12 U.S.C. § 215a-3 and 12 C.F.R. § 5.33(g)(5),
subject to the requirements set out below (the Merger).

**Background**

On July 18, 2005, AIB, which is in liquidation under 12 U.S.C. § 181,
applied to the OCC for approval to merge into AIH, a nonbank affiliate,
under 12 U.S.C. § 215a-3 (the "Merger"), with AIH as the surviving
entity. Immediately prior to the Merger, AIB will consummate a
transaction in which Zions First National Bank, Salt Lake City, Utah
(Zions), will purchase and assume all of AIB's deposits. Immediately
upon consummation of that purchase and assumption transaction, AIB's
status as an insured bank will be terminated by the Federal Deposit
Insurance Corporation (FDIC) under 12 U.S.C. § 1818(q). Immediately
following termination of AIB's FDIC insured status, AIB will merge into
AIH, a nonbank affiliate, pursuant to

12 U.S.C. § 215a-3 and 12 C.F.R. § 5.33(g)(5), and AIB will cease to
exist as a national bank. Leucadia National Corporation directly or
indirectly wholly owns both AIB and AIH.

Brad W. Merrill

July 28, 2005

Page 2

**Discussion**

In the Merger, AIB will be merged into AIH, a Utah limited liability
company, once AIB is no longer an insured bank. After the Merger, AIH
will be the surviving entity and AIB will cease to exist. The Merger is
authorized under 12 U.S.C. § 215a-3.

Section 215a-3 authorizes a national bank to merge with a nonbank
subsidiary or affiliate: "Upon the approval of the Comptroller, a
national bank may merge with one or more of its nonbank subsidiaries or
affiliates." The statute does not limit its scope to mergers in which
the national bank is the surviving entity, and so a merger *into* a
nonbank affiliate is within its scope. Moreover, 12 C.F.R. § 5.33(g)(5),
the OCC's implementing regulation, expressly takes the position that
mergers into a nonbank affiliate are covered. However, the regulation
limits these transactions to mergers involving a national bank that is
not an insured bank as defined in 12 U.S.C. § 1813(h). *See* 12 C.F.R.
§ 5.33(g)(5)(i).

The regulations implementing section 215a-3 set out substantive and
procedural requirements for the merger of an uninsured national bank
with its nonbank affiliate in which the nonbank affiliate is the
resulting entity. The regulation requires that the law of the state or
other jurisdiction under which the nonbank affiliate is organized allow
the nonbank affiliate to engage in such mergers. The regulation also
imposes the following additional requirements that: (1) the bank comply
with the procedures of 12 U.S.C. § 214a as if it were merging into a
state bank, (2) the nonbank affiliate follow the procedures for mergers
of the law of its state of organization, and (3) shareholders of the
national bank who dissent from the merger have the dissenters' rights
set out in 12 U.S.C. § 214a. *See id.* (12 C.F.R. § 5.33(g)(5)(ii)-(v)).
The regulation also provides that the OCC shall consider the purpose of
the transaction, its impact on the safety and soundness of the bank, and
any effect on the bank's customers, and may deny a merger if it would
have a negative effect in any such respect. *See id.* (12 C.F.R.
§ 5.33(g)(5)(i)).

The proposed Merger is covered by, and meets the requirements of,
12 U.S.C. § 215a-3 and 12 C.F.R. § 5.33(g)(5). First, as discussed
above, AIB's status as an insured bank will be terminated after the
purchase and assumption transaction with Zions. AIH is an affiliate of
AIB. Since Leucadia National Corporation directly or indirectly wholly
owns both AIB and AIH, they are under "common control." AIH is thus a
nonbank affiliate of AIB. *See* 12 C.F.R. § 5.33(d)(5) & 5.33(d)(8)
(sets forth definitions of control and nonbank affiliate). *See also*
12 U.S.C. § 371c(b)(3)(A).

Second, the law under which is AIH is organized allows it to merge with
AIB. AIH is a Utah limited liability company. Utah permits its limited
liability companies to merge with other entities "if each company and
entity that is a party to the merger approves a plan of merger and if
the merger is permitted by the statues governing each entity." Utah Code
Ann. § 48-2c-1407(1). The term "entity" includes a "domestic or foreign
corporation." Id. at § 48-2c-102(8)(a). This definition would appear to
include national banking associations for Utah merger purposes.

Brad W. Merrill

July 28, 2005

Page 3

Third, AIB has complied with the procedures of 12 C.F.R. § 214a to the
extent applicable. AIB's board of directors and its sole shareholder
have unanimously approved the merger and the merger agreement.

Fourth, AIH has complied with certain procedures for mergers by Utah
limited liability companies and AIB represents that the remaining
requirements will be satisfied. Specifically, as required by Utah Code
Ann. § 48-2c-1409, AIB represents that the articles of merger will be
filed with Utah.

Fifth, the dissenters' rights requirement has been satisfied here.

Finally, under the OCC's regulations, in reviewing mergers under section
215a-3, the OCC considers the purpose of the transaction, its impact on
the safety and soundness of the bank, and any effect on the bank's
customers, and may deny the merger if it would have a negative effect in
any such respect. The OCC reviewed the Merger with respect to these
factors and determined approval of the Merger would be consistent with
them. In this regard it should be noted that AIB has already disposed of
most of its business and is in liquidation.

**Conclusion**

The approval of the Merger is granted based on a thorough review of all
information available, including commitments and representations made in
the application, the merger agreement and by AIB's representatives. In
particular, this approval is based on AIB's representation that the
Merger will occur immediately after termination of AIB's status as an
insured bank, which will occur immediately after consummation of the
purchase and assumption transaction with Zions.

This approval is subject to the following condition:

The Merger must be consummated no later than August 3, 2005.

This condition of approval is a "condition imposed in writing by the
agency in connection with the granting of any application or other
request" within the meaning of 12 U.S.C. § 1818. As such, the condition
is enforceable under 12 U.S.C. § 1818.

The OCC must be advised in writing in advance of the desired effective
date for the Merger so that the OCC may issue the certification letter
for the Merger. The OCC will issue a letter certifying consummation of
the Merger when we receive:

1\. Written assurance from the Federal Deposit Insurance Corporation
that AIB is no longer insured.

2\. The Charter of AIB, all OCC Reports of Examination, and any other
OCC documents in the possession of AIB.

3\. A copy of the final Articles of Merger filed with the Utah
Department of Commerce, Division of Corporations and Commercial Code.

Brad W. Merrill

July 28, 2005

Page 4

4.  Secretary's certificates for each institution, certifying that board
    of directors and shareholder approval has been obtained.

This approval, and the activities and communications by OCC employees in
connection with the filing, do not constitute a contract, express or
implied, or any other obligation binding upon the OCC, the United
States, any agency or entity of the United States, or any officer or
employee of the United States, and do not affect the ability of the OCC
to exercise its supervisory, regulatory, and examination authorities
under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the United States.

Should you have any questions regarding this letter, please contact me
at (720) 475-7652.

Sincerely,

**signed**

Louis T. Gittleman

Senior Licensing Analyst