1
EXHIBIT 1
DRAFT 9/15/95
DEALER MANAGER AGREEMENT
September __, 1995
Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[Co-Managers]
Dear Sirs:
1. Offer to Purchase. Source One Mortgage Services
Corporation, a Delaware corporation (the "Company"), proposes to make an offer,
upon the terms and subject to the conditions set forth in the Prospectus (as
hereinafter defined) and the related Letter of Transmittal (the "Letter of
Transmittal") (which together constitute the "Exchange Offer"), to exchange up
to $100,000,000 aggregate principal amount of its __% Quarterly Income Capital
Securities ("QUICS") for any and all of its outstanding shares of 8.42%
Cumulative Preferred Stock, Series A (the "Shares").
Each QUICS consists of $25 principal amount of Subordinated
Interest Deferrable Debentures, Due 2025 (the "Debentures"). The Debentures
are to be issued under an indenture dated as of ___________ __, 1995 (the "Base
Indenture") between the Company and IBJ Xxxxxxxxx Bank & Trust Company, as
trustee (the "Trustee") to be amended by a supplemental indenture (the
"Supplemental Indenture") to be dated as of _______ __, 1995 (the Base
Indenture, as amended and supplemented by the Supplemental Indenture, the
"Indenture").
2. Appointment as Dealer Managers. The Company hereby
appoints Xxxxxx Brothers Inc., Xxxxxx Xxxxx & Co., PaineWebber Incorporated,
Prudential Securities Incorporated and Xxxxx Xxxxxx Inc. (collectively, the
"Dealer Managers") as dealer managers and authorizes the Dealer Managers to act
as such in connection with the Exchange Offer. As Dealer Managers, each Dealer
Manager agrees, in accordance with its customary practice, to perform those
services in connection with the Exchange Offer as are customarily performed by
investment banking concerns acting as a dealer manager in connection with
exchange offers of like nature and as are reasonably requested by the Company
from time to time in connection therewith, including, without limitation, using
its best efforts to solicit tenders of the Shares pursuant to the Exchange
Offer and communicating with brokers, dealers, banks, trust companies and other
persons with respect to the Exchange Offer. The Company acknowledges and
agrees that no Dealer Manager, acting in its role as a Dealer Manager, will
recommend to any stockholder how such stockholder should act with respect to
the Exchange Offer. In soliciting or obtaining tenders, each Dealer Manager,
as a Dealer Manager, is acting as an independent contractor and shall not be
2
2
deemed to be acting as the agent of the Company and no broker, dealer, bank or
trust company shall be deemed to be acting as any Dealer Manager's agent. Each
Dealer Manager is authorized to use copies of the Exchange Offer Materials (as
defined in Paragraph 6(c) hereof) in connection with the solicitation of
tenders of the Shares pursuant to the Exchange Offer.
3. No Liability for Acts of Dealer Managers, Etc. No Dealer
Manager shall have any liability (in tort, contract or otherwise) to the
Company or any other person for any losses, claims, damages, liabilities or
expenses arising from any act or omission on the part of any broker, dealer
(other than such Dealer Manager), commercial bank or trust company or any other
person and no Dealer Manager shall have any liability (in tort, contract or
otherwise) to the Company or any other person for any losses, claims, damages,
liabilities or expenses arising from its own acts or omissions in performing
its obligations hereunder or otherwise in connection with the Company's
proposed acquisition of the Shares, except for any such losses, claims,
damages, liabilities or expenses which are determined, in a final judgement by
a court of competent jurisdiction or a settlement in which the issue is
established by stipulation, to have resulted directly from acts or omissions
taken by it through its gross negligence or willful misconduct.
4. Compensation. (a) The Company agrees to pay the Dealer
Managers as compensation for their services as Dealer Managers hereunder a fee
of $0.25 per each Share tendered and accepted pursuant to the terms of the
Exchange Offer. No compensation shall be paid pursuant to this Paragraph 4 if
the Exchange Offer is terminated by the Company.
(b) The Company agrees to pay to each dealer as to which an
authorized designation of such dealer has been made on a Letter of Transmittal
relating to Shares tendered in the Exchange Offer (such dealer a "Soliciting
Dealer"), including each Dealer Manager who is designated as a Soliciting
Dealer, as soon as practicable after the date any Shares are accepted for
exchange (the "Acceptance Date"), a solicitation fee of $0.50 per Share for
each Share tendered and accepted for exchange pursuant to the Exchange Offer.
On such date, the Company also agrees to pay to the Dealer Managers an amount
equal to $0.50 for each Share tendered and accepted for exchange pursuant to
the Exchange Offer and in respect of which no authorized designation of any
Soliciting Dealer has been made on the Letter of Transmittal relating to such
Shares.
(c) The Company agrees to reimburse the Soliciting Dealers
for their reasonable mailing and other out-of-pocket expenses incurred in
communicating with beneficial owners of Shares and transmitting securities.
3
3
5. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Dealer Managers that:
(a) A registration statement on Form S-4 with respect to the
Exchange Offer has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations (the "1933 Act Rules and Regulations")
of the Commission thereunder and has been filed with the Commission
under the Act. Copies of such registration statement as amended to
date have been delivered by the Company to each Dealer Manager. The
Company meets the conditions necessary to be eligible to comply with
Item 10 of Form S-4. As used in this Agreement, "Effective Time"
means the date and the time as of which such registration statement,
or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "Effective Date" means the date
of the Effective Time; "Preliminary Prospectus" means each prospectus
(including documents incorporated therein by reference) included in
such registration statement, or amendments thereof, before it became
effective under the Act; "Registration Statement" means such
registration statement (including documents incorporated therein by
reference), as amended at the Effective Time; and "Prospectus" means
the form of prospectus (including documents incorporated therein by
reference) included in the Registration Statement, as amended at the
Effective Time. The Commission has not issued any order regarding the
Exchange Offer or preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement, any post-effective amendment
thereto, the Prospectus and the Prospectus as amended or supplemented,
including any document filed by the Company hereafter pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the termination of the
offering of the QUICS ("Incorporated Document"), will contain all
statements which are required by the Act and the 1933 Act Rules and
Regulations, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations thereunder and the
Exchange Act and the rules and regulations (the "1934 Act Rules and
Regulations") of the Commission thereunder; the Indenture will conform
with the requirements of the Trust Indenture Act and the rules and
regulations of the Commission thereunder; the Statement on Schedule
13E-4 (the "13E-4 Statement") and all amendments thereto filed
pursuant to Rule 13e-4 of the 1934 Act Rules and Regulations will
contain all statements which are required by the Exchange Act and the
1934 Act Rules and Regulations; the Statement on Schedule 13E-3 (the
"13E-3 Statement") and all amendments thereto filed pursuant to Rule
13e-3 of the 1934 Act Rules and Regulations will contain all
statements which are required by the Exchange Act and the 1934 Act
Rules and
4
4
Regulations; and the Registration Statement, any post-effective
amendment thereto, the Prospectus and the Prospectus as amended or
supplemented (including Incorporated Documents), the 13E-4 Statement
and the 13E-4 Statement as amended, the 13E-3 Statement and the 13E-3
Statement as amended and the Exchange Offer Materials and all
amendments thereto will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; provided
that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement
or the Prospectus solely in reliance upon and in conformity with
information furnished by or on behalf of the Dealer Managers in
writing to the Company expressly for use therein.
(c) Neither the Company nor any of its subsidiaries is in
violation of its corporate charter or by-laws or in default under any
agreement, indenture or instrument the effect of which violation or
default would be material to the Company or the Company and its
subsidiaries taken as a whole; the commencement and consummation by
the Company of the Exchange Offer and the transactions contemplated
thereby, the execution, delivery and performance of this Agreement and
compliance by the Company with the provisions of the Exchange Offer
Materials, the Indenture and the Debentures will not conflict with,
result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its
subsidiaries pursuant to the terms of, or constitute a default under
(with or without notice and/or lapse of time), any agreement,
indenture or instrument, or result in a violation of the corporate
charter or by-laws of the Company or any of its subsidiaries or any
statute or any order, rule or regulation of any court or governmental
agency having jurisdiction over the Company, any of its subsidiaries
or their respective properties the effect of which violation or
default would be material to the Company or the Company and its
subsidiaries taken as a whole; and except as required by the Act, the
Trust Indenture Act, the Exchange Act and applicable state securities
laws and state laws, regulations or rules which regulate exchange
offers and no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for
the execution, delivery and performance of this Agreement, the
Indenture or the Debentures.
(d) Except as described in or contemplated by the
Registration Statement and the Prospectus, there has not been any
material adverse change in, or any adverse development which
materially affects, the business, properties, financial condition,
results of operations or prospects of the Company or the Company and
its subsidiaries taken as a whole from the dates as of which
information is given in the Registration Statement and the Prospectus.
5
5
(e) Ernst & Young, whose report appears in the Company's most
recent Annual Report on Form 10-K which is incorporated by reference
in the Prospectus, are independent public accountants as required by
the Act and the 1933 Act Rules and Regulations.
(f) The Base Indenture has been duly authorized, executed and
delivered by the Company and the Trustee and qualified under the Trust
Indenture Act and the Supplemental Indenture has been duly authorized
by the Company and qualified under the Trust Indenture Act, and, when
it is executed and delivered by authorized officers of the Company and
duly authorized, executed and delivered by the Trustee, the Indenture
will constitute a valid and legally binding instrument of the Company
enforceable in accordance with its terms; the Debentures have been
duly authorized by the Company, and, when executed and delivered by
authorized officers of the Company and duly authenticated by the
Trustee and exchanged pursuant to the Exchange Offer, will constitute
valid and legally binding obligations of the Company enforceable in
accordance with their terms and entitled to the benefits of the
Indenture; and the Indenture and the Debentures will conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(g) The Company and each of its subsidiaries have been duly
incorporated, are validly existing and in good standing under the laws
of their respective jurisdictions of incorporation, are duly qualified
to do business and in good standing as foreign corporations in each
jurisdiction in which their respective ownership of property or the
conduct of their respective businesses requires such qualification,
and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are
engaged. Except as may be disclosed in the Registration Statement,
all outstanding shares of capital stock of the Company's subsidiaries
are owned by the Company directly, or indirectly through wholly owned
subsidiaries, free and clear of any lien, pledge and encumbrance or
any claim of any third party.
(h) Except as described in the Prospectus, there is no
litigation or governmental proceeding pending or, to the best
knowledge of the Company after due inquiry, threatened against the
Company or any of its subsidiaries which challenges the making of the
Exchange Offer, or the acquisition by the Company of the Shares or
otherwise directly or indirectly relates to the Exchange Offer, or
which might result in any material adverse change in the financial
condition, results of operations, business or prospects of the Company
or of the Company and its subsidiaries taken as a whole or which is
required to be disclosed in the Prospectus.
6
6
(i) The financial statements and schedules filed as part of
the Registration Statement or included in, or incorporated by
reference into, any Preliminary Prospectus or the Prospectus present
fairly, and the financial statements and schedules included in any
Incorporated Document will present fairly, the financial condition and
results of operations of the entities purported to be shown thereby,
at the dates and for the periods indicated, and have been, and in the
case of financial statements and schedules included in any
Incorporated Document will be, prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved.
(j) The documents incorporated by reference into each
Preliminary Prospectus and the Prospectus have been, and each
Incorporated Document will be, prepared by the Company in conformity
with the requirements of the Exchange Act and the 1934 Act Rules and
Regulations and such documents have been, or in the case of the
Incorporated Documents will be, timely filed as required thereby.
Copies of each of the documents incorporated by reference into each
Preliminary Prospectus and the Prospectus have been delivered by the
Company to each of the Dealer Managers.
(k) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the
Act or by the 1933 Act Rules and Regulations, or which were required
to be filed as exhibits to the 13E-4 Statement or the 13E-3 Statement
or any document incorporated by reference in any Preliminary
Prospectus or the Prospectus by the Exchange Act or the 1934 Act Rules
or Regulations, which have not been filed as exhibits to the
Registration Statement, the 13E-4 Statement, the 13E-3 Statement or
such document or incorporated therein by reference as permitted by the
1933 Act Rules and Regulations or the 1934 Act Rules and Regulations
as required.
(l) In connection with the Exchange Offer and to the extent
applicable, the Company has complied, and will continue to comply,
with the Exchange Act and the 1934 Act Rules and Regulations.
(m) There are no holders of securities of the Company who, by
reason of the filing of the Registration Statement under the Act or
the execution by the Company of this Agreement, have the right to
request or demand that the Company register under the Act securities
held by them.
(n) All necessary corporate action has been duly taken by the
Company to authorize the commencement and consummation of the Exchange
Offer and this Agreement has been duly authorized, executed and
delivered by the Company.
7
7
6. Covenants. The Company agrees:
(a) To commence, upon the terms and subject to the conditions
set forth in the Prospectus and the Letter of Transmittal and in accordance
with the provisions of the Exchange Act and the 1934 Act Rules and Regulations,
the Exchange Offer as soon as practicable after the Effective Date, and, on or
prior to the date of commencement (within the meaning of Rule 13e-4 under the
Exchange Act) (the "Commencement Date") of the Exchange Offer, to file with the
Commission the 13E-4 Statement and the 13E-3 Statement.
(b) To furnish promptly to each Dealer Manager and its
counsel, (i) a signed copy of the Registration Statement as originally filed,
and each amendment thereto filed with the Commission, including all documents
incorporated therein by reference and all consents and exhibits filed therewith
and (ii) a signed copy of the 13E-4 Statement and the 13E-3 Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all documents incorporated therein by reference and
exhibits filed therewith.
(c) To mail to each record holder of the Shares a copy of the
Prospectus and the Letter of Transmittal and to otherwise disseminate the
Exchange Offer Material in accordance with the 1934 Act Rules and Regulations,
and to deliver promptly to each Dealer Manager (i) such number of conformed
copies of the Registration Statement as originally filed and each amendment
thereto and of each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus, of any documents incorporated by reference in any of
the foregoing documents and any amendment thereto, of any Incorporated Document
and any amendment thereto, and of the 13-4 Statement and the 13E-3 Statement
and any amended 13E-4 Statement or 13E-3 Statement, (ii) such number of copies
of the Letter of Transmittal, all press releases issued and all advertisements
approved by the Company in connection with the Exchange Offer, any amendments
to the Letter of Transmittal and any additional material authorized by the
Company for use in connection with the Exchange Offer, as amended or
supplemented from time to time (the materials referred to in clauses (i) and
(ii) hereinafter collectively referred to as the "Exchange Offer Materials")
and (iii) a recent stockholder list of Company, setting forth the name and
address of each holder and the number of Shares held of record by each holder,
and the most recent security position listing of any clearing agency within the
possession or access of the Company, to be used in connection with the Exchange
Offer, as such Dealer Manager may request.
(d) To file with the Commission any amendment to the
Registration Statement or the Prospectus or the 13E-4 Statement or the 13E-3
Statement or any supplement to the Prospectus that may, in the judgment of the
Company or the Dealer Managers, be required by the Act or the Exchange Act or
requested by the Commission and approved by the Dealer Managers.
8
8
(e) Prior to filing with the Commission any Preliminary
Prospectus, any amendment to the Registration Statement or supplement to the
Prospectus or any amendment to any document incorporated by reference in any of
the foregoing documents, any Incorporated Document or any amendment thereto,
the 13E-4 Statement or any amendment to the 13E-4 Statement or the 13E-3
Statement or any amendment to the 13E-3 Statement, to furnish a copy thereof to
each Dealer Manager and its counsel and obtain the Dealer Managers' consent to
the filing.
(f) Prior to using any Exchange Offer Materials (other than
the Exchange Offer Materials in clause (i) of Paragraph 6(c) hereof, including
any exhibits to the Registration Statement) in connection with the Exchange
Offer, to furnish copies of such material to each Dealer Manager and obtain the
Dealer Managers' consent to its use.
(g) To advise the Dealer Managers promptly (i) when the
Registration Statement and any post-effective amendment thereto becomes
effective, (ii) of any request or proposed request by the Commission for an
amendment to the Registration Statement, a supplement to the Prospectus, an
amendment to any document incorporated by reference in the Prospectus, any
Incorporated Document or any amendment thereto, an amendment to the 13E-4
Statement, an amendment to the 13E-3 Statement or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any order
regarding the Exchange Offer or directed to any document incorporated by
reference in the Prospectus or any Incorporated Document or the initiation or
threat of any proceeding regarding any such stop order or order or of any
challenge to the accuracy or adequacy of any document incorporated by reference
in the Prospectus or any Incorporated Document, (iv) of receipt by the Company
of any notification with respect to the suspension of the qualification of the
Exchange Offer in any jurisdiction or the initiation or threat of any
proceeding for that purpose, (v) of the happening of any event which could
cause the Company to withdraw or rescind the Exchange Offer or would permit the
Company to exercise any right not to accept for exchange or exchange the Shares
tendered thereunder, and (vi) of the happening of any event which makes untrue
any statement of a material fact made in the Registration Statement or the
Prospectus or the 13E-4 Statement or the 13E-3 Statement or which requires the
making of a change in the Registration or the Prospectus or the 13E-4 Statement
or the 13E-3 Statement in order to make any material statement therein not
misleading.
(h) If the Commission shall issue a stop order suspending the
effectiveness of the Registration Statement or any order regarding the Exchange
Offer, to use its best effort to obtain the lifting of that order at the
earliest possible time.
(i) As soon as practicable after the Effective Date, to make
generally available to its security holders and to deliver to
9
9
the Dealer Managers an earnings statement, conforming with the requirements of
Section 11(a) of the Act, covering a period of at least twelve months beginning
after the Effective Date.
(j) So long as any of the Debentures are outstanding, to
furnish to each Dealer Manager copies of all public reports and all reports and
financial statements furnished by the Company to the New York Stock Exchange,
Inc. (the "NYSE") pursuant to requirements of or agreements with such Exchange
or to the Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder.
(k) To endeavor to qualify the QUICS and the Debentures under
the securities laws of such jurisdictions as the Dealer Managers may reasonably
request.
(l) To pay the costs incident to the authorization, issuance,
exchange and delivery of the Debentures and any taxes payable in that
connection; the costs incident to the preparation, printing and filing under
the Act of the Registration Statement and any amendments and exhibits thereto;
the costs incident to the preparation, printing, filing, mailing and
publication of the Exchange Offer Materials and of any document and any
amendments and exhibits thereto; the costs of distributing the Registration
Statement as originally filed and each amendment and post-effective amendment
thereto (including exhibits), any Preliminary Prospectus, the Prospectus and
any amendment or supplement to the Prospectus and any documents incorporated by
reference in any of the foregoing documents or any Incorporated Document as
provided in this Agreement; the costs and expenses of any and all information
meetings, including the costs and expenses of the Dealer Managers; the fees and
expenses of the Company's counsel and independent accountants; the fees and
expenses of the Dealer Managers' counsel; the fees paid to rating agencies in
connection with the rating of the QUICS; the fees and expenses of listing the
QUICS on the NYSE; the fees and expenses of qualifying the QUICS under the
securities laws of the several jurisdictions as provided in Paragraph 5(k)
hereof and of preparing and printing a Blue Sky Memorandum (including fees of
the Dealer Managers' counsel); the fees and expenses of First Chicago Trust
Company of New York, as Exchange Agent and X.X. Xxxx & Co., Inc., as
Information Agent pursuant to any agreement with said Exchange Agent and
Information Agent; the fees and expenses of the Trustee and its counsel;
solicitation fees of any Soliciting Dealer; the fees and expenses of any other
person rendering services in connection with the Exchange Offer; the
advertising expenses incurred in connection with the Exchange Offer; and all
other costs and expenses incident to the performance of the Company's
obligations under this Agreement and the Exchange Offer.
(m) Prior to the Effective Date, to apply for the listing on
the NYSE of the QUICS and the Debentures (in denominations of $25 and integral
multiples thereof), and to use its best efforts to complete such listings.
10
10
(n) Until the termination of the Exchange Offer, to timely
file all documents and any amendments to previously filed documents, required
to be filed by it pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
(o) To arrange to have the Exchange Agent advise the Dealer
Managers by telephone, confirming such advice in writing, at the opening of
business each day during the period of the Exchange Offer, of the number of
Shares and the number of registered holders thereof (i) that were received for
exchange during the immediately preceding day, (ii) that were received for
exchange since the Commencement Date, (iii) that have been received for
exchange and verified to be in proper form for exchange, (iv) that have been
rejected for exchange and (v) that are then being processed; to arrange to have
the Exchange Agent furnish the Dealer Managers, as soon as practicable after
the date upon which QUICS are to be issued in exchange for tendered Shares
pursuant to the Exchange Offer, as described in the Prospectus, with a list of
the names and addresses of the Soliciting Dealers and as to which each such
Soliciting Dealer was so designated. When the Dealer Managers furnish the
Exchange Agent with a list of the names and addresses of the Soliciting Dealers
so designated, the Company will arrange to have the Exchange Agent calculate,
in accordance with the provisions of Paragraph 4 hereof, and promptly forward
to each Soliciting Dealer the soliciting dealer fee payable to it, together
with (i) a list (a copy of which will be sent to each Dealer Manager) setting
forth the names of the registered holders of Shares (and, if different, the
names of the exchanging holders thereof) that have so designated such
Soliciting Dealer and the aggregate number of Shares as to which each such
holder so designated such Soliciting Dealer and (ii) a copy of each Letter of
Transmittal in which such Soliciting Dealer was so designated.
7. Conditions. The obligations of the Dealer Managers
hereunder are subject to the accuracy, when made, at the Effective Time, the
Commencement Date, the commencement of each extension of the Exchange Offer as
set forth in the Prospectus (each, an "Extension Date") and the Acceptance Date
(as if made on each such date), of the representations and warranties of the
Company contained herein, to performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Registration Statement shall have become effective
not later than the first full business day next following the date of
this Agreement or such later date as shall be consented to in writing
by the Dealer Managers; at or before the Commencement Date, each
Extension Date and the Acceptance Date, no stop order suspending such
effectiveness nor any order regarding the Exchange Offer or directed
to any document incorporated by reference in the Prospectus or to any
Incorporated Document or to any of the Exchange Offer Materials, to
the 13E-4 Statement or to the 13E-3 Statement shall have been issued
and prior to that time no proceeding
11
11
regarding any such stop order or order shall have been initiated or
threatened by the Commission and no challenge shall have been made to
the accuracy or adequacy of any document incorporated by reference in
the Prospectus or to any Incorporated Document or to any of the
Exchange Offer Materials, to the 13E-4 Statement or to the 13E-3
Statement; any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus, the 13E-4
Statement or the 13E-3 Statement or otherwise shall have been complied
with; and the Company shall not have filed with the Commission the
Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or any document incorporated by reference
in any of the foregoing documents or any Incorporated Document or any
amendment thereto, the 13E-4 Statement or the 13E-3 Statement or any
amendment thereto without the consent of the Dealer Managers.
(b) No Dealer Manager shall have discovered and disclosed to
the Company on or prior to the Commencement Date, any Extension Date
or the Acceptance Date that the Registration Statement or the
Prospectus or any document incorporated by reference in the foregoing
documents or any Incorporated Document or any of the Exchange Offer
Materials or the 13E-4 Statement or the 13E-3 Statement or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the opinion of counsel for the Dealer Managers, is material
or omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement,
the Indenture and Debentures, the form of the Registration Statement
and the Prospectus and any document incorporated by reference in the
foregoing documents and any Incorporated Document, other than
financial statements and other financial data, the 13E-4 Statement,
the 13E-3 Statement and all other legal matters relating to this
Agreement and the Exchange Offer and the transactions contemplated
hereby and thereby shall be satisfactory in all respects to counsel
for the Dealer Managers and the Company shall have furnished to such
counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) Miller, Canfield, Paddock and Stone, P.L.C. shall have
furnished to the Dealer Managers its opinion addressed to each Dealer
Manager and dated the Commencement Date, as counsel of the Company, to
the effect that:
i) The Company and each of its subsidiaries have
been duly incorporated, are validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and in good
standing as foreign corporations in all
12
12
jurisdictions in which their respective ownership of property or the
conduct of their respective businesses requires such qualification
(except where the failure to so qualify would not have a material
adverse effect upon the Company or the Company and its subsidiaries
taken as a whole), and have all power and authority necessary to own
their respective properties and conduct the businesses in which they
are engaged as described in the Prospectus. Except as may be
disclosed in the Registration Statement, all outstanding shares of
capital stock of the Company's subsidiaries are owned by the Company
directly, or indirectly through wholly owned subsidiaries, free and
clear of any lien, pledge and encumbrance or any claim of any third
party;
ii) The Base Indenture has been duly authorized, executed and
delivered by the Company and the Trustee and qualified under the Trust
Indenture Act and the Supplemental Indenture has been duly authorized
by the Company and qualified under the Trust Indenture Act, and, when
it is executed and delivered by authorized officers of the Company and
duly authorized, executed and delivered by the Trustee, the Indenture
will constitute a valid and legally binding instrument of the Company
enforceable in accordance with its terms;
iii) The Debentures have been duly authorized by the Company
and, when executed and delivered by authorized officers of the
Company, duly authenticated by the Trustee and exchanged pursuant to
the Exchange Offer, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms
and entitled to the benefits of the Indenture;
iv) The outstanding Shares have been duly authorized and are
validly issued, fully paid and non-assessable with no personal
liability attaching to the ownership thereof;
v) The Registration Statement is effective under the Act, no
stop order suspending its effectiveness has been issued, and, to the
best knowledge of such counsel after due inquiry, no proceeding for
that purpose is pending or threatened by the Commission;
vi) No order regarding the Exchange Offer or directed to any
document incorporated by reference in the Prospectus or to any
Incorporated Document has been issued and, to the best knowledge of
such counsel after due inquiry, the issuance of any such order has not
been threatened and no challenge has been made to the accuracy or
adequacy of any such document;
13
13
vii) The Registration Statement, the Prospectus, the 13E-4
Statement and the 13E-3 Statement (except that no opinion need be
expressed as to the financial statements contained therein) comply as
to form in all material respects with the requirements of the Act, the
Exchange Act and the Trust Indenture Act and the applicable rules and
regulations under said Acts and the documents incorporated or deemed
to be incorporated by reference in the Prospectus which have been
filed prior to the Commencement Date (except that no opinion need be
expressed as to the financial statements contained therein) comply as
to form in all material respects with the requirements of the Exchange
Act and the 1934 Act Rules and Regulations;
viii) The statements made in the Prospectus under the captions
"Description of QUICS" and "Description of Preferred Stock," insofar
as they purport to summarize the provisions of agreements and other
instruments specifically referred to therein, are accurate summaries
of such agreements and instruments in all material respects;
ix) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company or
any of its subsidiaries which challenge the making of the Exchange
Offer, or the acquisition by the Company of the Shares or otherwise
directly or indirectly relates to the Exchange Offer, or which might
result in any material adverse change in the prospects of the Company
or of the Company and its subsidiaries taken as a whole or which is
required to be disclosed in the Prospectus which is not disclosed and
correctly summarized therein;
x) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Act or by the 1933 Act Rules and
Regulations, or which were required to be filed as exhibits to the
13E-4 Statement or the 13E-3 Statement or any document incorporated by
reference in any Preliminary Prospectus or the Prospectus by the
Exchange Act or the 1934 Act Rules or Regulations which have not been
filed as exhibits to the Registration Statement, the 13E-4 Statement,
the 13E-3 Statement or such document or incorporated therein by
reference as permitted by the 1933 Act Rules and Regulations or the
1934 Act Rules and Regulations as required;
xi) To the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its subsidiaries is in violation of its
corporate charter or by-laws, or in default under any agreement,
indenture or instrument the effect of which violation or default would
14
14
be material to the Company and its subsidiaries taken
as a whole; and
xii) This Agreement has been duly authorized, executed and
delivered by the Company; the commencement and consummation by the
Company of the Exchange Offer and the transactions contemplated
thereby, the execution, delivery and performance of this Agreement and
compliance by the Company with the provisions of the Exchange Offer
Materials, the Indenture and the Debentures will not conflict with, or
result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its
subsidiaries pursuant to the terms of, or constitute a default under
(with or without notice and/or lapse of time), any agreement,
indenture or instrument known to such counsel, or result in a
violation of the corporate charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of
any court or governmental agency having jurisdiction over the Company,
any of its subsidiaries or their respective properties the effect of
which violation or default would be material to the Company and its
subsidiaries taken as a whole; and no consent, authorization or order
of, or filing or registration with, any court or governmental agency
is required for the execution, delivery and performance of this
Agreement, the Indenture and the Debentures, except such as may be
required by the Act, the Trust Indenture Act, the Exchange Act or
state securities laws or state laws, regulations or rules which govern
exchange offers.
In rendering such opinion, such counsel (i) may state that its opinion is
limited to matters governed by the federal laws of the United States of
America, the laws of the State of Michigan, the laws of the State of New York
and the Delaware General Corporation Law and (ii) may rely, as to matters
involving the application of New York law and Delaware law to the extent such
counsel deems proper and specifies in its opinion, upon the opinion of other
counsel of good standing, provided that such other counsel is satisfactory to
counsel for the Dealer Managers and furnishes a copy of its opinion to the
Dealer Managers and (iii) may state that the opinions set forth in clauses (ii)
and (iii) above are subject to the qualification that the enforceability of the
Company's obligations under the Indenture and the Debentures may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws relating to
or affecting creditors' rights generally and by general equity principles.
Such counsel shall also have furnished to each Dealer Manager a statement,
addressed to such Dealer Manager, dated the Commencement Date to the effect
that such counsel is counsel of the Company and no facts have come to the
attention of such counsel which leads such counsel to believe that the
Registration Statement, as of the Effective Date and as of the Commencement
Date (if different), contained any untrue statement of a material fact or
omitted to state a material fact required to be
15
15
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus, any Exchange Offer Materials, the 13E-4
Statement or the 13E-3 Statement contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the
Prospectus, the Exchange Offer Materials, the 13E-4 Statement or the 13E-4
Statement except as and to the extent set forth in clause (viii) above.
(e) The Company shall have furnished to each Dealer Manager
on the Commencement Date a certificate, dated the Commencement Date, of its
Chairman, its President or a Vice President and its Treasurer or an Assistant
Treasurer stating that:
i) The representations, warranties and
agreements of the Company in Paragraph 5 are true and correct
as of the Commencement Date; the Company has complied with all
its agreements contained herein; and the conditions set forth
in Paragraph 7(a) have been fulfilled; and
ii) They have carefully examined the Registration
Statement and the Prospectus, the Incorporated Documents, the
other Exchange Offer Materials, the 13E-4 Statement and the
13E-3 Statement and, in their opinion, the Registration
Statement and the Prospectus, as of the Effective Date and the
Commencement Date (if different), and the Incorporated
Documents, as of their respective dates, and the 13E-4
Statement and the 13E-3 Statement and any other Exchange Offer
Materials, as of the Commencement Date, did not include any
untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(f) The Company shall have furnished to the Dealer Manager on
the Commencement Date a letter of Ernst & Young, addressed to each Dealer
Manager and dated the Commencement Date, confirming that they are independent
public accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of such firm with respect to the
financial information and other matters as the Dealer Managers shall reasonably
specify.
16
16
(g) On the Acceptance Date, and prior to acceptance of any
Shares tendered:
i) Miller, Canfield, Paddock and Stone, P.L.C.
shall have furnished to the Dealer Managers its opinion
addressed to each Dealer Manager and dated the Acceptance
Date, as counsel for the Company, confirming as of such date
their opinion furnished pursuant to Paragraph 7(d) hereof
except that such opinion shall give effect to the execution
and delivery by the Company of the instruments referred to
therein and the execution, authentication, issuance or
countersigning, as the case may be, by the Company or the
Trustee, as the case may be, of the securities referred to
therein;
ii) The Company shall have furnished to the
Dealer Managers a certificate, dated the Acceptance Date, of
its Chairman, its President or a Vice President and its
Treasurer or an Assistant Treasurer confirming as of such date
the matters set forth in the certificate furnished to the
Dealer Managers pursuant to Paragraph 7(f) hereof and to the
effect that since the Commencement Date, no event has occurred
which should have been set forth in a supplement to or
amendment of the Prospectus which has not been set forth in
such a supplement or amendment; and
iii) The Company shall have furnished to the
Dealer Managers a letter of Ernst & Young addressed to each
Dealer Manager and dated the Acceptance Date, confirming that
they are independent public accountants within the meaning of
the Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, and stating, as of the
Acceptance Date (or, with respect to matters involving changes
or developments since the respective dates as of which
specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of such
letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered
by its letter referred to in Paragraph 7(f) hereof and
confirming in all material respects the conclusions and
findings set forth in such prior letter.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance satisfactory to
counsel for the Dealer Managers.
8. Withdrawal. In the event that (i) the Company uses or
permits the use of any Exchange Offer Materials or files any such material with
the Commission without the Dealer Managers' prior approval which the Dealer
Managers, in good faith after consultation with the Company, believe makes it
inadvisable for the
17
17
Dealer Managers to act as Dealer Managers hereunder, (ii) any restraining order
or other injunctive order shall have been issued or any action, suit or
proceeding shall have been commenced with respect to the Exchange Offer or with
respect to any of the transactions in connection with, or contemplated by, the
Exchange Offer or this Agreement before any court or governmental agency or
other regulatory body or administrative authority which the Dealer Managers, in
good faith after consultation with the Company, believe makes it legally
inadvisable for the Dealer Managers to continue to act hereunder, (iii) the
Company shall be in violation, in any material respect, of any of its
representations, warranties and agreements hereunder or (iv) the Dealer
Managers continuing to act as Dealer Managers would in the Dealer Managers'
reasonable judgment violate any applicable statute, regulation or other law of
the United States or any state or other political subdivision thereof, then the
Dealer Managers shall be entitled to withdraw as Dealer Managers in connection
with the Exchange Offer without any liability or penalty to the Dealer Managers
or any other Indemnified Person (as defined in Paragraph 9(a)) as a result of
such withdrawal and the Dealer Managers shall be entitled to receive the
payment of the expenses specified in Paragraph 6(l) hereof. In the event the
Dealer Managers withdraw as dealer managers the Company shall file an amendment
to the Registration Statement with the Commission reflecting such withdrawal.
9. Indemnification. (a) The Company agrees to hold harmless
and indemnify each Dealer Manager, each Soliciting Dealer and their respective
affiliates and any officer, director, employee or agent of either thereof and
any person controlling (within the meaning of Section 20(a) of the Exchange
Act; each Dealer Manager, each Soliciting Dealer or any of such persons
(collectively, the "Indemnified Persons")) from and against any and all losses,
claims, damages, liabilities and expenses whatsoever (as incurred or suffered,
and including, but not limited to, any and all legal or other expenses
reasonably and actually incurred in connection with investigating, preparing to
defend or defending any lawsuit, claim or other proceeding, commenced or
threatened, whether or not resulting in any liability, which legal or other
expenses shall be reimbursed by the Company promptly after receipt of any
invoices therefor from such Dealer Manager) (i) arising out of or based upon
(A) any untrue statement or alleged untrue statement of a material fact
contained in any Exchange Offer Material or any amendment or supplement to such
Exchange Offer Material or in any other solicitation material used by the
Company or authorized by it for use in connection with the Exchange Offer, or
arising out of or based upon the omission or alleged omission to state in any
such document a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (other than statements or omissions made solely
in reliance upon and in conformity with information furnished by the Dealer
Managers in writing to the Company expressly for use therein), (B) any
withdrawal or termination by the Company of, or failure by the Company to make
or consummate, the Exchange Offer, (C) any actions
18
18
taken or omitted to be taken by an Indemnified Person with the express consent
of the Company or (D) any breach by the Company of any representation or
warranty, or any failure by the Company to comply with any agreement or
covenant, contained in this Agreement or (ii) arising out of, relating to or in
connection with or alleged to arise out of, relate to or be in connection with
the Exchange Offer, any of the other transactions contemplated by the
Prospectus or the performance of such Dealer Manager's services as a dealer
manager with respect to the Exchange Offer. However, the Company will not be
obligated to indemnify an Indemnified Person for any loss, claim, damage,
liability or expense which has been determined in a final judgment by a court
of competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Person.
(b) If any lawsuit, claim or proceeding is brought against
any Indemnified Person in respect of which indemnification may be sought
against the Company pursuant to Paragraph 9(a), such Indemnified Person shall
promptly notify in writing the Company of the commencement of such lawsuit,
claim or proceeding; provided, however, that the failure so to notify the
Company shall not relieve the Company from any obligation or liability which
either of them may have under Paragraph 9(a) except to the extent that they
have been prejudiced in any material respect by such failure. In case any such
lawsuit, claim or proceeding shall be brought against any Indemnified Person
and such Indemnified Person shall notify in writing the Company of the
commencement of such lawsuit, claim or proceeding, the Company shall be
entitled to participate in such lawsuit, claim or proceeding, and, to the
extent the Company may elect upon written notice to such Indemnified Person, to
assume the defense of such lawsuit, claim or proceeding with counsel of its
choice at its expense; provided, however, that such counsel shall be
satisfactory to the Indemnified Person in the exercise of its reasonable
judgment. If the defendants in any such action include both an Indemnified
Person and the Company, and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to the Indemnified Person
which are different from or in addition to those available to the Company, the
Indemnified Person shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such action
on behalf of such Indemnified Person. Upon receipt of notice from the Company
to such Indemnified Person of its election so as to assume the defense of such
action and approval by the Indemnified Person of counsel, the Company will not
be liable to such Indemnified Person hereunder for any legal or other expenses
subsequently incurred by such Indemnified Person in connection with the defense
thereof unless (i) the Indemnified Person shall have employed separate counsel
in connection with the assertion of its legal defenses in accordance with the
preceding sentence (it being understood, however, that the Company shall not be
liable for the expense of more than one separate counsel (and, if an action is
brought in more than one jurisdiction, one local counsel in each affected
jurisdiction) selected by the Indemnified Person), (ii) the Company shall not
have employed counsel
19
19
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person within a reasonable time after notice of commencement of action or (iii)
the Company have authorized the employment of counsel for the Indemnified
Person at the expense of the Company; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel referred
to in such clause (i) or (iii). The foregoing indemnification commitments
shall apply whether or not the Indemnified Person is a formal party to any such
lawsuit, claim or proceeding. The Company shall not be liable for any
settlement of any lawsuit, claim or proceeding effected without its consent
(which consent will not be unreasonably withheld), but if settled with such
consent, the Company agrees, subject to the provisions of this Paragraph 9(b),
to indemnify the Indemnified Person from and against any loss, damage or
liability by reason of such settlement. The Company agrees to notify the
Dealer Managers promptly, or cause the Dealer Managers to be notified promptly,
of the assertion of any lawsuit, claim or proceeding against the Company, any
of its officers or directors or any person who controls any of the foregoing
within the meaning of Section 20(a) of the Exchange Act, arising out of or
relating to the Offer.
(c) The Company and the Dealer Manager agree that if any
indemnification sought by any Indemnified Person pursuant to Paragraph 9(a) is
held by a court to be unavailable for any reason, other than that specified in
the second sentence of Paragraph 9(a), then (whether or not the Dealer Managers
are Indemnified Persons) the Company, on the one hand, and the Dealer Managers,
on the other hand, shall contribute to the losses, claims, damages, liabilities
and expenses for which such indemnification is held unavailable in such
proportion as is appropriate to reflect the relative benefits to the Company,
on one hand, and the Dealer Managers, on the other hand, in connection with the
matter giving rise to such losses, claims, damages, liabilities and expenses,
and other equitable considerations, subject to the limitation that in any event
any Dealer Manager's aggregate contribution to all losses, claims, damages,
liabilities and expenses with respect to which contribution is available
hereunder shall not exceed the amount of fees actually received by such Dealer
Manager pursuant to this Agreement. It is hereby agreed that the relative
benefits to the Company, on the one hand, and the Dealer Managers, on the other
hand, with respect to the Exchange Offer and the other transactions
contemplated by the Exchange Offer shall be deemed to be in the same proportion
as (i) the aggregate value of the consideration paid or proposed to be paid to
the holders of Shares pursuant to the Exchange Offer (whether or not the
Exchange Offer and such other transaction are consummated) bears to (ii) the
fees payable to the Dealer Managers with respect to the Exchange Offer and such
other transactions pursuant to Paragraph 4.
(d) The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal
20
20
or other expenses reasonably incurred by such Indemnified Person in connection
with investigating, preparing to defend or defending any such action or claim.
The Company also agrees that no Indemnified Person shall have any liability to
the Company or any person asserting claims on behalf of or in right of the
Company in connection with this Agreement or any Dealer Manager acting as a
dealer managers hereunder, except for liabilities determined in a final
judgment by a court of competent jurisdiction to have resulted from any acts or
omissions undertaken or omitted to be taken by them through its gross
negligence or willful misconduct. The foregoing rights to indemnification and
contribution shall be in addition to any other rights which the Dealer Managers
and the other Indemnified Persons may have against the Company under common law
or otherwise.
10. Indemnification, Representations and Warranties to Remain
Operative. The indemnity and contribution agreements contained in Paragraph 9
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of (a)
any failure to commence, or the withdrawal, rescission, termination or
consummation of, the Exchange Offer or the termination or assignment of this
Agreement, (b) any investigation made by or on behalf of any party entitled to
indemnification pursuant to the terms of Paragraph 9 and (c) any withdrawal by
the Dealer Managers pursuant to Paragraph 8.
11. Distribute Exchange Offer Materials Only. The Company
and each Dealer Manager agree not to distribute publicly any written material
in connection with the Exchange Offer other than the Exchange Offer Materials.
12. Responsibility for Shares Tendered. The Company will
have sole responsibility for acceptance or rejection of the Shares tendered for
exchange pursuant to the Exchange Offer.
13. Certain Definitions. For purposes of this Agreement, (a)
"business day" means any day on which the NYSE is open for trading, and (b)
"subsidiary" have the meanings set forth in Rule 405 of the 1933 Act Rules and
Regulations.
14. Publications. The Company agrees that the Dealer
Managers have the right to place advertisements in financial and other
newspapers and journals at its own expense describing their services to the
Company hereunder, provided that the Dealer Managers will submit a copy of any
such advertisements to the Company for its approval, which approval shall not
be unreasonably withheld.
15. Notices. All notices and other communications required
or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally to the parties hereto as
follows:
21
21
(a) If to the Dealer Managers:
Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Liability Management Group
(b) If to the Company:
16. Successors and Assigns. This Agreement, including any
right to indemnity or contribution hereunder, shall inure to the benefit of and
be binding upon the Company, each Dealer Manager and such other parties
entitled to indemnification pursuant to the terms of Paragraph 9, and the
respective successors and assigns of such parties. Nothing in this Agreement
is intended, or shall be construed, to give to any other person or entity any
right hereunder or by virtue hereof.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the principles thereof relating to conflict of laws.
18. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof and thereof.
19. Miscellaneous. In the event that any provision hereof
shall be determined to be invalid or unenforceable in any respect, such
determination shall not affect such provision in any other respect or any other
provision hereof, which shall remain in full force and effect. This Agreement
may be executed in one or more separate counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
22
22
Please indicate your willingness to act as a Dealer Manager on
the terms set forth herein and your acceptance of the foregoing provisions by
signing in the space provided below for that purpose and returning to us a copy
of this letter so signed, whereupon this letter and your acceptance shall
constitute a binding agreement among us.
Very truly yours,
SOURCE ONE MORTGAGE SERVICES
CORPORATION
By:_____________________________
Title:
Accepted as of the date
first set forth above:
XXXXXX BROTHERS INC.
By:__________________________________________
Title:
XXXXXXX XXXXX & CO.
By:__________________________________________
Title:
PAINEWEBBER INCORPORATED
By:__________________________________________
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:__________________________________________
Title:
XXXXX XXXXXX INC.
By:__________________________________________
Title:
