EXHIBIT 1.1
DEALER-MANAGER AGREEMENT
COUNTRYWIDE FINANCIAL CORPORATION
AND
COUNTRYWIDE HOME LOANS, INC.
July __, 2004
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. THE EXCHANGE OFFER. Countrywide Financial Corporation, a Delaware
corporation (the "COMPANY"), intends to offer to exchange (together with any
amendments and extensions thereof, the "EXCHANGE OFFER") convertible securities
due 2031 (the "NEW CONVERTIBLE SECURITIES"), with the full and unconditional
guarantee (the "NEW GUARANTEE" and, together with the New Convertible
Securities, the "NEW SECURITIES") of Countrywide Home Loans, Inc. (the
"GUARANTOR" and, together with the Company, the "ISSUERS"), for any and all of
its outstanding XXXXx due February 8, 2031 (the "OLD SECURITIES"), on the terms
and subject to the conditions set forth in the Prospectus and related Letter of
Transmittal (each as defined below) attached hereto as Exhibits A and B,
respectively.
The New Securities will be issued pursuant to an indenture (the "NEW
Indenture") to be entered into by the Issuers and The Bank of New York, as
Trustee (the "NEW TRUSTEE"). The New Securities will be convertible into cash
and duly and validly issued, fully paid and nonassessable shares of common
stock, par value $0.05 per share (the "COMMON STOCK"), of the Company (such
shares, the "CONVERSION SHARES") on the terms, and subject to the conditions,
set forth in the New Indenture (including Exhibit A thereto).
The Prospectus, the Letter of Transmittal, the Registration
Statement, the Schedule TO (each as defined below), all statements and other
documents filed or to be filed with any federal, state or local governmental or
regulatory agency or authority and such other documents (including, but not
limited to, any advertisements, press releases or summaries relating to the
Exchange Offer and any forms of letters to brokers, dealers, banks, trust
companies and other nominees relating to the Exchange Offer), in each case in
the form first authorized for use by the Issuers in connection with the Exchange
Offer and approved by the Dealer-Manager, and thereafter in each case together
with any amendments and supplements thereto made in accordance with the terms of
this agreement (this "Agreement"), are collectively referred to as the "EXCHANGE
OFFER MATERIALS".
2. APPOINTMENT AS DEALER-MANAGER. The Issuers hereby appoint Xxxxxx
Brothers Inc. ("XXXXXX BROTHERS") as sole dealer-manager in connection with the
Exchange Offer (in such capacity, the "DEALER-MANAGER"), and the Issuers hereby
authorize Xxxxxx Brothers to act as such in connection with the Exchange Offer.
On the basis of the representations and warranties and agreements of the Issuers
contained in this Agreement and subject to and in accordance with the terms and
conditions hereof, Xxxxxx Brothers agrees in accordance with its customary
practice, and in accordance with all applicable United States laws and
regulations, to use its commercially reasonable efforts to solicit tenders of
the Old Securities pursuant to the Exchange Offer and to communicate with
brokers, dealers, banks, trust companies, nominees and other persons with
respect to the Exchange Offer.
3. NO LIABILITY FOR ACTS OF BROKERS, DEALERS, BANKS, TRUST
COMPANIES, NOMINEES AND OTHERS. The Dealer-Manager shall not be subject to any
loss, claim, damage, liability or expense owed to the Issuers or any of the
Issuers' affiliates or subsidiaries for any act or omission on the part of any
broker or dealer in securities (other than itself), bank, trust company, nominee
or any other person, and the Dealer-Manager shall not be liable for its own acts
or omissions in performing its obligations as Dealer-Manager except for any
losses, claims, damages, liabilities and expenses determined in a final judgment
by a court of competent jurisdiction to have resulted directly from any such
acts or omissions undertaken or omitted to be taken by it (including its
employees and authorized agents) through its gross negligence or willful
misconduct. In soliciting or obtaining tenders of Old Securities, the Issuers
hereby acknowledge that Xxxxxx Brothers, as Dealer-Manager, is acting as an
independent contractor and shall not be deemed to be acting as the agent of the
Issuers or as the agent of any broker, dealer, bank, trust company, nominee or
other person and no broker, dealer, bank, trust company, nominee or other person
shall be deemed to be acting as the agent of the Dealer-Manager, the Issuers or
any of the Issuers' affiliates or subsidiaries.
4. THE EXCHANGE OFFER MATERIALS; COMMENCEMENT; WITHDRAWAL.
(a) The Issuers have prepared and filed with the Securities and
Exchange Commission (the "COMMISSION"), under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and the applicable rules and regulations of the
Commission under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), and the applicable rules and regulations of the
Commission under the Exchange Act, a registration statement on Form S-4 (File
No. 333- ), including a Prospectus, covering the registration of the exchange of
New Securities for Old Securities in the Exchange Offer. The term "REGISTRATION
STATEMENT" as used in this Agreement shall mean such registration statement,
including financial statements, schedules and exhibits, and the documents
incorporated by reference therein, in the form in which it became effective and,
in the event of any further amendment or supplement thereto made in accordance
with the terms of this Agreement, shall also mean (from and after the
effectiveness of such amendment or supplement) such registration statement as so
amended or supplemented. The term "PROSPECTUS" as used in this Agreement shall
mean the prospectus included in the Registration Statement and, in the event of
any further amendment or supplement thereto made in accordance with the terms of
this Agreement, shall also mean (from and after the time it is first provided by
the Issuers for use in connection with
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the Exchange Offer) such prospectus as so amended or supplemented. Any reference
herein to the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 13 of Form S-4 under the
Securities Act, as of the date of the Prospectus, as the case may be, and any
reference to any amendment or supplement to the Prospectus shall be deemed to
refer to and include any documents filed after the date of the Prospectus under
the Exchange Act and incorporated by reference in the Prospectus. The term
"LETTER OF TRANSMITTAL" as used in this Agreement shall mean the letter of
transmittal to be used by holders of the Old Securities (the "HOLDERS")
tendering outstanding Old Securities pursuant to the Exchange Offer, in the form
included in the Registration Statement.
(b) Upon the Commencement Date (as defined below), the Issuers will
file with the Commission under the Exchange Act and the rules and regulations
promulgated thereunder a Tender Offer Statement on Schedule TO with respect to
the Exchange Offer (including the exhibits thereto and any documents
incorporated by reference therein, the "SCHEDULE TO"), a copy of which Schedule
TO (including the documents required by Item 12 thereof to be filed as exhibits
thereto) in the form in which it is to be so filed, will be furnished to the
Dealer-Manager promptly upon the filing thereof.
(c) The Exchange Offer Materials have been or will be prepared and
approved by, and are the sole responsibility of, the Issuers, except for
information provided by the Dealer-Manager in writing expressly for use in the
Exchange Offer Materials, it being understood that the only information so
provided by the Dealer-Manager expressly for use in the Exchange Offer Materials
is the name, address and telephone numbers of Xxxxxx Brothers, as
Dealer-Manager. The Issuers hereby represent and warrant that they will commence
the Exchange Offer as soon as practicable by publicly announcing its
commencement and by distributing, mailing, or causing to be mailed on their
behalf, copies of, where necessary, the Exchange Offer Materials to the Holders
for delivery excluding the documents incorporated by reference in the Exchange
Offer Materials (the "INCORPORATED DOCUMENTS"), to the beneficial Holders (the
date of such announcement and of the commencement of such distribution, the
"COMMENCEMENT DATE").
(d) The Issuers hereby (i) agree to furnish the Dealer-Manager with
as many copies as it may reasonably request of the final forms of all Exchange
Offer Materials filed with the Commission, mailed to Holders, or provided to any
other governmental authority or agency and, upon its request, any other
documents incorporated therein or otherwise filed or to be filed with any
federal, state or local governmental or regulatory agency or authority, any
stock exchange or any court and (ii) authorize the Dealer-Manager to use copies
of such Exchange Offer Materials in connection with the Exchange Offer. The
Dealer-Manager hereby agrees that it will not disseminate any written materials
in connection with the Exchange Offer other than such Exchange Offer Materials.
(e) The Issuers hereby represent and agree that no solicitation
material in addition to the Exchange Offer Materials, which additional materials
shall be in the form which has been approved by the Dealer-Manager, will be used
in connection with the Exchange Offer or filed with any federal, state or local
governmental or regulatory agency or authority, including the Commission, by or
on behalf of the Issuers without the Dealer-Manager's prior approval, which
approval will not be unreasonably withheld. In the event that (i) the Issuers
use or permit the use of any solicitation material not so approved by
Dealer-Manager in connection with the Exchange
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Offer or file any such solicitation material with any such federal, state or
local governmental or regulatory agency or authority without the
Dealer-Manager's prior approval, (ii) the Issuers withdraw, terminate or cancel
the Exchange Offer, (iii) if at any time the Dealer-Manager shall determine that
any condition set forth in Section 9 shall not be satisfied, (iv) the
Registration Statement containing all of the required information, including
pricing information, and a prospectus that meets the requirements of Section
10(a) of the Securities Act (including a letter of transmittal), shall not have
become effective on or prior to the expiration date of the Exchange Offer (the
"EXPIRATION DATE") or (v) at any time during the Exchange Offer, a stop order
suspending the effectiveness of the Registration Statement shall have been
issued or a proceeding for that purpose shall have been instituted or shall be
pending or threatened by the Commission, or a request for additional information
on the part of the Commission shall not have been satisfied to the reasonable
satisfaction of the Dealer-Manager or there shall have been issued, at any time
during the Exchange Offer, any temporary restraining order or injunction
restraining or enjoining Xxxxxx Brothers from acting in its capacity as a
Dealer-Manager with respect to the Exchange Offer; then the Dealer-Manager (A)
shall have a reasonable period of time after discovering or being informed of
such event to elect whether to continue to act as Dealer-Manager and shall be
entitled to withdraw as Dealer-Manager in connection with the Exchange Offer
without any liability or penalty to it or any other person defined in Section 11
as an "Indemnified Person," (B) shall be entitled promptly to receive the
payment of all fees and expenses payable to it under this Agreement which have
accrued to the date of such withdrawal or which otherwise thereafter become
payable and (C) shall continue to be entitled to the indemnification and
contribution provisions contained in Section 11.
5. COMPENSATION. Each of the Issuers hereby jointly and severally
agrees to pay the Dealer-Manager as compensation for its services as
Dealer-Manager the fees described in the engagement letter dated July 12, 2004,
(the "ENGAGEMENT LETTER"), between Xxxxxx Brothers and the Issuers, payable in
accordance with the terms of the Engagement Letter. Nothing in this Agreement
shall affect Xxxxxx Brothers' right to receive any other fees, compensation or
reimbursement set forth in the Engagement Letter. The fees set forth in this
Section shall be paid within three business days after the Expiration Date.
6. REIMBURSEMENT OF EXPENSES AND PAYMENT OF OTHER COSTS. Each of the
Issuers hereby jointly and severally agrees (a) to reimburse Xxxxxx Brothers in
connection with its services as Dealer-Manager for any out-of-pocket expenses
incurred by it in connection with the preparation, printing, filing, mailing and
publishing of the Exchange Offer Materials and for all out-of-pocket expenses
incurred by it as Dealer-Manager, including, without limitation, the fee for
special tax counsel described in the Engagement Letter; provided, however, that
the Issuers shall only be required to reimburse the reasonable fees and
disbursements of the Dealer-Managers' legal counsel, Xxxxxxx Xxxxxxx & Xxxxxxxx
LLP if the Exchange Offer is not consummated, (b) to pay all fees and expenses
of the Exchange Agent and Information Agent (each as defined below) in
connection with the Exchange Offer, (c) to reimburse brokers, dealers, banks,
trust companies and nominees for their customary mailing and handling expenses
incurred in forwarding Exchange Offer Materials to their customers, if any, and
(d) to pay any
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reasonable advertising and public relations charges pertaining to the Exchange
Offer and the related transactions. The Issuers shall promptly reimburse the
Dealer-Manager for all amounts owing under Section 6(a) after such expenses have
been paid or accrued and an invoice therefor has been sent by the Dealer-Manager
to the Issuers, which may be sent from time to time as such expenses are paid
(but without duplication) or accrued, whether or not the Exchange Offer is
consummated and in addition to the amounts owing to the Dealer-Manager under the
preceding Section 5.
7. THE EXCHANGE AGENT AND INFORMATION AGENT.
(a) The Issuers (i) have arranged for The Bank of New York to serve
as exchange agent in connection with the Exchange Offer (the "EXCHANGE AGENT"),
(ii) will arrange for the Exchange Agent to advise the Dealer-Manager daily as
to such matters as it may reasonably request, including the aggregate principal
amount of Old Securities that have been tendered pursuant to the Exchange Offer
and (iii) will arrange for the Exchange Agent to be responsible for the payment
of the consideration offered by the Issuers to the Holders in connection with
the Exchange Offer pursuant and subject to the Prospectus.
(b) The Issuers have arranged for X.X. Xxxx & Co., Inc. to serve as
information agent in connection with the Exchange Offer (the "INFORMATION
AGENT") and to perform services in connection with the Exchange Offer that are
customary for an information agent.
(c) The Issuers will provide, or will cause the Exchange Agent and
Information Agent, as applicable, to provide, the Dealer-Manager with the
security listing position (or other cards or lists) containing the names and
addresses of, and the aggregate principal amount of Old Securities held by, the
Holders as of a recent date and will use their commercially reasonable efforts
to cause the Dealer-Manager to be advised, from time to time as it may request,
during the period of the Exchange Offer as to any transfers of record of Old
Securities. In addition, the Issuers hereby authorize the Dealer-Manager to
communicate with the New Trustee, the Exchange Agent and the Information Agent,
as applicable, with respect to matters relating to the Exchange Offer and to
cause the Exchange Agent and the Information Agent, as applicable, to advise the
Dealer-Manager daily as to such matters as it may reasonably request, including
the aggregate principal amount of Old Securities that have been tendered.
8. REPRESENTATIONS AND WARRANTIES OF THE ISSUERS. In addition to the
other representations and warranties made by the Issuers contained in this
Agreement, each of the Issuers jointly and severally represents and warrants to
the Dealer-Manager, and agrees with the Dealer-Manager, on each of the
Commencement Date, the Expiration Date, the Exchange Date (as defined herein)
and on the date of any post-effective amendment to the Registration Statement
(each, an "AMENDMENT DATE") and during the period of the Exchange Offer (i.e.,
the period commencing on the Commencement Date through and including the
Expiration Date), that:
(a) Each of the Issuers has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus; and
each of the Issuers is duly licensed or qualified to do business and is in good
standing as a foreign corporation in each other jurisdiction in which such
licensing
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or qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such qualification and good
standing the failure of which individually or in the aggregate, would not be
likely to result in (i) a material adverse effect on the business, prospects,
financial condition or results of operations of either Issuer and their
respective subsidiaries taken as a whole or (ii) the material impairment of the
ability of either Issuer to consummate the Exchange Offer and the other
transactions contemplated in the Exchange Offer Materials and to perform in any
material respect its material obligations thereunder (each of (i) and (ii), a
"MATERIAL ADVERSE EFFECT").
(b) Each of the Issuers has all necessary corporate power and
authority (i) to execute, deliver and perform its obligations under this
Agreement and (ii) to make and consummate the Exchange Offer in accordance with
its terms; and all necessary corporate action has been duly taken by it to
authorize the Exchange Offer, the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby and in
the Exchange Offer Materials. Each of the Issuers has taken or will take all
necessary corporate action to authorize any amendments or supplements to, or
modifications of, the Exchange Offer and the Exchange Offer Materials.
(c) This Agreement has been duly authorized, executed and delivered
by each of the Issuers and constitutes a valid and binding obligation of each of
the Issuers enforceable in accordance with its terms, enforceable against each
of the Issuers in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(d) Each "significant subsidiary" of each of the Issuers (as such
term is defined in Rule 1-02 of Regulation S-X) (each a "SUBSIDIARY" and,
collectively, the "SUBSIDIARIES") has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
organization, has all power and authority attendant to its form of organization
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly licensed or qualified to do business and
in good standing as a foreign entity in each other jurisdiction in which such
licensing or qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing or licensed would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and is
owned by the Issuers, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity, except
as would not result in a Material Adverse Effect; none of the outstanding shares
of capital stock of any Subsidiary was issued in violation of applicable
preemptive or similar rights, except as would not result in a Material Adverse
Effect.
(e) Neither of the Issuers, nor any of their respective
subsidiaries, is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Issuers or
any
6
of their subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Issuers or any of their
subsidiaries is subject, except for such defaults that would not result in a
Material Adverse Effect.
(f) (i) The execution, delivery and performance by each of the
Issuers of this Agreement, (ii) the making and consummation of the Exchange
Offer by the Issuers, (iii) the use of the Exchange Offer Materials and the
filing of the Registration Statement, the Prospectus and the Schedule TO and any
amendments or supplement thereto and (iv) the consummation by the Issuers of the
transactions contemplated by this Agreement and in the Exchange Offer Materials
and compliance with the terms herein or therein (all of the foregoing,
collectively, the "TRANSACTIONS"), in each case, (x) do not violate and will not
result in a violation of any of the terms or provisions of the charter or
by-laws or similar organizational documents of either of the Issuers or any of
its Subsidiaries, (y) do not and will not conflict with, or result in a breach
or violation of any of the terms or provisions of, or constitute an event of
default (or an event which with notice or lapse of time or both would become an
event of default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of either of the Issuers
or any of its subsidiaries under, (A) the certificate of incorporation or
by-laws of either of the Issuers, (B) any material loan or credit agreement,
indenture, mortgage, note, deed of trust, lease or other material agreement or
instrument to which either of the Issuers or any of its subsidiaries is a party
or by which any of them may be bound or to which any of their properties or
assets are bound or affected, (C) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental or regulatory
instrumentality or agency or court, domestic or foreign, having jurisdiction
over either of the Issuers or any of its subsidiaries or any of its properties,
assets or (D) result in the creation or imposition of any lien, charge, claim,
or encumbrance on any material asset or property of either of the Issuers or any
of its subsidiaries and (z) complies and will comply in all material respects
with all applicable laws, rules and regulations of any government or
governmental or regulatory instrumentality or agency.
(g) None of the Exchange Offer or other Transactions require or will
require any consent, qualification or decree of, approval of, waiver by, license
or authorization from, or permit of, or other action by or filing or
registration with or notification to, any court or governmental or regulatory
authority or agency other than (i) such as have been already obtained or as may
be required under the Securities Act or the Exchange Act or state securities
laws and (ii) as described in the Prospectus.
(h) Each of the Issuers meets the requirements for use of Form S-4
under the Securities Act. On the Exchange Date, the Registration Statement and
any post-effective amendment thereto, each in the form delivered to the
Dealer-Manager, and including all Incorporated Documents, shall have become
effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto has been issued under the Securities Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of either of
the Issuers, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with or otherwise
satisfied. No stop order suspending the issuance or sale of the Common Stock
pursuant to the Exchange Offer has been issued and no proceedings for that
purpose are pending or, to the knowledge of either of the Issuers, are
contemplated. No other
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stop order and no injunction, restraining order or denial of any application for
approval has been issued or proceedings, litigation or investigation initiated
or, to the best knowledge of either of the Issuers, threatened with respect to
the Exchange Offer by or before any governmental or regulatory agency, or any
court.
(i) The Exchange Offer Materials, as then amended or supplemented
(other than the Prospectus and the Registration Statement, and any amendments
and supplements thereto, which are covered in subsection (j) below), (i)
complied and will comply in all material respects with the requirements of the
Securities Act and the Exchange Act; and (ii) did not and will not contain an
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, in light of
the circumstances under which they were made, not misleading.
(j) Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Exchange Date, included or will include an untrue statement of
a material fact or omitted or will omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. At the respective times the Registration
Statement and any post-effective amendments thereto became effective and at the
Exchange Date, the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the requirements
of the Securities Act and did not and will not contain an 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. The representations
and warranties in this subsection (j) and in subsection (i) shall not apply to
statements contained in the Exchange Offer Materials furnished in writing by or
on behalf of Xxxxxx Brothers for inclusion in the Exchange Offer Materials.
(k) The Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed pursuant to Rule
424(b) under the Securities Act, complied when so filed in all material respects
with the Securities Act and the Prospectus delivered to the Dealer-Manager for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to Regulation S-T
promulgated by the Commission.
(l) The Incorporated Documents, when they became effective or were
filed (or, if an amendment with respect to any such Incorporated Document was
filed or became effective, when such amendment was filed or became effective)
with the Commission, complied and will comply in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and any
documents so filed and incorporated by reference in the Registration Statement
or the Prospectus subsequent to the effective date of the Registration Statement
and until the Expiration Date will, when they are filed with the Commission,
comply in all materials respects with the requirements of the Securities Act and
the Exchange Act, as applicable. When read together with the other information
in the Prospectus at the time the Registration Statement became effective, at
the time the Prospectus was issued and at the Exchange Date, no such
Incorporated Document, when it was filed or became effective (or, if an
amendment with respect to any such Incorporated Document was filed or became
effective, when such amendment was filed or became effective), contained, and no
document so filed and incorporated by reference in
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the Registration Statement or Prospectus subsequent to the effective date of the
Registration Statement will contain, an untrue statement of a material fact or
omitted, or will omit, to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(m) KPMG LLP, the Company's auditors beginning as of the 2004 fiscal
year, are independent public accountants with respect to the Company as required
by the Securities Act and the Exchange Act. Xxxxx Xxxxxxxx LLP, who is reporting
upon the audited financial statements with respect to the Company included in
the Prospectus, were at the times of such reports independent public accountants
with respect to the Company as required by the Securities Act and the Exchange
Act.
(n) The financial statements of the Company included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly the consolidated financial position, the results of
operations and changes in financial position of the Company and its consolidated
subsidiaries for the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries; said financial statements (including the related notes and
schedules) have been prepared in conformity with United States generally
accepted accounting principles ("U.S. GAAP") applied on a consistent basis
throughout the periods involved except, in each case, as disclosed in the
Prospectus. The supporting schedules of the financial statements of the Company,
if any, included in the Registration Statement present fairly in accordance with
U.S. GAAP the information required to be stated therein. The selected financial
data and the summary financial information of the Company included in the
Prospectus present fairly the information shown therein and have been compiled
on a basis consistent with that of the audited financial statements of the
Company included in the Registration Statement.
(o) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus and through the expiration date of
the Exchange Offer, except as otherwise stated in the Registration Statement and
Prospectus, (i) there has been no Material Adverse Effect, (ii) there have been
no transactions entered into nor direct or contingent liabilities or obligations
incurred by either of the Issuers or any of its Subsidiaries, other than those
in the ordinary course of business, which are material with respect to the
Issuer and its Subsidiaries considered as one enterprise, (iii) there has been
no dividend or distribution of any kind declared, paid or made by either of the
Issuers on any class of its capital stock, and (iv) there has not been and will
not have been any material change in the capital stock or long-term indebtedness
of either of the Issuers or any of its Subsidiaries (except as disclosed to the
Dealer-Manager in writing).
(p) The authorized, issued and outstanding capital stock of the
Company will be as of the date at which information is given in the Prospectus
as set forth in the Prospectus under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus). All of the Issuers' shares of issued and outstanding capital
stock have been duly authorized, validly issued, and fully paid and are
non-assessable; none of the Issuers' shares of issued and outstanding capital
stock was issued in violation of applicable preemptive or other similar rights.
9
(q) There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of either of the Issuers, threatened,
against or affecting either of the Issuers or any of its respective subsidiaries
which is required to be disclosed in the Registration Statement (other than as
disclosed therein), which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the performance by each of the
Issuers of its obligations hereunder or which could reasonably be expected to
materially adversely affect the consummation of the Transactions; the aggregate
of all pending legal or governmental proceedings to which each of the Issuers or
any of its subsidiaries is a party or of which any of their respective property
or assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(r) Neither of the Issuers is or, after giving effect to the
Exchange Offer and the issuance of the New Securities as described in the
Registration Statement and the Prospectus, will be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(s) The Issuers have all necessary power and authority to execute
and deliver the New Indenture and perform their obligations thereunder; the New
Indenture has been duly authorized by each of the Issuers and is duly qualified
under the Trust Indenture Act of 1939, as amended, and the rules and regulations
of the Commission thereunder; when the New Indenture is duly executed and
delivered by each of the Issuers, assuming due authorization, execution and
delivery of the New Indenture by the New Trustee, it will constitute a legally
valid and binding agreement of each of the Issuers, enforceable against each of
the Issuers in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; and the New Indenture will
conform, when executed, in all material respects to the description thereof
contained in the Registration Statement and the Prospectus.
(t) The Company has all necessary power and authority to execute,
issue and deliver the New Convertible Securities and perform its obligations
thereunder; the New Convertible Securities have been duly authorized by the
Company and when the New Convertible Securities are executed, authenticated and
issued in accordance with the terms of the New Indenture and delivered to
Holders pursuant to the Exchange Offer on the Exchange Date, assuming due
authentication of the New Convertible Securities by the New Trustee, such New
Convertible Securities will constitute legally valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, and general equitable principles (whether
considered in a proceeding in equity or at law); and the New Convertible
Securities will conform, when
10
issued, in all material respects to the description thereof contained in the
Registration Statement and the Prospectus.
(u) The Guarantor has all necessary power and authority to execute,
issue and deliver the New Guarantee and perform its obligations thereunder; the
New Guarantee has been duly authorized by the Guarantor and when the New
Guarantee is executed and authenticated in accordance with the terms of the New
Guarantee and delivered to Holders pursuant to the Exchange Offer on the
Exchange Date, assuming due authentication of the New Guarantee by the New
Trustee, such New Guarantee will constitute legally valid and binding
obligations of the Guarantor, enforceable against the Guarantor in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing; and the New Guarantee will conform, when delivered, in
all material respects to the description thereof contained in the Registration
Statement and the Prospectus.
(v) The Company has all necessary power and authority to issue and
deliver the Conversion Shares; the Conversion Shares have been duly and validly
authorized and reserved for issuance upon conversion of the New Securities and
are free of preemptive rights; all Conversion Shares, when issued and delivered
upon such conversion in accordance with the terms of the New Indenture, will be
duly and validly authorized and issued, fully paid and nonassessable and will be
free and clear of any liens; and the Conversion Shares will conform, if issued,
in all material respects to the description thereof in the Registration
Statement and the Prospectus.
(w) Each of the Issuers (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with its management's
authorization, (B) transactions are recorded and reported to its management as
necessary to permit preparation of financial statements in conformity with U.S.
GAAP and to maintain accountability for assets, (C) access to assets is
permitted only in accordance with its management's authorization and (D) the
reported accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences, all as required by the Xxxxxxxx-Xxxxx-Act of 2002, and the
Commission's regulations thereunder.
(x) Each of the Issuers is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which either of the Issuers would have any liability; neither of the
Issuers has incurred or expects to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (collectively, the
"INTERNAL REVENUE CODE"); and each "pension plan" for which either of the
Issuers would have any liability that is intended to be qualified under Section
401(a) of the Internal Revenue Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
11
(y) Each of the Issuers and each of its subsidiaries has filed all
federal, state and local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes (including withholding taxes,
penalties and interest, assessments, fees and other charges) due thereon, other
than those for which extensions have been applied for or that are being
contested in good faith and for which adequate reserves have been taken; and no
tax deficiency has been determined adversely to either of the Issuers or any of
its subsidiaries which has had (nor do either of the Issuers have any knowledge
of any tax deficiency which, if determined adversely to the Issuer or any of its
subsidiaries, might likely have) a Material Adverse Effect.
(z) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither of the Issuers has (i)
issued or granted any equity securities or securities convertible into or
exchangeable for equity securities (other than, in each case, securities issued
or granted under the stock option and similar employee benefit plans of the
Issuers and their affiliates and subsidiaries), (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business that would be required to be
disclosed on a current or periodic report prescribed by the Commission or that
would be required to be reflected on a balance sheet in accordance with GAAP,
(iii) entered into any transaction not in the ordinary course of business that
would be required to be disclosed on a current or periodic report prescribed by
the Commission or that would be required to be reflected on a balance sheet in
accordance with GAAP or (iv) declared or paid any dividend on any of its capital
stock.
The representations and warranties set forth in this Agreement shall
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Indemnified Person (as defined
herein), (ii) any termination of this Agreement or (iii) any withdrawal by the
Dealer-Manager pursuant to this Agreement.
Any certificate signed by any officer of either of the Issuers or
any of its subsidiaries and delivered to the Dealer-Manager or its counsel shall
be deemed a representation and warranty by such Issuer to the Dealer-Manager as
to the matters covered thereby.
9. CONDITIONS TO THE DEALER-MANAGER'S OBLIGATIONS. Xxxxxx Brothers'
obligation to act as Dealer-Manager shall at all times be subject to the
performance by each of the Issuers of their respective obligations herein and to
the following additional conditions:
(a) At all times from the Commencement Date to and including the
date on which the Issuers exchange New Securities for validly tendered Old
Securities that they have accepted in accordance with the terms of the Exchange
Offer (the "EXCHANGE DATE"), each of the Issuers' representations and warranties
contained herein shall be true and correct in all material respects and each of
the Issuers shall have performed in all material respects all of the agreements
contained in this Agreement and as set forth in the Exchange Offer Materials
theretofore required by each of them to have been performed. Each of the Issuers
acknowledges that Xxxxxx Brothers' agreement to act, or to continue to act, as
Dealer-Manager at a time when the Dealer-Manager knows or should know that any
such representation, warranty and agreement is or may be untrue or incorrect or
not performed, as the case may be, in a material respect shall be without
prejudice to its right subsequently to cease so to act by reason of such
untruth, incorrectness or nonperformance, as the case may be.
12
(b) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending or, to
the knowledge of the Issuers, threatened by the Commission and no injunction
suspending the offer, issuance, delivery or exchange of the New Securities
pursuant to the Exchange Offer or the Transactions has been issued and no
proceedings for that purpose are pending or, to the knowledge of the Issuers,
have been threatened and no action, lawsuit, claim or governmental or
administrative proceeding shall have been commenced or, to the best of each of
the Issuers' knowledge, threatened with respect to the Exchange Offer or the
other Transactions before any court, agency or other governmental regulatory
body of any jurisdiction that the Dealer-Manager, in good faith after
consultation with counsel, believes renders it inadvisable for the
Dealer-Manager to continue to act as Dealer-Manager.
(c) On the Commencement Date and the Exchange Date, the Issuers will
furnish to the Dealer-Manager, (i) an opinion of Xxxxxx, Xxxxxx & Xxxxx LLP,
special counsel to the Company, substantially in the form attached hereto as
Schedule I, (ii) an opinion of the Chief Legal Officer or a General Counsel of
the Company, substantially in the form attached hereto as Schedule II, and (iii)
an opinion of the Chief Legal Officer or a General Counsel of the Guarantor,
substantially in the form attached hereto as Schedule III, in each such case
addressed to the Dealer-Manager.
(d) On the Commencement Date and the Exchange Date, the
Dealer-Manager shall have received an opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel to the Dealer-Manager, addressed to the Dealer-Manager, in form and
substance satisfactory to the Dealer-Manager.
(e) On the Commencement Date, the Exchange Date, and any Amendment
Date, the Issuers will furnish to the Dealer-Manager (i) a certificate of the
Chief Executive Officer and the Chief Financial Officer of the Company in the
form attached hereto as Schedule IV and (ii) a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Guarantor in the form
attached hereto as Schedule V, in each case addressed to the Dealer-Manager and
dated the applicable date of delivery.
(f) KPMG LLP will furnish to the Dealer-Manager a letter addressed
to the Dealer-Manager (i) dated the Commencement Date in the form attached
hereto as Schedule VI and (ii) dated the Exchange Date and any Amendment Date,
in form and substance satisfactory to the Dealer-Manager.
(g) Xxxxx Xxxxxxxx LLP will furnish to the Dealer-Manager a letter
addressed to the Dealer-Manager (i) dated the Commencement Date in the form
attached hereto as Schedule VII and (ii) dated the Exchange Date and any
Amendment Date, in form and substance satisfactory to the Dealer-Manager.
(h) All opinions and certificates required to be delivered pursuant
to the terms hereof shall be in a form and substance satisfactory to counsel for
the Dealer-Manager.
10. ADDITIONAL AGREEMENTS. In addition to the other agreements of
the Issuers contained elsewhere in this Agreement, each of the Issuers hereby
agrees and acknowledges, as applicable, that:
13
(a) The Issuers will advise the Dealer-Manager promptly of any of
the following: (i) the time when the Registration Statement has become effective
and when any post-effective amendment thereto has been filed or becomes
effective, or any amendment or supplement to the Prospectus or any amendment to
the Schedule TO or any amended or additional Exchange Offer Materials shall have
been filed, (ii) the occurrence of any event which may cause either of the
Issuers to withdraw, terminate or cancel the Exchange Offer, (iii) the
occurrence of any event or the discovery of any fact, the occurrence or
existence of which they believe would require the making of any material change
in the Exchange Offer Materials then being used or would cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect, (iv) any proposal or requirement to make,
amend or supplement the Registration Statement, the Prospectus, the Schedule TO
or the other Exchange Offer Materials or other filing required by the Securities
Act, the Exchange Act, "blue sky" or other state securities laws in connection
with the Exchange Offer or to make any filing in connection with the Exchange
Offer pursuant to any other applicable law, rule or regulation, (v) the issuance
by the Commission or any other federal, state or local governmental or
regulatory agency or authority of any comment or order specifically concerning
the Registration Statement, Prospectus or any other Exchange Offer Materials,
(vi) any material development in connection with the Exchange Offer, the
Transactions (including any change of the expiration date of the Exchange Offer,
of the occurrence of any event which could cause either of the Issuers to
withdraw, rescind, modify or amend the Exchange Offer and of any consummation of
the Exchange Offer), or (vii) any other information relating to the Exchange
Offer or the Transactions which the Dealer-Manager may from time to time
reasonably request. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statement, any state securities
commission or other governmental or regulatory agency or authority shall issue
an order suspending the qualification of the New Securities under state
securities or "blue sky" laws or any other governmental or regulatory agency or
authority shall issue any order impeding the making or consummation of the
Exchange Offer, each of the Issuers shall make reasonable effort to obtain the
lifting or removal thereof as soon as possible.
(b) Until the Exchange Offer is completed or terminated, each of the
Issuers will deliver to the Dealer-Manager, promptly upon their becoming
available, copies of all financial statements, reports, notices and proxy
statements sent by the Issuers to their security holders, and of all current,
regular and periodic reports filed by either of the Issuers with any securities
exchange or with the Commission (excluding Current Reports on Form 8-K filed
with the Commission on its XXXXX system).
(c) In making and consummating the Exchange Offer, each of the
Issuers will comply in a timely manner, in all material respects, with the
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations of the Commission thereunder and any other applicable laws,
regulations and requirements.
(d) Each of the Issuers agrees to make generally available to its
security holders as soon as practicable an earnings statement that will satisfy
the provisions of Section 11(a) of the Securities Act covering a twelve-month
period beginning not later than the first day of its fiscal quarter next
following the effective date of the Registration Statement.
(e) In the event that either of the Issuers is required, or
considers it advisable, to amend or supplement the Exchange Offer Materials or
make any additional filings with any
14
federal, state or local governmental or regulatory agency or authority in
connection with the Exchange Offer, then it shall not make such amendment or
supplement or filing without the Dealer-Manager's prior approval.
(f) Each of the Issuers will file and disseminate, as required, any
necessary amendments or supplements to the Exchange Offer Materials and other
documents that are filed with any federal, state or local governmental or
regulatory agency or authority relating to the Exchange Offer, and, if there is
any such filing, it will promptly furnish to the Dealer-Manager an accurate and
complete copy of each such amendment or supplement upon the filing thereof.
(g) Each of the Issuers will use its commercially reasonable efforts
to do and perform all things required to be done and performed by it under this
Agreement that are within its control prior to or after the Exchange Date.
11. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuers hereby jointly and severally agree that they will
hold harmless and indemnify the Dealer-Manager and its affiliates and any
officer, representative, director, employee or agent of the Dealer-Manager or
any such affiliates and any person controlling (within the meaning of Section
20(a) of the Exchange Act) the Dealer-Manager or any such affiliates
(collectively, the "INDEMNIFIED PERSONS") from and against any loss, claim,
damage, liability and expense whatsoever (as incurred or suffered, and
including, but not limited to, any and all legal or other expenses 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 Issuers
promptly after receipt of any invoices therefor from the Dealer-Manager or such
other Indemnified Persons), (i) arising out of or based upon (A) any untrue
statement or alleged untrue statement of a material fact contained in the
Exchange Offer Materials, or in any solicitation material used by the Issuers or
authorized by them 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 necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, (B) any
withdrawal, termination or cancellation by the Issuers of, or failure by the
Issuers to make or consummate, the Exchange Offer, (C) any actions taken or
omitted to be taken by an Indemnified Person pursuant to this Agreement or with
the consent of the Issuers or in conformity with actions taken or omitted to be
taken by the Issuers or (D) any breach by the Issuers of any representation or
warranty, or any failure by the Issuers to comply with any agreement, 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 Transactions or the performance of Xxxxxx Brothers' services as
Dealer-Manager with respect to the Exchange Offer. However, the Issuers will not
be obligated to indemnify an Indemnified Person for any loss, claim, damage,
liability or expense pursuant to (a) clause (i) of the preceding sentence to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information provided by the Dealer-Manager expressly for use in the Exchange
Offer Materials, it being understood that the only information so provided by
the Dealer-Manager expressly for use in the Exchange Offer Materials is the
name, address and telephone numbers of Xxxxxx Brothers, as Dealer-Manager, or
(b) clause (ii) of the preceding
15
sentence, which has been determined in a final judgment by a court of competent
jurisdiction to have resulted directly from the willful misconduct or gross
negligence on the part of such Indemnified Person. The foregoing indemnity
agreement is in addition to any liability which the Issuers may otherwise have
to the Indemnified Person or to any director, officer, and employee or
controlling persons of the Indemnified Person.
(b) If any lawsuit, claim or other proceeding is brought against any
Indemnified Person in respect of which indemnification may be sought against the
Issuers pursuant to this Section 11, such Indemnified Person shall promptly
notify the Issuers of the commencement of such lawsuit, claim or proceeding
after receipt by such Indemnified Person of notice of such lawsuit, claim or
proceeding; provided, however, that the failure to so notify the Issuers shall
not relieve the Issuers from any obligation or liability which they may have
under this Section 11 except to the extent that they have been prejudiced in any
material respect by such failure and in any event shall not relieve the Issuers
from any other obligation or liability which they may have to such Indemnified
Person otherwise than under this Section 11. In case any such lawsuit, claim or
proceeding shall be brought against any Indemnified Person and such Indemnified
Person shall notify the Issuers of the commencement of such lawsuit, claim or
proceeding, the Issuers shall be entitled to participate in such lawsuit, claim
or proceeding, and, after written notice from the Issuers to such Indemnified
Person, to assume the defense of such lawsuit, claim or proceeding with counsel
of their choice at their expense; provided, however, that such counsel shall be
satisfactory to the Indemnified Person in the exercise of its reasonable
judgment. Notwithstanding the election of the Issuers to assume the defense of
such lawsuit, claim or proceeding, such Indemnified Person shall have the right
to employ separate counsel and to participate in the defense of such lawsuit,
claim or proceeding, and the Issuers shall bear the fees, costs and expenses of
such separate counsel (and shall pay such fees, costs and expenses promptly
after receipt of any invoice therefor from the Dealer-Manager) if (i) the use of
counsel chosen by the Issuers to represent such Indemnified Person would present
such counsel with a conflict of interest; (ii) the defendants in, or targets of,
any such lawsuit, claim or proceeding include both an Indemnified Person and the
Issuers, and such Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it or to other Indemnified Persons which are
different from or in addition to those available to the Issuers (in which case
the Issuers shall not have the right to direct the defense of such action on
behalf of the Indemnified Person); (iii) the Issuers shall not have employed
counsel satisfactory to such Indemnified Person, in the exercise of such
Indemnified Person's reasonable judgment, to represent such Indemnified Person
within a reasonable time after notice of the institution of any such lawsuit,
claim or proceeding; or (iv) the Issuers shall authorize such Indemnified Person
to employ separate counsel at the expense of the Issuers. The foregoing
indemnification commitments shall apply whether or not the Indemnified Person is
a formal party to any such lawsuit, claim or proceeding. The Issuers 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, or if there be a final judgment of the plaintiff in
any such action, the Issuers agree, subject to the provisions of this Section
11, to indemnify the Indemnified Person from and against any loss, damage or
liability by reason of such settlement or final judgment, as the case may be.
The Issuers agree to notify the Dealer-Manager promptly, or cause it to be
notified promptly, of the assertion in writing of any lawsuit, claim or
proceeding against the Issuers, any of their 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
16
the Exchange Offer. The Issuers further agree that in connection with any
settlement of a lawsuit, claim or proceeding against them arising out of or
relating to the Exchange Offer or the consent to the entry of any judgment with
respect to any pending or threatened lawsuit, claim or proceeding in respect of
which indemnification or contribution may be sought under this Agreement
(whether or not the Indemnified Person is an actual or potential party to such
claim or action) shall include an explicit and unconditional release from the
parties bringing such lawsuit, claim or proceeding of all Indemnified Persons
who are or could have been a party to such lawsuit, claim or proceeding if such
Indemnified Persons could have sought indemnification hereunder, which release
shall be reasonably satisfactory to the Dealer-Manager.
(c) The Issuers and the Dealer-Manager agree that if any
indemnification sought by any Indemnified Person pursuant to this Section 11 is
unavailable or is insufficient for any reason, other than that specified in the
second sentence of Section 11(a), then (whether or not the Dealer-Manager is the
Indemnified Person) the Issuers, on the one hand, and the Dealer-Manager, on the
other hand, shall contribute to the losses, claims, damages, liabilities and
expenses for which such indemnification is held unavailable or insufficient (i)
in such proportion as is appropriate to reflect the relative benefits to the
Issuers, on one hand, and the Dealer-Manager, on the other hand, in connection
with the matter giving rise to such losses, claims, damages, liabilities and
expenses, or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing clause (i) but also the
relative faults of the Issuers, on the one hand, and the Dealer-Manager, 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 the 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 the Dealer-Manager pursuant to this Agreement. It is hereby agreed
by the parties hereto that the relative benefits to the Issuers, on the one
hand, and the Dealer-Manager, on the other hand, with respect to 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 beneficial holders of the
Old Securities of the Issuers pursuant to the Exchange Offer (whether or not the
Exchange Offer is consummated) bears to (ii) the fees payable to the
Dealer-Manager with respect to the Exchange Offer pursuant to Section 5 (whether
or not the Exchange Offer is consummated). It is further agreed that the
relative faults of the Issuers, on the one hand, and the Dealer-Manager, on the
other hand, (i) in the case of an untrue or alleged untrue statement of a
material fact or an omission or alleged omission to state a material fact, shall
be determined by reference to, among other things, whether such statement or
omission relates to information supplied by the Issuers or by the Dealer-Manager
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and (ii) in the
case of any other action or omission, shall be determined by reference to, among
other things, whether such action or omission was taken or omitted to be taken
by the Issuers or the Dealer-Manager and the parties' relative intent,
knowledge, access to information and opportunity to prevent such action or
omission. The amount paid or payable by an Indemnified Person as a result of the
losses, claims, damages, liabilities or expenses referred to in this Section
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating, preparing to defend or defending any such action
or claim.
17
(d) In the event an Indemnified Person appears as a witness in any
action brought by or on behalf of or against the Issuers (other than an action
brought by the Issuers against any Indemnified Person or an action brought by an
Indemnified Person against the Issuers) in which such Indemnified Person is not
named as defendant, the Issuers agree to reimburse such Indemnified Person for
all reasonable expenses incurred by it in connection with such Indemnified
Person's appearing and preparing to appear as such a witness, including, without
limitation, the reasonable fees and disbursements of its legal counsel.
(e) The Issuers also agree that no Indemnified Person shall have any
liability to the Issuers or any person asserting claims on behalf of or in right
of the Issuers in connection with this Agreement or Xxxxxx Brothers' acting as
Dealer-Manager hereunder, except for liabilities determined in a final judgment
by a court of competent jurisdiction to have resulted directly from any acts or
omissions undertaken or omitted to be taken by any Indemnified Person through
its or his, as the case may be, gross negligence or willful misconduct.
(f) The foregoing rights to indemnification and contribution shall
be in addition to any other rights which the Dealer-Manager and the other
Indemnified Persons may have against the Issuers under common law or otherwise
including, without limitation, rights to indemnification, reimbursement and
contribution under the Engagement Letter.
12. INDEMNIFICATION, REPRESENTATIONS AND WARRANTIES TO REMAIN
OPERATIVE. The rights to indemnification, contribution and exculpation contained
in Section 11 and the representations, warranties and agreements of the Issuers
set forth in this Agreement shall survive and remain operative and in full force
and effect regardless of (a) the failure to commence the Exchange Offer, the
consummation of the Exchange Offer, any withdrawal, termination or cancellation
of the Exchange Offer for any reason whatsoever, the exchange of Old Securities
pursuant to the Exchange Offer or any withdrawal by the Dealer-Manager pursuant
to Section 4, (b) any investigation made by or on behalf of any party hereto or
any person controlling any party hereto within the meaning of Section 20(a) of
the Exchange Act and (c) the completion of the Dealer-Manager's services under
this Agreement.
13. TERMINATION. Except as set forth in Section 12, this Agreement
shall terminate upon the earliest to occur of (a) the consummation or the
termination, withdrawal or cancellation of the Exchange Offer by the Issuers,
(b) the withdrawal by Xxxxxx Brothers as the Dealer-Manager pursuant to Section
4 hereof and (c) the date that is one year from the date hereof; provided that,
Sections 3, 5, 6, 8, and 11 -- 21 hereof shall survive the termination of this
Agreement.
14. NOTICES. All notices and other communications required or
permitted to be provided under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered personally, (b) sent by
facsimile with immediate telephonic confirmation or (c) sent by registered or
certified mail, return receipt requested, postage prepaid, to the parties hereto
as follows:
18
(a) if to Xxxxxx Brothers:
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
(b) if to the Issuers:
Countrywide Financial Corporation
000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
15. MODIFICATIONS. This Agreement may not be amended or modified
except in writing signed by each of the parties hereto.
16. GOVERNING LAW. The terms of this Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
such counterparts, when so executed and delivered, shall be deemed to be an
original, and all of such counterparts, taken together, shall constitute one and
the same agreement.
19
18. SEVERABILITY. If any term or provision of this Agreement is
deemed or rendered invalid or unenforceable in any jurisdiction, then such term
or provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction, which shall remain in full force and effect.
19. SUCCESSORS. This Agreement is made solely for the benefit of the
Dealer-Manager and the Issuers and, to the extent expressly set forth herein,
the Indemnified Persons and their executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement.
20. ENTIRE AGREEMENT. This Agreement and the Engagement Letter
constitute the entire agreement by and among the parties hereto with respect to
the subject matter thereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
21. HEADINGS. The headings to sections contained in this Agreement
are included for ease of reference only, and the parties hereto agree that they
are not to be given substantive meaning or otherwise affect each party's rights
and duties hereunder.
[The rest of this page has been left blank intentionally; the signature
page follows.]
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Please indicate your willingness to act as Dealer-Manager 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 valid and legally binding
agreement between us.
Very truly yours,
COUNTRYWIDE FINANCIAL CORPORATION
By:______________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
By:______________________________
Name:
Title:
Accepted and agreed as of the date
first above written:
XXXXXX BROTHERS INC.
By: _____________________________
Authorized Representative
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