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EXHIBIT 1.1
DEALER-MANAGER AGREEMENT
COUNTRYWIDE FINANCIAL CORPORATION
AND
COUNTRYWIDE HOME LOANS, INC.
July __, 2004
Lehman Brothers Inc.
745 Seventh Avenue, 3rd Floor
New York, New York 10019
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 LYONs 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".
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2. APPOINTMENT AS DEALER-MANAGER. The Issuers hereby appoint
Lehman
Brothers Inc. ("LEHMAN BROTHERS") as sole
dealer-manager in connection with the
Exchange Offer (in such capacity, the
"DEALER-MANAGER"), and the Issuers hereby
authorize Lehman 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, Lehman 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 Lehman 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 Lehman 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 Lehman 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 Lehman
Brothers and the Issuers, payable in
accordance with the terms of the Engagement
Letter. Nothing in this Agreement
shall affect Lehman 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 Lehman 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, Simpson Thacher & Bartlett
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 D.F. King & 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
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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 Lehman 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 appli
