Brown Rudnick Announces Settlement Reached in Lawsuit Regarding Countrywide's Series B Floating Rate Convertible Senior Debentures Due 2037

Business Wire, Oct 10, 2008

Countrywide agrees to commence tender offer for the Debentures

NEW YORK -- Brown Rudnick LLP, a premier international law firm, today announced that The Bank of New York Mellon (the "Trustee"), solely in its capacity as Indenture Trustee, and Countrywide Financial Corporation ("Countrywide") settled their ongoing litigation filed in the Delaware Chancery Court. Under the settlement agreement, Countrywide has agreed to commence a tender offer for Countrywide's Series B Floating Rate Convertible Senior Debentures Due 2037 on or before October 20, 2008. The purchase price for the tender offer will be $980 per $1,000 principal amount of bonds, plus accrued interest. Upon commencement of the tender offer, the Trustee has agreed to dismiss the pending lawsuit. Two billion dollars principal amount of the bonds are outstanding. The tender offer is subject to any necessary regulatory approvals.

On July 31, 2008, Brown Rudnick, on behalf of the Trustee, commenced the litigation in the Delaware Court of Chancery. The complaint alleged that Bank of America's recent acquisition of Countrywide was a Change of Control of Countrywide under the bond indenture. According to the Trustee's complaint, this Change of Control triggered an obligation by Countrywide to repurchase all bonds at par at the option of holders. Sigmund S. Wissner-Gross, of Brown Rudnick, counsel to the Trustee and an Ad Hoc Committee of Series B bondholders, stated: "The bondholders are quite satisfied with the settlement which is designed to quickly provide them with the means to liquidate this investment at close to par."

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