Exhibit 4.5
July 28, 1997
DecisionOne Holdings Corp.
DecisionOne Corporation
00 Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Quaker Holdings Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Agreement to Act as "Qualified Independent Underwriter"
Ladies and Gentlemen:
You have advised us that (i) DecisionOne Corporation
("DecisionOne"), a Delaware corporation, has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(Reg. No. 333-28411) (the "DecisionOne S-1"), relating to the offering by
DecisionOne of $150,000,000 principal amount of % Senior Subordinated Notes
due 2007 (the "Notes"), or such other principal amount of Notes as you may
determine, and (ii) Quaker Holding Co. ("Quaker"), a Delaware corporation, has
filed with the Commission a registration statement on Form S-1 (Reg. No.
333-28539) (the "Quaker S-1"), relating to the offering by Quaker of units (the
"Units"), each consisting of $1,000 principal amount of its ____% Senior
Discount Debentures due 2008 (the "Debentures") and warrants (the "Warrants")
to purchase shares of the common stock, par value $.01 per share, of Quaker
(the "Quaker Common Stock"). We understand that the number of Units offered and
the number of shares of Common Stock included in each Debenture Warrant will be
determined based on market conditions. Upon consummation of the merger (the
"Merger") between Quaker and DecisionOne Holdings Corp. ("Holdings"), a
Delaware corporation, Holdings will succeed
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to the obligations of Quaker with respectto the Debentures and the Warrants,
and the Warrants will become exercisable for an equal number of shares of
common stock, par value $.01 per share, of Holdings (the "Holdings Common
Stock"). The term "Unit Issuer" means Quaker before the Merger and Holdings
after the Merger, the term "Note Issuer" means DecisionOne and the term
"Issuers" means the Unit Issuer and the Note Issuer. The Notes will be issued
pursuant to an Indenture by and between DecisionOne and Fleet National Bank, as
Trustee. The Debentures will be issued pursuant to an Indenture by and between
the Unit Issuer and Fleet National Bank, as Trustee.
In connection with the public offerings of the Notes and
Units (the "Offerings"), Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
(the "Underwriter") will be the underwriter. Subject to the terms and
conditions of the underwriting agreement to be entered into between DecisionOne
and the Underwriter (the "Note Underwriting Agreement"), the Underwriter will
agree to purchase from DecisionOne, and DecisionOne will agree to sell to the
Underwriter, all of the Notes. Subject to the terms and conditions of the
underwriting agreement to be entered into between the Unit Issuer and the
Underwriter (the "Unit Underwriting Agreement"), the Underwriter will agree to
purchase from the Unit Issuer, and the Unit Issuer will agree to sell to the
Underwriter, all of the Units. The Note Underwriting Agreement and the Unit
Underwriting Agreement are sometimes collectively referred to as the
Underwriting Agreements. The Notes, Units, Debentures and Warrants are
sometimes collectively referred to as the "Securities."
We understand that, as a member of the National Association
of Securities Dealers, Inc. ("NASD"), the Underwriter may participate in the
Offerings only if the yield at which the Notes are to be offered to the public
in its Offering is no lower than the yield, and if the price of each Unit to be
offered to the public in its Offering is no higher than the price, recommended
by a "Qualified Independent Underwriter" (as such term is defined in Rule
2720(b)(15) of the NASD Conduct Rules) and such Qualified Independent
Underwriter participates in the preparation of the registration statement and
prospectus relating to each of the Offerings and exercises the usual standards
of due diligence with respect thereto. This Agreement describes the terms on
which Ladenburg Xxxxxxxx & Co. Inc. ("Ladenburg") agrees to serve as such a
Qualified Independent Underwriter in connection with each of the Offerings. In
connection with the services to be provided by Ladenburg hereunder and based
upon the several representations and warranties of, and subject to the
performance of the several covenants by, the Issuers herein set forth and
Xxxxxxxxx'x satisfaction with the results of its due diligence review,
Ladenburg agrees to deliver to the Issuers and the Underwriter, and file with
the NASD, a letter (the "Letter"), substantially in the form of Appendix A
hereto, on the date
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each Registration Statement (as hereinafter defined) is first declared
effective by the Commission (the "Effective Date") or, if the Offerings are not
priced on the Effective Date, on the date of the pricing of the Offerings (the
"Pricing Date"). As a condition to the delivery of the Letter, each
Registration Statement and each amendment thereto will include any revisions
that in the reasonable judgment of Ladenburg and its legal counsel are required
to enable Ladenburg to deliver the Letter.
As herein used, except as the context may otherwise require,
the term "Registration Statement" means either the DecisionOne S-1 or the
Quaker S-1 (including the related prospectuses, financial statements, exhibits,
schedules, term sheets and all other documents filed as parts thereof or
incorporated therein) for the registration of the respective Securities under
the Securities Act of 1933, as amended (the "1933 Act"), in the form declared
effective, filed with the Commission and any amendments thereto. The term
"Prospectus" with respect to each Offering means the prospectus, including any
preliminary or final prospectus (including the form of prospectus or term sheet
first filed with the Commission pursuant to Rule 424(b) or 430A under the 1933
Act after the Registration Statement with respect to such Offering becomes
effective or, if no such filing is required, each prospectus in the form
included in the Registration Statement with respect to such Offering at the
time it is first declared effective), and any amendment or supplement thereto
(including any form of prospectus or term sheet filed with the Commission
pursuant to Rule 424(b) under the 1933 Act), to be used in connection with such
Offering.
1. NASD Requirement. Ladenburg hereby confirms its agreement
to act in connection with the Offerings as a "Qualified Independent
Underwriter" within the meaning of Rule 2720 of the NASD Conduct Rules and
represents that Ladenburg satisfies or will satisfy at the times designated in
Rule 2720(b)(15) the requirements set forth therein.
2. Consent. Ladenburg hereby consents to be named in the
Registration Statement and Prospectus with respect to each Offering as having
acted as the Qualified Independent Underwriter and to the filing of this
Agreement as an exhibit to the Registration Statement with respect to each
Offering. All references to Ladenburg in the Registration Statement or
Prospectus with respect to each Offering or in any other filing, report,
document, release or other communication prepared, issued or transmitted in
connection with the Offerings by the Issuers or the Underwriter or any entity
controlling, controlled by or under common control with, or by any of them,
shall be subject to Ladenburg's prior consent with respect to form and
substance. Ladenburg's obligation to act as a Qualified Independent Underwriter
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hereunder shall terminate if the Issuers shall breach in any material respect
any representation, warranty or covenant hereunder and such breach shall not be
cured within 10 days of written notice thereof to the Issuers, provided such
breach would adversely affect Xxxxxxxxx'x ability to meet its obligations
hereunder or impose, in Ladenburg's reasonable judgment, additional liability
on Ladenburg.
3. Fee and Expenses. The Issuers agree to pay Ladenburg an
aggregate fee of $125,000 (the "Fee") for its services hereunder, of which
$45,000 (the "Initial Payment") shall be earned upon the execution of this
Agreement. The Initial Payment, together with the balance of the Fee, shall be
payable on the date on which payment for and delivery of any of the Securities
are made (the "Closing Date"). The Issuers also agree to reimburse Ladenburg
for all reasonable out-of-pocket expenses, including all reasonable fees and
expenses of Xxxxxxxxx'x counsel, incurred by Ladenburg in connection with this
Agreement and the Offerings; provided, however, that the obligation of the
Issuers to reimburse Ladenburg for fees and expenses shall be limited to
$25,000. The limitation on fees and expenses set forth in the immediately
preceding sentence is subject to there being no (i) material change in the
nature of the Offerings as described in the draft DecisionOne S-1 and Quaker
S-1 heretofore provided to Ladenburg, (ii) material delay in the consummation
of the Offerings which causes an unexpected and material number of revisions in
either S-1 or (iii) unusual number of refilings with the Commission as a result
of the Commission's comments with respect to either S-1. Ladenburg will be
entitled to retain the full amount of such fee and receive payment of such
expenses regardless of the yield of the Notes or the price of the Units that
Ladenburg recommends pursuant to this Agreement. If, for whatsoever reason, it
is determined that the Offerings shall not commence or will not be consummated,
Ladenburg shall be entitled to be paid in full for the above-mentioned
expenses, promptly following such determination, and shall continue to be
entitled to any amount payable to Ladenburg under Section 6.
4. Representations, Warranties and Covenants of the Issuers.
(a) Each of the Issuers agrees that all of its
representations and warranties contained in the Underwriting
Agreements, when made, shall be deemed to be incorporated by
reference herein and made to Ladenburg hereunder. Each of the
Issuers agrees that its execution of an Underwriting
Agreement shall constitute confirmation to Ladenburg that, on
such date, the representations and warranties of such Issuer
included in the Underwriting Agreements are true, correct and
complete in all material respects.
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(b) Each of the Issuers represents and warrants that
this Agreement has been duly authorized, executed and
delivered by such Issuer; the performance of this Agreement
and the consummation of the transactions contemplated hereby
will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of such Issuer
pursuant to the terms or provisions of, or result in a breach
or violation of any of the terms or provisions of or
constitute a default under, any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness,
lease, contract or other agreement or instrument to which
such Issuer or any of its properties is bound, or under the
certificate of incorporation or by-laws of such Issuer or
under any statute or under any order, rule or regulation of
any court or governmental body applicable to the business or
properties of such Issuer; and no consent, approval,
authorization or order of any court or governmental agency or
body is required for the consummation by such Issuer of the
transactions on its part herein contemplated which has not
been duly obtained.
(c) Each of the Issuers agrees that all of its
covenants and other agreements contained in the Underwriting
Agreements, when made, shall be deemed to be incorporated by
reference herein and made with Ladenburg hereunder. Each of
the Issuers agrees that its execution of an Underwriting
Agreement shall constitute confirmation to Ladenburg of such
Issuer's performance in all material respects of its
covenants and other agreements contained in the Underwriting
Agreements.
5. Availability of Information.
(a) Each of the Issuers hereby agrees to provide
Ladenburg, at such Issuer's sole cost and expense, with all
information and documentation with respect to its business,
financial condition and other matters as Ladenburg may deem
relevant and shall reasonably request in connection with its
performance under this Agreement, including, without
limitation, copies of all correspondence with the Commission
or the NASD, certificates of its officers, opinions of its
counsel and comfort letters from its auditors. The
above-mentioned certificates, opinions of counsel and comfort
letters shall be provided to Ladenburg, as Ladenburg may
request on or prior to the Effective Date, on or prior to the
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Pricing Date and on or prior to the Closing Date, if then
required to be provided under either Underwriting Agreement.
Each of the Issuers will make reasonably available to
Ladenburg its auditors, counsel and officers and directors to
discuss with Ladenburg any aspect of such Issuer which
Ladenburg may deem relevant. In addition, each of the Issuers
will cause to be delivered to Ladenburg, when delivered to
the Underwriter, copies of all certificates, opinions,
comfort letters, reports and other documents delivered to the
Underwriter pursuant to the Underwriting Agreements and shall
cause the person issuing such certificate, opinion, comfort
letter, report or other document to authorize Ladenburg to
rely thereon to the same extent as if addressed directly to
Ladenburg. In addition, the Underwriter and each of the
Issuers will promptly advise Ladenburg of all telephone
conversations with the NASD or the Commission which relate to
or may affect the Offerings, the DecisionOne S-1 or the
Quaker S-1.
(b) Xxxxxx & Xxxxxxx will provide, at the
Underwriter's expense, to Ladenburg the opinions said counsel
shall deliver to the Underwriter as underwriter under the
Underwriting Agreements, which opinions shall be addressed to
Ladenburg and shall be dated the Closing Date (or any other
date on which an opinion is delivered by such counsel
pursuant to the Underwriting Agreements).
(x) Xxxxxxxxx hereby agrees to cooperate in all
reasonable respects with the Underwriter and its counsel in
responding to any comments made by the NASD with respect to
the Offerings, this Agreement or Ladenburg's role as
"Qualified Independent Underwriter".
6. Indemnification and Contribution.
(a) The Issuers severally agree to indemnify and
hold harmless Ladenburg and its directors, its officers and
each person, if any, who controls Ladenburg within the
meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with
investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages,
liabilities or judgments and any amount paid in
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settlement of, any action, suit or proceeding commenced or
any claim asserted), to which Ladenburg may become subject
under the 1933 Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or
otherwise, related to, based upon or arising out of (i) an
untrue statement or alleged untrue statement of a material
fact contained in the applicable Registration Statement, any
preliminary prospectus, either Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
(ii) any breach or alleged breach by the applicable Issuer of
its representations, warranties and agreements contained in
this Agreement or (iii) Ladenburg's performance of its duties
under this Agreement; provided, however, that the applicable
Issuer will have no obligation under this Section 6(a) to the
extent that any such loss, claim, damage, liability or action
pursuant to clause (iii) above shall have been determined in
a final judgment of a court of competent jurisdiction to have
been due to the willful misconduct or gross negligence of
Ladenburg.
Ladenburg agrees to indemnify and hold harmless each
of the Issuers, its directors and officers, and each person,
if any, who controls any of the Issuers within the meaning of
either Section 15 of the 1933 Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity
from the Issuers to Ladenburg, but only with respect to
information relating to Ladenburg furnished in writing by
Ladenburg expressly for use in the applicable Registration
Statement, the applicable Prospectus, or any amendment or
supplement thereto, or any preliminary prospectus; provided,
however, that the foregoing indemnity by Ladenburg shall not
apply to any untrue statement or omission contained in any
preliminary prospectus which is not contained in the related
Prospectus.
(b) In case any action shall be comenced involving
any person in respect of which indemnity may be sought under
this Section 6, such person shall promptly notify each
indemnifying party in writing and such indemnifying party
shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such indemnified party,
and the payment of all fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to the first and
second paragraphs of Section 6(a), Ladenburg shall not be
required to assume the defense thereof, but
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may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as
provided below, shall be at the expense of Ladenburg). Any
indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the
employment of such counsel by such indemnified party shall
have been specifically authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have
failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party, or (iii)
the named parties to any such action (including any impleaded
parties) include both the indemnified party and the
indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal
defenses available to it which are different from or
additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to
assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but
substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by Ladenburg, in the case of
parties indemnified pursuant to the first paragraph of
Section 6(a), and by the applicable Issuer, in the case of
the parties indemnified pursuant to the second paragraph of
Section 6(a). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason
of any settlement of any action (i) effected with its written
consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days
after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and
expense of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to
the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any
pending or threatened action in respect of which the
indemnified party is or could have been a party and
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indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release
of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of
the indemnified party.
(c) To the extent the indemnification provided for
in Section 6(a) is unavailable to, or insufficient to hold
harmless any indemnified party under Section 6(a), in respect
of any loss, claim, damage, liability or judgment referred to
therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuers, on the one hand,
and Ladenburg, on the other, from the Offerings or (ii) if
the allocation provided by clause (i) above is not permitted
by applicable law, or if the indemnified party failed to give
the notice required under Section 6(b), in such proportion as
is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of the Issuers, on the one hand, and Ladenburg, on the other,
in connection with Xxxxxxxxx'x activities under this
Agreement or the statements or omissions that resulted in
such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The
relative benefits received by the Issuers, on the one hand,
and Ladenburg, on the other, shall be deemed to be in the
same proportion as the total net proceeds from the Offerings
(before deducting expenses) bear to the total fee paid to
Ladenburg pursuant to Section 3. The relative fault of the
Issuers, on the one hand, and of Ladenburg, on the other,
shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material
fact relates to information supplied by the Issuers or by
Ladenburg, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such statement or omission.
The Issuers and Ladenburg agree that it would not be
just and equitable if contribution pursuant to this Section
6(c) were determined by pro rata allocation or by any other
method of allocation which does not take account of the
equitable
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considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or
defending any matter, including any action that could have
given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 6,
Ladenburg shall not be required to contribute any amount in
excess of the amount by which the fee paid to Ladenburg
pursuant to Section 3 exceeds the amount of any damages
Ladenburg has otherwise been required to pay by reason of
such activities under this Agreement or such untrue or
alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at
law or in equity.
(e) The statements with respect to Ladenburg in the
last paragraph under the caption "Underwriting" in the
Prospectus with respect to each Offering constitute the only
information furnished to the applicable Issuer in writing on
behalf of Ladenburg expressly for use in the applicable
Registration Statement, the applicable Prospectus or any
amendment or supplement thereto, or any applicable
preliminary prospectus.
(f) The indemnity and contribution agreements
contained in this Section 6, and the covenants,
representations and warranties of the Issuers set forth in
this Agreement, shall remain operative and in full force and
effect regardless of (i) any investigation made by Ladenburg
or on its behalf or by or on behalf of any person who
controls Ladenburg or (ii) any termination of this Agreement
or the Offerings.
7. Successors and Assigns. The benefits of this Agreement
shall inure to the respective successors and assigns of the parties hereto and
the obligations and liabilities assumed
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in this Agreement by the parties hereto shall be binding upon their respective
successors and assigns. Ladenburg expressly acknowledges and agrees that this
Agreement shall be binding upon and inure to the benefit of Holdings only upon
consummation of the Merger.
8. Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented unless the Issuers, the
Underwriter and Ladenburg consent in writing to such amendment, modification or
supplement.
9. Notice. Whenever notice is required to be given pursuant
to this Agreement, such notice shall be in writing and shall be delivered by
hand or by commercial messenger service or mailed by first class mail, postage
prepaid, addressed (a) if to Ladenburg, at the address set forth at the head of
this Agreement, Attention: Xxxxxx Xxxxxx, (b) if to the Issuers, at 00 Xxxx
Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxx, (c) if
to Quaker, prior to the Merger, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention, Xxxxx X. Xxxxxx, or (d) if to the Underwriter, at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxx, Legal Department, or such
other address as to which any party shall notify the other parties hereto in
writing.
10. Governing Law. This Agreement shall be construed (both as
to validity and performance) and enforced in accordance with and governed by
the laws of the State of New York applicable to agreements made and to be
performed wholly within such jurisdiction. Each of the Issuers irrevocably
consents that any legal action or proceeding against it under, arising out of
or in any manner relating to this Agreement may be brought in any court of the
State of New York, County of New York, or in the United States District Court
for the Southern District of New York. Each of the Issuers, by the execution
and delivery of this Agreement, expressly and irrevocably assents and submits
to the personal jurisdiction of any of such courts in any such action or
proceeding. Each of the Issuers irrevocably consents to the service of any
complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to it in the manner provided for in Section 9
hereof.
11. Counterparts. This Agreement may be signed in two or more
counterparts with the same force and effect as if the signatures thereto and
hereto were upon the same instrument.
12. Obligations. After the Merger, all several
representations and warranties, covenants, agreements and obligations of the
Issuers contained in this Agreement shall become
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joint and several representations and warranties, covenants, agreements and
obligations of the Issuers.
If the above terms are in accordance with your understanding
of our agreement, please sign the enclosed copy of this Agreement and return
such copy to us.
Very truly yours,
LADENBURG XXXXXXXX & CO. INC.
By:
-----------------------------
Managing Director
CONFIRMED AND AGREED TO AS OF
THE DATE FIRST ABOVE WRITTEN:
DECISIONONE HOLDINGS CORP.
By:
----------------------------------------
Name:
Title:
DECISIONONE CORPORATION
By:
----------------------------------------
Name:
Title:
QUAKER HOLDING CO.
By:
----------------------------------------
Name:
Title:
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XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
By:
----------------------------------------
Name:
Title:
APPENDIX A
July , 1997
DecisionOne Holdings Corp.
DecisionOne Corporation
00 Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Quaker Holdings Co.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Agreement to Act as "Qualified Independent Underwriter"
-------------------------------------------------------
Ladies and Gentlemen:
You have advised us that (i) DecisionOne Corporation ("DecisionOne"),
a Delaware corporation, has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (Reg. No. 333-28411),
relating to the offering by DecisionOne of $150,000,000 principal amount of %
Senior Subordinated Notes due 2007 (the "Notes"), or such other principal
amount of Notes as you may determine, and (ii) Quaker Holding Co. ("Quaker"), a
Delaware corporation, has filed with the Commission a registration statement on
Form S-1 (Reg. No. 333- 28539), relating to the offering by Quaker of ________
units (the "Units"), each consisting of $1,000 principal amount of its ____%
Senior Discount Debentures due 2008 (the "Debentures") and warrants (the
"Warrants") to purchase _________ shares of the common stock, par value $.01
per share, of Quaker (the "Quaker Common Stock") at a price of $____ per share.
Upon consummation of the merger (the "Merger") between Quaker and DecisionOne
Holdings Corp. ("Holdings"), a Delaware corporation, Holdings will succeed to
the obligations of Quaker with respect to the Debentures and the Warrants, and
the Warrants will become exercisable for an equal number of shares of common
stock, par value $.01 per share, of Holdings (the "Holdings Common Stock"). The
July , 1997
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term "Unit Issuer" means Quaker before the Merger and Holdings after the
Merger. The Notes will be issued pursuant to an Indenture by and between
DecisionOne and Fleet National Bank, as Trustee. The Debentures will be issued
pursuant to an Indenture by and between the Unit Issuer and Fleet National
Bank, as Trustee. DecisionOne, Quaker and Holdings are sometimes collectively
referred to as the "Corporations". The Notes, Units, Debentures and Warrants
are sometimes collectively referred to as the "Securities."
We understand that, as a member of the National Association of
Securities Dealers, Inc. (the "NASD"), the Underwriter may participate in the
Offerings only if the yield at which the Notes are offered to the public is no
lower than the yield, and if the price of each Unit offered to the public is no
higher than the price, recommended by a "Qualified Independent Underwriter."
Pursuant to a letter agreement, dated July 28, 1997, among the Corporations,
the Underwriter and us (the "Retention Agreement"), we have been retained as a
"Qualified Independent Underwriter" (as such term is defined in Rule
2720(b)(15) of the NASD Conduct Rules) to recommend to you the minimum yield
for the Notes, and the maximum price for the Units, to be sold to the public.
We have participated in the preparation of the Registration Statement
and the Prospectus (as such terms are defined in the Retention Agreement) with
respect to each of the Offerings, and have exercised the usual standards of due
diligence with respect thereto. Assuming that the Offerings are each commenced
on July , 1997, and further assuming compliance by the Corporations and the
Underwriter with their representations, warranties and covenants in Sections 4
and 5 of the Retention Agreement, we recommend that (a) the yield of the Notes
be no lower than % and (b) the price of the Units be no higher than $ ,
each of which should in no event be considered or relied upon as an indication
of the actual value of any of the Securities.
Very truly yours,
LADENBURG XXXXXXXX & CO. INC.
By:_________________________________
Managing Director
